The long period of capitalist boom in the 1950s and 1960s has been replaced by two decades of recession. Within that long wave of recession there have been mini-booms like the one in the 1980s, and deep depressive crises like the one today. Here we publish an edited version of the speech on this topic made by Fourth International leader ERNEST MANDEL at the Socialist Outlook rally on 23 October. We are living in a generalised recession of world capitalism - the third since the early 1970s. It promises to be the longest depression in the hisory of capitalism Vhen you have a depression if doesn't mean that the normal business cycle of 7 to 10 years has stopped.
You still have recoveries. so it is not excluded there will be a recovery from this present deep recession, without any prospect of getting out of the long depressive wave.
There are two basic characteristics of such cycles within a long depressive wave which have today come to the forefront. You have to see these as basic long term trends of the capitalist economy. The most important one is the steady rise of unemployment.
Unemployment in the imperialist countries ( was around 10 million in the early 1970s and is around 50 million today. A very high figure which continues to rise. It may increase by between 15 and 25 per cent in two to three years. Figures in the Third World' are indescribable.
According to some estimates 500 million are unemployed. This depends on your definition of under conditions of very grave underdevelopment.
The second characteristic is the gradua dising aton or negemoneli perialist powers (like Britain or Emest Mandel 21 Nov 1992 No. 32 America). Today there is no one hegemonic imperialist power. There is inter-imperialist competition, internecine war or semi-war, and there are wade wars ana currency wars Disintegration Something very significant has happened. Every bourgeois state, including he most powerful states - the US Japan and Germany - is losing control over basic economic processes. There is a real disintegration of state control. There is increasing semi-chaos in the world capitalist economy.
Every working day the total amount of money capital which is traded on the currency markets is three trillion dollars. That's a figure with 12 noughts, a figure that doesn't mean anything any more, it goes beyond imagination.
It is more than f he total annual volume of world trade. It is many times the total currency reserves of all the world's central banks.
Money capital is totally out of the control of any state or semi-state institution. So much so that the Bank of International Settlements in Basle, Switzerland say that nobody knows the exact amount of this volatile capital. It could be up to five hundred billion dollars. Nobody knows.
This capital has totally escaped the control of the state and quasi-state institutions. When we had the recent waves of currency speculation and the Money capital is totally out of the control of any state or semi-state institution. ... Nobody knows the exact amount of volatlie capital. It could be $500 billion Japanese workers under pressure as economy runs out of steam near collapse of attempts to install a European System, 'speculators' were blamed.
But look at the so called speculators. They were not small fry. They were the big banks. They weren't acting out of principled opposition to Maastricht or a strong European common market. They did it to make a fast buck and they made a lot of money.
What is behind this is a fundamental re privatisation of money. This is unheard of in the history of capitalism. You have to go back to the 17th Century to find something similar. Governments have no more power over money; even central banks and the semi-continental quasistate institutions are losing power Monetary power is back in the hands of private institutions - banks and multinational corporations.
This happened because the basis of prosperity" was essentially debt! The international capitalist economy floated to prosperity on a sea of debt. It was a debt economy of hyperliquidity. With this tremendous increase in the amount of money, liquid-capital or quasi-liquid capital there is an internal logic which leads to depression -depression similar if not worse than that of the 1930s.
Crisis of bourgeois
leadership In this vice of uncontrollable hyper-liquidity and the threat of grave depres sion there is a growing paralysis of decision making by bourgeois leader. hips. They are too paralysed to act Ve speak about a 'crisis of proletariar leadership', but the crisis of bourgeois leadership is of at least the same historical impact. The G7 meetings of the big: gest imperialist powers have achieved nothing since the beginning of the present depression.
Meeting after meeting has not reached a serious collective decision, Inev have no capacity to make collective decisions! promises between imperialist powers and times prosperity. You can give and take -everybody gets something. Cartels like OPEC can function in conditions of prosperity. The EC could be slowly built in conditions of prosperity.
But when recession and depression set in, there can be no more 'give and take'. It's 'everybody for themselves', bickering, and the increasing incapacity 400088030 Many years ago the Fourth International said that the future of the European Community was undecided. It might go forward to more consolidated supra-national institutions; or it might go backward to a type of free trade zone. We said that the next big recession would decide the outcome.
We are now at the stage where everything is put into question. For usall these economic phenomena are combined or co-related to what happens in the real economy. ( Over-production We have the very serious danger of a blow up of the Japanese banking system. The biggest bank in the US, Citibank, is trouble, not essentially be cause of all these phenomena, but be cause there is a real crisis of overproduction and in the realisation of surplus value - the decline of the rate of profit.
All these are essentially identical phenomena. They are just different expressions of the same reality.
The most striking example is Japan. The solidity of Japan's economy is greatly exaggerated for obvious ideological What's happening to Japan is very simple. They are selling less colour televisions! They are selling fewer cars and electronic components.
They have no new products which can replace these on the same scale. They can till sell a lot of things but not on the ame scale. The world is very simple ir the final analysis.
