Economy

The US and British capitalists are gloating about how their economies are currently growing at 3-4% a year while Europe's big capitalist economies and Japan are hardly managing 2%. However, there is another side to this. Two recent reports show that the US and Britain also hold the record for the highest levels of poverty and social inequality. Capitalism only works for some.

In the USA, in Britain, even in Japan all the talk is now of economic recovery and boom. But scratch just a little below the surface and a completely different picture emerges - one of longer hours, later retirement, huge personal debt and a growing polarisation between rich and poor. The main European powers have all this and hardly any economic growth to talk of. Michael Roberts looks at the real state of the economy in the advanced capitalist world.

The German economy is the largest in Europe. Since the recession of 2001, the German government has been claiming an economic upswing is imminent. But are these predictions realistic? Christoph Mürdter analyses the real direction of the German economy.

Has British capitalism has finally overcome what used to be called the British disease: slower growth, higher inflation, continual currency crises and a falling behind in living standards compared with the US, Europe and Japan? Growth figures actually disguise a far more diseased system that the media would like us to see.

If you think things in the USA are bad now, wait till after the US elections. Once the result is in the bag (either for Bush or whoever stands for the Democrats) economic policy will switch from the present spending spree (mainly on arms) to cuts in welfare. The present level of indebtedness cannot be maintained for ever. Sooner or later the capitalists will make the workers pay.

The big financial institutions and investors have become hugely optimistic about the revival of economic growth and employment. They reckon that the weapons of mass growth (WMG) will be found. Everything is looking better, according to the latest intelligence sources, Messrs Bush, Blair, Schroeder and Greenspan tell us.  The reality is that US growth in 2003 was artificially created and will prove to be ephemeral in 2004.

Further to the publication of the Introduction to debate between AG and MB on The tendency of the rate of profit to fall and post-war capitalism and A reply to AG by Mick Brooks, we are publishing this piece by Mick Brooks which puts that debate into the context of the decline of British capitalism after the Second World War. It highlights the crisis of bourgeois economic theory and also the limitations in the method of AG.

As you read this, the papers are probably full of the news that the US economy is growing at the fantastic rate of over 6% a year. No wonder the stock markets of the world have been booming. However, Michael Roberts points out that in reality the economic growth that the US is now enjoying is an illusion. It is based on unhealthy premises of state spending and a massive credit boom, neither of which can last for much longer.

Last September 14, world trade talks broke down in Cancun, Mexico. Everybody blamed everyone else. Before the conference, British delegate Patricia Hewitt had predicted, "if we fail, it will be a disaster for world economy." And this is true, for the collapse could stun the already fragile prospects of economy recovery.

Instead of further integrating the world's economies, the World Trade Organisation (WTO) summit in Cancun actually succeeded in creating more polarisation and deeper divisions between its members. The viability of the WTO, which since Seattle (December 1999) has gone from failure to failure, is more than ever in doubt. Luis Enrique Barrios, from the Mexican Marxist paper Militante analyses the breakdown of talks and future prospects.

The world’s stock markets are hitting their highs for the year. Optimism rules in this sunniest and hottest of summers. The bulls (investors who reckon stock prices are going to rise) are in the ascendancy and the bears (those who forecast falling share prices) are in their caves. But is this optimism justified? Profits are up in the oil and the banking sectors. In industry as a whole profits are not up, as companies are finding it difficult to up prices in the world market.

Marxists are often accused of having a class bias, of having an irrational prejudice against the capitalist class. We must admit, that yes we don't particularly appreciate the fact that while millions go hungry in the underdeveloped countries a handful of super-rich billionaires actually decide on the fate of the world.

The debate over whether Britain should join the Euro is heating up. On both sides of the debate we find a capitalist logic being applied. One side stands for so-called British "sovereignty", the other praises the merits of the wider market. Neither side is defending the real interests of the workers. As Mick Brooks points out, "The answer is surely for us to control the movement of capital by taking over the means of production, not relying on the goodwill of our enemy, the capitalist class."

In the first three months of the year, the US economy grew at a 1.6% annual rate. All the signs are that the economic recession of 2001, from which 2002 saw a recovery, is now returning in 2003. The US economy is heading for what economists like to call a 'double-dip'.

Are we witnessing the beginning of the end of the American empire? The 20th century was the century of America’s rise to supremacy. Now, in spite of its present might, the US economy is showing all the signs of a future demise. It is no accident that just as the US economy begins to show its weakness, its emperors try to flex their muscles militarily. But the Empire looks as though it might be overstretching itself just when it seems that it is all-powerful.

This time last year, all the talk among the capitalist economic experts was about the V-shaped economic recovery that world capitalism would make in 2002. All stock market experts expected a significant rally in share prices. The main risk was a return to higher inflation. Everybody expected that the main central banks would have to raise interest rates in order to curb price rises. This column, however, argued that the underlying economic forces increasingly suggested that the recession of 2001 was developing into the depression of 2002. .The whole world is now levered on what happens in the US, even more than it was in the 1930s. .The danger in 2002 is...

The capitalist forecasters have got renewed optimism about the global economy and the value of their investments on the stock market. After huge falls in stock prices during September, the last two weeks have seen a significant rally in world financial market prices - up 15%. But world's stock markets are still down 15-20% on the year, which if maintained, would make it the third year in a row that they have fallen. That would not have happened since the Great Depression of the 1930s. Michael Roberts looks at the prospects for the world economy as it slides further into decline.

On the one hand, Blair prepares to send troops into Iraq behind the coattails of the Americans to overthrow Saddam. On the other hand, he and 'two Jags' Prescott prepare to send in troops to break the picket lines of the firefighters. If you adopt the policies of capitalism abroad, inevitably you will adopt them in domestic policy.

The mood of optimism about the world economy that arose during the summer months has now dissipated. The talk now is that there is a real risk of the US slipping back into an economic recession, taking the rest of the world with it. World stock markets are still pricing in the scenario of a quick victory in Iraq. But even if this were to happen, it might briefly improve "confidence" but it won't get businesses out of debt and it won't create jobs. Bush's Iraqi adventure is no way out for world capitalism at best, and it could be the tipping point for a world economic depression at worst.