The World Economy has entered into a very serious crisis, by most accounts, the worst since the economic catastrophe of the 1930s. Like the financial crisis which detonated it the crisis is centered in the United States, the major locomotive of the World Economy, contributing 25 percent of Global Gross Domestic Product, but has also spread to all major capitalist countries of Japan, the UK and the Eurozone. After the injection of hundreds of billions of dollars by Central Banks and successive bailouts amounting to trillions of dollars by major capitalist Governments, the financial system is still unstable and banks are either unable or unwilling to lend money. The drying up of credit is further choking investment, disrupting trade and sharply aggravating the crisis.
This crisis is neither accidental nor attributable to the irresponsibility or greed of a few individuals in the financial sector as some Economists maintain, but is essentially rooted in the fundamental contradictions of capitalism - the unplanned, anarchic character of the capitalist economy, the relentless pursuit of profit regardless of the social consequences, the gap between the tendency for limitless expansion of the productive forces and the limited purchasing power of the masses, the tendency of profit to decline on account of replacement of living labour by machinery. All these tendencies condition the Capitalist Economy to grow and develop in a spasmodic and cyclical fashion with booms interspersed with stagnation crisis, slump and depression.