I will now add something much more precise about use value. In the post war oom probably 40 per cent or more of hat expansion was supported by just two sectors- housing (and the consumer durables like washing machines that go with housing) and cars. That's all. They were the two mainstays.
How many automobiles were sold during 20-25 years on a world scale? A tremendous figure! About 550 to 700 million. ( How many houses were built during that period? The same - 400-500 million. What's going to be sold in the next years on that scale? Personal computers? No! A normal worker doesn't need a PC. They will sell some, but not
Austerity in the third world is leading to fresh military crackdown in the vast amount to spur a new boom.
There have probably never been so many new products on offer as in the last ten years. This is classical. In a period of depression, technical research and initial innovation goes on favourably - but people have to buy the goddamn things! electrical knives or PCs or other goodies being offered? Nobody! don't have that type of demand today.
Under these conditions it is extremely unlikely that the real economy, which centres on what is being produced and what is being sold, will take off.
Lenin and Trotsky said many times: there are no situations without way out for capitansty it the working class is prepared to pay the price. Nobody can say that in 10 to 25 years that this or that is not possible.
Tough
But, in the foresceable future there is no chance that capitalism can extract itself from this really tough crisis, unless there is a radical change in the world.
One thing would make a decisive change: the total disintegration of Russia and China and their total re-integration into the capitalist world market. That is to say - the biggest single defeat of the working class since Hitler. In that case a lot of things could be possible for capitalism.
However, there is not going to be total integration of Russia and China in the foreseeable future. There will be a continuing crisis in the world capitalist economy with a growing risk of the collapse of the international banking system.
I don't say that a new 1931-style col600 million Bank of England boss Leigh Pemberton lapse is certain; I believe that it is possible, but not likely.
The American government cannot akandon the Cnaco Manhattan Kink, be cause the American government is the But what is the price they must pay? i the price is salopins milanon, tie might accept it, but it won't let them off the hook. They just fall from one ill to to Japan is very simple. They are selling less colour televisions! They are selling fewer components"
Where we stand So that is the general framework of what is happening in the international mpitalist economy. We now have to look at what that means for our classand and where we stand.
The class relationship of forces has deteriorated at the expense of the workers ever since wis depression started. sive started in the mid-1970s. bined with an employers back. whose leaders were unwill ag to fight. We may cautiou:
say that, by-and-large, th low point is now behind us.
the fightback "What's happening started!
A fight-back doesn't mean that revolution is just around the corner. It means essentially defensive struggles, ones which are not doomed to defeat. They can be success.
Turning point
cars and electronic This turning point has occurred in a series of countries Probably the biggest fight back has been in Italy - where there has been a big wave of street demonstrations and strikes throughout country.
Impressive modest scale, because it is a much poorer and weaker country, is the fight back in Greece. especially the steel workers, have started to fight back.
There is one basic difOur class enemy have been on the offensive. Our class has been on the defensive especially as a result of the capitulation of the leaders of the traditional working class organisations.
Seduced There has been retreat and very the century. limited fightback. But there is also an objective element of the situation which we must remember if we are not to be seduced by semi-conspiracy theories.
There was genuine disarray in the working class and amongst militant trade unionists on how to respond to a new situation when the austerity offenBy and large working class militants Parties. know how to fight inflation, but suddenly high unemployment erupted. Comand government offensive, they did not have immediate answers to the way to fight They had to look at the new situation nd learn how to organise a fight-bac 'goodbye dependently of the bureaucratise traditional working class organisations, has but the on a more Spanish workers, "Today there are around 15 countries in the world where the Trotskyists are numerically larger than the Communist Parties" ference from the 1930s - the labour movement. Nowhere in the world, certainly not in Europe, has the working class suffered any defeat comparable to the 1930s. There has been no crushing of the labour movement like that imposed by Hitler or Franco - anywhere. The working class has by and large kept its potential and therefore it can still go over to the counter-offensive.
This is also true for eastern Europe and the ex-Soviet Union. The working class has suttered senous defeats there, but it has not been crushed. And I would add, controversially - not all lett forces accept this - the weakening of the working class • movement's organisations is not univerIt is very strong in certain countries, limited in others, but it is non-existent in others. The working class movements in Brazil, South Africa and South Korea have not been weakened - they stronger than ever. I could add other countries to the list. Even in where the situation is unclear like EL Salvador - things are not finished.
If you look at history labour movement, the left, especially the socialists and communists are much weaker than they 1918 and 1927/8 or at the end of world war two. But are they weaker than they were in Midnight That'sdubious to say the least. Certainly they are stronger than they were between 1938 and 1944, which period of the big defeats: the midnight of Stalinism and Social Democracy have caused tremendous havoc within the international working class. They have been the cause of tremendous defeats.
This big obstacle can slowly be overcome by genuine honest socialist forces.
Ne have today around 15 countries in the world where the trotskyists are numerically larger than the Communist That is something new. The number of these countries is slowly increasing. That something. It gives us a modest new chance - a chance to move closer to the day when the mass of women, men, toilers throughout the world take their fate into their own hands and too empyre goodbye to that road ye ministers'. are the in charge our own destiny now! More reduncancy notices as British industry closes down No. 32 21 Nov, 1992
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