Economic crisis: Thirty years of the open crisis of capitalism III - the 1990s

The third part of this history of the capitalist crisis is dedicated to the decade of the 90s. This decade has still not drawn to a close, and yet the last 30 months have been especially serious at the economic level[1].

The last decade has seen the collapse of all the models of economic management that capitalism has presented as a panacea and solution to its crises: 1989 saw the disintegration of the Stalinist model, which the bourgeoisie presented as “communism”, the better sell the lie of the “triumph of capitalism”. Since then, the much praised German, Japanese, Swedish, Swiss models, and finally, the “tigers” and “dragons” have fallen one after the other, though in a more discreet way. This series of failures demonstrates that capitalism has no solution to its historical crisis and that all the years of cheating and manipulating economic laws have only made the situation worse.

 The collapse of the Eastern bloc and the world recession of 1991-93

 The fall of the countries of the old Russian[2] bloc was a genuine disaster: between 1989 and 1993 production fell regularly by between 10% to 30%. Between 1989 and 1997 Russia lost 70% of its productive industry! Whilst the rhythm of this fall has moderated since 1994, the balance-sheet remains devastating: the figures are still negative in countries such as Bulgaria, Romania or Russia, while only in Poland, Hungary and the Czech Republic are they positive.

The collapse of these economies, which cover more than a sixth of the world’s surface, has been the most serious of the 20th century in times of “peace”. To this should be added the list of victims of the 80’s: the majority of the African countries and good number of the Asiatic, Caribbean, Central American and South American countries. The foundations of capitalist reproduction at the world level suffered a new and important amputation.

However, the collapse of the countries of the old Eastern bloc was not an isolated event, it heralded a new convulsion of the world economy: after five years of stagnation and financial tensions (see our previous article), from the end of 1990 recession gripped the main industrial heart-lands:

- The United States suffered a slow-down in growth between 1989 and 1990 (2% and 0.5%), which turned negative in 1991: -0.8%,

- Great Britain experienced its worst recession since 1945, lasting until 1993,

- In Sweden the recession was the most violent of the post-war period leading to a situation of semi-stagnation (the famous “Swedish model” has disappeared from the text books),

- Although the recession was delayed in Germany and in the other countries of Western Europe, it exploded from the middle of 1992 and lasted throughout 1993-94. In 1993 German industrial production fell by 8.3% and for all the countries of the EU it fell by a total of 1%,

- Japan from 1990 fell into a state of gradually evolving recession: average growth during the period 1990-97 was a wretched 1,2% and this despite the fact that the government launched 11 recovery plans!

- Unemployment hit new records. This is made clear enough by a few figures:

           - in 1991 the 24 countries of the OECD eliminated 6 million jobs,

           - between 1991 and 1993 in the 12 countries of the European Union 8 million jobs were destroyed,

           - in 1992, German unemployment reached levels not seen since the 1930s and since then far from falling it has continued growing, to reach 4 million in 1994 and 5 million in 1997.

Although in the terms of the fall in indices of production, the recession of 1991-93 looks smoother than those of  1974-75 and 1980-82 there are a series of qualitative elements that demonstrate the contrary:

- Unlike the previous recession no sector was spared by the crisis,

- The recession hit the armaments and computer sectors, which had not been affected before, especially hard. In 1991 IBM laid off 20,000 (80,000 in 1993); NCR 18,000; 10,000 at Digital Equipment; Wang 8,000 etc. In 1993 the modernised and powerful German car industry planned 100,000 layoffs,

- This gave rise to phenomena not seen in the previous recessions. These had occurred because governments, confronted with the threat of inflation, turned off the taps of credit. Between 1991-93, on the contrary, enormous injections of credit failed to stimulate the economic machine: “Unlike the recessions of 1967, 1970, 1974-75, 1980-82, the increase in monetary volume created directly by the state (notes and coins issued by the central bank) no longer produces an increase in the volume of bank credits. The American government has put its foot down on the accelerator, the banking machine has not responded” (International Review no 70  “A recession unlike its predecessors”). Thus, between 1989 and 1992 the United States Federal Reserve lowered interest rates 22 times, from 10% to 3% (a level lower than the inflation rate which meant that money was being lent to banks practically for free) but this still did not stimulate the economy. This was what the experts call the “credit-crunch”, the “contraction of credit”.

