Conclusion: the Coming Crisis

Since the onset of the East Asian crisis, the world economy has lurched toward chronic stagnation. Over the past decade, the US economy has effectively acted as the market of last resort for the rest of the capitalist countries, especially for East Asian exports. With the recent curtailment of effective demand in the United States, however, the final pillar of support has crumbled. For the first time in over two decades, the world economy is now at the threshold of a synchronized downturn, which will engulf the three major poles of accumulation in East Asia, the EU and the US. The only question that remains is over the severity of the emerging slump. Indeed, we have shown that this crisis of chronic stagnation has already engulfed Japan over the past decade. The question that will be posed in this final chapter is whether the crisis of overaccumulation will ultimately assume global proportions. In other words, will a similar dynamic of debt deflation and excess capacity characterize the core economies of Europe and the United States? Furthermore, is there a real likelihood that the world economy could relapse into another phase of depression?