A new model of growth?
PHASE I
6566 67 68 69 7 0 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 06 87 88 89 80 91 52
SOURCE OECD
WORLD ECONOMY ration of profits could be combined with the maintenance of a reasonable rate of growth.
To understand the reasons for this it is necessary to closely examine the peculiarities of the last decade. The graph
AFTER a decade of unrestrained free market policies, the beginning of the 1990s has seen a series of changes in the functioning of world capitalism. This article attempts to analyze the medium term effects of the changes and to propose a theoretical analysis of them.
MAXIME DURAND
UR analysis of the crisis rests on two pillars that can be rapidly reviewed here. The first is the specifically Marxist understanding of the dual nature of capitalism:
to function it simultaneously needs profits and outlets, and it is in this double need that one of its principle contradictions is found.
The second tool at our disposal is the theory of long waves (see box on p. 19), which focuses in particular on the fact that the passage from one long expansionary wave to a long recessionary wave results from factors internal to the system, whereas the putting in place of the conditions for a new expansionary wave involves the intervention of exogenous factors. We do not mean by this that the class struggle is "outside"
the capitalist economy, but rather that the development of such exogenous factors is neither automatic nor guaranteed.
This approach led Marxists to formulate a double prediction at the beginning of the 1980s. The first involved the imminence of a third big recession, which we thought would be unavoidable because of the difficulty capitalism faced in re-establishing profits while maintaining sufficient market openings, a difficulty to which must be added other factors connected to inter-imperialist imbalances and to international financial disorder. In seeking to restore profits the policies followed by the bourgeoisie would tend to lead to the contraction of markets and therefore unleash a new recession, this time on the demand side.
The second prediction was based on the idea that there could not be a fundamental improvement from the point of view of capitalism without a radical change of relations between classes. The big social clashes were therefore ahead of us. Today it must be noted that the experience of the 1980s contradicted both of these predictions. In the first place, there was not a third generalized recession, nor even a financial collapse, since even the October 1987 crash was overcome with relative ease. The restobelow allows us to examine them from a long term perspective, on the basis of two curves tracing the evolution of the rate of growth of production and the rate of profit.
These two variables were calculated from Organization for Economic Cooperation and Development (OECD) figures for the Group of Seven (G7) made up of the principal imperialist countries (the United States, Japan, Germany, France, the United Kingdom, Italy, and Canada); they were then altered to allow for fluctuations.
This chart is particularly rich in lessons, which we will comment on in the course of the article. The first striking aspect of the graph is the parallelism of the two curves, which verifies the old Marxist theorem according to which it is the evolution of the rate of profit that determines the dynamic of capitalism.
The second is the falling average rate of profit beginning with the US recession of 1967 and accompanied by a slowing down of growth which began well before the "oil crisis" of 1973. At the end of this first phase, in 1972 and 1973, renewed growth can be seen, which corresponds to an increased accumulation of capital aimed at offsetting the effects of wage pressures.
First generalized recession
The first generalized recession occurred therefore in 1975-1976 — it is marked by the rectangle on the chart. Growth and the rate of profit fell together, and this fall is stronger than it appears on the chart which, it will be recalled, is drawn up in such a way as to "smooth over" the
PROFIT AND GROWTH
Seven Principal Countries
6.0-
5.5-
5.0-
4.5-
3.5-
3.0-
2.5-
PHASE I
2.0-
•21
20
19
-18
PROFIT
17
-16
- 15
14
- 13
GROWTH
-12
PHASE W
After this first recession a new phase began during which policies aimed at led to a slight improvement in profits and growth. But these policies were no longer equal to the scope of the crisis, and the second generalized recession of 1980-1982 quickly put an end to this second phase. strained free market policies, there began a third phase, which has now lasted for almost ten years. The new phenomenon, which appears clearly in the grey zone of the chart, is that the two curves, that of profit and growth, tend to diverge. The rate of profit recovers quite rapidly, without however succeeding in reattaining the levels of the first phase, and growth rises without really taking off.
The situation in the early 1990s is characterized by a marked slowing down of profit. The three phases of this period of 17 growth and by a downturn of the rate of
----- photo credits and running heads -----
GROWTH RATE OF PROFIT
Source: VECe growth rates: I = 1965-73; I = 1973-1979; III = 1979-1987
WORLD ECONOMY crisis can therefore be synthesized in the table below where the figures are based on stylized data for the non-recessionary periods.
