In one week, between 5 and 12 February, more than 6,000 million dollars flooded into the German Bundesbank and hundreds of millions more poured into other central banks. Throughout the world, the capitalists were trying to get off the dollar's sinking ship, into strong currencies like the German Mark and the Japanese Yen.
The crisis was triggered off by the publication of the United States' 1972 trade figares. They showed that last year America had the biggest trade deficit in its history. But the full measure of the disaster can only be grasped when we remember that at the end of 1971, following the trade deficit of that year, the United States had devalued the dollar by 11% to ensure that the deficit would disappear. In fact, 1972, far from ending the trade deficit, brought a tripling of the 1971 figure.
The immediate crisis was ended by the US devaluing the dollar 10% and by the Japanese allowing the yen to float up to a LECT WELUC But this halting of the monetary crisis - a very temporary halt and even now the exchanges are still coughing and spluttering - has merely set the scene for a fierce struggle over trade and other aspects of the relations between the imperialist powers. INTER-IMPERIALIST RIVALRY Behind esoteric technicalities of monetary crises lies a power struggle between the American bourgeoisie and its rivals in Europe and Japan. The international monetary system set up at Bretton Woods at the end of the war made the dollar the main international currency: the American economy was overwhelmingly dominant throughout the world and therefore provided a solid basis for confidence in the dollar. But since the war, the dominance of the United States has been increasingly undermined by the growth of strong capitalist economies in Japan, West Germany and other European countries. These have begun to challenge American capital in one field after another, and call in question the international role of the dollar. The American bourgeoisie attempted to counter-attack in 1971 with the devaluation of the dollar and the imposition of an import Flags our in Wall St. surcharge. The aim was to put the US in a mote favourable position to beat its trade rivals, using the fact that the dollar was central to the international monetary system as a weapon. The February crisis demonstrates that this counter-attack has failed. Over the last year, the Japanese capitalists have been beating hell out of their American rivals inside the American market itself: in 1972 Japanese sales to the US were worth 4,000 million dollars more than its purchases from the US. This represents two thirds of the total US trade deficit for 1972. GENERAL LINE UP The result has been for a general line up against Japan. The Financial Times leader during the crisis was headlined: "The responsibility rests on Japan". But the problem posed is not a small one: if Japanese exports must not be directed at the USA then they would come to Europe instead - пої а pleasant thought for the editor of the FT, who has been publishing the agonised cries of British capital over the crushing Japanese push in the ball-bearing field in Britain. Furthermore, Europe has very little to offer Japan in the way of exports, for the Japanese economy at present is based on heavy industry requiring massive imports of raw materials such as iron ore, coal and oil, as well as food and other primary products. Europe has nothing much to offer in this field. Therefore there is a lot of talk about the need to fundamentally reorientate the Japanese economy to light industry and technological industries which do not require massive raw material imports, thus allowing Europe big openings to export manufactured goods to Japan. Such a transformation of Japan's industrial structure would be fine if the Japanese ruling class had just been defeated in a major imperialist war and could therefore be told what to do by its allies'. But today even trade ese sources point out that Japan is not in a . mood at this time to offer any major trade concessions."
At the height of the crisis the Washington rost bemoaned: "Each crisis contributes something more to a growing distrust and hostility between the US and its commercial competitors" - in other words, the "friendly allies" that dominate the world capitalist system are increasingly reaching for each others throats. With this latest convulsion the battlefield has been extended over a vast range of issues: the battle of exchange rates; the battle over tariff barriers; the US administration's fight against the EEC's Value Added Tax scheme which taxes imports from the US at 5% but allows EEC exports to the USA to go free of VAT tax; the struggle over various exchange control systems; Nixon's attempts to torpedo the Common Market agricultural policy which blocks US exports on that front; the fight over the distribution of defence costs between the different imperialist powers; and so on. MEANING FOR WORKING CLASS A fter each crisis editorial writers hope that the main powers will be shocked into an agreement for fear of a total breakdown of international trade and credit, such as was witnessed in the 1930s. Instead we find that every new crisis of the system produces more feverish struggles between the imperialist states.
At the same time, each bourgeoisie increasingly has to turn its efforts to stepping up its exploitation of the working class, destroying the gains made by the workers during the years of the boom and thereby strengthening the capitalist class's ability to fight its foreign rivals.
This is exactly what has been happening in Britain over the past years, leading to the Tory Government's Industrial Relations Act and wage control laws, in addition to the hundred and one other measures to slash living standards and ham-string working class organisation.