This document is the first draft of the World Perspectives for the upcoming Congress 2025 of The Struggle (طبقاتی جدوجہد), the section of the International Socialist League (ISL) in Pakistan. It was completed on 16 March 2025 and published on the Asian Marxist Review website on 18 March 2025.
We are publishing Part I of the document here; Part II will follow soon.
You can download the PDF version here, read the Spanish version here, and access the Urdu version here.
The bourgeoisie has been the first to show what man’s activity can bring about. It has accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts, and Gothic cathedrals; it has conducted expeditions that put in the shade all former Exoduses of nations and crusades… The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together. Modern bourgeois society, with its relations of production, of exchange and of property, a society that has conjured up such gigantic means of production and of exchange, is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells… For many a decade past the history of industry and commerce is but the history of the revolt of modern productive forces against modern conditions of production, against the property relations that are the conditions for the existence of the bourgeois and of its rule. It is enough to mention the commercial crises that by their periodical return put the existence of the entire bourgeois society on its trial, each time more threateningly. In these crises, a great part not only of the existing products, but also of the previously created productive forces, are periodically destroyed. In these crises, there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity—the epidemic of over-production. Society suddenly finds itself put back into a state of momentary barbarism; it appears as if a famine, a universal war of devastation, had cut off the supply of every means of subsistence; industry and commerce seem to be destroyed; and why? Because there is too much civilization, too much means of subsistence, too much industry, too much commerce. The conditions of bourgeois society are too narrow to comprise the wealth created by them. And how does the bourgeoisie get over these crises? On the one hand by enforced destruction of a mass of productive forces; on the other, by the conquest of new markets, and by the more thorough exploitation of the old ones. That is to say, by paving the way for more extensive and more destructive crises, and by diminishing the means whereby crises are prevented.
– Marx and Engels, The Communist Manifesto (1848)
(1) These words are far more significant and thought-provoking today than they were nearly two centuries ago when they were written and published. With each passing day, it becomes clearer that humanity stands at a crossroads. One path inevitably leads to a barbarism that could erase the unparalleled achievements of civilization—spanning productive forces, economy, society, politics, and culture—in a very short time. This barbarism, in its initial forms and manifestations, is becoming increasingly evident every day.
(2) The events of the past decade and a half, much like the two world wars, have once again demonstrated that even in the most advanced societies, the foundations of capitalist order and civilization are neither absolute nor permanent. In times of crisis, these societies can rapidly descend into fragmentation, chaos, and conflict. Meanwhile, the condition of underdeveloped or so-called developing societies, already plagued by poverty, backwardness, and instability, continues to deteriorate.
(3) The scale of production and consumption humanity engages in today is without precedent in the history of civilization. However, the crises generated by capitalism’s rapid advancement in science, technology, and productive forces are equally severe and are now confronting humanity in stark forms.
(4) Interestingly, within the colossal—almost unimaginable—scale of production under capitalism lies a deep-seated deprivation, an endless race for survival, and a pervasive uncertainty. Fundamentally, it is a manifestation of scarcity amidst abundance and abundance amidst scarcity. This contradiction cannot be resolved within the confines of the system itself.
(5) Humanity faces a multidimensional crisis (also called “polycrisis”), with new dimensions continually emerging. Global warming, climate change, and environmental destruction are taking on a catastrophic form. The global balance of power is destabilizing, as evidenced by the Ukraine war, which could be a precursor to even bloodier internal and external conflicts.
(6) Since 2008, most economies have effectively been in a state of stagnation. In a few exceptional cases where some growth is occurring, it is devoid of any significant social benefits. Factors such as debt crises, declining living standards, austerity, inflation, and layoffs have left not only the Third World but also developed societies in a state of constant turmoil. The welfare state in the West is gradually crumbling. Meanwhile, opportunities for a better life in former colonial regions are shrinking to such an extent that an unprecedented wave of legal and illegal migration to the West has surged. In these circumstances, the rise of ethnic and religious fundamentalism, along with their politics of extremism and terrorism, are also different facets or aspects of this same crisis.
(7) Whether it be the “end of history” or talks of reducing international tensions and arms buildup, all the promises and claims made by the representatives of imperialist capitalism after the collapse of Stalinism in the Soviet Union and Eastern Europe are turning into their opposites. On the international stage, the intensity, severity, and complexity of tensions between imperialist powers are far greater today than during the Cold War. The process of globalization, with all its economic and social aspects, has been in retreat since 2008. The liberal dreams of softening national borders and merging countries into political and economic blocs have been shattered. The European Union is showing growing cracks, while NATO has faced deep disruption since Trump came to power. Markets are under restrictions everywhere, and protectionist policies are on the rise.
(8) The economic crisis that erupted from the 2008 financial crash was fundamentally an inevitable product of the contradictions inherent in capitalism, which have been festering within the system since its inception. The rise of Keynesianism after World War II and the subsequent neoliberal onslaught were essentially different stages of attempts to control or suppress these contradictions. These contradictions and the policies to combat them can take various forms and intensities depending on time and place. However, the core of the problem remains the same as what Marx discovered and explained.
