p There has been a definite modification, in recent decades, of the tendencies that characterise the structure of consumption of the aggregate product of the countries of the nonsocialist world. This structure is shaped primarily by three main spheres of expenditure: (I) private consumption; (II) public consumption; and (III) the accumulation fund, i.e. expenditure, embracing all forms of capital investment on extended reproduction of goods and services.

p A certain part of the GDP of every country is not employed directly in its economy but is exported. At the same time another part of the goods and services used by it is imported from abroad. When estimating consumption of the gross domestic product, therefore, it is necessary to allow as well for the material results of international economic relations; in that connection all countries invariably distinguish exports and imports when characterising the main spheres of the distribution of the GDP. The balance between them makes it possible to determine the actual scale of the consumption of goods and services within any given country over a 93 year or some longer interval. An estimate of these indicators is especially important for the purposes of oar analysis; it gives an idea of the dynamics and scale of the internationalisation of social production both within separate countries or groups of countries and the world economy as a whole.

p Marked fluctuations in the level of consumption are closely dependent on the cyclic movement of capitalist production and on the continuous rise and fall in the market elements of supply and demand, from which it follows that a long-term approacli to the study of structural changes in the main spheres of consumption is very necessary.

p The international statistics do not allow us to examine the results of the trends in the distribution of the GDP in the world economy for the whole postwar period. Consolidated accounts from the beginning of the 50s have been published only for the developed capitalist countries. Analysis of them, however, brings out, though not fully, many highly important features of the structure of consumption in the postwar capitalist economy, since around four-fifths of the gross product of all its countries were expended in the industrial centres at the end of the 70s.

p Among these features the dynamics and ratio of public and private consumption deserve special attention. Public consumption increased more in the first postwar years than private. Later, however, the trend toward a heightening of the role of government in aggregate consumption of the GDP weakened. During the period covered by Fig. 4 private consumption rose rather fastor. In 1960-80 it rose on the whole by 130 per cent (in constant 1975 prices), while public consumption approximately doubled.

p These facts, however, hardly provide grounds for concluding that the tendency inherent in the preceding history of state-monopoly capitalism for a rise in the importance of government in consumption of the aggregate social product had lost its force. In this case, of course, we need a multifactor analysis of the specific features of the socio-economic processes of recent times taking place in the individual leading capitalist countries.

p Nevertheless we must always bear in mind here, (1) that relatively slower growth rales of public expenditure were by no means observed in all the leading capitalist countries. In particular it was largely linked with the decline in the growth rates of U.S. public consumption, especially 94
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Fig. 4 Capitalist countries: dynamics of the principal types of outlay of the GDP (1960=100) 425 400 1980 375 350 1377 325 300 275 250- 970 225- 1980 1977 1970 1980 1977 1970 970 200- 1980 175- 1977 1970 150- 12S- 100. PUBLIC EXPENDITURE PRIVATE EXPENDITURE GROSS CAPITAL INVESTMENT Sources: UN Handbook of World Development Statistics lafO- Major Economic Indicators Showing Historical Development Trends (New York 1980); UN Statistical Yearbook, and Monthly Bulletin ™ Statistics for the relevant yeara.
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95 after the collapse of its military adventure in Vietnam.  [95•1  In several other capitalist conn tries budget expenditure rose rather faster than private expenditure at the same time.  [95•2  (2) When the facts mentioned above are being evaluated, it must be taken into account that budget appropriations continued more and more to exert a stimulating influence on the formation of the accumulation fund.

p The substantial fall in the 70s and early 80s noted above, in the long-term development rates of the gross production of goods and services in capitalist countries, naturally, was expressed in a simultaneous slowing of the dynamics of the consumption sphere. This slowing down, moreover, was even more marked in personal expenditure. Their mean annual growth rates were around 3.5 per cent in 1970-80, or almost half the rates of the preceding decade. The corresponding slowing of the dynamics of public expenditure was roughly one-third. The extra demand created by the state was intended in those years somehow to compensate for the weakening of the growth trends of personal consumer demand, primarily in the crisis phases of modern capitalism’s development.

p The growth of capital investment on extended reproduction compared with consumer expenditure has become a not unimportant factor in structural changes in the distribution of the GDP. Over the period, investment in fixed capital increased by 260 per cent in the industrial centres of world capitalism. The dynamics of investment outlays, moreover, tended on the whole to accelerate, with very considerable fluctuations of the mean annual rates in the various phases of the capitalist cycle and in various countries right up to the world crisis of the mid-70s. In 1950-60, for example, these rates were 4.6 per cent, arid in 1960-73 6.1 per cent. As a result the weight of accumulation in the total consumption of developed capitalist countries rose from 18 per cent at the beginning of the 50s, to 22 or 23 per cent at the beginning of the 70s.

