Second of two slide packs dealing with the current world economy and its protracted crisis; used for presentations at the annual conference of the World Association for Political Economy (WAPE) hosted by the Geopolitical Economy Research Group (GERG) at the University of Manitoba, Winnipeg, July 2019. Accompanied by short video presentation at https://www.youtube.com/watch?v=uRuKiXR6LcA&feature=youtu.be; see academia entry at https://www.academia.edu/41884367/Unexplained_persistence_Essential_facts_for_a_theory_of_postcolonial_imperialism

1. The long slump
The economic facts behind the present
protracted political crisis
© CREATIVE COMMONS LICENSE
ALAN FREEMAN, GEOPOLITICAL ECONOMY RESEARCH GROUP DATA PROJECT,
UNIVERSITY OF MANITOBA
PROJECT AND DATASET: HTTPS://GITHUB.COM/AXFREEMAN/ECONOMIC-HISTORY
RESEARCH GROUP SITE: HTTPS://GEOPOLITICALECONOMY.ORG
PAPERS:HTTPS://GEOPOLITICALECONOMY.ACADEMIA.EDU/ALANFREEMAN

2. What is to be explained
• ‘Trumpism’ is widely perceived and presented as an aberration
• Actually, an integral part of a much more generalised political turn
• Ukraine: West promotes openly fascist forces to power for first time since Hitler
• Regime-change becomes ‘normal’ way of operating by the West
• Open war conducted via poorly-concealed proxies (Jihadists, Saudi, SDF, etc)
• Attempt to turn Latin America into a war zone
• Widespread European military intervention in Africa
• Sanctions as a weapon of war
• Marginalisation of traditional Social Democracy and rise of semi-fascist forces
• Direct suppression and criminalization of dissent in war on ‘fake news’
• In short, the abandonment of the ‘liberal centre’

3. Two sides of a single coin
• Much attention (rightly) on the ‘revolt of the poor nations’
• China
• Trends towards Eurasian unification (Shanghai Accord, ADB, Silk Road, etc)
• Venezuela etc: The Pink Tide refuses to go out
• But less attention on the autonomous crisis of the rich nations
• This is as much a causal part of the systemic political crisis
• In fact, one of the main causes of the new war on the South

4. Wild confusion about the facts
• Official institutions
• Everything fine until 2008 mysteriously arrived from nowhere
• Now some kind of ‘stagnant growth’ which just will not go away
• The Trump camp
• America booming like never before
• The Northern Left
• Dominant view is ‘neoliberalism worked’ (Dumenil/Levy, etc)
• But something went mysteriously wrong in 2008
• And new we have a crisis of the ‘structures of accumulation’
• Minority view (Kliman-Freeman, Shaikh): we are in a ‘third Great Recessioin’
• What is missing is a historical perspective
• This is now possible because there is a growing mass of long-term Macroeconomic data

5. Brief clarification
• ‘North’ means ‘Economic North’: a neutral term for ‘Advanced’,
‘Industrialised’, ‘First World’ or just plain ‘Imperialist’
• ‘South’ means everyone else
• Includes transitional countries but only when there are data
• Excludes China
• ‘Growth’ means average annualised growth in the given period
• ‘Average Growth’ means weighted by population
• (Official figures use PPP weights see Schultz-Gattas 1992)
• I will show it makes almost no difference

6. Two key terms
• Endogenous=the normal working of the (World) market; ‘blind’ or
concealed from consciousness by the commodity relation
• Exogenous=the outcome of conscious political action mainly by states
but also by classes
• Pluralism=a conclusion is not robust unless
• All alternative measures of the same concept have been assessed in reaching a
judgement (eg GDP at current, PPP, real prices)
• The conclusion has been assessed against the leading contending explanations

7. Weighted average growth of the North since 1940
-5%
-3%
-1%
1%
3%
5%
7%
9%
1941
1946
1951
1956
1961
1966
1971
1976
1981
1986
1991
1996
2001
2006
2011
2016
Annual growth (population-weighted)
Four-year moving average
• The ‘normal’ level of growth is
now much lower than before.
• We are living through a barely
concealed long slump.
• Decline continuous since 1950
• ‘boom’ in the 1950s/1960s but
decline was already under way
• Erupted in ‘open’ crisis in 1974
• No ‘recuperation’ (Dumenil/Levy,
Husson)
• No ‘new regime of accumulation’
• Financialization did not usher in
a crisis not already in existence.

