HOW HEALTHY is world capitalism today? And what does this mean for those struggling to overthrow this system and replace internationally economy? In the first of a series of monthly articles, ALEXANDER looks at the prospect of a new world recession.
THE LEADERS of the world have been reluctant to admit it but the American economy is in a recession. Between March and May 1979 it was running downhill at the rate of 2.3 per cent a year, and almost all the other economic indicators production, spending, productivity - also point downward. At the same time the Carter administration, worried about an inflation rate of over I per cent a year, is keeping Ine Interest rates are therefore again, making it more difficult than ever to raise cash for spending or investment.
WTI the resulted. Unemployment, which for a long time was at a jumped up from 5.7 to 6 per cent. Carter's Treasury Secretary now says it could hit 7.5 per cent - more than 7 million American workers out of jobs before things start to look up. Synchronised The big question that remains is this. Will the US slump mean just a partial • recession capitalist economy, with the stronger economies weathering the storm? Or will there be another recession like 1974/5, major economies In stump at the sale time? This would make the recession that much deeper and harder to get Obviously the USA was bound to drag the world economy down with it to some degree, and the British economy was headed for trouble without any prompting.
looked as if the other powers might decline to join the club.
Prospects in France weren't bright, but Germany and Japan still seemed to be holding their own, and even Italy was fairly bright. Socialist Challenge 11 October 1979 % socialist ROY capitalist consumer screws rising inevitable has standstill, has with rising LIC percentage point 'synchronised' with all the same league as France. same goes for Italy.
But until recently it capitalist through 1980 as well.
The only capitalism *net operating surplus as % of net value added in industry 1955-58 59-62 63-67 68-71 But now more and more people ! expected to ring up a growth figure of are coming around to the gloomy view • including, at the latest count, such bodies as the International Monetary Fund and the Bank of America It's not too hard to see why. In France the Barre government, faced unemployment and economy slipping towards only 2 per cent growth, has just decided to spend $1 billion to boost the economy. But that will only perk it up by half a - and won't do anything for inflation, which from 10 PS sen a lovie upwards cowards Germany supposedly immune to such diseases — is still set to top the government's growth target of 4 per cent this year. But 1980 could see the West German economy in the the Britain, of course, is already in reverse gear and expected to remain so ray of hope for the east.
Certainly the Japanese economy is doing much better than any other. It is
Japan
doro United States osa W Germany • Britain 72-75 7677 5½ per cent this year — not so hot for Japan, but enough to make British government envious even in a good year.
But the slowdown of the world economy means that exports are having a tougher time than ever before, while Japan's heavy dependence on imported energy means that its costs are rising sharply. It looks as if 1980 will also bring Japan down with a bang some brave souls even dare to suggest that the Japanese economy actually join that of Britain and the US in shrinking Certainly it looks as if 1980 will be another time of trouble throughout the capitalist world. One common to all this and the •enommatol 1974/5 crisis) is the jump in oil prices. This has led a whole series of people — from the IMF to the popular press in this country — to start crying oil sheiks' whenever anything wrong.
Next month we'il take a closer look at the effects of the 'oil crisis' оп world capitalism.
AT THE Labour Party conference in Brighton talked to three of the most prominent figures on some have already interpreted as marking a executive: Eric Heffer MP, Dennis Skinner MP last week two resolutions were passed which the Labour left and the party's national Bernard Dix:
whichis