Tectonic shifts in world relations provoke volcanic explosions

The whole world situation is dominated by enormous instability in international relations. This is the result of the struggle for hegemony between the US, the world’s most powerful imperialist nation, which is in relative decline, and other weaker but nonetheless rising powers, above all the younger and more dynamic China.

The relative decline of US imperialism and the rise of China in particular have created a situation in which other countries can balance one against the other. In doing so they have been able to gain a modicum of autonomy to pursue their own interests, at the very least at a regional level. 

What we are witnessing is a shift of tectonic proportions in the relative strength of competing imperialist powers. And as with the movement of tectonic plates on the Earth’s crust, such movements are accompanied by explosions of all sorts. 

Imperialist powers fighting for world redivision

When Lenin described imperialism in his famous work Imperialism, the Highest Stage of Capitalism in 1916, he did not conceive it as something static and fixed forever, but rather as the result of the dynamic struggle between different imperialist powers (see here for a discussion of the main ideas put forward by Lenin and their relevance today):

“... the only conceivable basis under capitalism for the division of spheres of influence, interests, colonies, etc., is a calculation of the strength of those participating, their general economic, financial, military strength, etc. And the strength of these participants in the division does not change to an equal degree, for the even development of different undertakings, trusts, branches of industry, or countries is impossible under capitalism. [...] Peaceful alliances prepare the ground for wars, and in their turn grow out of wars; the one conditions the other, producing alternating forms of peaceful and non-peaceful struggle on one and the same basis of imperialist connections and relations within world economics and world politics.”

This is precisely what we are witnessing now: the struggle for the division and redivision of the world among different imperialist powers. The war in Ukraine – where a humiliating defeat for US-NATO is being prepared – and the growing conflict in the Middle East, which threatens to spread into a regional war, are expressions of this conflict. These are not the only points of friction in world relations. 

Relative decline of US imperialism

When dealing with US imperialism, we must, however, stress that its decline is relative, that is, it is only a decline in comparison with its previous position and in comparison with the position of its rivals. The United States remains, on all measures, the most powerful and reactionary force in the world.

The United States remains, on all measures, the most powerful and reactionary force in the world / Image: Irisoptical, Wikimedia Commons

In 1985, the US represented 34.6 percent of the world’s GDP. It is now down to 26.3 percent, but remains the world's largest economy, one of the most productive and the one where the domination of finance capital is expressed in the most acute way. 

In the same period China has boomed from representing 2.5 percent of the world’s GDP to 16.9 percent. Japan, which reached a peak of 17.8 percent in 1995, has now collapsed to 3.8 percent. Meanwhile, the European Union, which was at its highest in 1992 (28.8 percent) has receded to 17.3 percent, reflecting the steady decline of European imperialist powers (data from IMF, GDP at current prices). 

The US still dominates the world economy through its control of financial markets. A massive 58 percent of the world’s currency reserves are held in US dollars (while only two percent are held in Chinese renminbi), although the figure is down from 73 percent in 2001. The dollar is also used in 58 percent of the world’s exports invoicing. In terms of net outflow of Foreign Direct Investment (a proxy for export of capital), the US is top of the world with US$454 trillion, while China (including Hong Kong) comes second at US$287 trillion.

It is a country’s economic clout which gives it international power, but this needs to be backed by military might. US military spending represents 40 percent of the world’s total, with China coming second at 12 percent, and Russia third with 4.5 percent. The US spends more on the military than the following 10 countries in the ranking combined.

As well as looking at the current situation, it is even more important to analyse its trajectory. After the collapse of the USSR in 1991, the US became the sole superpower in the world. The 1991 invasion of Iraq was carried out under the auspices of the UN, with Russia voting in favour and China merely abstaining. There was almost no opposition to the domination of US imperialism. This would be unthinkable today.

US dominance reached its limits. US imperialism became bogged down for 15 years in two unwinnable wars in Iraq and Afghanistan, at a great cost to itself in terms of expenditure and loss of personnel. In August 2021 it was forced into a humiliating retreat from Afghanistan.

Those costly and prolonged wars left the US public with no appetite for foreign military adventures, and the US ruling class very weary of committing ground troops abroad. US imperialism learnt nothing from the experience, however. By refusing to admit the new balance of forces and trying to maintain its domination, it has become embroiled in a whole series of conflicts that it cannot win.