(9) In the post-2008 crisis period, every rule and norm of the past has been upended. The economic foundations upon which post-World War II politics, the state, diplomacy, and society were built have crumbled. In their absence, the entire superstructure now trembles—jolted by shocks, gripped by decay, and teetering on the brink of collapse, like a society caught in the throes of an unending earthquake. Today, capitalism is not only facing an economic and political crisis but also a deep cultural and ideological crisis, which is inevitably manifesting itself in the crisis of bourgeois leadership.
(10) Since 2011, the global wave of revolutionary movements, protests, uprisings, governmental crises, coups, civil wars, the emergence of new left and right-wing trends, and increasing tensions between imperialist powers can all be explained only in this context.
(11) There is an unending series of events, and the situation is changing rapidly. This is a new normal of extraordinary changes, in which Trump’s second term represents a qualitative shift in many ways. It has created a situation analogous to the collapse of the Soviet Union. In this context, neglecting to accurately assess the situation becomes a crime for revolutionaries.
(12) The global liberal order established after World War II, along with all its values and institutions, is melting in the crucible of crisis. But the important question is: what new forms of economy, politics, and society can emerge from this crucible?
The sick economy
(13) In the long run, capitalism is not a balanced system. Its equilibrium is constantly disrupted. This process can continue imperceptibly beneath the surface for years, but it becomes glaringly obvious during periods of crisis. After emerging from these crises, a new equilibrium is established at a higher level, where the process of disruption begins again on an even larger scale.
(14) No philosophy other than Marxism is capable of providing a scientific explanation of historical evolution and motion. Consequently, tendencies like liberalism and left-wing reformism, under the mechanistic method of analysis, offer only ahistorical interpretations of emerging phenomena. This method ultimately leads to idealism, where the driving force of historical progress or events is generally attributed to the subjective desires of important personalities, government policies, or “sudden” accidents.
(15) Trotsky once said that for a historian, it is not enough to merely describe the course of history or its significant events. It must also be clear why these events occurred at that particular point in time and why history took that specific course (i.e., why these events did not occur earlier or later, and why history did not take a different path). But apart from history, the Marxist method and perspective are also the same when it comes to analyzing current affairs and identifying future possibilities.
(16) The classical political economy of the 18th and 19th centuries was a serious attempt by the intellectuals of the emerging bourgeoisie to understand and explain economic processes. Despite all its contradictions and shortcomings, it considered not only price but also value. It viewed the economy as a social process based on the interaction of social groups or classes and linked it with politics and society. It placed micro and macroeconomics within a single framework, focusing more on the production process than on consumption and market transactions. Behind all this was the Enlightenment of the Renaissance and the effort to present capitalism as a better and more just system compared to feudalism.
(17) Marx fundamentally provided a critique of this bourgeois discipline. Through a dialectical approach, he clarified its contradictions and presented a coherent framework for analyzing and explaining the economy, which is also known as Marxist economic theory.
(18) In the 20th century, classical political economy was gradually replaced by the economic discipline we now know as “economics.” Marx and Engels, in their time, rightly categorized the trends of “economics” as vulgar. However, the economics taught in universities and colleges today has reached new heights of absurdity. Over the past few decades, it has become less of a social science and more of a propaganda tool to justify capitalism. Its purpose is to deny facts and shape the minds of young people on irrational grounds.
(19) The shift from political economy to economics reflects changes in the bourgeoisie’s own composition, historical character and social role, its escape and detachment from the production process, the dominance of large monopolies over markets, and the rise of non-productive tendencies such as financial speculation and rent-seeking. This is fundamentally a manifestation of the ideological defeat and decline of a system that is no longer capable of seriously analyzing its own economy—or perhaps does not want to, out of fear of exposing its own repugnant character, historical obsolescence, and stark truths.
(20) Nobel Prize-winning economist Paul Krugman, in the context of the 2008 economic crash, stated that all the work done in macroeconomics over the past three decades has been useless at best, and harmful at worst. This single statement not only exposes the bankruptcy of neoclassical economics but also reveals that the more intelligent and serious policymakers of capital do not believe in their own mainstream theories and ideas. Many of them, if not most, through their practical experiences and empirical evidence eventually arrive at the same conclusions that Marxists have theoretically deduced. However, since they are incapable of seeing the objective world beyond the confines of capitalism, they ultimately sink back into right-wing or left-wing reformism.
(21) Economic realities ultimately express themselves forcefully in politics. The condition of the economy determines the character of politics and the state. The scientific explanation for the political and diplomatic upheavals of the past decade and a half in the world can only be based on these foundations. Otherwise, we are left with explanations that suggest people’s views change ‘suddenly’ and without reason, leading them to embrace revolution. Or, that figures like Imran Khan and Donald Trump unexpectedly appear out of nowhere, mislead people, and come to power.
(22) An accident is always the expression of a long-standing necessity, and to understand this “necessity,” it is essential to comprehend the process or factors that operate imperceptibly over long periods. In this regard, a consistent analysis of the capitalist economy becomes essential.
