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the increase in household savings rates in some countries.
There was the break down of international economic co operation.
There was the change in political climate due to the reaction
against the welfare state which turned the course of economic
policy round by 180 degrees.
The relative inflexibility of the profit margin at given
utilization shows itself in the low degree of utilization over
the past eight years.
We must, however, now take into account that the conditions
of our time differ vastly from the closed economy with negligible
role of government which had been assumed in my original
discussion of the effects of oligopoly on growth. There I
concluded that the increase in mark-up by the oligopolised
industry would in fact not increase the volume of their profits
which would be kept constant by a reduction of utilization.
There would only be a redistribution of profits within the
business from the competitive to the oligopolistic sector.
This is far from true nowadays because the depressive effect
of the oligopolist's action will increase the budget deficit
and increase the foreign balance. Its effect on the household
saving is more doubtful since even in the long run it may not
be very flexible. In consequence the oligopolists will obtain
an increased volume of profit not only at the expense of
competitive business but at the expense of the budget and the