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From The Socialist newspaper, 2 February 2001

World Economic Forum: The heights of capitalism

POLITICAL AND business leaders of world capitalism assembled last week for their annual get together - the World Economic Forum - in the mountain-top resort of Davos, Switzerland.

Dave Carr

And to ensure that delegates would have a trouble-free conference riot police and the Swiss army prevented anti-capitalist demonstrators getting within earshot of the event.

But capitalism's representatives have more to fear than angry demonstrators: their profit system is facing major problems, notably the dreaded 'R' word - 'recession'.

Delegates were, however, putting on a brave face, imploring each other not to 'talk themselves into a recession' - as if 'industrial overcapacity', 'credit crunch', 'stock market volatility', etc, are questions of psychology!

Many Davos participants were surprisingly upbeat about 'globalisation'. The free movement of capital around the world economy combined with governmental deregulation and privatisation is, supposedly, creating a wealthier planet. And as the richer economies of the West get richer so, they argue, poorer countries will benefit as they are pulled along in the wake of the globalisation juggernaut - a global 'trickle down' of wealth.

Of course there were some party poopers at Davos. Tanzanian president Benjamin Mkapa mocked the devotees of globalisation saying: "Globalisation can deliver - just as Tanzania can theoretically play in and win the World Cup."

Indeed, on the eve of Davos the United Nations International Labour Organisation (ILO) World Employment Report 2001 blew a big hole in the 'globalisation is good for all' argument.

The report's authors point out that one billion people - a third of the world's workforce - are unemployed or underemployed.

"The global economy will have to generate 500 million new jobs during the next ten years just to accommodate new seekers of the labour force and reduce the current level of unemployment", the report argues.

With multinational car manufacturers to pharmaceutical giants and financial conglomerates all busily downsizing their global workforces, job creation on this scale is unlikely.

Information Technology companies are faring little better as the speculative shares bubble deflated last year pushing many dot.coms into bankruptcy.

Interestingly, the report shows the current limitations of the 'IT revolution'. Only 5% of the world's population, according to the ILO, has ever logged on to the internet and nearly all the users live in the advanced capitalist countries. Far from being the world's 'great equaliser', the IT revolution is creating a massive digital divide between the 'haves' and 'have nots'.

The trickle-down school of thought also took a knock last year when the UN Human Development Report showed that the advent of world capitalism in the 19th century led to massive inequalities both within and between countries.

In 1820, Britain's wealth per person (in 1990 dollars) was $1,765, while that of poor China was $523. A ratio of roughly 3:1.

By 1992 in the US, the world's richest country, wealth per person (GDP per capita) was $21,558 while in Ethiopia, among the world's poorest countries, wealth per person was only $300. A ratio of 72:1.

And despite the previous claims of Chancellor Gordon Brown and Jubilee 2000 (the anti-world debt campaign), the World Bank and International Monetary Fund (IMF) that administer the heavily indebted poor countries (HIPC) initiative, have failed to reduce these countries' crushing debt burdens.

Of the 22 HIPCs who qualified for debt relief only one country - Uganda - has had its debt cancelled, even though most of the HIPCs debts are deemed 'unrecoverable'.

The amount the 22 continue to pay on debt servicing is over $2 billion a year. 16 of the 22 will still be spending more each year on debt than on health.

As jobs, infrastructure, health and social services are subject to the ruthless attacks of recession-hit capitalism, anti-globalisation actions by the world's working class and poor will increase. This internationalisation of the class struggle will also put the ideas and methods of socialism firmly on the agenda of the world's workers and poor.

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Coronavirus crisis - Finance appeal

The coronavirus crisis has laid bare the class character of society in numerous ways. It is making clear to many that it is the working class that keeps society running, not the CEOs of major corporations.

The results of austerity have been graphically demonstrated as public services strain to cope with the crisis.

The government has now ripped up its 'austerity' mantra and turned to policies that not long ago were denounced as socialist. But after the corona crisis, it will try to make the working class pay for it, by trying to claw back what has been given.

  • The Socialist Party's material is more vital than ever, so we can continue to report from workers who are fighting for better health and safety measures, against layoffs, for adequate staffing levels, etc.
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In The Socialist 2 February 2001:

Corus Steel Closures Strike to Stop Job Cuts

Back the Tube Workers

When flunkies fall out

Bribery, Bofors and the Hinduja brothers

Hackney Solid strike against cuts threat

"It's our livelihoods at stake"

Servants of big business

"You were the weakest link -goodbye!"

World Economic Forum: The heights of capitalism

The Philippines after Estrada


 

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