(23) If we begin with capitalism’s birthplace, the West, then all the major events and phases since World War II can adequately be explained by considering the long-term secular decline of the market economy. All the shifts in imperialist capitalist policy have essentially been attempts to reverse or at least halt this decline.
(24) World War II gave capitalism a new lease on life through large-scale war economies and unprecedented destruction, but the fundamental contradictions remained active. In this regard, examining the post-war economic growth rates reveals much. For example, the annual growth rate of the US economy, which averaged 4% during the “golden age of capitalism” from 1945 to 1973, fell to 3% between 1973 and 2000 and further declined to around 2% between 2000 and 2020. Currently, this growth rate fluctuates between 1.5% and 2%.
(25) In another perspective, over the past 15 years, the average growth rate of the US economy has declined by more than 40% compared to the previous 25 years.
(26) The growth rates of major Western European economies also fell from an average of 5.5% between 1950 and 1973 to 3% in the 1990s. By 2008, this growth rate hovered around 2%. After 2008, further slowdowns are evident, and since the 2020 COVID crisis, these economies have struggled to achieve even 1% growth.
(27) Japan’s economy, which was growing at a phenomenal rate of 8–10% until 1973, has barely managed to stay above zero since 2008.
(28) Let us try to understand this situation in a relatively simpler way by comparing the 15 years before and after 2008. If we compare the 15 years from 1993 to 2007 with the 15 years from 2009 to 2023 for some major economies, the decline in average annual growth rates appears as follows:
- Germany: Fell from 1.4% to 0.9%.
- France: Fell from 2% to 0.9%.
- UK: Fell from 2.7% to 1.2%.
- Entire Eurozone: Fell from 2% to 0.9%.
- Japan: Fell from 1% to 0.4%.
- US: Fell from 3% to 2%.
- Arab World: Fell from 4.4% to 2.5%.
(29) During the same time frame, the average global growth rate fell from 3.3% to 2.6% per annum.
(30) If we extend the analysis further back in time, the trend of declining growth rates becomes even more apparent. In all the above scenarios, the post-2008 economic growth rates are significantly lower than before and, in many cases, practically stagnant.
(31) This is essentially a massive long-term decline—a great slowdown. However, the factors used to explain this decline or stagnation—economies “maturing,” rising debt, shrinking fiscal space, declining populations, aging demographics, economic inequality, falling productivity growth, etc. —themselves require explanation. In other words, these answers raise further questions. No matter how “natural” this decline in growth rates is portrayed, it remains a serious problem for capitalism.
(32) After a temporary recovery from the COVID crisis, the condition of these economies has worsened in recent years. In Europe, economies like Ireland, Hungary, Austria, Germany, and Sweden have contracted rather than grown in 2023. Norway, Poland, the Netherlands, and the UK have barely stayed above zero growth. Switzerland and Italy have seen economic growth rates below 1%, while France has struggled to reach 1%. Overall, the EU’s growth rate was only 0.4%.
(33) Austria continued facing economic contraction in 2024. Ireland and Hungary’s growth rates were barely above zero, while Sweden and Belgium struggled to reach 1%. The UK’s economy once again failed to reach 1% growth in 2024, while France’s situation remained similar to 2023 (barely above 1%). The EU’s overall growth rate in 2024 was 1%, with a slight “improvement.”
(34) Germany, considered Europe’s economic powerhouse, has been in deep crisis for the past three years, with the economy contracting for two consecutive years (a contraction of 0.3% in 2023 and 0.2% in 2024).
(35) Over the past two years, Canada’s growth rate has also hovered around 1–1.5%.
(36) Nevertheless, it is also necessary to analyze this situation in terms of per capita GDP growth (in simple terms, average per capita income). This further highlights the decline of developed economies. If we take the G7 economies, between 2019 and 2023, the UK, Canada, and Germany saw per capita GDP declines of 1.8%, 1.4%, and 0.5%, respectively. During this period, France’s per capita GDP remained virtually unchanged, while Japan and Italy saw minor increases of 2.1% and 3.4%, respectively. In this group, only the US saw a 5.2% increase in per capita GDP, which can be considered somewhat better or satisfactory (a further analysis of the US economy is provided below).
(37) It should be clear here that a decline in growth rates negatively impacts productivity, private and public investment, government revenue, debt repayment capacity, infrastructure development, employment opportunities, and living standards. In fact, all these factors are dialectically interconnected and influence each other. However, the growth rate is a consolidated or concentrated expression of the state of the economy, and its decline inevitably disrupts political and social stability.
(38) In recent years, the US has been described as an “exceptional” economy in terms of growth, outperforming its peers. For example, in 2023 and 2024, it showed growth rates of 2.9% and 2.8%, respectively, with an overall growth of around 11% since the COVID crisis. However, a closer look at the data presented above reveals the flaw in this analysis: the economies being compared are in such poor shape that the US economy appears better by comparison.