The restoration of the rate of profit constitutes the major phenomenon of the most recent period: it is basically the result of a general shift in the share of wages in value added, of which a detailed examination will reveal two important tendencies.
The first is a falling off in the productivity of labor, whose average rate of increase fell by half at the beginning of the crisis. At first the growth of real wages tends to slacken while a strong resistance remains in countries like France or Italy. The decade of monetarism has countries, risks resulting in a new contraction of market openings. This periodization leads therefore to an examination of the way capitalism functioned in the 1980s and its capacity to reestablish profit without impinging on growth.
It is the change in the pattern of surplus-value consumption that constitutes the principal factor of adjustment. This is an essential thesis which simply follows from the tables. A stylized representation of this specific mode of growth can be developed from a simplified model of capitalist reproduction.
Let us imagine that income is simply split between profits and wages. The wage is completely consumed, a part of surplus value is accumulated, the rest is element is the reditribution of incomes to the detriment of wages. It means simultaneously reestablishing profits while reorienting demand in a manner that is more adequate to the needs of the realization of this profit. A process of this type underlies the shape of the world economy, where the United States deficit, and the expansion of credit that it involves, corresponds to a transfer of income towards the spheres with a strong propensity to
Finally: the burgeoning of the financial sector reflects a creation of surplus value that is not accumulated but leads to a distribution of incomes in a way that assures the recycling of this surplus value towards con-
Table 1 — The three phases of the crisis
Phase 1 Expansion
1965-1973
Phase II Keynesian
1976-1979 policies
Phase III Liberal
1983-1992 policies been marked therefore in all countries by a new slowing down of real wages which henceforth progress more slowly than productivity: the result of these two developments has been the decline in wages in the principal industrial countries, with the exception of the United Kingdom which had gone through these changes before the others.
Economizing on constant capital would have furnished a means of restoring the rate of profit without exercising excessive pressure on wages, but this has not been the case: the introduction of new technologies has until now been accompanied by the raising or at best the maintenance of the composition of capital. Table three shows that the coefficient of capital, that is, the amount of fixed capi-
Strong growth High rate of
(5%) profit (19%)
Moderate Poor rate of growth (3.5%) profit (15%)
Moderate Moderate rate growth (3%) of profit (17%) consumed. In "Fordist" growth expanded reproduction takes place in such a way that all the elements of income and of demand grow proportionally so that enlarged reproduction implies no structural deformation in the division of income allocation. In "Post Fordist" growth things happen differently. To put it simply, incomes rise but wages are blocked - hence the same for the consumption of wage earners. Under these conditions the realization of value supposes a relative growth of the fraction of surplus value consumed.
This abstract principle is accompanied by three defining features of this specific manner of accumulation. The essential
This presentation is different from other analyses. It can be said that it is more Regulationist than the Regulationists (see box on p. 20), who have progressively renounced proposing an overview of capitalism as it has functioned over the last ten to fifteen years and seem to confine themselves to a comparison of possible or desired scenarios. This analysis of the development of the financial sector is also different from the line of argument
"casino-economy", denouncing the "mess" criteria of efficiency which are too cen-
"financial profitability". This line, which is that of the economists of the French Communist Party (PCF), is based theoretically understanding of the law of value (as if the financial sphere could become totally independent of the cycle of capital and is accompanied by illusions as to the possibility of making capitalism function "differently", in a more "productive" manner.
If we want to clarify the current forms of capital reproduction we must focus on its tendency to divide into two large sectors: the first is the modern industrial and computer service sector characterized essentially by high gains in productivity tal per unit produced, has continued to
Table 2 - Share of value added rise during the last decade.
