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p The world economic relations of our day are no longer governed solely by the patterns of capitalism, but it does not follow from that historically undisputable fact that it is no longer necessary or is less urgent, in a situation of the growing interaction and opposition on the international arena of countries with different socio-economic systems, to study the specific features of the postwar development of the capitalist world economy on the basis of the laws peculiar to that mode of production. The need to elucidate the course of, and outlook for, the global interaction of the two opposing systems emphasises the necessity of such a study all the more. As Engels remarked:

p The reciprocal action excludes any absolute primary or absolute secondary; but it is just as much a double-sided process which from its very nature can be regarded from two different standpoints; to be understood in its totality it must oven be investigated from both standpoints one after the other before the total result can be arrived at.  [67•1 

p There is no doubt that there is no generalising indicator that might be used to evaluate the whole complexity and contradictoriness of the economic development of all the countries and main industries that comprise the world capitalist economy, and that there cannot be. Nevertheless there are still general tables in the international statistics that make it possible to bring out the predominant trends and dynamics of this development. Each of them is, as it were, a gigantic resultant of millions and millions of singular ’vectors of forces’. In the first place they include such indicators as the gross domestic product (GDP), gross 68 national product (GNP), and national income, calculated by UN statisticians for separate countries and for the world capitalist economy as a whole. Their calculations primarily characterise the main results of the economic development of countries over a long period of time. Since they more or less adequately reflect the quantitative parameters of the dynamics of the main sectors of the economy, they can be taken as a point of departure for a systems analysis of this development. But each of the consolidated indicators has its own specific features that must be kept in mind right from the start of a study of the total, combined rates of growth and structure of production of the countries of the non-socialist world.

p The term ’gross domestic product’ reflects the end result of the yearly process of reproduction of separate countries or groups of countries, and represents the value of all the
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Fig. 1 Diagram of the components of GDP, GNP, and national income GROSS DOMESTIC PRODUCT DEPRECIATION’ FUNr GROSS NATIONAL PRODUCT BALANCE OF PROFITS FROM OVERSEAS CAPITAL INVESTMENTS NATIONAL INCOME
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output produced in them minus the value of the intermediate products (raw materials, semi-finished products, ancillary materials, etc.) employed in the process. The gross national product differs from the GDP in being calculated from the results of the country’s world economic activity on the basis of the export of capital. In other words, the GNP also includes the difference (balance) between the profits obtained by the entrepreneurs of the country from their investments abroad and the profits of foreign companies in that country.

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p The term ’national income’ defines the newly created value directly at the disposal of each country; it is equal to the GNP less depreciation allowances (see Fig. 1).

p The need will repeatedly arise as we proceed to turn to an analysis of the socio-economic substance of the presentday international relations of capitalist production, including those associated with the existing differences in the level of GNP between individual countries and groups of countries. But it would obviously be more correct, in an initial description of the long-term tendencies of development of the productive forces for the whole capitalist economy, to base ourselves on statistics on the dynamics and structure of the gross domestic product that exclude the intersecting flows of profit from some countries to others.  [69•1 

p It does not follow, however, that the total data on the GDP of the capitalist world do not reflect the results of the development of the international relations of production. On the contrary, they also take in the results of each country’s world business activity. They reflect the immense influence these relations have on domestic economic processes. The economy of any country drawn into the orbit of the corresponding system of international division of labour turns out to depend both on the patterns of that system’s development and on the current state of the world market.

p The statistical agencies of the United Nations have done much to create a single system of national accounts, i.e. a system consisting of quantitative indicators characterising the world economy’s leading directions of postwar development. The UN statistics make it possible to elucidate most fully the scale and dynamics of the movement of the principal components of the gross domestic product of nonsocialist countries since the beginning of the 1950s. At the same time they offer possibilities for calculations that give some idea as well of the more long-term trends in preceding periods.

