Tuesday, September 15, 2009

When ships are going nowhere, neither is capitalism

Here, on a sleepy stretch of shoreline at the far end of Asia, is surely the biggest and most secretive gathering of ships in maritime history.
Their numbers are equivalent to the entire British and American navies combined; their tonnage is far greater. Container ships, bulk carriers, oil tankers - all should be steaming fully laden between China, Britain, Europe and the US, stocking camera shops, PC Worlds and Argos depots ahead of the retail pandemonium of 2009. But their water has been stolen.

They are a powerful and tangible representation of the hurricanes that have been wrought by the global economic crisis; an iron curtain drawn along the coastline of the southern edge of Malaysia's rural Johor state, 50 miles east of Singapore harbour.

The paragraphs above are from an article in the British Daily Mail titled “Revealed: The Ghost Fleet Recession.”

You can click on this link for the full article:


The article is a sobering reminder of the fact that the so-called “green shoots of recovery” are a long way from developing in mature plants of renewed prosperity.

The image of empty ships “equivalent to the entire British and American navies combined” stuck in a great oceanic parking lot for want of goods to be carried between continents emphasises the downturn in productivity which has led to unemployment and hardship being visited on the working classes of developed and developing nations alike.

It is the reality behind probably the most honest of a whole series of “economic indicators” used by economists to analyse and predict economic activity.

This is the Baltic Dry Index, a daily average of the prices to ship raw materials across the seas. Because it measures the demand for the movement of raw materials, it can be sued to predict production trends. It is a trade in shipping contracts between real users and lacking in incentives for speculative investors.

The Baltic Dry Index plunged 93% between June 2008 and January 2009 and has made two attempts at recovery, only to slip back each time. As an honest indicator of activity in the shipping world, it provides no material signs of global economic recovery.
It indicates that the crucial element in the response of capitalism to recurrent crises of overproduction is the large-scale, wanton and wasteful destruction of productive capacity.
There must be a better system than this!

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