- This caused a major outbreak of inflation. The figures for 1989-90 are:

 

USA                              6%

Great Britain             10.4%

E.E.C                          6.1%

Brazil                       1800%

Bulgaria                       70%

Poland                          50%

Hungary                       40%

USSR                          34%

 The recession of 1991-93 saw the tendency to the return of the feared combination that so scared the bourgeois governments in the 1970’s: recession and inflation, or “stagflation”. This demonstrates in a general way that the “management of the crisis” which we analysed in the first article of this series, cannot either overcome or even attenuate capitalism’s illnesses and can do no more than put them off, such that each recession is worse than its predecessor but not as bad as the one to come. Thus, that of 1991-93 manifested 3 very important qualitative features:

- Credit was increasingly incapable of relaunching production,

- The worsening threat of a combination between the stagnation of production, on the one hand, and the explosion of inflation on the other,

- The cutting-edge sectors: computers, telecommunications, armaments, which until then had been free from the crisis, were now being hit.

 A recovery without jobs

 Following 1994 and after some timid attempts in 1993, the economy of the United States, accompanied by Great Britain and Canada, began to show increased growth, though never greater than 5%. This allowed the bourgeoisie to cry victory and to proclaim economic “recovery” to the four winds with talk of “years of uninterrupted growth” etc.

This “recovery” was based on:

- The massive increase in the debt of the United States and the world economy as a whole:

           - Between 1987 and 1997 the USA’s total debt grew by $628 million every day. The foundations of this debt were: on the one hand, a drainage of the enormous mass of dollars that circulate throughout the world[3] and, on the other hand, the uncontrolled stimulation of domestic consumption which brought about such a collapse in savings that in 1996 the value of savings was negative for the first time in 53 years;

           - China and the so-called Asiatic “tigers” and “dragons” received substantial funds based on the parity between their currencies and the dollar (a great deal for the foreign investors), which fuelled their rapid but illusory growth;

           - A series of important Latin American countries (Brazil, Chile, Argentina, Venezuela, and Mexico) were the centre of enormous speculative loans paid for by high short-term interest rates.

-  A spectacular growth of labour productivity which allowed the lowering of costs and made American goods more competitive.

- An aggressive trade policy on the part of American capital whose pillars were:

           - Obliging its rivals to dismantle their tariffs and other protectionist mechanisms

           - The manipulation of the dollar, allowing its exchange rate to fall when the priority was to stimulate exports and making it rise when it was essential to attract funds

           - Taking full advantage of all the instruments that the USA has as the main imperialist power (military, diplomatic, economic) in order to improve its position on the world market.

The European countries followed the same route as the USA and from 1995 also enjoyed “growth” although at a much lower level (figures fluctuated between 1% and 3%).

The most distinct characteristic of this new “recovery” is that it is a recovery without jobs, which constituted a new development compared to previous ones. Thus:

- unemployment did not stop growing between 1993-96 in the countries of the OECD

- large companies, far from increasing jobs continued to destroy them: it is calculated that in the USA the Fortune 500 companies shed 500,000 posts between 1993-96

- For the first time since 1945 the number of civil servants fell. The American federal administration cut 118,000 jobs between 1994-96

- Unlike the previous phases of recovery the growth in business profits was not accompanied by a growth in employment, quite the contrary.

The new jobs that have been created are badly paid, and part time.

This recovery that increased unemployment is eloquent testimony to the level of gravity that the historic crisis of capitalism has reached since as we pointed out in International Review no 80 “When the capitalist economy is functioning in a healthy manner, the increase or maintenance of profits is the result of the growth in the number of workers exploited and the capacity to extract greater masses of surplus value from them. When it is suffering from a chronic illness, despite the reinforcement of exploitation and productivity, the lack of markets prevents it from maintaining its profits without reducing the number of workers to exploit, without destroying capitalism”.

As with the open recession of 1991-93, the recovery of 1994-97, due to its fragility and its violent contradictions, is a new expression of the aggravation of the capitalist crisis; but it differs from previous ones in that:

- Many fewer countries were involved

- The USA no longer played the role of world locomotive giving an impetus to its “partners”, rather this recovery was achieved at the cost of others, principally Germany and Japan

- Unemployment continued to grow; the best that can be said is that it grew more slowly

- The recovery was accompanied by continuous financial and stock market convulsions. Amongst others:

           - The collapse of the Mexican economy (1994)

           - The upheaval in the European Monetary System (1995)

           - The bankruptcy of Barings Bank (1996)

We can conclude that in the evolution of the capitalist crisis over the last 30 years each moment of recovery has been weaker than the previous one although stronger than the one to follow, whereas each phase of recession is worse than the previous one although not as bad as the following one.