(39) In reality, like other advanced economies, the US economy has been in a long-term crisis, which intensified after 2008. Since 2008, the US economy’s average annual growth rate has remained below 2%. Productivity and productive investment growth rates have also declined. The initial estimate for US economic growth in 2025 was only 1.9%. However, with Trump’s return, talks of recession and economic contraction have resurfaced.
(40) Immigration has played a significant role in the relatively better economic growth of the US in recent years, as it increases the labor force and output.
(41) It is important to note that immigrants have been crucial to the development of Western countries, especially since World War II. Imperialist countries do not grant refuge to immigrants—including student scholarships, study visas, work permits, residency, citizenship, etc. —out of compassion or humanitarianism but rather due to solid economic interests.
(42) Their primary objective is to attract the most intelligent, skilled, and physically and mentally healthy individuals from around the world and settle them in their own countries. This yields long-term economic benefits. Even illegal immigration is beneficial for their economies.
(43) This legal and illegal immigration provides them with labor for everything from the most advanced fields of science and technology to the most menial jobs. It fills gaps in their labor markets while also helping to suppress or control wages. The increase in the labor force also boosts tax revenues. Even illegal immigrants pay significant taxes, both directly and indirectly.
(44) Immigrants bring new knowledge, skills, and businesses to these countries. Foreign students make their educational industries profitable, and their valuable research in science, technology, social sciences, and literature paves the way for new inventions, discoveries, and economic growth opportunities.
(45) With the crisis of the system, trends such as avoiding marriage and not having children among the youth of Korea, Japan, and the developed West have led to declining populations and an increasing proportion of elderly individuals. In this context, rising life expectancy is also becoming a “problem” because retired individuals require pensions and care facilities, the costs of which crisis-ridden capitalism is increasingly unable to bear. As a result, many countries have been forced to relax immigration and long-term visa policies in recent years.
(46) In light of these developments, the irrationality and absurdity of the far-right’s anti-immigration and racist politics, which have gained prominence in recent years, become even more apparent. Most leaders of such currents are well aware of the aforementioned facts. However, in times of crisis, the ability of developed countries to absorb and integrate immigrants diminishes, and the rise of ethnic prejudices and conflicts becomes inevitable.
(47) Interestingly, the US appears at the forefront of countries benefiting from immigration (in fact, it is a country built by immigrants). Immigrants have played a key role in the development of America since World War II. For example, one out of every four high-tech businesses in the US is started by an immigrant (an individual not born in the US). In Silicon Valley, the hub of the world’s most advanced technological progress and inventions, this ratio is as high as 50%. Similarly, immigrants are twice as likely as the native population to start small businesses.
(48) Thus, immigration is a fundamental factor behind the relatively better economic situation of the US compared to its peers. However, figures like Trump exaggerate the number of immigrants and falsely portray them as a threat. Ground realities contradict their claims. The number of illegal immigrants in the US today is roughly the same as it was two decades ago.
(49) If we look a little deeper, the economic and social condition of the US is not as good as it appears on the surface. Otherwise, Trump would not be in power today.
(50) The problem is that the fruits of this relatively better economic conditions are not reaching the majority of ordinary American citizens. Several factors are at play here, the most important of which is perhaps economic inequality or disparity. For example, the US currently ranks first among G7 countries in terms of income inequality. Housing in the US is also much more expensive compared to these countries, while life expectancy is the lowest.
(51) Since World War II, the rate of increase in the income of ordinary American citizens has steadily declined. Since 2008, it has increased at a mere 0.9% annually.
(52) When inflation is taken into account, the real hourly wage of most blue-collar American workers has remained roughly at the 1979 level, while productivity has increased many-fold during this period.
(53) Another reason for the disparity between the rhetoric of economic growth and the actual condition of the masses is the lower “quality” of this growth. Since the neoliberal onslaught of the 1980s, the role of non-productive sectors in the economy has steadily increased. These include finance, real estate, the stock market, etc., which are increasingly disconnected from the real productive economy. However, their boom indices are interpreted as economic prosperity and progress. Even when GDP growth rates rise rapidly with the boom in these sectors, it is mostly joyless growth.
(54) For example, in 2023, finance, insurance, real estate, and rental and leasing activities accounted for more than 20% of US GDP. In contrast, manufacturing accounted for only 10%, while agriculture-related activities accounted for less than 1%. Clearly, the growth of the aforementioned non-productive sectors, which is primarily based on short-term investment, speculation, and rapid profit-seeking, does little to improve the lives of ordinary people.
(55) This problem is not unique to the US but is shared by all economies structured along neoliberal lines, also known as Washington Consensus economies. The most prominent example is India, where there is much talk of economic growth, but the condition of society continues to deteriorate.
(56) American companies are currently burdened with the heaviest debt in history. Their outstanding debt has reached 487% of their income. Over the past two years, corporate bankruptcies have increased by 87%. In this regard, the situation is worse than the COVID crisis, with high interest rates to control inflation playing a key role.
(57) The post-COVID global inflation trends have somewhat subsided. However, the US Federal Reserve has kept interest rates at 4.5%, meaning the risks of inflation rising again not only persist but have multiplied since Trump came to power.
