The international capitalist recession seems to have ended. All the imperialist countries, except Italy, foresee accelerated growth in 1973. The three key countries of the international capitalist economy - the United States, West Germany, and Japan —are experiencing a clearly ascending phase in industrial production. The time has therefore come to sketch out a preliminary balance sheet of the 1969- 72 recession, to examine its specific features, and to deduce some general tendencies in the comprehensive development of capitalist economy.
The Most Serious Recession of the Postwar Period
The 1969-72 recession was undoubtedly the most serious experienced by the postwar capitalist economy. The volume of trading on the Wall Street stock exchange fell by 40 percent in anticipation of the recession. This time, in contrast to the preceding recessions that have occurred since 1945, nearly all the imperialist countries, except France, were drawn in. Also unlike earlier recessions, recovery came very slowly, especially in the United States and Great Britain, and was accompanied by a persistent and even accelerated inflation.
Certainly, the recessions in the United States, West Germany, and Japan were not completely simultaneous. There was a space of about six months between the bottoming out in the United States and the beginning of the downturn in Germany. International capitalism had great need of these six months; without them, the situation would have been much more serious than it finally was.
Moreover, if the recession was serious in the United States, it was less so in West Germany. The decline in employment suffered by the West German economy during the 1971-72 recession was only about half what it had been during the 1966-67 recession. Nevertheless, the slowness of recovery in the United States was such 88
that most capitalist countries felt the effects of the West German recession before the effects of the American recession had faded away. Hence the persistence of economic difficulties and of unemployment in Great Britain, Italy, the Netherlands, Sweden, Belgium, and Australia, to mention only a few of the countries affected by the repercussions. It is only now, when the United States is reaching full production and when recovery is under way in West Germany that the situation is beginning to ease up.
The deepest causes of the recession have been described many times. The central motive forces of the postwar capitalist boom drew to an end. Productive capacity expanded beyond the consumptive capacity created by "effective demand" (that is, the buying power determined by the relations of class antagonisms under capitalism). Conditions of excess capacity have appeared in a series of key sectors: coal, steel, shipbuilding, natural and synthetic textiles, electrical home appliances, and no doubt also in the automobile and electronics industries. These branches now experience only shorter and shorter periods of expansion, interrupted by increasingly persistent periods of stagnation and decline.
The long period of expansion bolstered the militancy and organizational strength of the working class. The workers are not prepared to pay the cost of rising inflation, the only way for the capitalist system to avoid a very serious crisis. Hence the exacerbation of on-the-job conflicts, the proliferation of strikes, of higher and higher wage demands to keep pace with the rapid rise of prices. Because the employers have not succeeded in definitively breaking the workers' militancy, the rate of profit has been eroded by two factors: by the decrease in the rate at which capacity is utilized and by the stagnation of the rate of exploitation of the working class.
A long-term decline in the rate of profit coinciding with an unfavorable the symbol of English capitalism; Montedison, the Italian chemical giant-all went down the drain. A few other "showpieces" of international capitalism, such as the U.S. aircraft companies Lockheed and Boeing, the "greats" of the Italian electrical appliance industry, and most of the German metal trusts, came within a hair's breadth of crashing. Only the big banks continued to steadily increase their profits.
Trade War and Export of Inflation
As is always the case during an international capitalist recession, interimperialist contradictions were exacerbated during the 1969-71 period. Above all, the West European powers and Japan made serious inroads into positions held by American imperialism since the second world war, both in trade and finance. Then, beginning with Nixon's August 15, 1971, speech, American imperialism passed to the counterattack.
Did the counterattack succeed? In the monetary field, the competitors of the United States were unable to get together and organize a collective response. On this level American imperialism therefore scored some points. Nixon exported inflation. It declined in the United States and increased in the rest of the imperialist world.
Paradoxically, in the area of trade, success was elusive. The deficit in the American balance of trade is greater than ever. American imports continue to increase faster than exports. The short-term chances for a leveling off of the American balance of payments deficit are hardly propitious.
Under these circumstances the resistance of the USA's partner-competitors to accepting "devalued dollars" as payment for this American balance of payments deficit will increase. The dollar is less and less suitable for the role of world currency. "Confidence" in it has been badly shaken.
American imperialism will continue its trade-war offensive, which will take on a pronounced protectionist character in several areas. Nevertheless, inflation continues at full steam, and with it the attempts to gain some advantage by adjustments in the rate of exchange (that is, by devaluations).
This growing disorder in the international monetary system threatens to halt extension of credit and of international trade. The imperialist powers will have to react. Freedom to manipulate national currencies will become limited. Already, Euroincreasingly pean currencies have been "floated collectively." The tendency is thus toward a system under which the independence of national governmental decisions on questions of monetary and credit policy will be subject to greater and greater constraints, which will accentuate the tendency to return to an industrial cycle marked by simultaneity in all countries.
Recession, Inflation, Class Struggle
For the first time, the 1969-72 recession was accompanied by accelerated inflation on an international scale. More than ever, inflation remains the only way to halt the crisis at a certain level (that is the big difference between "classical" crises and today's recessions). But a stronger and stronger dose of inflation will be needed to do the job. The Republican Nixon, theoretical champion of the "balanced budget," could end the recession only by deficit spending at a record level in American history. In Great Britain industrial production picked up only after an increment on the order of 25 percent in one year in the amount of currency in circulation.
Why, under these conditions, has inflation been able to slow down in the United States? Basically because the American working class-under the pressure of the betrayal of the tradeunion bureaucrats, who "went along" with the wage freeze imposed by Nixon — has allowed its standard of living to be reduced and has suffered mas-
In capitalist sive unemployment.
Europe the workers' resistance to any form of incomes policy has been stronger and until now has prevented the bourgeoisie from making the workers foot the bill by raising prices.
But this situation will hardly last forever. With accelerated expansion, unemployment will no doubt finally decline in the United States. Then the workers will be able to take revenge for the "lean years" imposed on them by Nixon. As soon as unemployment seriously drops, outbreaks of strikes can be expected.
Thus, in the long term, Nixon will have succeeded in exporting inflation and unemployment only to import an upsurge of workers' struggles. Small comfort for U.S. imperialism!
In the rest of the imperialist world, inflation will remain at a high level, and with it the discontent and the related militancy of the workers. These will combine with the structural causes of class conflict revealed by May 1968- reaction against speedup, against intensification of exploitation, against the brutalization of assemblyline production, against management authority, and against the relations of capitalist production in general. All these phenomena have been accentuated since the recession. They will scarcely disappear with the end of the recession.
The prospects for the international capitalist economy are thus hardly optimistic. While it may be able to rely on some new openings in the Eastern countries, while the agricultural crisis has been somewhat ameliorated by the shortage of beef in West Europe and by the massive grain shipments to the Soviet Union and China, while the prospect of an "oil shortage" will stimulate investment in the energy industry, the currently beginning boom will not last very long. The pre-1967 situation will not reappear. Monetary, financial, and industrial difficulties will combine with the growing social tensions to make the 1970s as a whole a decade of slowdown of economic expansion and of multiplication of explosions of the class struggle.