Slump and Cold War

  • Leo Huberman
  • Paul M. Sweezy
Keywords: Imperialism, Political Economy


In terms of overall statistics it might seem somewhat exaggerated to speak of the present economic situation as one of slump or even recession. According to the latest available (December) issue of Economic Indicators, monthly publication of the President's Council of Economic Advisers, total demand for goods and services, also known as Gross National Product (GNP for short), rose throughout 1956 and the first three quarters of 1957, reaching a peak figure of $439 billion in the third quarter of 1957. The three major components of GNP are personal consumption expenditures, government purchases of goods and services, and gross private investment. Of these, personal consumption rose more sharply than total GNP; while government purchases increased through the second quarter of 1957 and dropped off only slightly in the third quarter. Private investment, the third major component of GNP, reached its maximum in the fourth quarter of 1956 and then fell rather sharply, but even here there was a marked recovery in the second quarter of 1957, which continued into the third quarter. Our friend the Man from Mars, after a quick look at Economic Indicators' chart of GNP and its components, would probably be more than puzzled by the gloomy pessimism which seems to pervade large sections of the business and financial community today.
Review of the Month