(58) The US healthcare system, based on private profit, is notorious for producing the worst outcomes in the developed world and is one of the primary reasons for the anger and discontent among the American public. Every year, half a million people go bankrupt solely because they cannot pay their medical bills, accounting for 66% of all personal bankruptcies!
(59) It is no accident that a 26-year-old youth who killed the CEO of a major health insurance company a few months ago was hailed as a hero by a large section of the American public. After the incident, social media in the US was filled with celebrations. Images of the young man, along with memes condemning the looting of the health industry, were widely shared for weeks. Interestingly, people from both the right and left of the political spectrum were active in this social media trend.
(60) This single incident gives a clue of how frustrated people are with their living conditions and how filled with hatred and rage they are against the bosses.
(61) Thus, the relatively “high” growth rate of the US economy is proving to be an indicator of worsening conditions for the majority of the population rather than improvement. This is one of the reasons why people have not paid attention to Biden’s claims of “extraordinary” and “exceptional” economic growth.
(62) In light of the situation in the US, if we examine other major Western countries—whose economies, as reviewed above, are in even worse shape—the grounds and extent of socio-political instability become abundantly clear.
(63) Despite all the oppression, exploitation, and other vices, capitalism has always justified itself by presenting continuous economic growth, increasing social wealth, and improving living standards as its ultimate rationale. However, even in its most developed forms, this justification is now eroding. This is a manifestation of the long-term decline, prolonged depression (“Long Depression”), and historical obsolescence of the system.
(64) Regardless of the human and environmental cost at which economic growth is achieved under capitalism, the economic and social structure of this system is such that it cannot function without continuous and significant expansion.
(65) The problems of the developed world must be viewed according to its own standards. In this regard, it is clear that Western societies are in the midst of a deep crisis, which is a precursor to major upheavals in the coming days. Upheavals before which even the extraordinary events since 2008 may pale in comparison.
The nature and essence of the crisis
(66) What is the nature or essence of the crisis of capitalism? This question has long been a subject of debate in Marxist circles. It has even led to factionalism and splits. Yet, if we set aside sectarian bigotry, ideological dogmatism, stubbornness, and the complexities of “academic Marxism,” this is not an unsolvable mystery.
(67) Marx and Engels were the first to scientifically refute the so-called “Say’s Law” of classical economics—which states that the production/supply of goods creates its own demand—and to clarify the inevitable tendency of overproduction under capitalism. This phenomenon is fundamentally the result of the contradiction between social production and private appropriation or between the forces and relations of production. Curiously, upon closer examination, it is hidden within the contradictory nature of the ‘commodity’ itself.
(68) However, if the problem were this simple, the two gentlemen would not have needed to spend thousands of pages analyzing the capitalist economy from their youth to old age. After all, they had already identified capitalism’s tendency toward overproduction in The Communist Manifesto. It should be remembered that Marx remained occupied with writing Capital until his last days. The second and third volumes of Capital were completed and published by Engels after Marx’s death, while the Theories of Surplus Value, considered the fourth volume of Capital, was published in an incomplete form after Engels’ death.
(69) The tendency of overproduction has always existed under capitalism. Nonetheless, this is only one aspect of the system’s long-term, organic crisis. To describe the entire problem as merely a “crisis of overproduction” is an oversimplification. Not only does it present a one-sided picture of the situation, but it also fails to adequately explain or clarify many politico-economic phenomena. Moreover, this approach ultimately leads to Keynesian reformism.
(70) In this respect, the third volume of Capital is of utmost importance, as its primary focus is on the key driving force of capitalism—profit—and the underlying indicator behind numerous economic metrics—the rate of profit. In simple terms, Marx, while analyzing the process of profit-making from every angle, formulated a multidimensional crisis theory, which he called the “law of the tendency of the rate of profit to fall.” It should be noted that classical economists were also aware of the problem of the falling profitability over long periods but were unable to fully comprehend it.
(71) The primary purpose of this document is not to engage in a theoretical discussion of the nature of the crisis under capitalism or to delve into the details of the aforementioned law. However, we consider it necessary to briefly state the basic point, which, in simple terms, is as follows: Under capitalism, there is an inherent tendency for the proportion of constant capital—machinery, computers, robots, tools, and, more recently, artificial intelligence—to increase relative to variable capital, primarily human labor power, in the production process. This gives rise to the phenomenon of “overproduction of capital,” for which the more accurate term might be “over-accumulation.” Marx also called it an “abundance of capital.” Consequently, beyond a certain point, capitalists are unable to employ this capital profitably. In simple words, the surplus value generated by the production process becomes insufficient relative to the total investment, leading to a decline or fall in the rate of profit. In this situation, it is entirely possible for the rate of profit to fall while total profits continue to increase. However, a point comes when the mass of profits also begins to decline. This is, in fact, the stage at which the crisis erupts. Investment comes to a halt, the production process is disrupted, the economy begins to contract, employment opportunities decrease, and wages start to fall. This reduces “effective demand” in the market. In other words, goods exist, productive capacity exists, but there is no one to buy them—overproduction!
