Full text: From Stagnation in the 30s to Slow Growth in the 70s.

19 
really serious attempt to get substantial agreement between 
the major powers on the questions of exchange rates, 
interest rates, capital movements, debts, and last not least, 
world wide mass unemployment, is a proof of my contention 
that international cooperation in the West has broken down. 
It illustrates at the same time also the fundamental change 
in attitudes towards unempkyment. The reason for this 
change can be foundjin a reaction against the welfare state 
and increasing taxation. 
It may be admitted, however, that this major change in 
outlook was also influenced by the fact that full employment 
policies were bound to be more difficult than before- in 
those years. In U.S. specially ( where, however, full 
employment was never adhered to consistently ) there was 
I 
atetrong increase in the growth rate of labour supply in the 
70s. A full employment policy would therefore have required 
increasing th^rate of growth of GDP by something of the 
order of one percent. At the same time there emerged 
a series of factors which were apt to create unusual 
uncertainties. There was the environmental problem which 
had received official recognition in 1969 and which obviously 
affected investment decisions and plans, presumably 
unfavourably at that time. The same was true for the 
changed energy situation. There was, moreover, increased 
uncertainty with respect to the way technological development 
would gc , not only in connection with energy use but also 
raw materials, electronics etc. The superiority of large 
scale production, a seemingly ironclad rule of economics 
as well as practical management, had been put in doubt, 
for technological as well as organisational reasons.
	        

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