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p It is expedient to begin study of the main trends of postwar development from the time when the worst consequences of the war were behind and the volume of material production and scale of international economic ties had risen on the whole above the prewar level. One can take that time to be the turn of the decade of the 40s and 50s.  [70•1  It was then that many of the most important features of the economic structure of world capitalism’s production and of today’s crisis of its international ties began to arise and take shape. The trends and problems considered in this part of the book cover throe decades, the 50s, 60s, and 70s. They can also be taken as the basis for analysing longer periods, including an estimate of their probable trends of development in coming years.

p What, on the whole, were the changes in the level of the productive power of world capitalism that can be noted in this period? If we start with 1950, then, by the end of the period under review, the GDP had increased by 240 per cent within capitalism’s contemporary boundaries. International trade grew much faster. At the same time the manpower of world capitalism was growing steadily; its population increased in the period under review by nearly 1,400 million (roughly 200 million in capitalist countries and 1,200 million in developing countries). As a result the level of the mean per capita GDP of all these countries at the beginning of the 80s was a bit less than double that at the beginning of the 50s (see Fig. 2. Here and from now on figures are given in 1975 prices, unless otherwise stated).

p These maximally integrated and averaged figures are only, of course, the extreme reference points that still give a very general picture of the scale of the enlargement of the volume and internationalisation of social production within the postwar capitalist world economy. Behind them are not only shifts of scale but also real structural changes in the main sectors of the economy and in various groups of countries of the non-socialist world. Facts of that kind necessarily call for further refinement and evaluation. Above all they blur over such integral features of capitalism as the intermittent cyclicity and unevenness of development, which 71 are also clearly traceable in its specific postwar conditions. An attempt will be made later at a comprehensive description of the most important factors governing the specific features of the postwar cyclic development of capitalist economy; that, however, in no way eliminates the need to clarify long-term trends that transcend the limits of any one economic cycle. What line has prevailed on the whole in
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F i g. 2 Dynamics of the GDP, international trade, and population growth of the countries of the world capitalist economy -700-1 1981* -5DO- -400- -300- -200- -100 TOO * Estimated ** Dynamics of the physical volume of exports Sources: UN Statistical Yearbook; Monthly IJulletin of Statistics for the relevant years.
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these tendencies? That to a slowing down or that to an acceleration of the growth of social production and of the international division of labour?

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p It is extremely difficult to determine this line because of the sharp, spontaneous fluctuations of capitalism’s market conditions, the intensification of its economic and political instability (including that due to the break-up of the colonial system), and the unsatisfactory degree of theoretical development of the problems of the specific character of the periodisation of the contemporary world capitalist economic cycle. Furthermore, the temporal framework of the postwar period is still too limited for broad, far-reaching generalisations. Nevertheless the available quantitative estimates of the long-term trends allow us to attempt a concrete study of this problem which is so vital for describing both the postwar results and the outlook for the further development of the productive forces.

p The spontaneous rises and falls of the mean annual growth rates of production and trade, which absorb a truly infinite number of every kind of cyclic and non-cyclic fluctuations of the economic conditions of various countries, are an integral feature of the capitalist world economy. In the final account it explains one of the main causes dooming capitalist economics to a lack of prospects in its search for theoretical principles for modelling and forecasting both the long-term and the short-term trends of capitalist development. This lack of prospects stands out the more clearly the less the contradictory character of production and market relations is taken into account and the less attention is paid to the law-governed inevitability of an alternation of cyclic booms and slumps in the world capitalist economy discovered by Marxist-Leninist political economy.

p Nevertheless, with the sharp aggravation of the general crisis of capitalism, the job of clarifying and modelling the patterns of capitalism’s ‘self-movement’ is in fact becoming particularly urgent. It is no accident that capitalist economists have been exerting more and more efforts of late to find some approach to coping with this problem. In addition, however, to quests for methods of controlling crisis processes in the economy, which pose great danger for the whole social system of modern capitalism, another social imperative is being fulfilled, that of concealing its antagonistic contradictions and of finding ways for a future ‘harmonising’ of its development.