The refusal of the US to use ground troops after the experiences of Iraq and Afghanistan was a major handicap in terms of its ability to intervene in the Syrian civil war, for instance. In 2012, Obama had announced that the use of chemical weapons by Assad would be a “red line”, and threatened to intervene directly. But since he was not prepared to follow up his threats with decisive military intervention on the ground, it was Russia which became the main power broker in that conflict.

The US did intervene in the Syrian civil war, but did so mainly through proxies rather than committing troops, as it had done in Iraq and Afghanistan. A number of other regional powers also intervened, each one defending their own interests and wanting to carve up Syria (Saudi Arabia, Qatar, UAE, Iran, Turkey) by arming and funding different sets of reactionary Islamic fundamentalist gangs.

Russian imperialism committed to defending its ally, Assad, and its only naval base in the Mediterranean / Image: kremlin ru

Russian imperialism committed to defending its ally, Assad, and its only naval base in the Mediterranean. It sent ground troops, air defence, and fighter jets. In this way it forced Turkey (a NATO member) to a deal and defeated the jihadi forces funded by the US and other regional powers. Such an outcome, in a very important geostrategic region like the Middle East, would have been unthinkable 10 years earlier.

A new balance of forces in the Middle East resulted from it. Iran came out strengthened, with a series of regional allies: Hamas, Hezbollah, the Shia militias in Iraq, and the Houthis in Yemen. Turkey, Saudi Arabia and the Gulf States recognised the new situation and acted accordingly. Syria was readmitted into the Arab League. A China-brokered Iran-Saudi agreement put an end to the war in Yemen. China, which is the world’s biggest oil importer, has emerged as the largest client for the Gulf states’ energy exports.

The upper hand gained by Russia in Syria came at the same time that US relations with Saudi Arabia, a key ally in the region, had soured. There were a number of factors involved in this: the inability of Washington to keep Mubarak in power in Egypt during the Arab revolution; the development of shale oil production in the US, which made it a competitor to Saudi oil exports; the conflict over the killing of Khashoggi; energy hungry China becoming the main export market for its oil, etc. 

Saudi Arabia was thus pushed into developing a more independent policy, including: helping Russia keep oil prices high to overcome US sanctions over the Ukraine war; striking a "comprehensive strategic partnership agreement" with China; and agreeing to a China-brokered peace deal with Iran.

This was how things stood before the 7 October attack by Hamas in 2023. We will deal with the current conflict in the Middle East further down.

The rise of China as an imperialist power 

China is not only a capitalist country, but one which has become imperialist. As a latecomer to the international arena it has projected its power mainly through economic means, but it is also building its military power. It has sought to control sources of raw materials and energy for its industry, fields of investment for its capital, trading routes for its imports and exports, and markets for its products.

The thirty-year rise of China to the status of a major imperialist power, which we have discussed elsewhere, has been the result of massive investment in the means of production and reliance on the world markets. Initially it took advantage of its large reserves of cheap labour to export goods like textiles and toys to the world market. Now it is a technologically advanced capitalist economy which has a dominant position in a series of modern high-tech sectors (electric vehicles and EV batteries, photovoltaic cells, etc.), but also exports capital.

China is facing a classic crisis of capitalist overproduction / Image: Kremlin.ru, Wikimedia Commons

Now it is coming up against its own limits. China is facing a classic crisis of capitalist overproduction and the impact of the rising organic composition of capital. At the same time, Chinese exports are coming up against tariff barriers and protectionism at a time when the expansion of world trade has come to a halt. The same amount of investment no longer produces the same amount of economic growth, and what it produces is more difficult to sell in the world market.

The Chinese economy is still growing, but at a much slower pace. Since 1990, China has grown at a breathtaking pace of nine percent a year, with peaks of 14 percent. Between 2012 and 2019 it grew at between six and seven percent. It is now struggling to reach five percent.

Massive economic stimulus packages – Keynesian measures – have prevented a steeper fall. But this is a case of diminishing returns, and they also have the side effect of a massive increase in debt.

China’s debt-to-GDP ratio was only 23 percent in 2000 and has now increased to 83 percent in 2023. This is still lower than most advanced capitalist economies, but is nevertheless a significant increase. According to some calculations, total debt (including state debt, households, corporations and Local Government Finance Vehicles) would be as much as 297 percent of GDP, a figure which is clearly unsustainable.

