masnaive American deficite-tha situation would be catestrophic for the eapitalist world - there would be a tremenmious centrnetian of trades — and a slump of the thirties dimensions. Therefore tha Preuch cug: eation of a return to the Gold Standard - which implies.a drastic reduction of international liguidity in present circumstances - can be seen only as an extreme position taken wp for bargaining purposes, No matter how much they twist and wrigwle the Veet European capitalisate will have to face up to the fast that despite their improved financial position since the middle fifties, they are in no position as yet to have a direct confrontation with the United States. The overwhelming technological and productive superiority,of the 0.9. ensures ite eventual dominance in the financial aphere, even though it aprears to be somewhat weakened at the moment; for 4s ] have tried to indicate this apparent weakness in reality flows from ite basio strength.
i¥
Therefore, given the elemants indicated, plus the slowing down in the growth of world trade that has been predicted for 1947, the situation seems to be shaping up for & compromise, 58 Wea sugmested by the Financial Times. Such &@ compromise, however, will still leave the U.5. the dominant power and with it the underlying drive towards war. Vor Britain there will probably be some attarot to settle the status of Sterling, without upsetting the syatem greatly, either by funding the Sterling balencea or by further loane and/or an extension of the re-payment period for those debts already contracted. Whichever method is used, it means that Pritain must take peangures to 'sorrest! tha internal economy. This implies thet Mr. “ilaon'a ‘medicine’ will be continued, and the working clasa Will be the ones to carry the burden,
For the underdeveloped countries an inereses in world liguidity may mean further loans and a little more aid, but thie will only be to more firmly chain them to the imperialist syatem. And this impliea their further alide into poverty,
The editors of Monthly Review wrote in December 1964 "...the United States balance of paymente deficit is a powerful time bomb ticking away in the Tinanoila angine room of the world capitalist aystem. Unleae the boob is defused in good time, & shattering explosion is inevitable..." It ie to defuse this bomb thet the finance ministers etd. are now acurrr= ing round the world. The apparent ateability of world oapitslisam ia today more threatendd than at any tinea singe the 1940's, Not only does it hare the "time bomb!’ ticking away, 1% has the awakened eolonial world to face. Vietnam is in this way merely (if one Gan use thet word} the tip of the iee-berg. All of these-eventse have « disiectical unity in their contradictions. Both the irrationality and the oontradictory nature of mono= poly capitaliéo expresa themselves on an international acalé Via geno fidel wer and, for méet pecple, thet myrsterioug animal international liguidity. They are not separete phenomens, but merely facets of the fame eyetems
AFPERDIA
Headers should clarify in their minde the difference between a
trade deficit and a belance of paymenta deficit. The trade balance ie
the difference between physical imports and exports. The balence of
payments is made up from a number of itema, of which the trade balance
is only ones”
& Million.
1950 1951
Exports 2254 2752
Importe 2390 350]
Trade Balance =0136 = Tag
Investeent Income
Credit 271 3-5 ,
Debit 112 158
Shipping (net) + Tat + 133
Government Account |, = 136 = 156
Other items ey rt
Current Balance of
payments total + 297 =- 419
Por each of these two yeare if one adds up all the negative iteme
and subtracts the eum from the total of 111 the positive items one arrives
at the last item, the total, What should be noted is that in each year
the balance of trade was in deficit yet in 1950 the balance of paymenta
waa in credit while in 1951 it waa in debit. Therefore, while balance
of trade figures are important they do not tell the whole story. This
distinction should be borne in mind.