p As we have already stressed, the amplitude of the fluctuations of the mean annual growth rates of GDP and trade in 73 the capitalist economy became very considerable in the postwar decades (see § 3 of Chapter 2). As the time parameters have merged the degree of fluctuation, of course, has been smoothed out. When the characteristic curves of the resultant indicators are compared for different postwar periods, it is useful to employ as long a time interval as possible. But it is, then, also of no little importance to have a definition, however approximate, into what phase of the world economic cycle the initial and concluding years of the period being analysed fall, for if the beginning of the period relates to the lowest phase of the cycle and the final one to the highest, the rates will be overstated compared with a period whose beginning and end relate to one and the same phase. Conversely, if the starting point of the interval relates to the phase of cyclic boom and its final point to the phase of the next economic crisis, then the mean annual rates will prove to be correspondingly rather understated.

p Comparison of the dynamics of economic growth in the first two postwar decades considered in Table 4 indicates that
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Table 4 Growth Rates of GDP and International Trade in 1950-81 and Estimated Growth to 1990 Mean Annual Growth Kates Variants of Grow 111 to 1990§ Period GDP Trade* GDI’ Trade 11)60 = 100 1970 = 100 11)00=100 1970 = 100 1950-60 4.3 5.8 350 210 610 290 1960-70 5.0 7.8 370 220 720 340 1970-81 3.4* 5.2 320 200 580 270 including 1973-81 2.7+ 3.5 300 180 500 240 1960-73 5.1 8.2 370 230 740 350 1960-81 4.0+ 6.4 340 210 630 300 * Estimated »Estimates based on the assumption that the mean growth rates for the appropriate years will remain in the 80s Physical volume of exports Sources: calculated from UN Yearbook of National Accounts Statistics, Statistical Yearbook, and Monthly Bulletin of Statistics for the relevant years.
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the GDP of the non-socialist world rose by 50 per cent in 1950-60 and by 63 per cent in 1960-70. The physical volume 74 of turnover on the world capitalist market increased respectively by 76 and 111 per cent in the same years. In other words, the rates of these most highly integrated indicators of the development of world capitalist economy in the 60s were rather higher than those of the preceding decade. The difference is not so great that we can conclude that there was a substantial increase in them, nevertheless a certain growth is traceable. In any case, even allowing for all the conventionality of the breakdown of the postwar period into decades, there would be no grounds for considering that the general long-term trend of economic growth in that period revealed a tendency to a marked fall. We must also allow here for the movement of the world economic cycle; at the turn of the 60s and 70s there was a crisis fall in the growth rates of capitalist production, while the preceding decade had been completed by a boom phase.

p The picture changed substantially, however, in the 70s and early 80s. There was a clear deterioration of the conditions for further development of the reproduction process on a world scale. After a brief upswing in 1972-73 the capitalist economy was hit by the deepest cyclic crisis of the postwar years, which led, in combination with a very considerable disturbance of its energy, raw material, and monetary and financial relations, to a significant slowing down of the physical volume of production and trade and then to an absolute fall. In consequence the mean annual index of GDP fell in the first half of the 70s to a level unprecedented in the postwar period. There was also a decline in the growth rates of international trade. (These points will be considered in more detail in Chapter 5.)

p Although economic growth rates later rose somewhat, the consequences of the world crisis of the mid-70s had a restraining effect on the long-term dynamics of the further growth of capitalism’s productive forces. The position was further intensified by the effect of the next crisis that involved most of the leading capitalist countries at the turn to the 80s. The compilers of the UN World Economic Survey for 1979- 80, summing up the situation, remarked:

There is evidence that the developed market economies, without having fully recovered from the 1974-1975 recession, are now entering a new downswing in the business cycle. Among tho major industrialised countries, the deceleration of growth in 1979 was concentrated mainly in the United Kingdom of Great Britain and Northern Ireland and tho United States of America, 75 but signs of weakness emerged in other countries as well in the second half of the year, and a more widespread slowdown is expected in 1980.  [75•1 

