A full scale slump will not occur yet, But a brief survey of the adyanced capitalist world makes it look already like a disaster area.
Britain is now vying with Italy for the title of sick man of Europe Inflation will continue to rip away at a rate of at least 20 per cent a year. Unemployment will continue its slow creep upwards from its present 650,000. The economy is only expected to expand by a miserly one per cent in 1975.
In Italy the most the capitalist class is hoping for is to halve the rate of inflation to 14 per cent. But this could only happen if their attempt to raise unemployment above the 1% miiion level succeeded in frightening off the working class from defending its jobs and living ***T* remain insoluble.' ***************** nards, Gaven the workers recent success in forcing from the Govermment a 20 per cent reduction in lectricity prices, this is hardly likely to happen.
The United States is in its deepest and longest recession since the Second World War. The economy has shrunk by 4 per cent in two years. Unemployment figures for December showed that more than 6l6 per cent of the labour force -more than six million workers out of jobs. This does not include workers who have given up looking for work, nor does it include those who only have part-time jobs because they cannot get full emplayment. If the latter two categories are included, the actual number of unemployed would be closer to nine million!
The present world recession started to hit Japan in 1974 and, for the first time in a quarter century, the "miracle" economy failed to grow. The working class fought back apPEOPLE ON THE DOLE Al the wond sinks deeper ein incasarn, pee faros putte cany ha 4 car begun suffered here: they account for at least 60 per cent of the unemployed while representing less than 40 per cent of the working population.
West Germany remains the strong est capitalist economy in the world -despite its one million unemployed But the real strength of West German capital lies in the political weakness of the working class, smashed by a decade of fascism and world war. Its cconomic "planning" owes its effectiveness to lack of major strikes and its ability to fix wages in advance and at a level below the annual growth of productivity. But these historic reserves of West German capital are limited, and as the crisis of world cupitalism deepens it will invitably be drawn into the swamp. ***************** The present crisis is rooted in the way capitalism re-stabilised Itself after the Second World War.
In the immediate post-war yoars it was able to raise the rate of exploitation by taking advantage of the tremendous historical defeats inflicted on the international working class through slump, fascism and war, and the betrayal of favourable revolutionary situations in France, Italy and Greece by the salimsed Commare unist Parties.
On this basis international capital was able to utilise the tremendous stores of technological advance built up in the previous period of slump to bring about a massive increase in productivity. The lung boom which resulted was financed through the creation of a mountain of credit that is, paper money by both capitalist governments and private industry Of course, capitalists could no more stop recessions than they could stop the rain. However, the way in which they dealt with these crises changed, Each recession was slowed down by pumping more money into the economy to stimuate a further bout of inflationhased growth.
Furthermore, becuuse the capitalist countries did not suffer recession at the same time, a fal in prodbetion and internal demand in the countries hit by recession was. compensated for by an expansion in exports to the countrics that had escaped the crisis. In this situation each capitalist government was able to apply 'its owe" credit policy, with successive phases of expansion and contraction tied in a "flexible mutner to the world marker through the ups and downs of the balance of pay ments of che countries in questLOLL Deeper economic transformation. were a so laking place derine this long period of expansion, The intermationalisation of production took new leaps forward, invitably cuttIng across the attempts of 'national' capitalist governments to apply "anti-cyclical" policies limited to natJonal frontiers.
the imperialist countries, as it was bound to do, a very serious crisis was provoked in the international monetary system leading in 1971 of 'floating exchange rates', in freely on the open market. As it became impossible to resort to inter-imperialist competition lo ation of the recession.
then to stamp/lation in 1974-75.
are now persistine during a period acțivity and of increases in unemcountries.' for buyers.
ployment As inflation accelerated in all to the collapse of the dollar and the Bretton Woods agreements of 1944.
The collapse of the international monetary system led to the system which cach currency finds its value against other currencics more or less shurp devaluations to boost exports as Wilson had done in 1967, all cap- accelerated inflation. italist governments were forced by appiy an anti-inflationary policy at the same time. Hence the generalisThe international capitalist economy has passed from permanent inflation stimulating economic activity to stagflation in 1970-71 and sliding trom one to the other down the slope of the accolcration of inf- bottlenecks. lation. Inflation and price increases of nutright reduction in productive Thous oi volkswagen cars sinbo ug in a car-lot in Houston, Texas, waiting However much the apologists of capitalism try to blame the present crisis on the 'oil sheiks", increases in the price of oil account for no more than 2 per cent inflation in the imperialist countries.
The main cause of inflation is without doubt the inflation of credir, particulariy in the private sector -in other words, the bank Joans and paper money that served as the main prop for the preceding booi. The Western economy sailed towards expansion on a sea of debts whose cumulative effects necessarily Moreover, the recession has been accompanied by several particular Thus there have been shortages in some sectors even when there was a general abundance of commodities. The recession began in 1974 in the ", increases in the price automobile and construction industries. It then spread to the textile industry, to meat, to electrical app lances. and to building materials (glass, bricks, cement), finally hittine the petrochemical industry.
Steel was spared right until the end of 1974, but now the recession is bitting there foo.
It would be incorrect to see the recession as leading directiy to a new world slump on the scale of che 1920: and 1930s. Despite its peculiarities the present crisis remains a classic capitalist crisis of overproduction. reflected in the vast amount of usused capacity in the economy. (In the United States this amounts **************** to the virtually permanent nonutilisation of nearly a third of the productive capacity directed toward: civilian productive goals.
The breadth and duration of the veile The car share cras!
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omy.
iture as "unfit dwellings". *********** direct cuts in government expendThe rude shattering of Welfare State better or to daydreum about setting Britain is seen most dramatically in housing Some 18.2 percent of British housing units are described The reality behind this official euphemist is that over one million families live in slums. avoided, it is not enough to try to make the market economy function up an impossible "mixed economy The capitalist system and the bourgeois state must be overthrown. The regime of the workers must be established and in the semi-colonial countries, the regime of the workers
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'The leopard has not changed his spots. Capitalism is still capital- ism. Its internal contradictions
However much the apologists of capitalism try to blame the "oil sheiks", of oil account for no more than 2% inflation in the imperialist
"Of course capitalists could no more stop recessions than they could stop the rain.
'It is not at all an exaggeration to say that the millions of human beings who are threatened with starvation in the coming months will have been murdered by the profit laws of the market econ-