p The heaviest cyclic crisis in the postwar history of 96 capitalism that then followed, and the crisis decline of production in most capitalist countries at the beginning of the 80s, substantially slowed down operation of this tendency. The annual rate of increase of gross investment in the last decade reviewed in Fig. 4 fell to 1.8 per cent, i.e. was roughly a quarter of that in the previous decade. This process was steepest in the U.S. economy, where the volume of capital investments in the 70s was still greater than in all the other capitalist countries put together.  [96•1  The growth rates of investment again rose in the second half of the 70s, during the next upswing, and were appreciably above the pre-crisis level.

p When gross investment in the economies of separate countries and groups of countries is being estimated it becomes necessary to allow for imports of capital as well as the volume of national capital investment. The international statistics of the United Nations do not publish sufficiently generalised facts on this tidal flow of productive capital, but the available accounts indicate the great scale of this process, in which transnational corporations of the USA and other main capitalist countries occupy a leading place. Their exports of capital developed 60 per cent faster than industrial production in the postwar period.  [96•2 

p Not only does a considerable part of capitalist countries’ production and consumption fall to them, but also much of international trade, about 40 per cent of the turnover of which already consisted of intracorporative transactions at the beginning of the 80s.

p The authors of the 1981 UNCTAD Report stressed in connection with the present-day ‘dramatic growth of transnational conglomerates’:

p In the case of minerals and manufactured products recent tendencies have been towards an expansion of intrafirm transfers among the transnational trading affiliates of industrial transnational firms. This growth of intrafirm transactions has made 97 for the widespread use of transfer pricing. Through Ibis technique corporations are able to minimize their overall tax payments by manipulating the prices of intrafirm transactions, shifting profits from countries characterized by relatively high tax rates to those where rates are lower. Such corporate practices affect the trade and other international transactions not only of developing but also of developed countries.  [97•1 

p The very important tendencies developing in the sphere of the capitalist international division of labour have begun to have an appreciable influence on structural shifts in consumption of the aggregate social product. The production for export of the main centres of capitalism rose by 430 per cent between 1960 and 1980, while the weight of industries working for export in the aggregate distribution of the GDP rose in the same years approximately from 10 to 20 per cent. The growth of exports in turn opened up broader horizons for their imports, the physical volume of which correspondingly increased by 310 per cent.

p Never before have capitalist countries made such big outlays in such a short period in the realm of internationalising social production, as is evidenced by its entering on a higher phase of its development. This kind of broad social phenomenon must undoubtedly be the consequence of deep-seated processes in the capitalist world economy arising from the concentration and centralisation of monopoly capital, rather than of superficial and transient ones. The rapidly mounting expansion of multinational monopolies in the postwar world, and especially of U.S., West European, and Japanese transnationals, is playing an extremely important role in this respect. Although their activity now embraces most of the main types of capitalist countries’ domestic expenditure, it is reflected most fully in the area of their external economic policy.  [97•2 

p The composite indicators of the international statistics on the end use of the GDP do not include the total figures on exports and imports taken separately, but in their integral 98 inter-rotation. In fact they take account only of the difference between total exports and imports of goods and services. If, for example, exports exceed imports in any country, or group of countries, their consumption of the gross domestic product will be lower than their domestic production. On the other hand, an excess of imports over exports of goods and services means that consumption will be higher than home production.

p Over recent decades the exports of industrially developed capitalist countries as a whole have, as a rule, exceeded their imports. At the same time there has been another trend in the whole group of economically backward agrarian countries and raw material producers; their imports have, as a rule, exceeded their exports, which has inevitably led to a systematic growth of their foreign debt. The latter has reached unprecedented size since the break-up of the colonial system. The public and private indebtedness of these countries to the developed capitalist countries alone, for instance, increased in 1973-79 by almost 3.5-fold exceeding $ 400 billions by the beginning of the 80s.  [98•1  In the last quinquennium (1976-80), for example, their medium and long-term indebtedness to developed capitalist countries increased in current prices by more than 120 per cent (from $ 130 billion to $ 287 billion). Total payments on this debt rose at the same time from $ 20 billion to $ 30 billion. The economists of the International Bank for Reconstruction and Development estimated that the foreign debt of all developing countries would exceed $ 550 billion by the end of the next quinquennium, while the outflow of funds from them to repay the basic debt and meet the interest on it would be higher than $ 100 billion.  [98•2 

p The discrepancy between the volume of production and consumption of the GDP in the different groups of countries noted above is only one aspect stressing the need for a comprehensive study of the long-term tendencies in the area of its distribution. Such a study would help clarify certain essential features of the world capitalist economy since the break-up of the colonial system. The figures in Table 6 can characterise in very general form the dynamics of the 99 changes in the structure of consumption in both capitalist and developing countries in the 60s and 70s.

