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Not a pretty picture
International Viewpoint #246 June 1993
VER the last few months, some less pessimistic diagnoses of the international economic situation have appeared from various quarters. These reports have focused primarily on the revival that has taken shape in the United States and, as far as Europe is concerned, on the signs of revival in Britain and the significant growth in Italian exports.
These are incontestable facts, but it would be quite wrong to overstate their importance. While Italian exports have risen, this is due primarily to the major devaluation of the lira last autumn, and not to any generalised improvement in the country's economy which, in fact, has not stopped its downward plunge.
As for Britain, the positive statistics remain very partial and it would be premature to draw the conclusion that a real turnaround is underway.
Germany is in the middle of a recession and, outside Europe, Japan is going through the most difficult period it has known for decades; and forecasts predict that in the coming years its rate of growth will be modest at best.
Even the most apologetic commentators have already toned down the optimistic analyses which talked about revival in the United States, a revival which has been limited and precarious and which, among other things, has been unable to reduce unemployment. "Little or negligible growth"
In an article which appeared in the New York Times in mid-May, John Kenneth Galbraith wondered aloud if his country's economy was going to get bogged down in conditions of under-utilisation of resources and under-employment with "little or negligible growth"
More generally, a recent report of the International Monetary Fund made things quite clear, saying that in 1993 Europe would not emerge from its stagnation, and that the average rate of growth in industrialised countries would be under 2% - the IMF now hopes that the 2.9% growth rate it had predicted for
• EDITORIAL this year will be attained in 1994.
But, beyond worries about the possibilities of an economic revival, economists and political leaders are growing increasingly anxious about medium and long-term perspectives. Broadly speaking, there is consensus regarding the fact that the world capitalist economy has to deal with structural tensions and contradictions - and that these will not be overcome through a simple change in
It is becoming increasingly clear that, in order to set right the 'normal' mechanisms of the system, it is necessary to undertake a much more thorough restructuring than what was seen in the 1980s. This is true not only in regard to the technical and financial organisation of enterprises, but also on the macroeconomic level — the pressing need, for example, to deal with the major upheavals in the international division of
Devastating social consequences
In any event, the implementation of plans aiming to deal with these problems would have devastating social consequences and inevitable upheaval in the political field. In this area, too, hypotheses and worries are on the rise.
We can't go into all the problems here. We shall, however, list rather schematically the reasons for which a thoroughgoing revival — or, to use some classical terminology, a new long expansive wave — of the capitalist economy currently seems improbable:
• Technological innovation will continue apace, but there will not be the critical mass of innovations needed to stimulate on its own new long-term growth. We can not foresee the emergence of new sectors which could play
• There is no country which can be the global locomotive force, given the relative economic decline of the United States and the fact that Germany and Japan themselves seem to be running out of steam. Moreover, there is no political leadership which is powerful enough to draw up and implement projects comparable to Roosevelt's New Deal or the post-WWII Marshall Plan.
• Multinational corporations, which are playing an ever more dominant role, are also running up against a growing number of difficulties and contradictions, which have already provoked veritable crises in a number of the most powerful outfits.
• In the current context, and in the foreseeable future, a new massive growth in the sphere of consumption, comparable to what was seen in the post-WWII period, is wholly improbable. Indeed, austerity policies and the unceasing growth of unemployment suggest quite the opposite.
• In most countries, the implementation of revival plans along Keynesian lines has come up against the huge obstacle of the public debt, which has now attained colossal proportions. This problem has already been encountered with Clinton's rather weak-kneed projects.
Then there is the question of whether or not capitalism could rely on a reconquest' of the former Soviet Union and Eastern Europe for a major economic revival. Theoretically, this possibility does indeed exist. If there are concrete plans and if China itself can be reintegrated, in one form or another, into the world capitalist economy, the situation would be radically altered.
No generalised revival
But all the analyses which we have frequently put forward in International Viewpoint and other publications of our movement indicate that this is not at all a credible perspective in the short or medium-term.
In the short-term, the world capitalist economy will have great difficulty emerging from its conjunctural crisis. And in any event, it will neither overcome its structural crisis nor experience a generalised and durable revival. *
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