8. 0%
1%
2%
3%
4%
5%
6%
7%
1949-19531954-19571957-19611961-19691969-19751975-19811981-19911991-20012001-20082008-2018
Annualised growth over Business cycles

9. The North, the whole North, and
nothing but the North

10. 0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
A game of two halves: before and after 1974
Crecimiento promedio anual 1950-1975 Crecimiento promedio anual 1975-2017

11. The USA is not an exception
This is not a ‘crisis of
the USA’ but of all rich
nations
During 1950-1974 rest of
the North ‘caught up’
with USA
USA partially redressed
1974-2006
But the trend is
essentially the same
-4%
-2%
0%
2%
4%
6%
8%
1950
1954
1958
1962
1966
1970
1974
1978
1982
1986
1990
1994
1998
2002
2006
2010
2014
GDP Growth of the North compared with USA
USA annual growth
Unweighted average growth of North without US

12. The ‘Asian’ miracle is over
There is much talk of
the ‘Economic failure’ of
North Korea
There is less discussion
of South Korea
After rapid growth led
to ‘catch up’ by 1990s,
South Korea hit by US-
engineered ‘Asian crisis’
Since then follows
general pattern of
decline
-5%
0%
5%
10%
15%
1954
1957
1960
1963
1966
1969
1972
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002
2005
2008
2011
2014
2017
South Korea annual growth, four-year moving average

13. The rise of the South – in real but not money terms
‘Real’ growth actually measures
productivity increase. If there was no
change in productivity, output would
simply measure the size of labour inputs.
Also there would be no accumulation
(unless the labour force grows)
The South outstrips the North in
productivity growth. But the North
captures this rise in money terms which
means living standards in the South are
static or falling.
That is to say the South’s growth is
completely overridden by the
constant devaluation of its
purchasing power.
As the North’s growth trends to zero
this increasingly becomes the only
way it can ‘buy’ social peace.
0%
1%
2%
3%
4%
5%
6%
7%
8%
1971
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
2013
2016
Annualised Growth, four-year moving average
Norte Sur

14. Sources of bias
• There are various alternative measures of average growth
• We can aggregate with different weights
• We can use PPP instead of real GDP
• We can try ‘corrections’ for distortions like treatment of finance (Assa)
• Again it makes no qualitative difference
• The conclusion of long-run secular decline is therefore robust

15. Effect of a different measure of GDP
In 2018 the Maddison
project released two sets
of PPP measures
Single Benchmark, the
traditional measure, is
said to be best for
studying growth
Multiple benchmark is
said to be best for
comparing countries
Both show exactly the
same trend as real GDP
and as each other.
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
1950
1954
1958
1962
1966
1970
1974
1978
1982
1986
1990
1994
1998
2002
2006
2010
2014
Annual growth of the North: two PPP
measures compared
Single benchmark PPP 2011 Multiple benchmarks PPP

16. Weighting makes almost no difference
The need for weighting
arises because ‘growth’ is
measured in national
currency terms.
The chart compares
growth rates weighted by
population with a ‘simple
average’ of country
growth rates
They are very similar
This confirms that the
countries are ‘statistically
compact’ – they behave
in the same way
-15%
-10%
-5%
0%
5%
10%
15%
1941
1945
1949
1953
1957
1961
1965
1969
1973
1977
1981
1985
1989
1993
1997
2001
2005
2009
2013
Growth of the North, weighted and
unweighted average
Unweighted Average Average weighted by population

17. Next up: a study of cause
Investment: driver of
growth, driver of
decline
15%
17%
19%
21%
23%
25%
27%
29%
1950
1953
1956
1959
1962
1965
1968
1971
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
2013
North: total investment, proportion of GDP

18. Project and dataset:
https://github.com/axfreeman/Economic-History
Research Group Site:
https://geopoliticaleconomy.org
Papers:
https://geopoliticaleconomy.academia.edu/AlanFree
man