For the capitalists, this Great Recession could be more or less over, but the level of spare capacity in industry and construction together with the level of debt still owed by businesses, government and households alike mean that this recovery may be stunted. Every major capitalist economy now finds that it has more than 30% more capacity than it needs to meet demand. That is a record high of overcapacity in industry.
The capitalist system is passing through its deepest crisis since the 1930s and the Great Depression. The apologists of capitalism – including those in the labour movement – had completely ruled out such a scenario. After all, they explained, capitalism has changed and governments are now able to over-come any deficiencies experienced by the markets. They have learned the lessons of the 1930s.
The knock-on effects of the crisis have already hit Hungary, Lithuania and Latvia. Other countries in the region are also in the firing line. Governments are going down like ninepins. There is no end in sight to the economic and political turmoil. The so called "emerging" economies have been brought to their knees.
It is the working class of the world who will
really suffer from the present crisis. Globally, the UN estimates that
unemployment will reach 220m this year. Out of a global workforce of about
3 billion, that’s "only" 7%. But this figure leaves out millions of hidden
unemployed who just cannot even begin to look for work. And as a percentage
of those working in sweat shop and factories around the globe, it is more like
20%.
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