The Course of Global Capitalism: The Course of Capital is Inevitably Chaotic and Catastrophic (Pt. 2)

(continued from the previous issue)

Industrial Production

To complete this overview, we will provide two tables showing the average annual increases in industrial production from period to period.

TABLE 1

The first table concerns the old imperialist countries and is divided into four periods: 1950-1973, 1973-2007, 2007-2018 and finally, 2018-2024. The last two columns have already been shown. Industrial production in 2024 is contrasted with 2018 and in 2007 (2008 in the case of Germany). In the first period, immediately after post-war reconstruction and when industrial production had returned to its pre-war peak, the increases were not simply sustained but accelerated in South Korea, Japan, Germany, and Spain. Spain had just finished a civil war. The increases range from +16.4% in South Korea to +8.5% in Germany. To be clear, this means that over the course of 23 years, production increased by an average of 16.4% per year. The figure for France, 6.1%, is lower, but still very respectable. Finally, the United Kingdom has a modest 2.7%, in line with its age and the lesser destruction it suffered. America, already overflowing, still recorded an annual surge of 4.3%!

It is also very clear that, for all forms of capitalism, there is a sharp slowdown from period to period, ending with negative growth in the last period of 2018-2024. The exceptions are South Korea (+1.8%) and Belgium, which beats South Korea with an average annual growth rate of 2.4%! The second table shows the periods for Eastern European countries. In the next article, a third table will list countries with young capitalism, such as Brazil, India, Mexico, Turkey, etc.

TABLE 2

This second table details the periods of 1998-2007, 2007-2018, 2018-2024. The starting year, 1998, is the year in which all these countries, which experienced a recession with the crisis of overproduction that led to the collapse of the Russian empire, returned to pre-crisis production levels. For each period, we have two columns. The first indicates the total increase between the two years and the second indicates the average annual increase for the period calculated from the total increase given in the first column.

In the 1998-2007 period, Poland saw a total increase of 78.9%, which corresponds to an average annual increase of 6.7%. For Hungary, we have 102.9% and 8.2%. For Estonia, we have an increase of 107.5% and 8.4%. For Latvia, we have 57.5% and 6.7%. For Lithuania, we have 55% and 5% For Romania 44.2% and 4.2%

Moving from one period to the next, there is a steady decline in growth rates, which even turned negative in the last period for Lithuania (-0.1%) and Romania (-1.5%). In fact, Romania has been in recession since 2019. It is interesting to see the total increase since 1998. Poland leads the way with a total increase of 253% and an average annual increase of 5%. Followed by Estonia with a total increase of 183.9% and an average annual increase of 4.1%. Hungary and Lithuania follow with total increases of 155.7% and 157.8% respectively, corresponding to an average annual increase of 3.7% for both countries. Then comes Romania with 101.8%, corresponding to an annual increase of 2.7%. Finally, Latvia saw a total increase of 94.1%, equal to an average increase of 2.8%.

For the purposes of constructing the table, the dates of the periods indicated are those of most countries. However, some countries may have different start and end dates for their periods and therefore different durations, which explains why a smaller total increase may result in a slightly higher annual increase, as in the case of Latvia compared to Romania.

To get a more accurate picture of the real industrial growth of these countries, we need to compare it with the peak reached before the great crisis of overproduction in the 1990s. Romania, for example, only managed to surpass its 1988 peak in 2017, because it saw entire sectors of industrial production, such as steel, collapse. Russia for example, has never recovered from the peak it reached in 1989. For other countries, however, there is no doubt that joining the European Community has benefited them and enabled them to experience a real industrial boom.

International Trade

Exports

We have tabulated exports in current dollars. After a decline in exports in 2019 and 2020, there has been a recovery in exports in subsequent years. In 2024, exports in current dollars increased compared to 2018 for almost all countries, with the exception of two: Japan (-4.2%) and the United Kingdom (-1.8%). The winner is China, with a total increase of 43.1%. For the others, the increase ranges from 24% in the United States to 7.8% in Germany. But in reality, these increases are mainly due to inflation.

TABLE 3

We have therefore included a second table expressed in 2019 dollars.

China remains the winner, but with a more modest increase of 13.6%. All others are in negative territory, with increases ranging from -24% in Japan to -1.6% in the United States. This result is more in line with what we saw for industrial production, which suffered a sharp decline in all these countries.

TABLE 4

It is interesting to note that the United States has become the second largest exporter of goods, replacing Germany since 2010, thanks mainly to hydrocarbons. It is surprising that Italy has overtaken France and ranked fifth, starting in 2020. Apparently, France has not recovered from Covid. Otherwise, Italy, France, Korea, and Belgium are very close in terms of the volume of their merchandise exports.

The third table shows the annual increases for the years 2018 to 2024. Without going into detail, we find the same trends in industrial production. This trend is even clearer if we express exports in constant dollars, eliminating the effect of inflation.

TABLE 5

Imports

The United States leads with $3.267 trillion, followed by China with $2.585 trillion. Further behind, in third place, is Germany with $1.421 trillion worth of imported goods. Then, with less than half that amount, come France, Japan, the United Kingdom, South Korea, Italy, and finally Belgium with $514 billion.

If we look at the annual increases, we see that they are all negative in 2023 and 2024, with the exception of the United States and China in 2024. The figures are +6.6% for the United States and +1.6% for China. All others are therefore in recession.

Trade Balances

China ranks first, with an overwhelming trade surplus of $992 billion. Germany follows, more modestly, but still with a more than respectable surplus of $260 billion. Italy, Belgium, and Korea also have trade surpluses, but at a much more modest level of around $50 billion. Next comes France with a deficit of $111 billion, the United Kingdom with $292 billion, and finally the United States with a monstrous deficit of $1.202 trillion. It is thanks to this gigantic deficit that global capitalism continues to thrive. If America turns off the import tap, everything collapses.

Conclusion

We can clearly see that things are accelerating under the pressure of the crisis of overproduction. We do not know how far the new US administration will go to force reindustrialization and rebalance the trade and payments balance, but we hope it will go as far as possible, triggering a massive trade, financial, and overproduction crisis. The situation is such that it won’t take much for the entire building to collapse.

As we know, the international proletariat will only return to the path of class struggle and communism when the situation becomes untenable. The earth must open up beneath their feet.