In some respects, the economic evolution of China over the past three decades resembles that of Japan. Japan grew very quickly in the 1960s, averaging 10 percent GDP growth a year, then slowed down in the 1970s and 80s. It then entered into a protracted period of crisis and stagnation in 1992, from which it has never recovered despite successive massive stimulus plans. 

This is not to say that China is going to follow exactly the same path henceforth, and there are of course important differences between the two countries. But what it does suggest is that, having reached a plateau, it will be very difficult for Chinese capitalism to recapture the rates of growth it has seen in the past.

Meanwhile, a massive working class has been created in China, one which has become used to a steady increase in its living standards over a protracted period. This is a young, fresh working class, unsaddled by defeats, and not bound by reformist organisations. When it starts to move it will provoke an explosion of seismic proportions. 

Russia

Russia is a much weaker imperialist power. It is economically much smaller than China, but has built a powerful army and defence industry, and possesses a nuclear arsenal which it inherited from the USSR.

Following the collapse of the Soviet Union and the wholesale looting of the planned economy, the Russian ruling class toyed with the idea of being accepted at the world table on equal terms. They even floated the idea of joining NATO. This was rejected. The US wanted to exercise complete and unfettered domination over the world and they saw no need to include a weak and crisis-ridden Russia. Yeltsin, a buffoonish drunk and a puppet of US imperialism, was a representative of that period.

The humiliation of Russia was starkly revealed, first when Germany and the US engineered the reactionary break-up of Yugoslavia, in Russia’s traditional sphere of influence, and then with the bombing of Serbia in 1995. It concluded with the standoff between Russian tanks and NATO forces at Pristina airport in 1999.

Russian capitalism, however, recovered from the economic crisis.It started to push back against the eastward advance of NATO, a move which broke all the promises made to the Russians in 1989. The Russian ruling class and state apparatus were no longer prepared to accept their humiliation in the international arena and started to throw their weight around. This new period produced Putin, the cunning, manoeuvring Bonapartist, who used gangster methods to impose his will.

In 2008 it waged a short and effective war in Georgia, destroying the country’s army which had been trained and equipped by NATO. That was the first warning shot. Syria was the next.

The relative weakness of US imperialism was further revealed in their humiliating withdrawal from Afghanistan (August 2021). It was in this context that the Russian ruling class said ‘enough is enough’ and sought to reassert its national strategic interests, against 25 years of US imperialist encroachment in its sphere of interest. The civil war in Ukraine served to test in practice the relative strength of Russian imperialism on the international stage.

The Russian invasion of Ukraine was the logical conclusion of the West’s refusal to accept Russia’s national security concerns, expressed in the demand of neutrality for Ukraine and a halt to the eastward expansion of NATO.

From the point of view of US imperialism the war in Ukraine was unnecessary. The West had never seriously entertained the idea of Ukraine joining NATO as they knew that would mean a head-on conflict with Russia. But they obstinately refused to accept this formally, as this would have been seen as a sign of weakness in the face of Russia. US imperialism and NATO were fully aware that this was a red line from the point of view of the national security interests of Russian capitalism.

Later on, in April 2022, negotiations in Turkey between Ukraine and Russia were quite advanced and could have led to an end of the war, on the basis of accepting a number of Russian demands. Western imperialism, in the person of Boris Johnson, scuppered the talks, pressuring Zelensky not to sign, on the promise of unlimited support which would lead to Ukraine’s full victory.

China and Russia have now become much closer allies in their opposition to US domination in the world / Image: Kremlin.ru, Wikimedia Commons

US imperialism thought it could use Ukraine as cannon fodder in a campaign to weaken Russia and cripple its role in the world. A country like Russia, a rival to US imperialism, could not be allowed to invade a country which was an ally to the US. Washington also wanted to send a clear message to China regarding Taiwan. At one point, Biden, puffed up by his own arrogance, even raised the idea of regime change in Moscow! They thought that economic sanctions and military exhaustion would bring Russia to the point of collapse.

Today the US faces a humiliating defeat in Ukraine. Sanctions have not had the desired effect. Rather than Russia becoming isolated, it has now established closer economic ties with China, and several countries which are meant to be in the US sphere of influence have helped it circumvent sanctions: India, Saudi Arabia, Turkey and others.

