Deindustrialisation
why and how it happened
what it is
most pronounced during 1950s to 1970s
institutional and policy factors
Thatcherism
free market policies
Argument: supply-side policies
nationalisation of industries led to decreased competition
Argument: decline of Keynesianism
increased inflation but no effect on unemployment or output
Argument: high marginal tax rates less investment
Argument: Increased oil prices
Arab-Israeli war. Arab countries increased oil price
a secular decline in the share of manufacturing in national employment
consumer demand shifts towards services sector
neglect of manufacturing sector
benefits
drawbacks
Argument: it is a feature of successful countries
Argument: it is a result of higher productivity. employment decreases
advances in services sector lead to higher living standards
increased employment in the services sector
Argument: decline in manufacturing indicates lower share of GDP
UK share of world manufacturing not doing as well
Argument: It is a relative decline
compare to USA. Leading services sector: 56% employed in 1960
Rebuttal: service sector had lower productivity so it had to have larger employment to keep up.