boom) unless the conditions for valorising capital - the process through which labour-power produces addiHona value over anu aDove s owe value (surplus value) - improve dramatically. The international capitalist class desperately requires a savage increase in the rate of exploitation to restore profitability. And there can be no question of this in the short or medium term.
Cautiously, The Economist, which had predicted a new boom for 1976, has already pushed its prediction back to 1977. Since the rise in productive investment has yet to occur, even this 1977 boom becomes increasingly open to question.
Index 1970=100 -190 Britain -175 el 20-160 -145 -115 Jan. Aug. 1973 1975 Sources O.E.C D. and Intemationa/ Monetary Fund Any serious overproduction crisis manifests itself as a massive aggression by the capitalist class against the jobs and living standards of the working class. They do this to jack up the rate of exploitation. The intensified competition brought about by the recession impels companies to step up their efforts in the realm of rationalisation investments. Investment, far from creating new joos, Is armca alreaucig me labour force. The Labour Government's Leyland and Chrysler rescues' are a graphic demonstration of this.
Although the recession in most major capitalist countries is no longer worsening, and the first signs of upturn are appearing, unemployment is nonetheless getting worse in all the imperialist countries. Here are the estimates for winter 1975-76, compared with the situation during winter 1974-75:
Number of Total Unemploved fin millions)
winter 74-75 United States 7.5 britain Japan 1.0 1.5 France 0.8 West Germany 1.0 It is certain that the delay in the reabsorption of unemployment will powerfully retard the industrial upturn, and that this will in turn slow down a return to a boom.
Dilemma
And here we hit upon the real dilemma of the capitalist governments, which reflects a real contradiction in the capitalist mode of production. *To turn the cycle up again, the rate of profit must be improved, Gole say. And they are not wrong From this they conclude, a bit too hastily, that austerity must take hold in the hearts (and the stomachs) of the working class.
the workers' movement and the Pacity, consumption by the "final wrong either.
Pious expansion of sales to final ised.
winter 75-76 8.2 1.5 1.5 The working class ill not stand 1.5 1.3 oisie attempts to eliminate the gains of three decades of success1.2 ful struggle in order to save its battles are yet to come and these capital.
in these commodities loses value.
'No", respond the reformists of bourgeois reformers of all stripes, *to reabsorb excess productive capconsumers" must be jacked up and not held down'. And they are not The trouble is that both sides are half right, which means that they are both wrong. A genuine capitalist boom requires both a serious upturn in the rate of profit and a serconsumers'. It is not easy to bring about these two conditions simultaneously, especially when the capital markets are weighed down by excess capacity and by a militant working class that is not demoralNo guarantee And nothing guarantees the success of the worldwide offensive of capital against the living and working conditions of the working class.
apparent paradox. by with folded arms as the bourgecrumbling system. Despite temporary ebbs and setbacks in countries like West Germany and Britain, the rising cycle of workers struggles is still in its initial phase. The biggest could wreck the most carefully laid plans of the international bourgeoisie.
Alongside any increase in the rate of exploitation, the second objective function of a crisis of overproduction is the devalorisation of First, as a result of the decline in value (price of production) of commodities, the capital invested Secondly, as a result of commerical bankruptcies and firms going out of business as a result of intensified competition, much of the value of their capital is destroyed.
This capital was part of total social capital, which therefore loses part of its aggregate value. The total mass of surplus value remains unchanged, increases in the rate of exploitation compensating for the reduction caused by unemployment in relation to a shrinking total social capital. Result: the desired increase in the rate of profit.
In the current recession the number of bankruptcies has increased, by more than 30 percent in the United States and by more than 60 per cent in Britain. There were 7,500 bankruptcies in West Germany in 1974 and 8,600 in Japan in 1975. There were also a few spectacular banking and big trust failNevertheless, what is striking is precisely the relatively small dimensions of this process of devalorisation of capital in light of the considerable scope of the fall of production and profits. It is not difficult to discover the explanation of this Inflation Inflation (see graph), which is continuing full force during the height of the recession, contributes to limiting the effects of increased competition on the less solid trusts. The banking system continues to extend credit. The state and the central banks are continuing to bail out firms in danger of going under.
The consequences of this are twofold. First, there is more and more indebtedness among the great trusts. which obviously slows down the rise of the rate of profit. In the year 1974, the 700 largest Italian companies, for example, had to borrow
Red Weekly 8 January 1976
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Consumer Price Increases Compared
... 130 Wi. Ger.