Gains in productivity have, therefore, been less and less translated into rises in real wages and have been instead allocated to stabilizing the rate of profit. This mode of functioning abandons one of the essential rules of "Fordism" which is the parallel growth of real wages and pro-
The question of how the system reproduces itself in these conditions thus constitute: the key. In fact, whether in
Marxist or Keynesian terms, this growing gap between productivity and wages should lead to a crisis of realization. That is, if the workers produce more and more without earning more, who will buy what they produce? The squeeze on wages, on
18 a large scale and a gue samon me for anl
International Viewpoint #223 • March 2, 1992
Productivity I II III USA 1.3 0.1 0.8 Japan 8.3 2.9 2.9 FRG 4.0 2.9 1.4 France 4.4 2.4 1.9 Italy 5.6 2.8 1.8 UK 3.2 2.7 2.1 Canada 2.4 1.3 1.3 G7 3.6 1.6 1.7 real wages share of wages
I II III II III 1.5 0.2 0.2 0.2 0.1 -0.6 7.9 2.8 1.4 -0.3 -0.1 -1.5 5.1 2.5 0.9 1.0 -0.4 -0.4 4.1 3.5 1.3 -0.2 1.0 -0.6 5.0 3.5 0.9 -0.6 0.7 -0.9 4.4 1.6 2.1 1.2 -1.1 0.0 2.5 1.8 0.7 0.1 0.5 -0.6 3.9 1.6 0.9 0.2 0.0 -0.8
The theory of long waves and the creation of rather small numbers of jobs. The second sector is that of services, with low productivity, more sheltered by its nature from international expulsion out of the capitalist sphere of a sector of the economy independently
WORLD ECONOMY
THE theary of "long waves" of captalcompetition. This is the privileged place
Ist development originates from the work for the creation of jobs.
of the Husslan economist N. D. Kondra-
This schema, which could be presented tlev. In his book The World Economy and as a neat solution to the crisis of employite Conjunotures During and After the ment, can however only work if several
War (1922), Kondratiev explained that the conditions are met. The first involves economic criale of 1920-21 had resulted profitability. It must be recalled here that from a disruption of egullibrlum In the productivity is one of the essential paramdistribution of world markets and proeters that determines the level and the ductive forces, following the expansion evolution of the rate of profit. A downof production by the United States and turn in productivity, if it allows the creaother non-European countries during the tion of more jobs, therefore tends to
FIrst World War. This crisis did not, however, herald the collapse of capitalism,
The problem therefore is to disconnect but rather the restoration of Its equilibrithe creation of jobs on the basis of weak productivity, on the one hand, and the
Kondratlev argued that since 1789 capldetermination of the rate of profit. The tallem had experienced two complete sole logical solution resides in the devellong cycles of around 50 years. The pertopment of an economic sphere that is not od 1789-1809 saw a long wave of expansubject to the demands of capitalist profitsion, followed by a long wave of relative ability or which compensates for weak stagnation from 1809 to 1849, In 1849 a productivity by lowering wages. The disnew cycle began, with an expanding parities in productivity lead therefore to wave lasting untll 1873, followed by a what one could call a neo-dualism. The declining wave until 1896. The expanding
French Ministry of the Economy has offiwave of the third cycle then lasted from cially theorized this idea (see box on p.
World War crisis stemmed from the fact
The function of inequality that It marked a turning point in the third long cycle and the beginning of Its
This theoretical sketch has several declining wave. in Kondratlev's view, important corollaries. The first involves these long cycles represented osciliathe functionality of inequality. The reductons around the long-term moving equition of inequality has never been one of librium of capitalism, related to the capitalism's central objectives. But the reproduction of the most durable and model that is being followed accords it a costly forms of fixed capital — forma of central role. What must be done in terms
Investment like canals, railways, bulldof incomes for the model described above
Ings and perlodic technological renova-
In the service sphere wages must obviously remain at a low level because they waves has most notably been employed will have to be exchanged either against in an attempt to understand the overall wages in the competitive sector or against dynamic of capitalism in Ernest Mandel's the redistributed surplus value, and reciprocally, a concentration of income to the benefit of the rich, who alone can continue to consume on a large scale as real prices increase, must be assured.
One can then rule out the idea of an
Table 3 - Coefficient of capital
I
II
III
USA
-0.2
1.1
0.4
Japan
2.6
3.2
1.7
FRG
1.4
1.0
0.9
France
-0.9
1.0
0.4
Italy
-0.3
-0.3
0.6
UK
0.6
1.5
-0.5
OECD
0.4
1.5
0.8
Annual growth rates: I = 1960-1973:
TT = 1973-1979: III = 1979-1988
Source: OECD because the model, in order to be credible, implies the articulation of the two sectors. Under these conditions the production of the service sectors cannot be bought be this sector itself; it can only be done by the wages of the other sectors or by non-accumulated value. Expenditures on either because they incorporate wages or because they decrease the surplus value available for accumulation, inevitably allow the development of a service sector creating jobs which will have harmful effects on the
The way out of this is, therefore, the emergence of a "third demand" characteristic of many semi-industrialized countries. It being regularly increased so as to buy the products of low produc tivity sectors, increase of wages in the productive sector remain blocked. Likewise, the way in which the rich allocate their income between investments, purchases of industrial goods and expenditure on services corresponds best to the current dynamics of capitalism.
