Von who? The epicenter of the economic crisis that produced the world Depression of the 1930s was the decline of European capitalism. Europe never really recovered from World War I. As a result, the US lacked sufficient markets for its surplus goods and surplus capital. The crisis in the US was overcome only by the immense stimulus provided by war production for World War II. In the war, the US demonstrated the superiority of its advanced production methods, far outstripping the capacity of Germany and Japan to turn out planes, ships, tanks and bullets and feed and equip their soldiers. At the end of the war, the supreme power of American capitalism was rooted in its industrial might, more than its military supremacy.
To give some indication of the preponderance of American industry in the decade following the war: four out of every five cars sold throughout the world were produced in the US; America, which had 6 percent of the world’s population, produced and consumed one-half of the world’s goods. America’s gross domestic product rose from $100 billion in 1940 to $300 billion in 1950 and $500 billion in 1960. What was the process that transformed the United States from the industrial hegemon of the post-war boom period to the massively leveraged, industrially anemic center of global financial parasitism of today? Fundamentally, American imperialism foundered on the contradiction between world economy and the nation-state framework within which capitalist economies must develop. In the end, no single capitalist state, even one as rich as the United States, could resolve the problems of global capitalism. The post-war economic order established by the United States contained a fatal contradiction from its inception. It represented an attempt to overcome the general historical decline of the world capitalist system on the basis of the strength and dominance of the most powerful capitalist nation. But the very success of the post-war reconstruction of Europe and Japan, upon which American capitalism depended to provide markets for its exports, investment outlets for its capital and sources of raw material and labor power for its industry, inevitably entailed a diminution of the vast preponderance of American capitalism over its rivals upon which the post-war order was based. The recovery and expansion of European (especially German) and Japanese industry was, by the late 1950s, beginning to undermine the previously unchallenged supremacy of American industry and the US economy as a whole. This basic contradiction was likewise the bane of the global monetary system established at the end of the war. Under the Bretton Woods system, the US dollar was simultaneously to serve as the international reserve and trading currency and the currency of a single nation state. This contradiction ultimately led to the collapse of the Bretton Woods system in 1971. The post-war boom rested, in the final analysis, on the increased rate of profit resulting from the use of American production methods. By the end of the 1960s, however, profit rates started to fall. This was to lead to a major global recession in 1974-75—the deepest to that point since the 1930s. Beset by growing competition from its imperialist rivals, increasing pressure on the profitability of its manufacturing base and a looming dollar crisis, the American bourgeoisie was hampered in its response by the continued militancy of the American working class. Despite the reactionary politics of the trade union bureaucracy, US workers bitterly resisted all attempts to drive down their wages and working conditions. Their power and strength of resistance were bound up with the strength and power of American industry itself. The mounting economic stresses and imbalances within American and world capitalism imparted to social relations in the United States an increasingly tense and explosive character. The 1960s was a period of continual social and political crisis, signaled by the assassination of Kennedy in 1963. The late 1960s and early 1970s saw protracted and bitter strikes in virtually every economic sector, including auto, steel, electronics, longshore and postal. Entire new sections of the working class, including the most oppressed and impoverished layers, entered into struggle in the form of the civil rights movement that had emerged powerfully in the 1950s. Widespread poverty and pervasive police repression, especially against minority workers, led in the second half of the decade to violent social eruptions in dozens of American cities. The Vietnam War provoked growing opposition within the working class and radicalized an entire generation of student youth, who increasingly turned against American imperialism and its two-party system and looked toward alternatives of a revolutionary character. The social and political tensions found bloody and spectacular expression in the assassinations of Malcolm X, Martin Luther King, Jr. and Robert Kennedy. The Watergate scandal exposed the growing crisis of American democracy and the turn by sections of the ruling class toward authoritarian forms of rule. Nixon’s resignation in 1974 reflected the continuing social and political turmoil. The 1970s was the period when Keynesian deficit spending policies broke down in the face of “stagflation.” It was also the decade that saw a sharp growth of European and Japanese imports of industrial goods into the US and a rapid deterioration in the share controlled by American companies of both the global and US markets in autos, steel, electronics and other sectors. The US share of auto production fell from 65 percent in 1965 to 20 percent by 1980. The United States produced 39.3 percent of the world’s steel in 1955. By 1975 that percentage had fallen to 16.4 percent. In 1984 it was just 8.4 percent. On Oct 14, 1:15 pm, "M.A. Johnson" <[EMAIL PROTECTED]> wrote: > MisesWas Right About MoneyPosted byLew Rockwellat 07:29 PM > "It all went wrong when we left the gold standard," says Dominic Lawson in > the UK'sIndependent. From his column:There is, however, a small band of men > and women – long insulted as fanatics or even fantasists by the political > mainstream – who can now say: "We told you so." I am not referring to the > Communist Party of Great Britain (Marxist-Leninist). No, I'm talking about > the followers of the great Austrian economist Ludwig von Mises (1881-1973). > in his 1912 work,The Theory of Money and Credit, Mises declared that the > corruption and distortion of money by the state and bankers, usually to pay > for wars, was the principal cause both of inflation and – to coin a phrase – > boom and bust.As the chief economic advisor to the Austrian government in the > 1920s, Mises put his theories into practice and slowed down inflation in his > native country (which, as a Jew, he later fled). He used his "cycle" theory > to forecast that the "New Era" of apparently permanent prosperity in the > 1920s was illusory, and that it would end in runs on banks and depression: > The Wall Street crash of 1929 was exactly what Mises had predicted.Mises > believed that any currency which was not backed by gold was powerless to > resist the depredations of governments and bankers addicted to the > possibilities of limitless credit. Until the past few weeks, this has been > seen as a bizarrely old-fashioned and eccentric outlook; but I would not be > surprised if many young people – who have hitherto been comfortable with the > idea of money as something which can just exist in the ether, travelling > through the digital highway – now wonder whether anything of intrinsic value > lies behind it all.As far as Mises was concerned, even money made of paper, > if it had nothing behind it other than the good word of politicians and > central bankers, was inherently unsound; he lived just long enough to see the > United States of America – where he ended his days – break decisively with > the international Gold Standard. --~--~---------~--~----~------------~-------~--~----~ Thanks for being part of "PoliticalForum" at Google Groups. For options & help see http://groups.google.com/group/PoliticalForum * Visit our other community at http://www.PoliticalForum.com/ * It's active and moderated. 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