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The World Economic Crisis

As the unemployment figures continue to increase implacably upwards, it is
sobering to reflect that the underlying structural crisis of the world capitalist
system is now in its tenth year. The recent article by Michel Aglietta (World
Capitalism in the Eighties) in NLR 136 (NovemberDecember 1982) is undoubtedly a major contribution to a Marxist understanding of why chronic stagnation
has dominated the world economy since the end of 1973. Especially stimulating is
Agliettas emphasis on the dynamics of the international division of labour
between the main capitalist economies, and the international monetary relationships and contradictions to which this gives rise. Without observing the concrete
motion of the relations among nations each having a specific insertion in the
international economy, the global structure of the world economic crisis is not
comprehensible. Thus Aglietta is correct to adopt a comparative and historical
mode of analysis that rejects abstractions pitched at the level of capital logic or
the neo-classist fantasy of a homogeneous international economic order.
In my opinion, however, Aglietta bends the stick too far: his very proper
emphasis on the international division of labour slips into an analytic position that
makes the trade relations among heterogeneous nations the central process of
crisis generation. It is especially curious that an author whose principal work, A
Theory of Capitalist Regulation (NLB 1976), devoted such priority to the class
struggle at the point of production in the etiology of crisis, should now have so
little to say about the roles of class relations and capital accumulation. Why are the
central problematics of the respective analyses kept so distinct?
The separation of themes reminds me of the implicit procedure of Marxs
Critique of Political Economy. His master plan, formulated at the end of the
1850s, envisioned the treatment of six major items: Capital, Landed Property,
Wage Labour, State, Foreign Trade, and the World Market. As evident in the
final form of the finished sections of Capital, the basic principles of the first three
themes are initially treatable in abstraction from the latter three. Agliettas recent
essay raises the question of whether the latter three, especially foreign trade and
the world market, can be analysed by themselves. I must register a methodological objection and say no. Even in the most concrete study of phenomena arising
from the world economic crisis, it is necessary to refer to the underlying dynamics
of accumulation and class struggle which are refracted through the surface of
international commercial and financial relations. Otherwise, observations can not
help being more or less fragmented, ad hoc and superficial. Likewise, the political
implications of such observations will probably be obscured and misleading.
Frankly, Agliettas essay is not immune from such tendencies.
For example, he symptomatically fails to explain the oil shock waves as an intrinsic
factor in the development of the current crisis. Instead they are regarded more or
less as external events, obviously because Aglietta believes that the division of
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labour between the most advanced countries is the privileged locus of crisis
formation. Similarly, the role of labour markets in the accumulation processa
focal point, of course, of Marxs own analysis of the general law of
accumulationtends to be treated as an extraneous factor. In my view, this
approach is incorrect. The very possibility of capitalisms long wave of expansion
from the Korean War to the end of the war in Indochina rested upon the
provision of cheap primary products from the Third World and upon the relative
elasticity of the supply of labour-power. The virtuous circle of reinforcing
growth-patterns among the metropolises in the era of American hegemony
assumed these two factors as its preconditions.
Conversely, the destruction of the virtuous pattern of accumulation and its
transformation into the current tendency toward destabilizing vicious circles
cannot be explained as simply the consequence of the breakdown of the world
trade equilibrium previously maintained under the Bretton Woods system.
Although the collapse of Bretton Woods, and the emergence of a volatile
monetary float, certainly amplified the inflationary surge of the late-seventies
boom (as well as the deflationary plunge of the current depression), the
underlying systemic contradictioni.e. the overaccumulation of capital in relation to
the supply elasticity of both labour-power and primary productswould have sooner or
later expressed itself as a profits squeeze due to the rise of wages and the price of
raw materials. Far from being an external event, the first oil shock was the
dramatic expression of the larger process whereby the increasing relative
bargaining power of metropolitan trade unions and of certain strategic countries
of the South was bringing to an explosive culmination a global overaccumulation
of capital.
Certainly the restructuring of the world economy has been made far more
protracted and difficult by inflation, unstable economic policies and the threat of
financial collapse, but we should not underestimate the fundamental importance
of overaccumulation as reflected in the current levels of idle capacity throughout
the industrial world. Saturated market demand for consumer durables interacted
with the price disequilibria unleashed by the rising cost of energy and tightness of
labour markets to bring to a grinding halt the inflationary bubble of the late
seventies. Significantly, the signal event was again an oil price shock wave:
demonstrating that, even with energy-conserving programmes in place, the
maintenance of a modal postwar level of consumption in the North remains far
too expensively and wastefully dependent upon energy-intensive technology.
Although the current oil glut may give the appearance of a capitalist way out of
this dilemma, it seems to me that the present situation is but a transitionalbeit
fraught with massive dangers for the international financial systemtowards
new energy and resource crises of the future.
Agliettas treatment of the role of Japan in the international economic crisis also
seems to me inadequate and even one-sided. Because of the primacy that he
accords to the advanced capitalist countries trade relations, I think he exaggerates
the responsibility of Japan in the destabilization of world trade equilibrium and
the destruction of the Bretton Woods system. In the first place, the growth of the
competitive power of the EEC countries, above all Germany, played no less
important a role in the undermining of an order historically linked to American
hegemony. Secondly, it is important to remember the growth rate of Japans
share of world trade was higher in the prosperous period through the mid-sixties
than in the recessionary period after 1973. Indeed the Japanese share in the import
trade of North America or the EEC has remained more or less stable since 1973,
while Japans own share in the import trade from the developing and
oil-producing countries in the 1970s grew to more than twice the proportion of
her share in total world export trade. Thus the Japanese market has been far from
impermeable and undoubtedly contributed massively to the stabilization of the
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trade balances of key new developing countries and oil statesimportant markets
for US and European exports.
This is not to say that I discount any destabilizing role for Japan at all in the march
towards the current depression. However, I think a more accurate and useful
characterization is that the pattern of Japanese economic growth, with its
dependence on manufactured exports to advanced countries to defray its
enormous Third World import bill, as well as its internal absorption of labour
from the countryside (in contrast to the import of foreign labourers), has
highlighted and anticipated the general problem of capital overaccumulation vis
vis primary products and labour markets. Today Japan shares the malaise of other
capitalist economies, suffering from stagnant export and internal markets,
increasing unemployment, a serious fiscal crisis and a high rate of business failure.
Far from an exception, Japan is an integral component of the crisis. A recognition
of this fact is especially necessary if we hope to build an international
working-class solidarity against the common affliction of capitalist depression.
Makoto Itoh

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