Faultlines in a New Epoch of Crisis

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Image by Zoshua Colah.

We have entered a new epoch of global capitalism. It is characterized by crisis, imperial rivalry, authoritarian nationalism, and episodic, explosive resistance from below. The Trump administration’s brief year of misrule has brought all these to a head, particularly with its war on Iran. That war has put a definitive end to Washington’s imperial order of free trade globalization that it constructed within its bloc after World War II and expanded globally after the Cold War. Now the U.S. is a predatory imperialist state out for its own interests against nominal allies, rivals, regional powers, and subject nations.

Trump’s rise to power, like that of other authoritarian nationalists, did not come out of the blue. The electoral successes of the Right are the product of capitalism’s multiple crises and the establishment parties’ inability to overcome them. Their failure has triggered political polarization to the right and left. Given the revolutionary Left’s decline and reformist parties’ incapacity to deliver when in power, the new Right, in the form of authoritarian nationalism, has been the principal beneficiary. But their program of austerity, bigotry, and scapegoating has also failed to address capitalism’s systemic crises, undercutting their ability to secure hegemony and impose stable rule. As a result, political instability is the order of the day throughout the world.

These conditions have triggered wave after wave of resistance from below. But so far this resistance has been episodic and unable to win, largely because of the decomposition of class, social, and political organizations to sustain struggle and pose an alternative to the establishment parties and the Right. Nonetheless, these struggles open opportunities to rebuild the infrastructure of resistance, cohere a militant minority, and reconstruct a revolutionary Left for the 21st century.

Capitalism’s global slump

Capitalism is beset by multiple systemic crises from climate change to mass migration and pandemics like COVID. The other two, which are the most important ones for shaping our new epoch, are the global economic slump and the return of inter-imperial rivalry. The 2008 economic crisis triggered the Great Recession, which brought an end to the long neoliberal boom that began in the 1980s.

While capitalism survived, its recovery has been characterized by low profitability and slow growth, punctuated by recessions and weak recoveries. The heartlands of the system, from the U.S. to Europe and Japan, are either growing at a modest rate or are stagnant. As far as the U.S. is concerned, only the high-tech companies’ massive investment in AI data centers and the accompanying stock market bubble have kept the economy growing. But that is now in jeopardy as a result of the war with Iran. Even China, which was key to the global recovery after the Great Recession, has seen its growth drop from 10 percent a year in the 2000s to under 5 percent today.

Inflation in the wake of the COVID recession has forced the U.S. and Europe to maintain relatively high interest rates, hampering investment and growth. On the other hand, overinvestment, cutthroat competition, and low profitability have fueled deflation in China, forcing its corporations to seek out profitable sites for investment internationally through the Belt and Road Initiative (BRI), while exporting their surplus products and in the process undercutting their competition everywhere.

The combination of U.S. high interest rates and Chinese dumping has triggered a double crisis in the Global South. First, high interest rates have hammered indebted countries, which are now facing the prospect of another debt crisis like the one they suffered in the 1980s. Already, creditors are demanding austerity measures from governments in the Global South. Second, Beijing’s exports have undermined the Global South’s domestic manufacturing base, reducing it to exporting raw materials to China for China’s ongoing expansion.

Thus, we are in a global slump. It will continue until a deeper crisis clears out all the uncompetitive capital in the world economy. Up to today, the main capitalist states have stopped this from happening. They have bailed out corporations they consider too big to fail, fearing mass bankruptcies and a 1930s-style depression. That has propped up the so-called zombie corporations. These are so unprofitable that they are forced to take out ever more loans to repay interest on their existing loans. As a result, the system limps along.

By contrast, ruling classes have imposed austerity measures on their workers, cutting social welfare spending and attacking wages and benefits. As a result, class inequality has deepened throughout the world. At the same time, states have turned to protectionism and other beggar-thy-neighbor policies to protect their capitals against other states and their capitals.

The return of inter-imperial rivalry

Thus, the global slump is intensifying the second key crisis—inter-imperial rivalry, especially between the two biggest economies in the world, the U.S. and China. Washington no longer oversees the unipolar world order as it did after the Cold War. The long neoliberal boom produced new centers of capital accumulation from China to Russia and a host of regional powers.

