The onset of recession across the developed world should really come as no surprise � in the capitalist economy bust inevitably follows boom just as night follows day.
It would be fair to say that currently even the more astute of the various business analysts and journalists who are paid to monitor developments in the markets have noticed this. Many realise that all they can really do is talk about softening the blow and mitigating the worst effects of the downturn. Because the capitalist economy is orientated to making profits and as the expansion of the competing enterprises in the economy is not regulated and harmonious, the over-expansion of some sectors, a process which has a knock-on effect to the economy as a whole, is always a danger � and periodically a reality. This is what appears to be happening now. The industries that expanded so rapidly during the boom of the mid to late nineties, such as those involved in the 'dot com' and telecommunications revolution, have expanded far too quickly for market demand and the consequences have been severe. Sales have fallen, production has had to be cut back, debts have mounted and jobs have been slashed as companies get into serious difficulties, in some cases going bankrupt. A key factor in this is that capitalism's financial apparatus is largely built on confidence that transactions will be smooth and payments will be met. When this confidence in the efficiency of trade and commerce starts to ebb then things can take spectacular � and serious � turns for the worse. The erosion of financial confidence is one of the ways in which a downturn in one sector - or country - can spread to others. If the word 'globalisation' means anything in the era of the Multi National Corporation, it is surely that the world economy has now become so inter-related that the worsening of a company's financial position in one country can lead to them shedding jobs in another. This is what currently seems to be happening across the industrialised world and illustrates why so many of the so-called 'solutions' to economic downturns in the past (import controls, Keynesian 'pump-priming' economics, etc) are now more transparently useless than they ever were. Jt www.worldsocialism.org ________________________________________________________________ Nokia 5510 looks weird sounds great. Go to http://uk.promotions.yahoo.com/nokia/ discover and win it! The competition ends 16 th of December 2001.
