The Organisation for Economic Cooperation and Development (OECD), the body representing the world's richest 30 countries, has predicted that this year economic growth would be as low as 1% and would be only 1.2% next year. At the same time, capitalist economists forecast that global economic growth this year and next would be the worst for 30 years. The great economic recession of the early 21st century is under way.
The ripple effect of the terrorist attacks has spread far and wide. It was clear from the beginning that the airline and insurance industries, as well as the stock market in general (except for the armaments industry!) would suffer. But there have been other consequences that no one could have predicted.
The World Trade Organisation has recently held its summit. Their aim was to skulk in Qatar in the Gulf of Arabia, as far as they could get from the 'teamsters to turtles' coalition against all that is wrong about capitalism. An important part of their agenda has been the General Agreement on Trade in Services - GATS, due to come into by the end of 2002. But what is GATS and why do we need to fight it?
British capitalism is ill equipped to escape the huge downturn in world capitalist economic activity. The world is not going to recover quickly from the economic recession of 2001. Gordon Brown's proclamation of the end of "boom and bust" will be exposed for what it is.
Michael Roberts, our economics correspondent looks at the prospects for the world economy in the year 2002. Barely a year ago, the world's leading economic and financial organisations and most economists predicted that the U.S. economy would grow by 3.5% in 2001 and by a similar rate in 2002. Considering that new data show an economy that is rapidly deteriorating right across the board, a final outcome of less than zero growth until year-end 2001 presently seems the best bet. The question now is not whether the world is in recession but how long it will last and how deep it will be. And yet optimism reigns in the stock markets as we start the New Year. This is the optimism of fools.
The overriding economic factor for the first half of this decade will be deflation i.e. an economy where prices are falling. Deflation is going to affect every area of the world capitalist economy, particularly profitable investments.
The ignominious collapse of Houston, Texas-based Enron is a powerful reminder of how "business as usual" is conducted in the epoch of capitalist decay and imperialism. This formidable downfall has had far-reaching effects, and there are many lessons that the working class can learn from it. By John Peterson, editor, Socialist Appeal(USA).
The collapse of Enron is the biggest crash in corporate history. In a matter of months the total share "value" of energy firm Enron, the seventh biggest company in America, went from $80 billion to next to nothing. Mick Brooks takes a look at Enron's so-called energy trading.
The US has just suffered the steepest decline in economic growth ever - from a breakneck pace of 4.1% annually in the years 1998-2000 to a negative 1.1% in the third quarter of 2001. But now most capitalist economists forecast the US is on course for what they characterise as a V-shaped recovery, and along with it, the end of the world recession of 2001-02. Our Economics Correspondent Michael Roberts looks at this theory.
On Wednesday March 6, President Bush imposed tariffs as high as 30% on most steel imports coming to the US from Asia and Europe. This will hit European steel makers hard, especially in Britain where there is a slump already in the steel industry. In periods of capitalist economic downturn, national interests predominate over international. Bush is supposedly a supporter of the "free market". But the Wall Street Journal called the tariff "perhaps the most dramatically protectionist step of any president in decades."