for fresh profitable investment. But there were not nearly as many of these in productive sectors as previously. One consequence, as we have seen, was a general slowdown in the level of accumulation and decline in average growth rates. Fairly fast growth of productive sectors would occur in one part of the world economy or another-in Brazil and the East Asian NICs in the late 1 970s, in Japan and Germany in the 1980s, in the US and the East Asian NICs again in the mid to late 1990s, in China and to a lesser extent the other BRICS in the 2000s. But profitability was not sufficient to raise productive accumulation throughout the system as a whole to its previous levels.
There were increased competitive pressures on individual firms to undertake large individual investments so as keep ahead of rival firms, but there was less certainty than before about being able to make a profit on those investments. Firms, wealthy individuals and investment funds reacted by being cautious about committing themselves to such investments lest it leave them without ready cash ( "liquidity" in financial parlance) next time there was a crisis. The result was an inevitable tendency for the average level of productive investment to fall.
Growth of private sector real non-residential capital stock in industrial countries 14
1960-69 5.0 percent
1970-79 4.2 percent
1980-89 3.1 percent
1991 -2000 3.3 percent
These figures, it should be noted, understate the slowdown in productive investment, since a growing share of investment went into the non-productive financial sphere. And it was not only in the old industrial countries that a falling share of surplus value went into productive investment. The "tigers", the NI Cs and the BRICS drew a sharp lesson from the Asian crisis of 1997-8. They were not willing to risk being stuck again with a shortfall of ready cash the next time international instability hit their markets, and built up surpluses on foreign trade that they saved rather than invested domestically. Even China ended up with an excess of saving over investment equal to 10 percent of its national income, despite its virtually unprecedented rate of accumulation.
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The New Age of Global Instability