Stock markets in the US and Europe have bounced up during August. Indeed, after reaching a new low on July 24, they've now recovered by 20%. It seems that there is some renewed optimism that capitalism is not going to slip into recession after all, but can make a steady recovery. But beneath all the hype the cruel realities of the economic data in America, Europe and Japan remain unchanged.
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.
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 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.
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 competitive devaluation and deflation, driving the world capitalist economy further down.
Maverick Nobel prize-winning economist Stiglitz lifts the lid on his years as Chief Economist to the World Bank and what really goes on behind the scenes. Though he’s certainly no Marxist, his insights confirm the correctness of the Marxist outlook on the world economy and its ruling institutions.
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.
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'.
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."
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 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.
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.