This brief examination of this theoretical model of growth leads to two predictions: the creation of jobs in the service sector must be accompanied by lower wages and the allocation of income must be modified in favor of a non-wage
The example of the United
States clearly confirms these two prognostics. It became the fashion to talk of the Great American
There were ten million jobs created in the United States between 1980
1986, while the four major European countries, with roughly the same population, shed nearly two million. But the immense majority of these new jobs are extremely poorly paid service sector jobs. Between 1981 and 1987 the job expanding sectors paid salaries that were less than two-thirds of that of other sectors (1,830 dollars a month compared to
2,700) although the differences had been negligible during the previous twenty years. It therefore involves a break with previous tendencies. This reversal has been confirmed by many studies of the
United States as well as the United King-
This development is analogous to what has begun to happen in France since
1983. The purchasing power of wage earners has stagnated and the surplus
1896 until 1920. The acute nature of the post-First tions of industry. In recent years, the theory of long
Late Capitalism. k resulting from the progress of productivity is distributed under the form of nonwage revenues. Two categories benefitted from this bounty: the holders of financial assets, to the degree that the raising of interest rates signals a rise of their quota of surplus value, and the independent professions because they benefitted from a very favorable evolution of relative pric-
This reduction in wage earners' consumption has just been spectacularly confirmed by a study
National Institute of Statistics and Economic Studies (INSEE) showing that in ten years "the expenditure made by the most wealthy quarter of households rose around 20% in francs while that of less well off households stagnated. The consumption gap between wealthy and mid.
dle income households grew." 19
On a world wide scale a similar pheMarch 2, 1992 • #223 International Viewpoint
WORLD ECONOMY nomenon tends to divide entire zones of development. In 1987, comprised around 3.4 3,600 dollars a year. But the poorest half only gained a little more than 1,200 dollars a year, while two-thirds earned less than 3,000 dollars. Moreover, throughout the 1980s and for the first time since the Second World War, average per capita production fell in areas like Africa, the Middle East, and Latin America. famous "four dragons" of Southeast Asia (South Korea, Singapore, Hong Kong and Taiwan) were only an exception, because they represent no more than 1.4% of the world's population.
Starting with a notion of norms of consumption, the Regulationists have insisted on an important aspect of the analysis of social reproduction which centers on the in obtaining profits and openings, but it tends to increasingly come up against an additional obstacle which is found in the growing desynchronization between the demands of profitability. The principal economic problem here is that of the allocation of social labor. If society is as a whole, at any given moment it has a certain quantity of labor that it will choose to allocate to this or that sector. This choice reveals its priorities, whether they are explicitly spelled out or not. This allocation is realized by combining two sets of criteria which
On one one hand, the search for profit
The Regulation School
ACCORDING to one account:
criteria, or in other words, by a growing difficulty in assuring the connection between what people want to buy and what capitalism wants to produce. While the so-called Fordist period was characterized by a shift in the norms of contowards manufactured goods (automobiles and so on) produced under conditions of high productivity, the demand of wage earners in the imperialist countries is shifting towards categories of goods whose satisfaction is assured under conditions of lesser productivity.
We can answer the question of why a new range of products cannot assume the role in the norms of consumption played in a previous period by automobiles with two points. On the one hand, elecparts, which expected to "neo-Fordism", do not represent a sufficient market volume; walk-
"In the past two decades the French (or Paris) School relationship between value and of Economic Regulation has developed an ambitious use-value. Not every mode of conhistorical-economic theory which has already had a sumption is compatible with the major impact on efforts to understand the current malgiven conditions of reproduction.
aise of the capitalist system and the accompanying eco-
One cannot restrict oneself to a global analysis of value, examining
The Regulationists deny that the capitalist mode of how it breaks down between wages production is comprehensible in terms of a single set of and surplus value. It is also neceslaws that remain unchanged from its inception until its sary for the structure of production eventual supersession. They see the history of capitalto be adequate to that of consumpism, rather, as a succession of phases, each distintion as far as use-values are conguished by certain historically developed, socioinstitutionally defined structural forms that give rise, so
A society cannot for example long as they are maintained, to distinctive forms and patterns....[they] insist that the structural forms that conconcentrate its efforts on the prostitute their modes (or phases) of development within duction of luxury goods and at the the history of capitalism must be understood as the outsame time privilege wage earners.
come, to a significant degree, of class and political
This point does not amount to struggles." (From Robert Brenner and Mark Glick, "The some kind of rejection of Marxism
Regulation Approach: Theory and History" in New Left but rather a restitution of Marx's analyses on the role of use values.