China and Russia have now become much closer allies in their opposition to US domination in the world, and have gathered around them a whole series of other countries. When the US defeat in Ukraine is finally realised it will have enormous and lasting consequences for world relations, further weakening the power of US imperialism across the world. It is clear what conclusions China will draw from this regarding Taiwan.

The US defeat in Ukraine will send a powerful message. The world’s mightiest imperialist power cannot always impose its will. Furthermore, Russia will emerge from it with a large army, tested in the latest methods and techniques of modern warfare.

War in the Middle East

The current conflict in the Middle East can only be understood against the background of the world situation. US imperialism had been weakened in the Middle East, while Russia, China and also Iran had become strengthened. Israel felt threatened. The 7 October attack was a serious blow to the Israeli ruling class. It destroyed the myth of invincibility and questioned the ability of the Zionist state to protect its Jewish citizens, the key question which the Israeli ruling class had used to gather the population behind it.

It also clearly exposed the collapse of the Oslo Accords, signed in the aftermath of the collapse of Stalinism, when it seemed possible to solve the world’s conflicts through negotiation. The Zionist ruling class never really entertained any idea of conceding the Palestinians a viable homeland. They regarded the Palestinian National Authority (PA) as simply a way of outsourcing the policing of the Palestinians. This discredited Fatah and the PA, seen correctly as mere puppets of Israel, leading, with the acquiescence of Israel, to the rise of Hamas, seen as the only force pursuing the struggle for Palestinian national rights.

The Abraham Accords, signed in 2020, were meant to establish the position of Israel in the region as a legitimate actor and normalise trade relations between it and the Arab countries. This would have meant the burying of Palestinian national aspirations, something the reactionary Arab regimes were quite happy to do. The 7 October attack was a desperate response to that.

The current conflict in the Middle East can only be understood against the background of the world situation / Image: own work

The attack was used by Netanyahu, who had faced mass protests immediately prior, as an excuse to launch a genocidal campaign against Gaza. One year later, Israel had still not achieved its stated aims: the release of the hostages and the destruction of Hamas. This led to mass demonstrations by hundreds of thousands and even a brief general strike. 

The character of these demonstrations was not one of support for the Palestinian cause, nor of opposition to the war per se, but the fact that there was such a degree of mass opposition to the prime minister in the middle of the war is an indication of the depth of the divisions within Israeli society.

The collapse of his support pushed Netanyahu to escalate the situation with the invasion of Lebanon and an attack on Hezbollah, which was accompanied by constant provocations against Iran. In order to save himself politically, he has shown repeatedly that he would be prepared to unleash a regional war which would force the US to intervene directly on his side.

Washington was worried that the massacre in Gaza could lead to the revolutionary destabilisation of the reactionary Arab regimes (in Saudi Arabia, Egypt and above all in Jordan) which have not lifted a finger in support of the Palestinians. This is why they made public gestures of attempting to restrain Netanyahu. However, from the beginning, Biden made it clear that his support for Israel was “iron-clad”, and Netanyahu used this blank cheque repeatedly to go on the path of escalation towards a regional war.

That the narrow personal interests of one man can have such an outsized effect on events is a reflection of the enormous instability of the whole of the world situation. The ruling class is not always capable of acting in a rational way, in its own best interests. The US, challenged by rival powers and reluctant to admit its diminished role in the world, pursues a desperate policy (in Ukraine and in the Middle East), which ultimately will lead to disaster.

Russia, faced with constant provocations on the part of US imperialism in Ukraine (the delivery of ever more modern weapons, allowing deep strikes into Russian territory, etc.), has responded in a reciprocal and proportional manner by increasing its support for Iran and also the Houthis. Russia possesses advanced hypersonic missile technology and superior air defence systems, which can be useful to the US’ enemies in the region.

In the recent period, the Iranian regime had been weakened at home by mass protests and slower-than-average economic growth. Before Netanyahu’s reckless escalatory attacks on Iran, the country was seeking accommodation with the West to reach a deal on nuclear development, which could end sanctions. 

The situation has now been completely reversed. Iran has a strong incentive to speed up the development of nuclear weapons. The equation is simple. Neither Iraq nor Libya had weapons of mass destruction. They were crushed by imperialism and their leaders killed. North Korea on the other hand does possess nuclear weapons and for that very reason US imperialism has not attacked it.

