[GM104-105-106] Course of the economic crisis

The reports on the course of the crisis refer to the regularly updated monthly indices of industrial production and Trade, with separate data given on all the major capitalisms, including the ‘tiger economies’ where capitalism arrived later.

The effect of the course of the current crisis on each one was shown. In particular, drawing on the historical series for industrial production as illustrated in a graphic table, a comparison was made between the current crisis and the numerous previous ones, and the frequency, duration and depth of these crises was noted.

Referring just to the United States from 1919 onwards, a further graphic table showed crises of more than a year’s duration. In the post First World War period there was the crisis of 1920-21, then the Great Depression of 1929-36; in the pre-Second World War period there was the crisis in 1938-39; in the post 2nd World War period there was the crisis in 1945-50, the intercalary crises of 1953, 1957, and 1970-71, the world crisis of 1974-75, the series of periodical crises of 1980-83, 1990-91 and 2001-3, and finally the crisis we are in the middle of now, which started in June 2008. For almost four out of every ten years during the last century of capitalism, the USA has been in recession. But as we know, that doesn’t mean that the actual volume of production, and thus capital, hasn’t actually increased in the USA over the same period. In fact it has done so twentyfold, with the growth evidently concentrated in the other six years out of the ten when there wasn’t a crisis.

We can subdivide the eleven crises mentioned above according to the depth of their corresponding recessions. After the largest one in 1929, when production was halved, we arrive at a contraction of a third in the crises between the wars (1920 and 1938), and in the one immediately after the 2nd World War in 1945. The next seven crises after the 2nd World War were however much less virulent.

As regards the duration of the period of recovery to the next production peak, the longest crises were those in 1929, seven years, and in 1945, five to six years. All others were shorter, no longer than two years. There was a return to longer recovery periods after two of the most recent crises, those of 1980 and 2001, prolonged to almost four years.

We predicted that even the youngest capitalisms would be vulnerable to the general crisis and this has been confirmed. Crises of over-production are endemic to capitalism and as a rule the younger capitalisms are hit harder by the crises than the older ones.

From 1975 onwards the mature capitalisms – the old imperialisms where capitalism is merely ‘a walking corpse’ – experienced numerous crises of overproduction in quick succession. Average cycles were of five to ten years duration but without the pressure building up to the level of a ‘complete blow out’.

There are many factors that have allowed capitalism’s survival. The main one is the Second World War, which, due to its massive destruction of dead and living capital, permitted a long, almost crisis-free, cycle of expansion. The second factor, from 1975 onwards, has been the generalised attack on the working class which has increased the rate of profit. The third factor is imperialism and the revenue it has derived from exploiting its monopolist position, allowing additional super-profits. The fourth is the development of capitalism in Asia, which will not however be enough on its own to permit the survival of the big imperialist centres.

All of these factors cannot prevent a major crisis of 1929-like proportions breaking out. They may have bought themselves a bit of time, but only by reinforcing and concentrating the very same forces that are driving forwards towards a general devaluation of capital. The present crisis announces this situation.

The speaker then went on to present a graph comparing the international trade figures of the seven major capitalisms. Here the recession has hit everybody. Since October 2008 global trade has steadily decreased reaching a maximum rate of contraction of around -30% between April and July in 2009. After that there was a further reduction in international trade but at a slower rate, to around -12% in October 2009, a value which however was about 10% lower than in the same month of the year before.

Some numerical tables, whose purpose was to compare the volume of exports of the various capitalisms, were now shown. Germany appeared in first place, in terms of the value of its global exports, followed by China, which has ousted the USA from second place. They were followed by Japan, France, Holland, Great Britain and Italy.