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An economic recovery has begun.
- President Obama, Second Inaugural Address
President Obama’s optimism — baseless as it may be — was surely appreciated at the annual meeting of the World Economic Forum. For in what was described as the “most optimistic” meeting since 2007, 2,600 members of the global elite convened over the weekend at their exclusive Davos, Switzerland retreat to once again set upon “improving the state of the world.”
In a certain respect the cautious hopefulness of Davos 2013 was perhaps justified, as it was only a year ago when the retreat was preempted by warnings of a looming “period of evil” and the potential “collapse of the financial system” from no less than George Soros.
Yet, one year later, while optimism gains a foothold amongst the world’s elite, the evil doled out by global capitalism continues unabated.
According to a recent report by the International Labor Organization (ILO), “The number of unemployed worldwide rose by 4.2 million in 2012 to over 197 million.” And as the report goes on to warn, global unemployment could increase even further in 2013.
Global youth unemployment, meanwhile, remains particularly dire. According to the ILO report, nearly 74 million people between the ages of 15 and 24 are unemployed.
“Some 35 per cent of unemployed youth in advanced economies have been out of a job for six months or longer,” the report continues. “As a consequence, increasing numbers of young people are getting discouraged and leaving the labour market.”
And for those currently languishing in the global reserve army of labor, the forecasts for meager growth offer little hope for a reprieve.
According to the latest World Economic Outlook by the International Monetary Fund (IMF), global growth is projected to reach 3.5 percent in 2013. That is a downward revision of 0.1 percent from the Fund’s October outlook. But the outlook is much worse for the advanced economies.
The IMF projects the euro area to contract 0.2 percent in 2013, with contractions in Italy and Spain of 1.0 and 1.5 percent respectfully.
In France, where youth unemployment is already over 25 percent, growth is projected to register a measly 0.3 percent.
In Britain, it is the specter of a triple-dip recession that looms, after a contraction of 0.3 percent was seen in the last quarter of 2012. As the Guardian reports, “The economy remains 3.5% below its peak in 2007 and is not expected to regain its previous level for at least another two years, making it the longest recovery in 100 years.”
Growth in the U.S., meanwhile, is projected by the IMF to come in at 2 percent — a downward revision of 0.1 percent from the Fund’s October outlook. This, as inequality in the U.S. continues to worsen.
But even this rather bleak outlook for the world’s advanced economies may be too optimistic.
As the IMF cautions, “downside risks remain significant, including prolonged stagnation in the euro area and excessive short-term fiscal tightening in the United States.”
Indeed, as the Economist warns, “You might think that six years after the global financial crisis first broke, the downturn would be well behind us and the economy would be humming along. Instead, huge swaths of the world seem to be embarking on a Japanese-style experiment with long-term stagnation.”
This is precisely what Marxists scholars John Bellamy Foster and Robert McChesney argue in their latest book, The Endless Crisis.
Showing that the globalized system of monopoly-finance capital is characterized by a dangerous stagnation-financialization trap, Foster and McChesney argue that it is in fact stagnation that is now the norm — not growth. And this stagnant reality has left greater financialization as the only acceptable remedy for the global elite.
“Yet,” Foster and McChesney write, “rather than overcoming the stagnation problem, this renewed financialization will only serve at best to put off the problem, while piling on further contradictions, setting the stage for even bigger shocks in the future.”
Of course, figuring out how to put off the problem, while piling on further contradictions, is where the World Economic Forum comes in. After all, despite the pretentious claims of “improving the state of the world,” Davos is really little more than a posh mountain retreat held for global elites hell-bent on preserving their own privileged class positions. And as for that world they purportedly seek to improve, all Davos ever has to offer those beyond its pearly gates is the mysticism of invisible hands.
And in this sense, the growing talk of an “economic recovery” is but the byproduct of a world suspended in an illusion annually cultivated high up in the Swiss Alps. But for the global elite, that’s evidently grounds for optimism.