A section of the Israeli ruling class thinks it can use the excuse of Hamas’ 7 October attack to weaken and degrade its enemies (Hamas, Hezbollah and Iran) by dragging the US into a regional war. Clearly they had prepared to strike Hezbollah by accumulating intelligence ever since they were forced out of Lebanon at the end of the 2006 invasion. Past experience shows that it is impossible to completely crush organisations like Hamas and Hezbollah, which draw their support from the fact that they are resisting foreign military aggression and occupation.

Hezbollah emerged as a result of the 1982 Israeli invasion of Lebanon, and Hamas as a result of Fatah’s PLO sellout. Aerial strikes and intelligence-led attacks on communications and leadership can inflict serious damage, but cannot really destroy them. Aerial bombardment needs to be followed up with ground operations, with troops. These troops are open to guerrilla tactics, ambushes, and are fighting in enemy territory, where the defending forces have an advantage, as well as the support of the population. The brutality of Israel’s methods, along with the indiscriminate attacks on the civilian population and infrastructure, act as recruiting sergeants for these organisations.

The sudden and unexpected collapse of the Assad regime in Syria has changed the regional balance of forces once again. Turkey is a minor capitalist power in terms of the world economy, but it is one which has powerful regional ambitions. Erdogan has very skilfully played the conflict between US imperialism and Russia to his own advantage. An example of this is his attempt to acquire the most sophisticated Russian air defence system, while continuing to court the US for the latest fighter jets.

Sensing that Iran and Russia, with whom Erdogan  made a deal in Syria in 2016, were otherwise engaged (Russia in Ukraine and Iran in Lebanon), he attempted to bully Assad into giving him a bigger slice of the Syrian pie. When Assad refused, Erdogan decided to back the offensive of the HTS jihadis from Idlib. To everyone’s surprise, that precipitated the complete collapse of the regime. The degree to which it had already been hollowed out by economic sanctions, corruption and sectarianism was much greater than anyone had realised.

The interests of the Zionist ruling class in Israel do not allow for the formation of a genuine homeland for the Palestinians / Image: own work

The fall of Assad is a blow to the standing and prestige of both Russia, as a minor world power, and Iran, as a regional power. Now, Erdogan feels strengthened and will push further against the Kurds in north-east Syria. Netanyahu, emboldened by the weakening of Iran and the blows inflicted on Hezbollah in Lebanon, will now attempt to reassert Israel’s interests vis-a-vis Hamas, but also in the West Bank, the Golan Heights and even further into Syria.

The current carve up of Syria is the continuation of more than 100 years of imperialist meddling all the way back to the Sykes-Picot agreement.

Ultimately, there can be no peace in the Middle East as long as the Palestinian national question is not resolved. This cannot be done under capitalism. The interests of the Zionist ruling class in Israel (backed by the world’s most powerful imperialist power) do not allow for the formation of a genuine homeland for the Palestinians, and even less for the right of return of millions of refugees.

From a purely military point of view, the Palestinians cannot defeat Israel, a modern capitalist imperialist power with the most sophisticated military technology and an intelligence service which is second to none. The Palestinian struggle needs allies, and these can be found in the powerful working class in the region, in Egypt and Turkey above all, but also in Saudi Arabia, the Gulf states and Jordan. A successful uprising in any of these countries, bringing the working class to power, would create the conditions for a revolutionary war to liberate the Palestinians.

The state of Israel and its Zionist ruling class can only be defeated by splitting the country’s population along class lines. At the moment, the perspective of a class split in Israel seems distant. However, the 7 October attack, combined with constant war and strife, can eventually lead a section of the Israeli masses to draw the conclusion that the only way to peace is through a democratic solution of the Palestinian national question.

Wars in the Middle East will solve nothing. Under the rule of imperialism, temporary ceasefires and peace agreements will merely prepare the basis for new wars. But the general instability that is both the cause of wars and their consequence will create the conditions for a revolutionary movement of the masses in the next period. If this movement were led by a conscious Marxist – that is, proletarian internationalist – party, it could slice through the tangled knot of seemingly insoluble contradictions and point to the only possible lasting solution: the Socialist Federation of the Middle East.

