I believe that this has happened in Australia where part-time work has risen from 10 per cent in 1966 to 25 per cent today. Moreover, I believe the rise in self-employment has hidden the extent of suboptimal employment. The rise in Australia of self-employment is not the result of a functioning free labour market but of a severly hampered labor market. Holland is another country with rigid labor markets and where part-time employment has risen to abour 37 per cent. On the other hand, America's more flexible labor markets has seen part-time employment at only about 16 per cent.
Investors confront huge overcapacity, glutted world markets and declining profit and growth rates.
Profits have been made in the 1980s and 1990s through cutting costs in order to drive rival firms out of the market. Though this is really appalling nonsense it is constantly appearing in one form or another. An enormous credit expansion in the 1980s, especially in Asia, created massive malinvestments. This happens because the newly created credit misdirects production causing overinvestment in the higher stages of production at the expense of the lower stages. When governments are finally forced to halt the monetary expansion these malinvestment quickly emerge as idle capacity, rising unemployment and bankruptcies and falling output.