 So-called “globalisation”

 During the 90s, we have seen the flowering of the ideology of “globalisation”. According to this the imposition throughout the globe of the laws of the market, budgetary rigour, labour flexibility and the unrestricted circulation of capital, will permit the “definitive” overcoming of the crisis (to be sure, along with a whole new load of crushing sacrifices on the backs of the proletariat). As with all the “models” that have proceeded it, this new alchemy is another attempt by the main capitalist states to “accompany” the crisis and to try to slow it down. There are three main elements to this:

-  A formidable increase in productivity

-  A reduction in trade barriers and restrictions on world trade

-  A spectacular development of financial transactions.

 The increase in productivity

 Throughout the 90s, the most industrialised countries have experienced a major increase in productivity. In this growth we can distinguish between on the one hand, the reduction in costs; on the other, the growth in the organic composition of capital (the proportion between constant and variable capital).

Many factors have contributed to the reduction in costs:

-  A tremendous pressure on wage costs: reduction of the nominal wage and increasing cuts in that part of wages materialised in social spending

-  A vertiginous fall in the prices of raw materials

-  The organised and systematic elimination of the unprofitable parts of the productive apparatus - as much in the private sector as in the public - through various mechanisms: closures pure and simple, privatisation of  state property, mergers, sale and transfer of shares

-  So-called “delocalisation”, in other words the transfer of low added value production to Third World countries with very low labour costs and ridiculously low prices (frequently due to dumping), allowing the central countries to lower their costs.

The overall result was a universal reduction in labour costs (a brutal increase in both absolute and relative surplus value).

Levels of annual variation of
Unit Labour Costs
(source: the OECD)

 

	1985-95	1996	1997	1998
Australia	3.8	2.8	1.7	2.8
Austria	2.4	-0.6	0.0	-0.2
Canada	3.1	3.8	2.5	0.8
France	1.5	0.9	0.8	0.4
Germany	0.0	-0.4	-1.5	-1.0
Italy	4.1	3.8	2.5	0.8
Japan	0.5	-2.9	1.9	0.5
Korea	7.0	4.3	3.8	-4.3
Spain	4.2	2.6	2.7	2.0
Sweden	4.4	4.0	0.5	1.7
Switzerland	3.5	1.3	-0.4	-0.7
Great Britain	4.6	2.5	3.4	2.8
United States	3.1	2.0	2.3	2.0

 As far as the growth in the composition of capital is concerned, this has continued throughout the period of decadence since it is indispensable to compensate the fall in the rate of profit. During the 90s, the systematic introduction of robotics, information technology, and telecommunications has given this a new impetus.

This growth in organic composition gives this or that individual capital, or even a whole nation, a certain advantage over its competitors, but what does this mean from the point of view of the whole of world capital? In the ascendant period, when the system was able to incorporate new masses of workers into its relations of exploitation, the growth in organic composition constituted an accelerating factor of capitalist expansion. In the present context of decadence and 30 years of chronic crisis, the effect of these increases in organic composition is completely different. While they are vital to each individual capital, to allow it to compensate the tendency of the rate of profit to fall, they have a different effect for capitalism as a whole in that they aggravate overproduction and reduce the very base of exploitation by lowering the amount of variable capital, ie by throwing ever-greater masses of workers onto the streets.

 The reduction in customs barriers

 Bourgeois propaganda has presented the elimination of customs barriers over the decade as a “triumph of the market”. We cannot make a detailed analysis here[4], but it is necessary to reveal the reality that is hidden behind the ideological smoke screen:

- This elimination of tariff barriers and protectionist measures has been essentially one-way: it has been carried out by the weakest countries for the benefit of the strongest and has particularly affected Brazil, Russia, India, etc. Far from reducing their customs barriers, the most industrialised countries have created new ones using the alibis of environmental protection, “human rights” etc. Contrary to its presentation by bourgeois ideology, this policy has sharpened imperialist tensions.

- Faced with the aggravation of the crisis, the most industrialised countries have imposed a policy of “co-operation” whose content is focused on:

           - Pushing the effects of the crisis and the aggravation of competition onto the weakest countries,

           - Impeding by all means a collapse of world trade that will do nothing but increase even more the crisis with especially serious consequences in the central countries.

