Although it is too early to mako very precise prodictions on the world economic situation, the prospects for tho capitalist economy are not the most encouraging. ilees Mogg of the Sunday Times roecontly went so far as to detect Wa, world wide surplu:s of capacity in basic industries, and even in industries like oil and chomicals, with a rapid growth in normal demand." He went on to maintain that a violont upheaval is unlikely because of high arms and state spending, novertholess "unless it is corrected in time this situation could lead to a contration in world trade."
Apart from the effects of contraction on the so called »dvanced coun= tries, a roduction or upheaval in world trado can have particularly serious . conseqences for tho underdeveloped nations, Capitalist spokesmen are not unaware of the problem of capital accumulation for these nations, but are incapable of finding a serious long term solution. Capitalism remains ossentially national even in its decay and can hardly begin to solve intornational trading and invest— ment probloms. Thus the report of the American Senate sub-committee on fasign aid in Latin-America has stressed the need for "self help" and opxsnly approved of close association with tho various military cliques thore, This is actually solf contradictory because the military cliques are incapable of solf help -— only a wholesale social revolution ontailing considerable discipline in consumption could achieve effective accumulation of capital. Moro important than this cynical report, has boen Gaitskell's recontly expressed concern that Common IMarkot or Atlantic Community tariff barriers might seriously effect the prices of the primary commo= dities, thus dislocating tho economies of the underdeveloped nations.
Industrial countries over the last twenty years have more than doublod the volume of thoir oxports. Dut commoility producors have increased the volume of sales by little more than half. Prices can fluctuate a great deal also in these primary products - thus Ghrna cocoa, Malayan rubber and Pakistan jute which play a vital role in their respective economies could prove very vulnerable in a down turn in the world economy. In 1957-58, Chilo suffered a loss of £25 millions through a fall in copper prices — aid given to her was on avorago £4 millions a year.
According to Sachs (Polish Perspoctives May 1961), in 1959 exports from Indonesia calculated por head of tho population were actually 44% lower than in 1937, in Argontina 60% lower, in Bsypt 34% lowor, in Malaya 27% and in Mexico @ lower. In 1938, these countrios producing primary commodities accounted for 37.5% of capitalist world exports, yet in 1959 despite the vast oxpansion of world trade, these countries still accounted for only 34.1%. In the U.N. Economic Survey of 1958, it was estimated that the primary producing areas lost more as a result of deterioration in the torms of trade than the whole of the foceign aid they reccived.
Great Britain is one of those nations which has indirectly bonefitted a great deal from favourable terms of trade. According to Balogh (New Statesman 12 Dec. 1959) "In Britain, for instance home costs since 1955 have risen at a steady rate of 5% Price stability since 1957 could be maintained only because import costs declined by oight percent.....The improvoment in the standard of life sinco 1957, some two or three per cont, is entirely duo to the violont improvements in the terms at which we are able to purchase food and raw materials -— to the discomfortuee of poor aroas. Not less than half of the total gain since 1951 is duo to this same cause." In toto between 1953-61 the terms of trade have improved as muci as 18% (Labour Research) = import pricos have fallen and oxport prices risen, Ultimately, of course, this leads to a reduction of trade and stagnation of exports for the advanced nations. To crown it 211 the latest figures would seom to make it clear (Lloyds Bank Review Feb. 1962) that the recovery of output in the U.K. in 1959 and that in the U.S. have made no impact on falling commodity prices.
The facts of the world economy are that a small group of advanced nations, primarily the U.S.A. and Western Murope are exploiting in a variety of ways the rest of the non-communist underdeveloped nations — and isolating nations such as China in desparate need of capital and massive aid. These advanced nations are Jeared to the fantastic waste of the permanent war economy — the proletariats of these advanced nations indirectly benefit from alterations in the terms of trade, are, in fact, aristocrats in relation to the rest of the world. It is to be hoped hat disturbances within the Western economics will awaken these proletarists and load them further to consider thoir responsibilitiostowards the hundreds of millions of exploited workers and peasants all over the world who require tremendous economic aid to relieve thoir hellish existence and their ondless poverty o