The Palestinians can only achieve national liberation as part of the socialist revolution in the region. The same can be said for the Kurds, now under assault in Rojava. Only a socialist federation can solve the national question once and for all. All peoples, Palestinians and Israeli Jews, but also Kurds and all the others, would have the right to live in peace within such a socialist federation. The economic potential of the region would be realised to the full in a common socialist plan of production. Unemployment and poverty would be a thing of the past. On that basis alone, the old national and religious hatreds could be overcome. They would be like the memory of a bad dream.

Revolt against the US

As we have explained, there is a struggle for the redivision of the world between different competing imperialist powers, mainly between the US, the old hegemon, now in relative decline, and China, the new rising dynamic power challenging it on the international arena.

The rise of the BRICS, which were formally launched in 2009, represents an attempt by China and Russia to strengthen their position on the world arena, to protect their economic interests, and to firmly bind a whole series of countries into their sphere of influence.

The rise of the BRICS, which were formally launched in 2009, represents an attempt by China and Russia to strengthen their position on the world arena / Image: President.az, Wikimedia Commons

The implementation of wide-ranging economic sanctions by US imperialism against Russia has failed in its main aim of weakening its rival to the point of making it impossible to pursue the war in Ukraine. In working out mechanisms to avoid and overcome sanctions, Russia has made a series of alliances with other countries, including Saudi Arabia and India, and has been brought into much closer economic cooperation with China.

Rather than demonstrating US power, the failure of sanctions has revealed the inability of US imperialism to impose its will, and has pushed a number of countries to consider alternatives to the US domination of financial transactions. Membership of the BRICS has expanded with new countries being invited or applying to join, including several which are meant to be allies or subordinates to US imperialism.

When dealing with this question we need to have a sense of proportion. As important as these changes are, the BRICS are riddled with all sorts of contradictions. Brazil, while being part of the BRICS, is at the same time part of Mercosur, which is in the process of signing a free trade agreement with the EU. Several Brazilian flagship companies are traded on the NYSE. India is a core BRICS member, but at the same time it has a ‘strategic partnership’ with the US. It is also part of the Quad security and military alliance with the US, Japan and Australia, and its navy conducts regular military exercises with the US.

The degree of political and economic integration of the BRICS countries is still very weak. Furthermore, despite all the talk, they are very far from having established an alternative means of international financial transactions, or an alternative to the domination of the US dollar in the world financial system.

What is significant here is that a country like India, which is considered a US ally and a rival of China, has played an important role in helping Russia bypass US sanctions. India buys Russian oil at a discount price and then resells it to Europe in the form of refined products at a higher price. For now the US has decided not to take measures against India. In 2023 China became India’s main trading partner, dislodging the US from the first place.

So far, the BRICS are no more than a loose alliance of countries, each with their own interests. India, for example, is reluctant to allow new members into the BRICS as that would diminish its weight within the bloc. The United States’ imperialist bullying against its rivals is what is pushing them closer together and encouraging others to join.

Crisis in Europe 

While the US has suffered a relative decline in its strength and influence globally, the old European imperialist powers, Britain, France, Germany and others, have declined much further since their former days of glory, to second-rate powers. It is worth noting that Europe, as an imperialist bloc, has been particularly weakened in the last decade. A series of military coups have displaced France from Central Africa and the Sahel, to the benefit of Russia.

The European powers enthusiastically followed US imperialism in its Ukraine proxy war against Russia, something that went directly against their own interests. Since the collapse of Stalinism in 1989-91, Germany had pursued a policy of expanding its influence to the East, following a long-standing orientation of its foreign policy, and had established close economic links with Russia. 

German industry had benefited from cheap Russian energy. Before the Ukraine war, more than half of Germany’s natural gas, a third of all the oil, and half of Germany’s coal imports were coming from Russia.

This was one of the reasons for the success of German industry in the previous period, the other two being the deregulation of the labour market (carried out under social-democratic governments) and a high degree of productive investment. The domination of the European Union by the German ruling class, and free trade with China and the US, formed a virtuous circle.

The situation was similar for the EU as a whole in regards to energy supply, with Russia the largest supplier of petroleum (24.8 percent), pipeline gas (48 percent) and coal (47.9 percent). It was foolish for the European capitalists to declare sanctions on Russia. This led to much higher energy prices, with a knock-on effect on inflation and the loss of competitiveness of European exports. 