 Globalisation of financial transactions

 A new escalation of debt took place during the 1990’s. Quantity was transformed into quality, and we can say that debt was converted into super-debt:

- During the 70’s debt could be reduced by running the risk of provoking a recession; since the mid-1980’s debt has become a permanent and growing necessity for every state during recovery as much as in periods of recession: “Debt is not a choice, an economic policy that the world’s leaders can decide to use, or not. It is a constraint, a necessity forced on them by the very functioning and contradictions of the capitalist system” (International Review no 87 “The casino economy”)

- On the one hand, states, banks and businesses need an influx of fresh credits which could only be obtained through the financial markets. This leads to a frenzied competition to attract lenders. Increasingly elaborate devices have been developed to this end: establishing a forced parity between local currencies and the dollar (this is the device used by China or the famous “tigers” and “dragons”), currencies re-valuations to attract funds, increasing interest rates etc.

- On the other hand, “profits made from production no longer find enough outlets in profitable investment to increase productive capacity. ‘Crisis management’ thus means finding other outlets for this excess floating capital, to avoid their abrupt devaluation” (idem). It is the states and the most respectable financial institutions themselves that have stimulated a frenzied speculation not only to avoid this gigantic bubble of fictitious capital bursting, but also to alleviate the cost of ever-increasing debt.

It is thus this super-debt, and the exuberant and irrational speculation which it has caused, that has led to this famous “free movement” of capital, the use of electronics and the Internet in financial transactions, the indexing of currencies in relation to the dollar, the free repatriation of profits_ The complicated financial engineering of the 80’s (see the previous articles) looks like child’s play compared to the sophisticated and labyrinthine gimmicks of the financial “global-isation” of the 90’s. Until the middle of the 80’s speculation, which has always existed under capitalism, had not gone beyond being a more or less temporary phenomenon. Since then it has turned into a deadly, but indispensable, poison which has become inseparable from the process of super-indebtedness, and which has to be integrated into the functioning of the system. The weight of speculation is enormous: according to figures from the World Bank so-called “hot money” has risen to $30 billion, of which $24 billion come from the industrialised countries.

 A provisional balance-sheet of the 1990s

 We want to offer some provisional conclusions (for the period 1990-96, before the explosion that has been called “the Asiatic Crisis”), that, however, appear significant to us.

 I - Evolution of the economic situation.

 

1. The average levels of growth have continued falling:

Levels of increase in GNP
(average for the 24 OECD countries)

 

1960-70	5.6%
1970-80	4.1%
1980-90	3.4%
1990-95	2.4%

 

2. The amputation of the directly productive industrial and agricultural sectors has become permanent and affects all sectors, the “out-dated” as much as the “cutting-edge ”.

Evolution of the % of GDP taken up by directly productive sectors
(industry and agriculture)

 

	1975	1985	1996
United States	36.2	32.7	27.8
China	74.8	73.5	68.5
India	64.2	61.1	59.2
Japan	47.9	44.2	40.3
Germany	52.2	47.6	40.8
Brazil	52.3	56.8	51.2
Canada	40.7	38.1	34.3
France	40.2	34.4	28.1
Great Britain	43.7	43.2	33.6
Italy	48.6	40.7	33.9
Belgium	39.9	33.6	32
Israel	40.1	33.1	31.3
South Korea	57.5	53.5	49.8

 3. In the struggle against the inevitable fall in the rate of profit, businesses resort to a whole series of measures which will alleviate the fall in the short-term, but will only aggravate the problem in the medium term:

- Lowering of labour costs and increasing the organic composition of capital

- Decapitalisation: the massive transfer of assets (factories, property, financial investments etc) in order to boost profits

- Concentration: business mergers have undergone a spectacular growth.

The value of mergers in billions of $
(source JP Morgan)

 

	European Union	United States
1990	260	240
1992	214	220
1994	234	325
1996	330	628
1997	558	910
1998	670	1500

Whilst the gigantic process of the concentration of capital between 1850 and 1910 reflected a development of production and was positive for the evolution of the economy, the present process expresses the opposite. It is a a defensive response, designed to compensate for the strong contraction of demand, organising the reduction of productive capacity (in 1998 the industrialised countries cut their productive capacity by 10%) and reducing the work force: prudent estimates put the total reduction of jobs due to mergers carried out in 1998 at 11%.

4. There was a new reduction in the foundations of the world market: a large part of Africa, a certain number of Asian and American countries, have participated very weakly as they have sunk into a situation of decomposition; these have become known as “black holes”: a state of chaos, the resurgence of forms of slavery, an economy based on barter and looting, etc.