From this point of view, the long expansionary wave was made possible by a fit between norms of consumption and conditions of production
Regulationists have dubbed Fordism. In short, the consumption of wage-earners is made up of a growing part of manufactured products that these same wage earners produce in conditions assuring significant gains in productivity. These gains in productivity allow a compensation of the effects of growing real wages for the profitability of capital.
For capital reproduction to occur in a dynamic manner, it is necessary that three conditions be met:
1) A production of surplus value assuring the valorization of capital;
2) A realization of this value in terms of the large mass of exchange value;
3) A relationship between what is produced and what is consumed by each type of income.
All these conditions must not only be present episodically;
they must be dynamically reproduced over a period of time.
This brief sketch helps shed light on a third facet of the crisis: not only does capitalism encounter growing difficulties
International Viewpoint #223 • March 2, 1992
Review, no. 188, July/August 1991.) * and more specifically the outlook for profits at the highest possible level over a long period of time leads to a rule that can be summed up in the following way: there is a spontaneous tendency for capital to be invested in the sectors that assure the highest amount of growth and productivity, for this is the basis and guarantee of a high rate of profit being maintained. The other logic, which we can, with Engels, call that of useful social effects, leads to giving priority to the most urgent or the most intensive
Under capitalism this logic is present but remains latent. Goods cannot be sold that do not correspond to any social need, and the satisfaction of certain social needs comes to impose itself on the spontaneous logic of capitalism, which only exists in its pure form in text What you want and what they want you to want
Our theory of the current period of capitalism is that it is characterized by growing gap between these two series of mans, video-recorders, and so on are rapidly expanding but a videorecorder is worth twenty times less than an automobile. And especially, there is a spontaneous shift towards other types of goods or rather services which cannot currently be "industrialized" due to technical limitations. The most example is that of health expenditure which is spontaneously increasing more quickly than income and which all the attempting to limit, as they do not give rise to production associated with high productivity. Capitalism does not treat different types of demand equally. When a worker buys an automobile, it stimulates worker receives medical treatment s/he is "excessively" raising health expenses. In any event, s/he is in both cases satisfying
The change in the distribution of income towards the "third demand" (nonwage incomes) is therefore, a change in the consumption structure to the benefit of industrial goods or industrial goods of a higher average value. One of the corollaries of this evolution is also the role played by the incessant reproduction of the "up-market". For each product that enters into the phase of mass production with marked price drops, it is necessary to constantly recreate a differentiation and introduce new models from above that maintain the volume of demand. But that can only be done by privileging the demand emanating from the high income whose structure best corresponds to the demands of the valorization of capital. Insisting on this aspect by introducing the notion of norms of consumption certainly does not mean adopting the position of the Regulationists, which on the contrary is discredited today. One of the aspects of the current crisis is that, contrary to what the Regulationists postulate there exists
A view from the French ministry of finance...
"THE enterprises exposed to international competition should seek the highest productivity. A policy of low wages could leave them lagging behind in technological development... On the other hand, in the sectors the least exposed to no automatic process of adjustment of the norms of consumption to the structure of
WORLD ECONOMY production.
This image of division is again reinforced by the effects of technological changes. One of the principals of the international competition, it is possible to practice a low-wage policy more
Marxist analysis of capitalism involves never dissociating technical innovations
"Household services constitute a very important source of jobs. But the numfrom the social relations in which they bers there can only be increased if wages are sufficiently low... to maintain must be inserted. This is why the crisis attractive prices. They can, then, only develop if the wages there are very difcannot be solved purely and simply by ferent from those of the exposed sector. This means a growing and significant such innovations.
dispersion of income, like in the United States or even in Japan. Sweden pro-
One of the most astonishing paradoxes vides the opposite example of a very egalitarian partition of incomes.
of the current situation is that capitalism
It is also the country where the share of private services in total employment today possesses new methods of producis the smallest — this is accompanied by the particularly high weight of the pubtion that allows it to envisage a qualitalic services. These latter are financed by obligatory deductions... socially acceptable if the benefits provided in return are sufficient. This seems to be the productivity. But these potentialities cancase in Sweden... But this implies a high level of qualification in services, a not be fulfilled within the framework of strong social cohesion and a fairly homogeneous globally active population.
