There must be someone in the Bush’s government who believes the American economy is living its glory days. However, people with common sense might have noticed the recent piece of news stating that Toyota Motor has become number 1 in the automobile world industry, surpassing General Motor (GM), as one more sign of the American decline. In this year’s first trimester, the Japanese company sold 2,348 million vehicles, having conquered 1st place in the world market, while the North-American giant ended in 2nd place (after 76 years of leadership), having sold 2,260 million vehicles in the same period of time.

Toyota has surpassed its rival in several other fields as well. Its market value, estimated in USD 225 billion, is almost 12 times as much as GM’s. Toyota’s profit in the 12 months preceding March 2007, was of USD 13 billion, while the American company still fights to get out of the red, having accumulated a deficit of USD 2 billion in 2006 and USD 10.4 billion in 2005. Fearing some protectionist reaction, the Japanese were rather discreet spreading the news.

Long decline

As an example of what’s been happening to the American economy as a whole, the imperialist automobile industry did not collapse from the night to the day. As noticed by The New York Times’ journalist Keith Bradsher (in an article translated by “Folha de São Paulo on April 25, page B14), “Toyota’s climb, which has been forecasted by several economy observers for a long time, is a new landmark in the long decline of the American industry, which once dominated the world”. Problems started getting shape in the mid 1960’s”.

The North-American companies lost field little by little due to factors such as its relative technology stagnation, a result of its monopolist arrogance (pictured by Francis Ford Coppola in “Trucker – A man and his dream”) and the high cost of its working aristocracy, among others. Conversely, the foreign competition (especially the Japanese) grew stimulated by its industrial creativity, translated into technological and managing innovations (toyotism), associated with higher taxes of the working force, having obtained as result advantages as far as productivity and competition (more attractive prices).

Detroit, once the prosper automobile industry world capital, is today an image of decay, having gained the fame of “ghost city, unfriendly, frightening”, in the words of journalist Cora Rónai, who in her blog described sad scenario. “Several buildings from the golden age have now been abandoned. Others were occupied by homeless people. It’s all dirty. Street after street, what we see are closed stores, dirt, few life signals”.

Unequal Development

The market loss is particularly sensitive within the United States, where foreigners respond for 49% of automobiles sales today. From Detroit’s three big ones (GM, Ford and Chrysler), only two remain (GM and Ford), which are not far from becoming history too. First to break down, Chrysler was bought by Germany’s Daimler. With quality and attractive values, Toyota, alone, already has 16% of the North-American market.

The decline of the North-American automobile industry hegemony gives us an eloquent example of the unequal development of nations acting in this specific field of industrial production. Nonetheless, it’s only the tip of the iceberg. The decadence of the American industry is a phenomenon much bigger and more complex, which can be better understood (from a more general point of view) when we analyze the accumulated industrial deficit by Uncle Sam in foreign trade, which in 2006 reached the record value of USD 836 billion.

The commercial deficit in the industrial sector is the main cause for the deficit in current account and the amazing US foreign debt. It reflects the loss of space for the foreign competition by the industry as a whole. It means that the sector’s corporations, in several different fields, have lost field to the foreign capital in the biggest and most disorderly center of single world market. Not only, or even particularly, to Japan, as also to China, Germany and other countries. Competition and parasitism are awakening a strong protectionist resentment among businessmen and in the American Congress House.

Parasitic Reproduction

This phenomenon has been causing significant changes in the economic cycle and in the capital reproduction in the United States and in the entire world. It is associated to which the North-American History professor and director of the Center for Social Theory and Comparative History of California, Robert Brenner, classified as “a way of distorted expansion”, in the book “The Boom and the Bubble”.

The fact is that the hesitant expansive cycle which came after the 2001 recession in the United States did not have as its main force the growth of real value production (merchandise) by the industry or the re-heating of employment level, which started to react again only in 2003. “The industrial and other similar sectors keep on shrinking”, comments Brenner. Its recovery, which today can be considered fragile (suggesting more of a “bubble” than a “boom”), was led by the commerce expansion (stimulated by the excess of imports) and of credit, especially in the real estate sector (which gave strength to the civil construction), besides being reinforced by the so-called “Keynesianism of war” (Iraq and Afghanistan).

The optimistic will claim that the industry recoil is a natural process or an unavoidable and even healthy sub-product of progress, once we all happily walk towards the “post-industrial society”. But, this is a wrong way of projecting what’s really going on. We should not erase the boundaries between work and productive and unproductive sectors of the economy or forget Marx’s elementary lessons about commercial and financial activities, which certainly move, but do not create capital, and, consequently, are by nature unproductive, although necessary. We shall suspect of growth when it’s pulled by consumption and credit.

As said by an American economist (Addison Wggin), to measure up the GDP based on the consumption fed by debts is the same as measuring it through the tax the Unites States is fated to bankruptcy (while a hegemonic powerhouse). “Debts in constant expansion constitute a dangerous ways to keep alive the consumption in the country, without mentioning the fact of financing a war”, alerted David Harvey (in the book “The New Imperialism”).

In this case, the industry decline reflects a parasitic road to capitalist reproduction, in which the exaggerated consumption has become the main source for growth, generating a false abundance; it is a fruit of the old but renewed parasitism, which the historical result (as forecasted by Lenin, as expected) is the rotting of the American economy and the U.S. dollar pattern. Notice that China’s amazing climb, found on the opposite pole of unequal development, has in its foundation, instead of “financing measures”, the extraordinary development of the Chinese industry. I intend to return to this point in my next article.