5. The countries once considered as “models” have fallen into prolonged stagnation. This is the case in Germany, Switzerland, Japan and Sweden where:

- The average rate of increase of production for the period 1990-97 did not exceed 2%;

- Unemployment grew significantly: between 1990-97 it practically doubled (for example, in Switzerland average unemployment between 1970-1990 was 1%; in 1997 it had increased to 5.2%);

- From being creditors, all four countries became debtors (Swiss households are the most indebted in the world after the USA and Japan);

- Most significant is the situation of the Swiss economy, until recently considered the healthiest in the world:

Growth of Swiss GNP

1992       - 0.3%

1993       - 0.8%

1994       - 0.5%

1995       - 0.8%

1996       - 0.2%

1997       - 0.7%

 

6. The level of debt continued its unstoppable escalation turning into super-debt:

- World debt rose to a figure of  $30 trillion (one and a half years of world production);

- Germany, Japan and all the countries of Western Europe joined the ranks of the highly indebted (in the previous decade it had been much more moderate):

 % of debt to GNP (source: World Bank)

 

	1975	1985	1996
United States		48.9	64.2
Japan	45.6	67	87.4
Germany	24.8	42.5	60.7
Canada	43.7	64.1	100.5
France	20.5	31	56.2
Great Britain	62.7	53.8	54.5
Italy	57.5	82.3	123.7
Spain	12.7	43.7	69.6
Belgium	58.6	122.1	130

 

- The countries of the Third World suffered a new overdose of debt:

Total debt of the “underdeveloped”
countries (source: World Bank)

1990   1.480,000 million $

1994   1.927,000 million $

1996   2.177,000 million $

 

7. The financial apparatus suffered the worst convulsions since 1929 leaving it no longer the secure place it had been up until the middle of the 1980s. Its deterioration has gone along with a gigantic development of speculation which has affected all activity: shares on the stock markets, property, art, agriculture etc.

8. Two phenomena, which have always existed under capitalism, have taken on alarming proportions over the decade:

- The corruption of politicians and economic managers, which is the product of two combined factors:

           - The increasingly overwhelming weight of the state in the economy (businesses are increasingly dependent on its investment plans, its subsidies, its purchases),

           - The growing difficulty of gaining a reasonable profit through “legal” means.

- The gangsterisation of the economy, the increasingly strong inter-penetration between states, banks, businesses and traffickers (of drugs, arms, children, emigrants etc). The most dubious businesses are the most profitable and the most ‘respected’ institutions both governmental and private cannot help but satisfy their appetites. This makes increasingly clear a tendency towards the decomposition of the economy.

9. In line with the above, a phenomenon has appeared in the industrialised states, that of the increasingly obvious falsification of economic indicators and “creative” accounting tricks of all kinds, which until now have been the preserve of banana republics and Stalinist regimes. This is another expression of the aggravation of the crisis since for the bourgeoisie it has always been necessary to dispose of reliable statistics (especially, in the countries of “Western” state capitalism that need the market to impose its final verdict on the functioning of the economy).

The World Bank, the source of many statistics, includes as a part of GDP the notion of “non-tradable services”, which includes the pay of the military, civil servants and teachers. Another method of exaggerating the figures is to consider as “self-consumption” not only agricultural activities, but a whole series of services. The much praised “budget surplus” of the American state, is a fiction gained through playing with the surpluses of the Social Security funds[5]. However, due to their great social and political importance, the most scandalous tricks are played on the unemployment statistics with a view to substantially lowering them:

- In the USA our publication Internationalism no 105 has made clear the tricks used by the Clinton administration to achieve its “magnificent” unemployment figures: including as active workers those working part time, eliminating from the statistics the unemployed who refuse meaningless jobs, count the various part time jobs done by one worker as if they were done by different individuals, etc.

- In Germany only those who look for jobs of at least 18 hours a week are considered unemployed, whilst in Holland the figure is 12 hours a week and in Luxembourg 20 hours[6].

- Austria and Greece have got rid of monthly statistics in preference for quarterly ones which allow them to mask the real figures.

- In Italy, those who work between 20 and 40 hours a week or who work between 4 and 6 months a year are not considered unemployed. In Great Britain those unemployed that receive no state benefits are eradicated from the figures.

