Economic Crisis: A "Recovery" Without Jobs

Printer-friendly version

Apparently all the economic statistics are clear: the world economy is finally coming out of the worst recession since the war. Production is increasing, profits are returning. The medicine seems to have worked. And yet no government dares cry victory, all of them are calling for still further sacrifices, all remain extremely prudent, and above all, every one of them says that as far as unemployment is concerned - ie the main issue - there's not a great deal to look forward to[1].

But what kind of recovery is it that doesn't create jobs or only creates precarious ones?

During the last two years, in the Anglo-Saxon countries, which are supposed to be the first to have come out of the open recession which began at the end of the 80s, the 'recovery' has essentially taken the form of an extreme modernization of the productive apparatus in enterprises which survived the disaster. Those who did survive did so at the price of violent restructurations, resulting in massive lay-offs and no less massive expenditure on replacing living labor with dead labor, with machines. The increase in production noted by the statistics in recent months is essentially the result not of an increase in the number of workers reintegrated into employment but of a greater productivity on the part of those who have kept their jobs. This increase in productivity, which for example accounts for 80 % of the rise in production in Canada, one of the countries who have advanced the furthest into the 'recovery', is mainly due to very high investment into the modernization of machinery and communications, into the development of automation - not into the opening of new factories. In the USA it's this investment into equipment, principally computers, which explains the growth of investment in recent years. Investment in non-residential building is virtually stagnant. Which means that existing factories are being modernized but new ones aren't being built.

A Mickey Mouse recovery

In Britain today, while the govermnent never stops singing about the continual fall in unemployment, nearly 6 million people are working an average 14.8 hours a week. It's these kind of precarious and poorly paid jobs which are swelling the employment statistics. The British workers call them "Micky Mouse jobs".

Meanwhile the program of restructuring the big enterprises continues: 1,000 jobs cut in one of Britain's main electricity companies; 2,500 in the second largest telephone company.

In France, the Society Nationale des Chemins de Fer (railways) have announced 4,800 job-cuts for 1995; Renault 1,735, Citroen 1,180. In Germany, the giant Siemens company has announced that it will cut "at least" 12,000 jobs in 1994-5, after the 21,000 already gone in 1993.

The lack of markets

For each enterprise, increasing productivity is a precondition for survival. Globally speaking, this ruthless competition leads to important gains in productivity. But this poses the problem of the existence of sufficient markets to absorb the growing amount of production that the enterprises can ensure with the same number of workers. If the markets are insufficient, job-cuts are inevitable.

"We have to raise productivity by 5 or 6% per year, and as long as the market doesn't progress more quickly, jobs will go". This is how the French car bosses summed up their situation at the end of 1994[2].

Public Debt

How can the market be made to "progress"? In International Review 78 we showed how, in the face of the open recession since the end of the 80s, governments have resorted massively to public debt.

This debt has made it possible to finance the expenditure which helps create 'solvent' markets for an economy which is cruelly lacking in such things because it can't create them spontaneously. The spiraling growth in the debts of the main industrial countries is part of the basis for the re-establishment of profits[3].

Public debt allows 'idle' capital, which finds it harder and harder to find profitable emplacements, to function as state bonds, assured of convenient and reliable returns. The capitalist can extract his surplus value not from his own management of capital, but from the work of the state which levies taxes[4].

The mechanism of the public debt takes the form of a transfer of values from part of the capitalists and workers to the holders of state bonds, a transfer which follows the path of taxes then of interest drawn from the debt. This is what Marx called "fictitious capital" .

The stimulating effects of public debt are risky, but the dangers it accumulates for the future are guaranteed (see 'New financial storms ahead' in International Review no 78). The present 'recovery' will be very expensive tomorrow on the financial level.

For the proletarians, this means that on top of the intensification of exploitation at the workplace, taxation will get heavier and heavier. The state has to levy a growing mass of taxes to reimburse capital and the interests on the debt.

Destroying capital to maintain its profitability

When the capitalist economy is functioning in a healthy manner, the increase or maintenance of profits is the result of the growth in the number of workers exploited and the capacity to extract a greater mass of surplus value from them. When it is suffering from a chronic illness, despite the reinforcement of exploitation and productivity, the lack of markets prevents it from maintaining its profits without reducing the number of workers to exploit, without destroying capital.

Although capitalism draws its profits from the exploitation of labor, it finds itself in the 'absurd' situation of having to pay the unemployed, workers who are not working, as well as having to pay peasants not to produce, to leave their fields lying fallow.

The social costs of ‘maintaining incomes' have reached up to 10% of the annual production of certain industrial countries. From capital's point of this is a mortal sin, an aberration, pure waste, the destruction of capital. With all the sincerity of a convinced capitalist, the new Republican spokesman of the House of Representatives, Newt Gingrich, went on the warpath against all "the government aid to the poor".

But capital's point of view is that of a senile system, which is destroying itself in convulsions that are dragging the world into endless barbarism and despair. The aberration is not that the bourgeois state throws a few crumbs to people who aren't working, but the fact that there are people who can't play a part in the productive process at a time when the cancer of material poverty is spreading all over the planet.

It's capitalism that has become a historical aberration. The current 'recovery' without jobs is further confirmation of this. The only real 'medicine' for the economic organization of society is the destruction of capitalism itself, the inauguration of a society where the objective of production is no longer profit, the return on capital, but the pure and simple satisfaction of human needs.


"It goes without saying that political economy only considers the proletarian as a worker: he is the one who having neither capital nor ground rent, lives solely by his labor, by an abstract and monotonous labor. It can thus affirm that, just like a beast of burden; the proletarian deserves to earn enough to be able to work. When he is no longer working, political economy no longer considers him to lie a human being; it abandons this consideration to criminal justice, to the doctors, to religion, to statistics, to politics, to public charity" (Marx, Outlines of a Critique of Political Economy).

[1] The official predictions of the OECD announce a diminution in the rate of unemployment in 1995 and 1996. But the level of these reductions is miniscule: 0.3% in Italy (unemployment officially stands at 11.3% in 1994; by 1996 it is supposed to go down to 11 %); 0.5% in the USA (from 6.1 % in 94 to 5.6 % in
96); 0.7% in Western Europe generally (from 11.6% to 10.9%). In Japan no reduction is in sight.

[2] Liberation, 16.12.94  

[3] Between 1989 and 1994, the public debt, measured as a percentage of gross national production, went from 53 to 65 % in the USA, from 57 to 73 % in Europe; in 1994, this percentage reached 123 in Italy, 142 in Belgium.

[4] This evolution of the ruling class into a parasitic body that lives off its state is typical of decadent societies. In the late Roman Empire as in decadent feudalism this phenomenon was one of the main factors in the massive development of corruption.

Recent and ongoing: