The UK has seen a weak recovery since 2009, one marked by poor
productivity and a disappointing growth in exports. Some believe
that "zombie" companies are partly to blame. The argument
runs that, sustained only by low interest rates and forbearance by
banks, such companies hog resources and hinder a cathartic process
of corporate restructuring.
The zombie company argument fits with views of so-called
Austrian school economists. For them the "creative
destruction" of uncompetitive businesses frees resources for
more productive uses and, in time, regenerates economies. Some
Austrian economists think the UK's problem – and more
widely Europe's problem - is that it has had too little
economic change, not too much.