(72) The entire situation inevitably manifests itself in the financial sector, real estate, and the stock market, where bubbles that have been inflating for long periods eventually begin to burst. We have already seen this entire scenario play out in the 2008 financial crash.
(73) Thus, the overproduction of goods is linked to the overproduction of capital. In Marx’s words, “The overproduction of capital always includes the overproduction of goods…”
(74) So how does the system emerge from the crisis? In fact, the very conditions of severe crisis pave the way for recovery. Due to bankruptcies, a large amount of “excess” capital is destroyed or sold for pennies, a kind of so called “creative destruction.” The prices of the means of production, i.e., constant capital, fall. Unemployment leads to a decline in wages. In short, investment becomes profitable again, and the economic cycle restarts.
(75) What’s interesting is that major wars also pave the way for “recovery” in a more destructive and bloody manner through the aforementioned methods.
(76) However, even in normal and peaceful conditions, there are factors that counteract the tendency of the rate of profit to fall. For example, attempts are made to restore the falling rate of profit by increasing surplus value through greater exploitation of workers—restrictions on unionization, layoffs, low wages, etc. Similarly, technological progress reduces the cost or value of constant capital, thereby supporting the rate of profit. Privatization turns public sectors into sources of profit, or new economic sectors or branches are created through new inventions and technological advancements. Environmental destruction, imperialist domination, expansion, and occupation are used to gain control over new markets and cheap labor and raw materials. Deregulating the market and giving tax breaks to capitalists also aim to increase their profits, for which the tax burden is shifted onto workers or the state cuts entire social welfare programs or sells them to capitalists. This is what austerity is all about.
(77) Neoliberalism has essentially been a massive project to strengthen these countervailing tendencies for restoring the rate of profit.
(78) Nonetheless, in the long term, the tendency of the rate of profit to fall persists, the room for recovery diminishes, and the intensity of crises increases. History has validated the prediction made in The Communist Manifesto, published long before Capital.
(79) If we connect the above discussion on the rate of profit with the previous section (“The Sick Economy”), the terminal illness of capitalism—along with all its effects and implications, including economic stagnation—becomes fully evident within a historical continuum. Perhaps no title captures this entire phenomenon better than ‘the historical obsolescence of the capitalist system.’
Donald Trump: Meaning and implications
(80) While Trump’s rise in 2016 was an important development, his second term represents a qualitative leap in the crisis of liberal capitalism. However, it is important to understand once again that Trump is not just a person but a political phenomenon (“Trumpism”), which has obviously thrived under specific objective conditions.
(81) If we speak in a broader context, this is a continuation of the rise of new and more extreme forms of the right-wing after 2008, which are referred to as the far-right, populist right, hard right, or alt-right. These are essentially different forms and styles of the same current. Or, in other words, they are “sister” tendencies. Despite differences in organizational form, social influence, intensity, and methods of emergence, they share deep similarities. For example, they have thrived under similar conditions (as analyzed in detail above from an economic perspective). Values and beliefs such as conservatism, hatred for gender rights, superstitious thinking, racial prejudice, anti-immigration sentiment, and imperialist nationalism are also largely shared among them. In this regard, their ambitions and programs also show significant similarities.
(82) Figures like Viktor Orbán in Hungary, Giorgia Meloni (FdI) in Italy, the AfD in Germany, Nigel Farage (Reform UK) and UKIP in the UK, Marine Le Pen (National Rally) in France, Jair Bolsonaro in Brazil, Geert Wilders (Party for Freedom) in the Netherlands, Javier Milei in Argentina, Narendra Modi in India, Imran Khan in Pakistan, and Donald Trump in the US can be placed in this category. Vladimir Putin in Russia, Benjamin Netanyahu in Israel, and Recep Tayyip Erdoğan in Turkey also share similarities with this group. Even Sheikh Hasina in Bangladesh might be considered a similar phenomenon.
(83) With the exception of Germany, France, and the UK, all the parties or individuals in the above list are either in power or have been in power. However, in these three countries as well, these parties are either hovering around power or may rapidly move toward it in the coming days.
(84) Ideologically, the most important commonality among all of them is that they do not believe in any liberal value, tradition, or decorum, including democracy, and seek a non-liberal solution to the crisis of capitalism.
(85) In terms of economic programs, they may appear somewhat different from each other, but the tendencies toward protecting national capitalism—basically protectionism—instead of globalization and free international trade are present in almost all of them to varying degrees. This is why they want to limit or completely dismantle economic unions like the EU and free trade agreements.
(86) In terms of domestic economics, they generally tend to implement neoliberal policies in a more savage and authoritarian way. They want state intervention in the economy only to the extent and in the manner that protects the interests of their class or gang.
(87) The economic programs of figures like Milei, Nigel Farage, and Trump fall squarely into the category of “libertarianism,” which is essentially an extremely unrealistic, unscientific, and inhuman theory of capitalist anarchism. That is, the role of the state (if it exists at all!) should be limited to protecting private property. Everything else should be left to the market. However, their “libertarianism” seeks market freedom only to the extent of completely negating the rights of the working class and abolishing its organizations. Beyond that, nepotism and corruption are rampant among them.
