WORLD ECONOMIC POSITION

Grey River Argus, 17 October 1936, Page 10

WORLD ECONOMIC POSITION

The International Federation of Leaders Unions reports;—Lu view of the well-proved fact that the depth and duration of the world eeoncmic depression—which is of a svuclutal nature—are due to the coincidence of crisis in agriculture, industry and lite whole capital. st credit and currency system, the question arises of whether ttie signs of world and' nat onal recovery evidenced here and there really mean that, the depression is being overcome. It is true that for mouths the depression is being overcome. It is true that for mouths the statisies have been showing an upward trend in production and trad£. Most countries) have dragged' themselves out of the trough of depression, while some —still according to the production figures • —have even gone beyond the level of fbe last peak year, 1928-1929, and reached a new high level. This applies not only to the pronouncedly industrial countries, like Belgium, Germany, Great Britain, Japan and the United States, but also to countries where industry and' agriculture are equally balanced, such as Norway and Sweden, and mainly agrarian countries, like Denmark. Estonia, Finland, and Hungary, ft applies both to European and overseas countries. The picture is completed by the signs of recovery shown in Czechoslovakia, France and Poland, some of the Balkan countries, such as Bulgaria, Greece, Roumania. and Yugoslavia, and' several of the predominatingly agricultural States of South America. The only European countries not included in the general move forwards are Holland. Lithuania., Spain and Switzerland, and the only overseas country is India.

This survey would justify a certain amount of optimism, except for flic feeling that, this measure of recovery has not brought equiliibrium to the crisis bal’ance-sheet, and the evidence that, this new boom is merely the facade of a tottering edifice. Apart from the fact that world economy has suffered such structural damage through the. crisis as cannot be repaired, the characteristic feature of the new upward movement is the ominous feature that equilibrium between production and consumption has not only been reached but is in some countries assuming a still more unhealthy relationship than before the outbreak of the last crisis. This fact —which is at the same time the classic cause of of crisis—is most clearly shown by a comparison of world production and unemployment figures. In spite of the fact that industrial production has on the whole again reached the 1929 level, which might be taken superficially as a sign of victory over the crisis, there are still twenty million unemployed. An army of twelve millions, without, purchasing power and with its reserves long since exhausted —and on top of that, a hundred million workers whose wages have been cut down to a very low level during the crisis. The drastic falling-off in purchasing power on a world scale is bound sooner or later to bring to a halt that production which has to-day taken on an upward movement for unsound economic reasons —the demnad for war supplies! This is fhe r eal cause for the apparent boom in the industrial great powers and it is subject to a disastrous law of decline. The facts must be faced with courage and in good time. This new boom of Fascist capitalism will either bring in its train another world economic crisis, which will leave far in the shade the one we have just passed through or else it will bring war, the safety valve of ruined dictatorships and the “economic” cosequence of rearmament which must either produce bloody dividends or break down. Nothing shows more clearly the threatening danger of war than this coincidence of power and', economic motives. It is to be feared that, the dictators will stake their last cards on a war which each of them' (looking forward to victory!) expects to provide the last way out of imminent bankruptcy. It is these latent dangers, shown up by the Spanish war, which characterise the unhealthy atmosphere of feverish industrial activity going on throughout, the world. From the economic point of view, and in spite of what looks like a boom, the world is still more diseased than in 1929. World economics were paralysed by the economic crisis, which is to-day regarded as overcome; to-day world trade is largely destroyed, and national egoisms have given rise to partly voluntary and partly involuntary isolation which make it. practically impossible to go back to the peaceful division of labour on the world scale, which is bound to prevent the recovery of world trade, ■which blocks the way for the diplomata to prepare for peace and which shows the Fascists the tai'get for their attacks. The time it has taken for recovery from the crisis to set in and the at-a’-nment of a new peak level of in- I dustrial production, has already-led rhe theorists, on the basis of their | exper'ence of trade cycles, to prophesy 1 the imminence of another crisis. In [ view of this tendency, it seems useful to point, out that post-war events . have shown the workers tout in 1936 it is not cyclical trends but the Fascist dictators and their capital'. l ! pseudoplann'ng which is deciding the fate . of industry. It is Fascism which is leading to economic breakdown and a new world' crisis, and the organised workers see only one way of avoiding this catastrophe—the deftruct’on of Fascism, which will clear the way for the organisation of a real Socialist planned economy. |