Europe has had to import much more expensive liquified natural gas (LNG) from the US and much more expensive Russian oil products via India / Image: Rawpixel

In the end Europe has had to import much more expensive liquified natural gas (LNG) from the US and much more expensive Russian oil products via India. In fact, a large part of Germany’s gas still comes from Russia, only now it does so via third countries, at a much higher price.

The German, French and Italian ruling classes have shot themselves in the foot, and now they are paying a heavy price. The United States has repaid its European allies by waging a trade war against them through a battery of protectionist measures and industrial subsidies.

The European Union represented an attempt of the weakened imperialist powers of the continent to huddle together in the hope of having a bigger say in world politics and the economy. In practice, German capital dominated the other weaker economies. While there was economic growth, a certain degree of economic integration was achieved, and even a single currency. 

However, the different national ruling classes composing it remained in existence, each one with their own particular interests. Despite all the talk, there is no common economic policy, no united foreign policy and no single army to implement it. While German capital was based on competitive industrial exports and its interests laid in the East, France draws from the EU large amounts in agricultural subsidies, and its imperialist interests are to be found in the former French colonies, mainly in Africa.

The sovereign debt crisis which followed the 2008-9 world recession stretched the EU to its limits. The situation has now worsened even further. The recent report by former European Central Bank president, Mario Draghi, which we have discussed, paints the crisis of European capitalism in alarmist terms, but he is not wrong. At bottom the reason the EU is not able to compete with its imperialist rivals in the world is the fact that it is not a single economic-political entity, but rather a collection of several small and medium-sized economies, each one with their own ruling class, their own national industries, sets of regulations, etc.

The crisis of European capitalism has important political and social implications. The rise of right-wing populist, eurosceptic and anti-establishment forces across the continent is a direct result of this. The collapse of the French and German governments are the latest manifestations of this crisis. The European working class, with its forces largely intact and undefeated, will not accept a new round of austerity cuts and mass layoffs without a fight. The stage is set for an explosion of the class struggle.

Arms race and militarism

Historically, any significant change in the relative strength of different imperialist powers tended eventually to be settled through war, chiefly the two world wars of the 20th century. Today, the existence of nuclear weapons makes an open world war very unlikely in the coming period. 

Capitalists go to war to secure markets, fields of investment, spheres of influence. A world war today would lead to the wholesale destruction of infrastructure and life, from which no power would benefit. It would require a crazed Bonapartist leader, ruling over a major nuclear power, for a world war to take place. That would require one or several decisive defeats of the working class, which is not the immediate perspective ahead of us.

Nevertheless, the conflict between imperialist powers, which reflects the struggle to assert a new redivision of the planet, dominates the world situation. This is expressed in several regional wars, causing massive destruction and tens of thousands of people killed, as well as in trade and diplomatic tensions, which are growing all the time. Last year saw the highest number of wars since the end of WWII.

The conflict between imperialist powers, which reflects the struggle to assert a new redivision of the planet, dominates the world situation / Image: public domain

This has led to a new arms race, the growth of militarism in the western countries, and increased pressure to rebuild, re-equip and modernise the armed forces everywhere. The United States is set to spend an estimated $1.7 trillion over 30 years to revamp its nuclear arsenal. It has now decided to deploy cruise missiles on German soil for the first time since the Cold War.

There is strong pressure by the US on all NATO countries to increase their defence spending. China has announced a 7.2 percent increase in defence spending. In 2023 Russia’s military spending grew by 27 percent, reaching 16 percent of total government spending and 5.9 percent of GDP. Global military expenditure in 2023 reached over $2.44 trillion, a 6.8 percent increase from 2022. This was the largest increase since 2009 and the highest level ever recorded.

These are eye-watering amounts of money, not to speak of labour-power and technological development, which could be used for socially necessary purposes. This is a point we need to stress in our propaganda and agitation.

It would be simplistic to say that capitalists embark on a new arms race in order to boost economic growth. In fact, arms expenditure is inherently inflationary and any effect on the economy will be short-term and offset by cuts in other sectors. The conflict between imperialist powers for the redivision of the world is what is fuelling the increase in military spending. Capitalism in its imperialist stage inevitably leads to conflicts between the powers and ultimately war.

The struggle against militarism and imperialism has become a central question in our epoch. We are staunch opponents of imperialist wars and imperialism, but we are not pacifists. We must stress that the only way to guarantee peace is the abolition of the capitalist system which breeds war.