(88) Notably, although all of them have come to power—or are attempting to—within the framework of bourgeois democracy, they adhere to the established laws and norms of politics and the state only insofar as these serve their interests. When necessary and given the opportunity, they adopt an extremely aggressive and authoritarian approach. Their goal is to transform the state into an instrument of their absolute power to the greatest extent possible. In this process, they may also clash with different parts of the state, as we have seen in the cases of Imran Khan and Donald Trump.
(89) If we consider it, figures like Putin, Orbán, Modi, and Erdoğan have largely dismantled the bourgeois democratic setup. It is very difficult to remove them through electoral means alone. Imran Khan in Pakistan had similar ambitions, while Trump in the US is rapidly advancing this process. In any case, this is a different phenomenon from traditional military dictatorships that come to power through coups.
(90) This situation is fundamentally an expression of the deep crisis—indeed, the obsolescence—of the liberal order established after World War II, which is itself an aspect of the obsolescence of capitalism. The problem is that the system is unable to function through old methods. Liberal politics has been stripped of its economic foundations. There is intense unrest among the people, leading to the large-scale rejection of traditional reformist trends of the left and right with their “center-left” and “center-right” politics.
(91) However, while the rise of this hard or non-traditional right-wing is partly due to the compromises, betrayals, and ideological deviations of the old left, the failure and retreat of the new left-wing currents that emerged after 2008 also play a role. Examples include Syriza in Greece, Podemos in Spain, Jeremy Corbyn in the UK, and Bernie Sanders in the US
(92) Similarly, the rise of the left-wing in Latin America, associated with leaders like Hugo Chávez (Venezuela), Rafael Correa (Ecuador), Dilma Rousseff (Brazil), and Evo Morales (Bolivia), as well as various social movements in different countries—referred to as the “Pink Tide”—has also faced defeat, or at least a major setback. Additionally, the failure of the Arab Spring has generated widespread disillusionment.
(93) Regardless of whether they came to power or not, the failure of the left-wing in almost all the aforementioned cases is due to the common element of reformism. Despite having broad and repeated opportunities, they insisted on limiting their programs, strategy, and perspectives within the economic and political confines of capitalism.
(94) Even when reformist programs gained popularity, they were not adequately utilized. For example, Bernie Sanders’ popular class-based slogans gained significant traction in 2016. Yet, the entire movement was ultimately handed over to the Democratic Party—aptly described as the graveyard of movements. Had the Democratic Socialists of America (DSA), along with figures like Bernie Sanders and Alexandria Ocasio-Cortez (AOC), broken away from the Democratic Party and advanced the movement with solid class-based slogans and a concrete program—while building independent organizations—the situation in the US could have been markedly different. Even if Trump had come to power despite this, a strong resistance could have been mounted against him today.
(95) A political vacuum cannot remain unfilled for long. If the left does not fill it, the right will. If reason fails to assert itself, folly and obscenity will reign. The rise of the “hard right” is a manifestation of exactly this situation, which we are witnessing in many parts of the world today.
(96) It is important to remember that such political currents gain popularity under conditions of intense disillusionment and disgust toward the prevailing conditions. Therefore, nonstop sloganeering and rhetoric of hatred and ridicule toward the old political elite and state apparatus—the so-called “status quo” or “establishment”—are essential elements of their politics. Through this, they present themselves as well-wishers and saviors of the people.
(97) Moreover, over the past four decades, the privatization, commercialization, deindustrialization, and corporate media onslaught of neoliberalism have culturally distorted societies and created an army of ignoramuses. This includes not only the lumpen sections of the working class but, more importantly, the new middle class and nouveau riche that have emerged as a result of neoliberal policies.
(98) The frustration of crisis-ridden conditions, combined with this objective hypocrisy, conservatism, vulgarity, and stupidity, finds its subjective expression in dominant politics, giving rise to phenomena like Bolsonaro, Javier Milei, Imran Khan, and Donald Trump. In Pakistan, supporters of PTI (Imran Khan’s party) are referred to by a specific epithet that functions not merely as a political jab, but as a characterization of distinct habits, modes of thinking, and patterns of behavior. In the US, Trump’s supporters are mostly of the same ilk—perhaps even worse.
(99) When the working class rises in movements and takes on a revolutionary direction, it not only drags along a significant portion of the middle class but also several layers of lumpen elements. However, in periods of class retreat and reaction, the opposite happens, and several layers of the working class, along with otherwise reasonable people from intelligentsia, are swept away by lumpen and vulgar trends. The backwardness, reaction, and low-grade beliefs and prejudices buried in people’s subconscious resurface and overpower logical thinking. We have observed all these things in the phenomenon of the PTI in Pakistan.
(100) In this regard, there is a deep similarity between Imran Khan and Donald Trump in terms of personality and behavior. However, to the extent that the US is more developed than Pakistan, Trump’s arrogance, overconfidence, stupidity, and vulgarity are equally intense, broad, and deeply consequential.
