In this Friday, Dec. 7, 2018 photo, a large liquefied natural gas (LNG) carrier is being built at the Daewoo Shipbuilding and Marine Engineering facility on Geoje Island, South Korea. [AP Photo/Ahn Young-joon]
As the world becomes increasingly mired in wars, there are clear signs of growing economic malaise, the result of ever-expanding fronts driven by American imperialism's drive to maintain its position of global supremacy.
This development will increase geopolitical tensions and lead to an increase in militarism, as capitalist governments around the world increase arms spending and intensify attacks on the working class to pay the price. .
The deteriorating global economic outlook was highlighted last week by data showing both the UK and Japan experienced two consecutive quarters of negative growth in the second half of 2023.
This trend was underlined by the European Commission's decision to revise downward this year's EU economic growth forecasts after 11 of the EU's 27 member states experienced recession in 2023. Most seriously, the German economy contracted by 0.3% in 2023. Year.
The contraction of Japan's economy (output fell 0.3% in the previous quarter after contracting 3.3% in the third quarter) was in some ways shocking. That's because the “consensus” forecast among economists was instead for more economic growth. 1.1 percent.
British statistics showed the economy contracted by 0.3% in the fourth quarter, following a 0.1% contraction in the third quarter. But beneath these relatively small numbers, at least for now, there are deeper trends at work.
Taking into account the UK's population growth, output per capita will fall by 0.7% in 2023, continuing to decline quarter-on-quarter as growth has been slow since early 2022. Excluding the impact of coronavirus in 2020, the UK experienced its first economic contraction in 2020. Per capita output since the 2008-2009 global financial crisis. Output per capita remains 1.5 percentage points below pre-pandemic levels in the final quarter of 2019.
Since the 2008 financial crisis, global economic growth has been sustained to a large extent by the expansion of the Chinese economy. It is hopeless.
China recorded a growth rate of 5.2% in 2023, the lowest level in 30 years, and the government's soon-to-be-announced target for this year is unlikely to exceed that. In fact, there is considerable doubt that even 5% can be reached.
China's economy is beset by a series of problems, including the onset of a vicious cycle of deflation as prices fall at the fastest pace in 15 years. The stock market continues to decline despite efforts by regulators to prop it up, and more foreign investors are labeling the country “uninvestable.''
The real estate crisis has not improved, with two of China's largest real estate development companies going bankrupt. In the years since 2008, real estate and property development have grown to account for approximately 25 percent of the economy. The government has been extremely reluctant to provide any stimulus, fearing it would only exacerbate an already substantial debt problem.
But its efforts to carve out alternative growth paths based on high-tech advances run head-on into the bans and restrictions the United States has imposed as part of its ever-expanding economic war plans against countries it considers its major economic rivals. ing.
The only relative exception to the deteriorating global economic outlook appears to be the United States, which grew by more than 3% in the final quarter of 2023. But closer inspection reveals that the same basic tendencies are at work, even in their direct manifestations. is slightly different.
One important aspect of America's growth is that it feeds directly on the death and destruction produced by the developing front. As a recent article in the Wall Street Journal pointed out, proponents of increasing military spending for the Ukraine war argue that it is “good for the economy.”
White House National Economic Council Director Lael Brainard said in a recent interview that he supports the Biden administration's new military policy: It's a country. ”
U.S. defense and space production has increased by 17.5% since the start of the Ukraine war, according to data compiled by the Federal Reserve. According to a State Department report, the United States made large-scale arms deals worth more than $80 billion in the year ending in September last year, of which about $50 billion was with Europe, more than five times the historical level. It became.
And there were other “benefits” as well. The cut off of Russian gas supplies to Europe and soaring prices as a result of the Ukraine war was a bonanza for the United States, which last year became the world's largest exporter of liquefied natural gas, with exports set to double by 2019. It's planned. 2030.
However, the U.S. economy is not immune to the ongoing recessionary trend. Major U.S. companies in the auto industry and other industries are cutting jobs as the global battle for markets and profits intensifies. The Financial Times reports that tech companies alone have cut 34,000 jobs so far this year as part of the transition to using artificial intelligence.
And the U.S. economy is in another financial crisis, as the Fed-initiated interest rate hikes to curb workers' wage demands threaten to collapse the financial sands built on the previous low interest rate regime. The threat of is always present.
In a recent commentary article, German Finance Minister Christian Lindner issued a warning to the working class around the world. He says that in the past “peace dividends” have been used to expand the welfare state. This time a change of direction was needed.
In recent remarks that also had international implications, he said the German economy was not in the best shape because Germany's “structural deficit” was due to low interest rates, demand from world markets and low energy costs. He said that this has been covered by the decline and now it must be improved. Focus on “structural issues”.
Every major capitalist government faces some form of “structural problem.” Governments are seeking to increase military spending, but they do so in the face of record government debt amid a global economic slowdown. It means an intensification of attacks on the working class.
The political implications are clear. There is an inextricable link between fighting wars and protecting jobs, wages and living standards.
After all, imperialist wars are not policy “choices” that can somehow be reversed if enough pressure is applied. It is rooted in the objective contradictions of the capitalist profit system itself, as are recessions, unemployment, inflation, and financial crises.
Therefore, the only viable and realistic perspective for resolving the deepening crisis is one directed toward its roots. It is a plan for an international socialist revolution to overthrow capitalism, fought by the International Committee of the Fourth International and its divisions.
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