Their forecast was justified. At the start of the current decade, the capitalist business world was hit by another cyclic crisis. As a result the aggregate growth rates of GDP were around 2.6 per cent in 1973-81 against 5.1 per cent in 1960- 73, i.e. were nearly halved, while the growth rates of the physical volume of their international trade were down by more than a half.

p It would be wrong, however, to conclude from these figures that the phases of cyclic revival and upswing no longer have any essential influence on the course of capitalism’s economic development, and that we must expect protracted stagnation or complete obstruction of its productive forces. Even if we assume that the mean annual rates of development in the 80s will not exceed those of 1973-81, the volume of capitalist countries’ gross production should be 80 per cent above the level of 1970 at the beginning of the next decade, and of international trade 140 per cent higher. In other words, world capitalism’s total production of goods and services will be roughly 200 per cent above the 1960 level, and foreign trade 400 per cent higher. If economic development rates reach the mean postwar level, then these indicators will be somewhat higher (see Table 4).

p A need inevitably arises, when estimating the long-term tendencies of postwar economic development, to compare them with some prolonged results of the preceding growth of the productive forces. As regards aggregate production we cannot judge the real scale of general economic growth at the turn of the century with any high degree of reliability because of the weak development of international statistics. But the available estimates provide the basis to some extent for certain conclusions. The English economist Angus Maddison has calculated that the annual growth rate of the total output of the leading capitalist countries of Western Europe and North America averaged around 2.7 per cent in 1870- 1913. The highest growth rates were shown by the USA (4.3 per cent) and Canada (3.8 per cent).  [75•2  The Soviet 76 economists Bolotin and Kudrov have calculated that the aggregate GDP of all the countries of the world capitalist economy (within its present boundaries) had risen hy 120 per cent hy the beginning of the 1950s compared with 1913.  [76•1  At the same time the physical volume of world trade increased by 44 per cent.  [76•2  From that it follows that the mean annual growth rate of GDP was around 2.1 per cent, and of trade 1 per cent.

p These indicators, however, also cover periods of a sharp disturbance of the whole course of capitalist reproduction during the two world wars. The highest GDP growth rates in the interwar period were achieved in 1920-29 when they averaged 3.4 per cent. The lowest growth rate occurred on the eve of World War II (0.8 per cent in 1930-38), when world capitalism was hit by the great over-production crisis of 1929-33 and later began to experience a new cyclic fall in production in 1937-38. On the whole the mean annual indicator of GDP growth in the interwar years and the first decades after World War II was 3.3 per cent, and that of international trade 4.5 per cent.

p For all their extremely generalised character and lack of full comparability, these data give us the chance, all the same, to draw the following conclusions. On the long-term plane the mean growth rates of the capitalist economy were higher in the postwar years, for all their periodic falls during cyclic crises, than in the interwar years; over the greater part of the postwar period, moreover, right to the end of the 60s, they had a certain tendency to accelerate, and this tendency was by no means exclusively a feature of the period under review. It was forcing its way through against opposing, blind patterns of the capitalist mode of production throughout its preceding history and so predetermined the inevitability of a progressive aggravation of its contradictions.  [76•3 

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Lenin stressed that capitalism grew faster as a whole in the monopoly stage than earlier, although its growth was generally becoming more uneven.  [77•1  The facts bringing out the scale and long-term rates of its development in the postwar decades indicate that Lenin’s proposition is also fully applicable to the conditions of the general crisis of capitalism. They indicate that, in spite of considerable cyclic fluctuations and increasing instability, the productive forces have grown more rapidly on the whole within its shrunken boundaries in the second half of the twentieth century than in its first half and in the second half of the nineteenth. This development, however, has not led, and cannot lead either, to consolidation of monopoly capital’s positions or to an attenuation of the crisis processes in the world capitalist economy.