capitalism, which in order to perpetuate
Indeed, the population in Sweden, with a very reduced proportion of nonitself needs to reproduce at the same time
Scandinavian immigrants, is precisely more homogeneous than in the other the extension of its essential functioning countries. The American model is without doubt more suitable for offering jobs principle, the law of value, as well as to a population which is very diversified on the cultural plane and in terms of levels of productivity" (Document of July 1991). *
It involves assuring the submission of the entire economic sphere to the domination of the logic of capital. So, technological changes represent a double infringement on this domination. They imply a considerable economy of labor time that will openly accentuate the problems born from the crisis of labor. They also imply in their essence a reorganization of labor in a sense that is not compatible with wage discipline: polyvalency, teamwork, initiative, "involvement" and
The unexploited innovations
For probably the first time in its history, capitalism appears incapable of integrating a series of innovations which are unexploited. The possibilities that automation holds in terms of the economy of labor, as well as the electronic instruments of communication in terms of circulation and exchange of information and knowledge, are absolutely underutilized, or if one prefers, over exploited but in narrow segments giving priority to the futile and to elitism. A recent book!
throws interesting light on these questions. As its title indicates, it is one of the most optimistic analyses as to the progressive content of the new methods of
But at the same time its authors insist on this fundamental idea: "as long as the new models of: production remain enclosed in their narrow private framework they will constitute a restricted modernization, not satisfying demand, which implies the notion of a rationality that interests society as a whole."
Confronted by its incapacity to absorb all its potentialities, capitalism, and this is one of its essential characteristics today, will react by introducing all sorts of processes of differentiation of which we have seen several examples. In the field of the organization of labor, the tenfavorable to employment. dency is not towards the progressive overall extension of its sectors, of forms of organization, and the most advanced methods, it is on the contrary, a logic of selective implantation that is dominant. The two sociologists cited above conwork by insisting on the changes that they see as being at the heart of German industry and consist, for the enterprises, of rejecting to the exterior, to the extent this is possible, the negative phenomena which accompany the new models of production and, if that is not possible, to concentrate them, on the interior, in isolated sectors" which constitutes "a factor accentuating the formation of segments". This contradiction - which is classically Marxist — between the development of productive forces and relations of production, can thus be formulated in the following way: "can this current dividing up of the world of labor between actors won over to or resigned to rationalization, workers without any skill, "marginalized", between victims of the crisis, between long-term unemployed, express itself other than by a new form of inequality, contradicting the historical and social conception of modernization?"
Such terms as parcelling out, segmentation, splitting up, fragmentation or disconnection all express the same tendency of capitalism to limit the sphere in which it can develop. This process is powerfully at work at an international level, in the form of a sharpening disconnection between center and periphery: the introduction of new technologies creates a new basis of dependence and accompanies the formation of a tripolar imperialist structure where each of the summits of the "triad" structures zones of lowwage labor where it selectively installs units of advanced production. The United States is currently reconquering American continent with the Initiative for the Americas, exchange treaties which amount to so many dictated treaties between unequal partners in competition. Asia is structured around the Japanese giant in a perfectly hierarchical manner, from "four dragons" to the poorest countries and those aspiring to industrialization through low salaries like Malaysia or the
Europe, meanwhile organizes its different concentric circles less densely, going from the hard core of the center of the European Economic Community (EEC) to the low wage zones of the south and the east. The logic of this model leads, as far as the East European countries are concerned, to a clear prognostic which is being verified: the penetration of the "market economy" will not be across-the-
Instead of heading towards the new Eldorado, the international investors are on the contrary putting into place sifting procedures and selecting sectors susceptible to being usefully incorporated into the international division of labor. This process will therefore have the effect of breaking up the societies concerned, by rejecting, marginalizing, "informalizing" and so on, the non-competitive sectors and the segments of labor incapable of adapting to the new technologies. This frontier could shut out certain particularly powerless countries completely.
Capitalism has not therefore emerged from its crisis. But in order to fully grasp the meaning of this diagnostic it is useful 1. Horst Ker and Michael Schumann, La Fin de la division du travail?, Editions de la Maison des Scienc- " es de l'Homme, Paris 1989. March 2, 1992 • #223 International Viewpoint