JAPAN is the second biggest power in the capitalist industrial world, behind the United States.
It has just announced that its industrial output dropped by a colossal eight per cent in November the biggest fall ever of the Japanese economy. This comes on top of the shock that Japanese motor giants, Nissan, Toyota and Honda are in big trouble.
Japanese exports have been hit very hard by the collapsing US economy.
This has led to a leap in Japanese unemployment, which has now risen to four per cent of the population, to 2.56 million.
Factories have closed and jobs have been cut as demand for manufactured goods slumped amid the global financial downturn. Production at major Japanese manufacturers fell by 3.1 per cent in October.
On top of this disaster it is now suggested that the December figure for industrial production will see a further eight per cent decline.
Japanese interest rates are pegged at 0.1 per cent lower than the US, meaning that they cannot go lower, while the government has already brought in a number of ‘economic stimulus’ packages.
Japan is the greatest capitalist power in Asia, and is now one of the centres of the growing world crisis.
Countries like China, where capitalism was overthrown in 1948 and which has moved to the right under Stalinist rule and is seeking to enrich itself through establishing special economic zones where the western bourgeoisie can exploit Chinese workers, are now experiencing a massive social crisis as exports to the US are collapsing and hundreds of factories are being shut, leaving workers demanding jobs.
States whose leaderships broke with the USSR such as the Baltic States and the Ukraine, have been engulfed by the capitalist crisis and are now having to be bailed out by the IMF, as they are ravaged by waves of hugely inflationary price increases. The IMF is demanding a cruel return for its loans. It is already insisting on pay cuts and big VAT rises.
In Russia the ‘patriotic’ wing of the capitalists, the Abramoviches and others on whom Putin rests his right foot, have been undermined strengthening the working class which is demanding the restoration of the USSR as the only correct response to the world crisis of the bankrupt capitalist system.
The Stalinist Putin is however seeking to financially aid the oligarchs and rebuild them, leaving the working class angry at his demonstration of political bankruptcy.
The world’s major exporter is Germany, and its economy is now beginning to follow Japan’s into recession and slump, with unemployment and short time working in industry mounting rapidly.
In Britain, deindustrialised by Thatcher, Major and Blair-Brown, the crisis is exposing its completely empty shell.
The Centre for Economics and Business Research (CEBR) predicts the British capitalist economy will shrink by 2.9 per cent in 2009 – more than at any time since the 1940s.
The CEBR states that the economy will contract by its largest amount since 1946, when the country was in the grips of mass de-mobilisation after the war.
In 1938 Trotsky, in his work the Transitional Programme, describes capitalism, in the aftermath of the 1929-31 crash, tobogganing with closed eyes towards an economic and military catastrophe.
Trotsky was right then and we are right now. The only way to resolve the capitalist crisis and avoid the threatening catastrophe is through a socialist revolution to get rid of bankrupt and historically out of date capitalism, to bring in socialism.