p In the early 60s consumption (and production) was still growing faster on the average in developed countries than in developing ones. Later, however, another tendency began to show; the growth rates of the first group slowed while those of the second increased perceptibly, which led as well to a certain rise in the share of developing countries in the
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Table 6 Expenditure of GDP by Developing and Capitalist Countries (in percentages)* C.apilalist Countries Developing Countries Total expenditure 1960- 1970- 1961 1971 1980- 1981** 1960- 1961 1970- 1971 1980- 1981** Total Public Private Gross investment Exports Imports 85 91.5 84 87 74.5 78.5 84 90 84 86.5 75 83 80. 84 82 75. 82 79 15 8.5 16 13 25.5 21.5 16 10 16 13. 25 17 19. 16 18 24. 18 21 * Total in the two Croups in each rubric = 100 ** Estimated Sources: as for Fig. /i.
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total consumption of the capitalist world’s GDP. In spite of the comparative smallness of the increase, it can be taken as a not unimportant indicator of the prospective new lines of development of the capitalist world economy that are becoming noticeable in connection with the break-up of its former colonial structure.

p The accelerated growth of public consumption in the emancipated countries above all requires attention. Over the years covered in the table it rose in constant prices by more than 250 per cent, which is considerably higher than the corresponding indicators for the developed countries. As a result the weight of the group of developing countries in Asia, Africa, Latin America, and Oceania in the aggregate public expenditure of all the countries of the non-socialist world as a whole rose to 16 per cent at the end of the 70s against 100 Emacs-File-stamp: "/home/ysverdlov/leninist.biz/en/1982/WCE326/20070620/199.tx" 9.5 per cent in the early 60s. This tendency will probably spread to some extent in coining years. We must also bear in mind that, in addition to the extreme heterogeneity of the political structure and state system of the emancipated countries, there are substantial differences between the socio- economic nature of their public sectors and state-monopoly capitalism.

p The increase in the role of government in the decisive areas of the public life of the former colonies and semi-colonies has naturally been converted into a constantly operating factor of the deepening crisis of the imperialist system of exploitation since the war. As 0. D. Ulrich has justifiably commented, the creation and extension of the public sector in the emancipated countries

p is an absolute pattern of their economic development and characteristic feature of the social changes taking place in them. The process reflects the objective conditions and main practical tasks that now determine their development. The basic one is consolidation of national state and political independence in the fight for economic and social progress, which presupposes tho preparation of and transition to new forms of production.  [100•1 

p Private consumption in the capitalist and the developing countries rose at about the same rates to the end of the 60s, while the ratio between them in the total GDP of the world capitalist economy remained quite stable. Since then this type of ‘stability’ has also become a thing of the past. The rates of expenditure of the private sector rose more slowly in the 70s in the capitalist countries than in the developing ones, which went hand in hand with a certain rise in the weight of the latter in the capitalist world’s total outlays in this sector. Nevertheless the gap between them in this respect remained immense and is estimated at a ratio of 4.5 to 1 at the end of the period considered in favour of the main economic centres of capitalism.

p Private expenditure occupies a decisive place in both groups, but in the developed capitalist countries its share in aggregate consumption of the GDP has been perceptibly lower, while the proportion of public expenditure has been correspondingly higher than in developing countries. This 101 structure of consumer expenditure has also largely determined the important differences in the forming of the accumulation funds in the two groups.

p This tendency, established in the imperialist stage, has in fact been losing its former significance in recent years in a situation of crisis weakening of investment in the whole group of industrially developed countries. Furthermore, at the end of the 70s and in tho early 80s the proportion of investments in the structure of their consumption was less than in the developing countries. The latter’s accumulation fund continues to expand more rapidly than in capitalism’s centres. Nevertheless, more than three-quarters of the total investment of the non-socialist world was still being made in capitalist countries.

p The objective conditions for a further deepening of the contradictions in the economic, and consequently social development as well, of the two groups thus continued to operate, which was also fostered by the lines of development of the economically backward countries’ economic ties with the industrial centres, which remained extremely unfavourable for the former. Evidence of this is given by the figures in Table 6 on the changes over recent decades in the ratio of the weight of exports and imports between the two groups of countries.

p The very broad-scale trends of development of the most important spheres of production and consumption being considered only lay the initial basis for studying the world capitalist economy as an integral system, and cannot, of course, provide an adequate foundation for any detailed conclusions and generalisations.

p For this very intricate system consists of various sub- systems, each of which in turn is extremely varied and has special characteristics of ‘self-movement’ that often differ from those of the movement of the system as a whole. The final directions of the latter’s development may therefore differ considerably from the trends in any one region or country, since one and the same factors often have a very different effect on the system as a whole and on its separate parts.

p The underlying idea of the foregoing exposition started from the well-known principle of Marxist-Leninist systems analysis of the economic structure of society, that was formulated in particular by Lenin in his review of Bogdanov’s A Short Course of Economic Science. Noting that ‘the most 102 important problems of contemporary social life’ are linked in a very direct way with the problems of economics, Lenin stressed the need

p to represent the different aspects and different manifestations of contemporary economic life as component parts of a definite system of social economy, as manifestations of the basic features of that system.  [102•1 

A comparative analysis of these features in the development of the productive forces of the postwar capitalist economy and of its most important sub-systems will be continued in the next part of our book.