Reversal of globalisation

In the sphere of economics, the increased competition for markets and fields of investment at a time of economic crisis has led to the rise of protectionist tendencies. 

‘Globalisation’ (the expansion of world trade) was one of the main drivers of economic growth for a whole period after the collapse of Stalinism in Russia and the restoration of capitalism in China, combined with their integration into the world economy. Instead, what we have now is tariff barriers and trade wars, between all the major economic blocs (China, the EU and the US) each one attempting to save their own economy at the expense of the others. “Tariff is the most beautiful word in the dictionary”, exclaimed Donald Trump!

In 1991, world trade represented 35 percent of the world’s GDP, a figure which had remained basically unchanged since 1974. It then started a period of rapid growth to a peak of 61 percent in 2008, reflecting a sharply increased integration of the world economy. This was of course not a neutral process from which all countries benefited. The lowering of tariff barriers between the US and Mexico benefitted US capital and destroyed Mexican agriculture, for example.

Since the 2008 crisis, world trade as a percentage of world GDP has remained stagnant. The IMF projects world trade to grow at just 3.2 percent a year over the medium term, a pace well below its annual average growth rate for 2000-19 of 4.9 percent. The expansion of world trade is no longer a driver of economic growth at the same level as it was in the past.

In 2023, governments worldwide introduced 2,500 protectionist measures (tax incentives, targeted subsidies and trade restrictions), triple the number from five years earlier. US tariffs on Chinese goods have increased sixfold to 19.3 percent, in the case of electric vehicles the US has imposed tariffs on Chinese imports of 100 percent.

During the first Trump presidency the US adopted an aggressive protectionist stance, not only against China, but also against the EU. This policy continued under Biden. It has enacted a series of laws (CHIPS, the so-called Inflation Reduction Act, etc.) and measures aimed at benefiting US production at the expense of imports from the rest of the world.

Let’s remember that after 1929 it was a general turn towards protectionism which tipped the world from economic recession into a depression. Global trade volume fell by 25 percent between 1929 and 1933, and a large part of that was the direct result of increased trade barriers.

A multipolar world?

It is in this context of growing inter-imperialist tensions that Donald Trump has won the US presidential election. His “America First” programme reflects these contradictions in world relations. 

It is in this context of growing inter-imperialist tensions that Donald Trump has won the US presidential election / Image: Gage Skidmore, Flickr

It is difficult to forecast what Trump’s policies will be, but his stated aim of reducing the US direct involvement in conflicts around the world would seem to be a recognition of the real, relatively diminished strength of US imperialism. His idea of offering a hand of friendship to Putin’s Russia, so as to be able to better concentrate on the US’s main rival China, also, on the surface, makes more sense than Biden’s reckless provocations.

However, whatever Trump’s intentions may be, US imperialism is the dominant world superpower. It cannot disentangle itself, because any real retreat by Washington in the world arena would be a victory to its rivals. As Lenin explained, the redivision of the world by imperialist powers on the basis of their changing relative strength will be effected not so much through gentlemen's agreements, but rather through “peaceful and non-peaceful struggle”.

Some have suggested that the present world situation is leading towards a ‘multipolar’ world, in which the diminished strength of US imperialism will supposedly create a balance between different powers, which will all respect each other and solve their problems through peaceful dialogue. We are told that this is somehow a progressive aim that the working class and imperialist-dominated peoples of the world should aspire to, perhaps even fight for.

Nothing could be further than the truth. What we see is not the struggle to establish a more just world system, but rather the struggle between different imperialist robbers for the division of the loot. Ask the people of Syria if they think the struggle between competing regional and world powers on their land has led to a progressive outcome. Ask the poor of the Congo if China’s struggle for the mineral wealth of their country has led to peace and prosperity. Ask the working class of Ukraine if Washington’s provocation of Russia has strengthened national sovereignty.

No. There is nothing progressive in replacing the brutal and predatory domination of US imperialism by the domination of several imperialist powers fighting each other over the dead bodies of hundreds of thousands of workers and the poor, and millions of displaced.

The domination of imperialism can only be overcome in a progressive manner through the revolutionary overthrow of capitalism and the coming to power of the working class. Only then would it be possible to create a genuinely fair society in which the means of production humanity has created over thousands of years would be held in common ownership, harnessed under a democratic plan of production in order to satisfy the needs of the majority, not the private insatiable thirst for profits of a parasitical minority.