Petras on World Depression

The pair of articles by Petras (World Depression – Part I and Part II) is different from the others we are reading for Session 2 the in the following ways:

• Petras has a go at connecting the dots between developments in different parts of the world, in the creation of the conditions for the crisis. So for example he refutes the “de-industrialisation” proposition applying to the world economy, pointing out that the location of industrial production has shifted (from USA, UK – to the BRICs although he doesn’t use that term).

• He (therefore?) attributes less significance to “financialisation” . (I am trying to work out if “financialisation” might have delayed the inevitable crisis because it created additional circuits for capital that hid the declining rate of profit for longer?)

• The under-lying cause of the crisis in Petras view is “over-accumulation” – i.e. a declining rate of profit, and a lack of new avenues for capital to invest at a higher rate of profit, because of the impoverishment of exploited labour which denies a market for potential new investments. (This seems to be a reasonable but non-specific explanation)

• His lense is more “anti-imperialist” than anti-capitalist, in that where he points to solutions the implicit actor is the nation rather than the working-class (a lot of writing in the passive voice, or generalised unspecific actors) and he makes recurrent references to the problem of production for export at the expense of domestic/ internal markets.

• The bailouts of the banks, which are clearly a form of “socialising the losses” are described by Petras as “nationalisation”, and he deliberately opposes proposing nationalisation of banks but instead posits that “the entire paper economy needs to be dismantled in order to free the productive forces from the shackles and constraints of unproductive capitalists and their entourage.”

• His solutions otherwise centre on local market stimulation and redistribution of wealth, both in Asia and Latin America, and – in the USA by a “rebalancing” of the economy which “means creating demand…via direct state-ownership and long-term, large scale investment in the production of goods and services.”

• He says that no economic recovery is possible for capitalism. (See conclusion on China). In this sense he fits into a left tradition – every current problem is insoluble by capitalism (since 1960s at least) – but then capitalism solves many problems (except problems of exploitation and subordination of labour, and gross inequalities), in some sense (creating others on the way…) and survives.

• Petras account of the decline of working class weight is a combination of power of globalised and diversified capital, and collaboration with it by labour leaders. (WL account is that the WC was actually defeated in critical battles in the 1980s). He sounds indifferent if not hostile to any existing working class organizations, on the grounds that their role is collaborationist.

• The scope of Petras articles is broader than the others, and he has a lot more political issues in his articles, which depicts Petras “world-view” more explicitly than the other writers, so there is more to say of a less “economic” nature about Petras.

• There is no mention of what agency might be able to carry out his broad ranging solution (beyond a sweeping reference to “popular democratic control”) and might be persuaded to do this, no account of the political and industrial prospects for rebuilding working class strength –the absence of which is notable particularly because of the broad scope his articles cover.