THE DEPRESSION IS SPREADING
It is now almost a year since the "recession" began in the United States. By its duration and extent it has given the lie to all optimistic prognoses, and though it has not taken on the forms of a genuine classic eco• nomic crisis, it is already plainly a question of a depression rather of than a simple "recession" like that of
1948-1949 or 1953-1954.
In the first half of the current year all economic indices in the United States marked an almost continuous decline. Automobile production dropped 41 % compared to the previous year; steel, 21 %; oil, 13 % ; freight car loadings, 17%; new industrial orders, more than 10%. It is further estimated that expenditures for equipment for this year will be $ 6,300 million less than 1957, that is 17% (instead of 13% estimated at the beginning of the year).
Industrial expenditures, properly so-called, for the third semester of this year may even be 29% less than in the corresponding period of 1957. The development of unemployment is no less indicative of the extent of the economic slump and its prospects. Despite seasonal diminutions occurring in April and May, it remains at about 5 million fully unemployed, without counting the number of part-time unemployed, and the reduction in working hours per week. But it is highly characteristic that the falling-off of the number of workers in industry itself is steady and was not afAccording to the most "optimistic" official estimates, fected by the seasonal conjuncture. unemployment next winter will remain between 5 and 5½ million. According to "less optimistic" estimates, it vill, omithe contrade, exat in any case full employment "Optimists" 'pessimists" cannot again be foreseen before the middle of next year, or even the beginning of 1960. The only encouraging factors in this rather sombre picture of the American economy were the slight increase in industrial production in May (of one point), and more particularly, for a few weeks, that of steel. The relative steadiness of the stock market, still speculating on "an upturn soon," has been so far another encouraging sign. The slight recovery in the steel industry (which, dentally, is beginning to sag again) is explained, ever, by the production of new models of automobiles -despite the continuing stagnation in sales - and by forward buying before the price of steel goes up again as a consequence of wage increases (occurring, according to the terms of the collective contract, in July). Meanwhile the signs of a "recession" elsewhere, cluding in the capitalist economy of western Europe, are multiplying. According to two reports published in June by the Secretariat of the United Nations (one by
FOURTH INTERNATIONAL the Economic Commission for Europe, at Geneva; the other by the United Nations, at New York), the indus- on t trial production of European capitalist countries will this year fall off, or at best stagnate. The reports establish clearly that the economic depression which is spreading through the capitalist world, is of an overproduction nature. The main difficulty, these reports state, arises from the gap between the steadily increasing productive capacity of industry and the inadequate growth of demand. This phenomenon, already characteristic of the American "recession," has also appeared in Germany and in Great Britain, where most industries admit to having a productive capacity only partly used and in a declining France still forms an exception, explained however by the time-gap between the lessening of demand for goods already visible in that country, and however, the latter will inevitably feel gode to of the still increasing demand for capital goods. the falling-off of demand already affecting consumers The reports quoted foresee that the dollar deficit in world trade will soon grow worse, bringing about additional measures of restriction of imports from the United Hence, toward the end of the year, we shall enter a stage where the aggravated depression in the United States threatens to be combined with that beginning in Europe, and this in conditions of world trade, becoming more difficult than ever for lack of "liquid". Hence, far from heading toward a revival in the United sete t the end of pros year, spected see being and aggravated depression in the capitalist economy as