The U.S. attempt to defend its increasingly challenged hegemony through wars in Afghanistan and Iraq backfired, leading to disastrous defeats. On top of that, the Great Recession hammered the U.S., Europe, and Japan, in contrast to China, which used massive state investment to keep its economy booming, and with that, all its tributary economies expanding from Russia to Australia and Brazil.

These developments led to the relative decline of the U.S. against its rivals, especially China, ushering in today’s asymmetric multipolar world order. The U.S. remains the largest economy with the biggest military and greatest geopolitical influence. Its dollar remains the world’s reserve currency, it oversees an empire of 800 military overseas bases, and uses that power to bully allies, rivals, and so-called rogue states.

But it is no longer unrivaled. China is now a potential peer competitor, while Russia, with its vast nuclear stockpile and fossil capitalist economy, is an outsized regional power with global pretensions. In this context, regional powers exploit conflicts between the great powers to pursue their own interests. Iran, for instance, oversaw the so-called Axis of Resistance, which it used to build regional imperial influence against the U.S., the Arab states, and Israel.

Faced with this new order, successive U.S. administrations have abandoned Washington’s post-Cold War strategy of superintending capitalism by incorporating all states into a neoliberal world order of free trade globalization. Obama initiated a shift toward great power competition with China through his Pivot to Asia.

In his first term, Trump enshrined great power rivalry as Washington’s new grand strategy, naming specifically China and Russia. His America First foreign policy put what he perceived to be U.S. interests over and above those of both friends and foes. He began to abandon free trade for protectionism, particularly by raising tariffs on China. But his administration’s internal divisions, hostility to traditional allies, propensity to make transactional deals with rivals, and general incompetence prevented its coherent implementation.

The Biden administration retained Trump’s focus on great power but abandoned his unilateralism. Instead, it tried to rebuild Washington’s alliance structure, especially NATO, and unite its vassals against China and Russia in defense of the so-called rules-based international order. It paired that with strategic protectionism against Beijing and an industrial policy to ensure U.S. dominance in high-tech industries, especially microchips, which it wanted to onshore from Taiwan.

Biden capitalized on Russia’s imperialist war on Ukraine to rally NATO behind Kyiv’s national liberation struggle. His aim was not to defend Ukraine’s right to self-determination but to weaken Russia. However, his administration fatally discredited its claims to support international law, human rights, and oppressed nations by championing, bankrolling, and arming Israel’s genocidal war in Gaza.

The global slump, growing inter-imperial rivalries, and capitalism’s other systemic crises have combined to destabilize societies around the world. These conditions have set off waves of resistance from below by various classes, from the petty bourgeoisie to the working class and peasantry. The movements have been politically heterogeneous, spanning the gamut from right-wing small business revolts to uprisings of workers and the oppressed.

Most important for the Left have been the progressive class and social struggles throughout the world from the Arab Spring revolutions in the Middle East and North Africa to the Red State Teachers Revolt, Black Lives Matter, and Palestine solidarity in the U.S. These movements have been the largest since the 1960s and have a class content more like that of the 1930s, expressing rage against the deep economic and social inequalities of our epoch.

But they all have been hampered by the weaknesses inherited from the previous period of defeat and retreat. These include everything from the collapse of the revolutionary Left to the dramatic drop in trade union density and retreat of social movements from membership-based groups to grant-funded NGOs with all their golden chains.

As a result, workers and the oppressed have gone into struggle bereft of class, social, and political infrastructures of dissent. That has impacted the character of movements today. They tend to seemingly come out of nowhere and explode in size, challenging capital and the state. Their demands are usually negative in character, like the slogan of the Arab Spring, which was “the people want the fall of the regime,” and lack a positive alternative. In the words of one analyst, they are revolutions without revolutionaries.

That makes them vulnerable in all sorts of ways. The states and capitals can crush them with brute force as the regimes succeeded in doing throughout the Middle East and North Africa. They can also co-opt them as the Ford Foundation did with key leaders of Black Lives Matter. Reformist parties can also channel uprisings into the dead-end of electoral attempts to use the capitalist state to overcome systemic crises and inequalities. The movements can also dissipate in........

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