 II - The situation of the working class

 1. Unemployment has accelerated brutally throughout the decade:

Unemployment in the 24 countries of the OECD

           1989        30 million

           1993        35 million

           1996        38 million

          

% of unemployment in the industrialised countries (source: ILO)

 

	1976	1980	1990	1996
USA	7.4	7.1	6.4	5.4
Japan	1.8	2	2.1	3.4
Germany	3.8	2.9	5	12.4
France	4.4	6.3	9.1	12.4
Italy	6.6	7.5	10.6	12.1
Great Britain	5.6	6.4	7.9	8.2

 The ILO showed that in 1996 world-wide unemployment or under-employment had reached the threshold of one billion people.

2. The chronic under-employment of the Third World has spread to the industrialised countries:

- In 1995 part time contracts (also known as “dustbin contracts”) made up 20% of the workforce in the 24 countries of the OECD;

- The ILO report for 1996 observed that “between 25% and 30% of the world’s workers rely on a shorter day’s work than they would want, or on a wage which is less than the minimum necessary to live decently”.

3. In the Third World there has been a massive development in forms of exploitation such as: child labour (some 200 million according to statistics from the World Bank for 1996); slavery or forced labour - even in a developed country like France, diplomats have been condemned for treating as slaves domestic personnel brought from Madagascar or Indonesia.

4. Along with generalised mass layoffs (especially in the large companies) governments have adopted policies of “reducing the costs of redundancy”:

- Reduction in layoff compensation,

- Cuts in unemployment benefits, and in the number of beneficiaries.

5. Wages have suffered their first nominal fall since the 1930s:

- Wage levels in Spain in 1997 were lower than those in 1980,

- In the USA the average wage fell by 20% between 1974 and 1997,

- In Japan wages have fallen for the first time since 1955 (by 0.9% in 1998).

6. Substantial cuts in social spending have become permanent. By contrast taxes, prices, and Social Security levies all continue to grow.

7. Since the middle of the decade, capital has opened another front of attack: the elimination of legal minimum working conditions. This has had a number of consequences:

- The increase in the working day (particularly through the demagogy about the “35 hour week” which presupposes the flexible calculation of working hours on a yearly basis and therefore the reduction in overtime payments)

- The elimination of limits on the retirement age,

- The elimination of limits on the age for beginning work (2 million children already work in the European Union)

- Reduced protection against work accidents, work-related illnesses etc.

8. Another, non-negligible aspect is that banks, insurance companies etc are pushing workers to place their small savings (or help from parents or grandparents) in the Russian roulette of the stock market, making them the first victims of its continuous summersaults. However, a worse problem is that, with the elimination or the cutting of the derisory pensions from Social Security, workers are being forced to depend for their retirement on Pension Funds which invest the bulk of their capital on the stock market which causes serious uncertainty: for example the main Fund for education workers in the USA lost 11% of its value in 1997 (see Internationalism no 105).

Bourgeois propaganda has insisted ad nauseam about the lessening of inequality, about the “democratisation” of wealth and consumption. Thirty years of capitalism’s deepening historic crisis has systematically given the lie to these proclamations and confirmed the marxist analysis of the tendency of increasing impoverishment of the working class and the whole exploited population brought about by the aggravation of crisis. Capitalism is concentrated into on the one hand, an ever smaller minority with enormous and provocative riches and on the other a growing majority suffering terrible and lacerating poverty. Some figures gathered in the 1998 Annual Report of the UN are significant: whilst in 1996 the 358 richest people in the world concentrated in their hands the same amount of money as the 2.5 billion poorest, in 1997 the first 225 held the same equivalent.

Adalen

 

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[1] It is not an aim of this series of articles to analyse the new stage of the historic crisis of capitalism opened up in August 1997 with the so-called “Asian crisis”. See International Review no 92 and after for a more specific study.

[2] It is not the aim of this article to analyse the consequences of this on the class struggle, imperialist tensions and on the life of the countries submitted to the Stalinist regime. In order to do this we refer everyone to the articles we have published in the International Review, especially in numbers 60,61,62,63, and 64.

[3] Whilst American production represents 26,7% of the world, the dollar amounts to 47,5% of bank deposits, 64,1% of the world’s reserves and 47,6% of transactions (figures from the World Bank)

[4] See International Review no 86 “Behind the ‘globalisation’ of the economy: the aggravation of the capitalist crisis”.

[5] According to analysis published by the New York Times of 9-11-98

[6] These and the following figures have been taken from the Official Diary of the European Community (1997).