Central banks: can they control the economy?

The UK decided to join the EEC in 1973, just as today it has decided to exit the European Union. Both were difficult times. The world had enjoyed continuous economic growth from 1945 to 1973 – what the French called the ‘Trente Glorieuses’. But in the 70s, the world trading platform started to stutter and break up. Productivity fell to low levels and what had driven the impetus for growth – the profound desire, after the 1930s, to ensure full employment – meant that wage increases now became inflationary in a way they hadn’t before. A system which was collectivist in construction – government and big businesses – started to crack, especially after the oil price rose 400% on the back of the Arab/Israeli conflicts. The problem was that governments were obsessed with the fact that nothing should be done to endanger employment and this gave the trade unions all the power and allowed inflation to continue to rise. Just when the communist revolutionaries were expecting the system to break up, capitalism fought back. (VIEW LINK)