(101) Stubbornness, narcissism, bigotry, egotism, and recklessness are the fundamental traits of leaders of this type. Ironically, these very conducts make them popular among specific social layers or classes. Their conflicts with the state establishment and the more astute and serious representatives of capital are not merely due to policy disagreements. Rather, these individuals are inherently unruly and unreliable, making long-term planning and policy continuity impossible under them.
(102) This is why they are also called lumpen capitalists or lumpen representatives of capitalism. They are fundamentally short-sighted, i.e., indifferent to the consequences of their actions and incapable of long-term thinking or planning. Furthermore, in most cases, their personal yearnings and ambitions seem to override the demands of the system. This is fundamentally a profound crisis of bourgeois leadership.
(103) Imperialist states and ruling classes entrust power only to their most astute and reliable individuals, whether from the right or the left. Behind this lies decades of selection, shaping public opinion, and training, during which unreliable individuals or “outsiders” are systematically sidelined. Even in states like Pakistan, this mechanism has existed to some extent. But the crisis has turned everything upside down. The reins of Western imperialism, which once planned a hundred years ahead, are now in the hands of walking corpses like Biden and clowns like Trump, who create a new spectacle every day. The actions Trump is taking today would have been unthinkable—not only a few decades ago, but even during his own previous term.
(104) We will leave the discussion of the similarities and differences between Trumpism and classical German and Italian fascism for another time. Similarly, there is an endless series of threats, statements, and moves by Trump after coming to power, which we neither have the space nor the need to list here. What is important for us are Trump’s ambitions and their implications—what he wants to do and what the consequences might be. But does Trump really have a concrete plan and a coherent agenda? Interestingly, regardless of the answer to this question, the situation is perilous in any case.
(105) However, there is always some method or logic hidden within every madness. Even the most foolish people have some goals and plans, no matter how stupid, disastrous or impractical they may be. Additionally, we cannot expect enlightenment, sanity, or rationality from the leaders of obsolete and crisis-ridden systems. The crisis of their system drives them mad. This is, in a way, an expression of the ruling classes’ lack of confidence in their own system.
(106) In Trump’s case, there are several strategic and political reasons behind opening a new front, committing new vulgarity, and making new boasts almost every day. First, such people need to keep their followers in a constant state of frenzy, insecurity, and war psychology against the “enemy”—essentially fostering a siege mentality. Imran Khan’s entire politics in Pakistan was based on this tactic, which involved the unrestrained use of lies, slander, and exaggeration. Additionally, such narcissistic individuals resort to absurd actions to stay in limelight.
(107) However, Trump’s planning goes beyond this. On one hand, it involves advancing as aggressively and unexpectedly as possible—basically a kind of political Blitzkrieg. On the other hand, it aims to hide the real motives within a multidimensional chaos. Many of his absurd actions and orders are merely meant to create a “smoke screen.” This also gives his followers the impression that day and night, work is being done to achieve a great goal.
(108) The primary goal of this entire clique, including Elon Musk and Trump, is to increase their wealth, which, obviously, knows no bounds. To this end, they need not only unrestrained authoritarian power but also to control the unchecked deficits and debts of the economy. This requires an extremely aggressive and ruthless economic program, which, in turn, necessitates the suppression of democratic rights and all forms of resistance—whether political, class-based, or from any faction of the state. This is the fundamental logic behind all this insanity and chaos. Everything else revolves around it, whether they have a solid, long-term strategy or are merely moving forward through “trial and error.”
(109) It should also be noted that the extremely reactionary and conservative social and cultural ideas associated with the far-right—denial of gender rights, racial superiority and prejudice, religiosity, etc.—are an inevitable part of this project. This is not merely a matter of the personal beliefs. Rather, it is their social and political necessity. As the American Marxist Adam Shils explains:
Trump needs a strong social base in order to carry out such a huge enrichment program. This is where right wing social ideas come in. Trump’s personal political proclivities are certainly towards the far right. One of his first steps on the political scene was buying a full-page ad in The New York Times calling for the execution of the (totally innocent) Central Park Five. However, right wing ideas are more than just ideology for Trump. He consciously and deliberately uses them to build a popular base. He could not create a massive following on the basis of “more money for me” so he has positioned himself as a far-right ideologue. The new President has been very successful in casting himself as a populist standing up for the “common man against the elites”. Of course, like any skilled demagogue, he not only reflects popular feelings and emotions he also fans and deepens them.
(110) However, the problem is not limited to the US. With the same ambitions, they also want to create a new world order (or disorder?) with stakeholders from the same ilk of autocrats. Trump’s handshake with Putin is not without reason. However, this camaraderie is not entirely new. Javier Milei in Argentina is Elon Musk’s ideal. Similarly, the Trump administration is openly supporting far-right trends in Europe. Thus, this is once again an international grouping with many shared interests and deep business, ideological, and political connections.
(111) They view the decorum of the liberal order with extreme contempt. Old trade agreements, economic/military/political alliances or institutions (European Union, United Nations, NATO, etc.), and talks of environmental protection, democracy, and human rights are, in their view, entirely losing propositions. It is true that capitalism has always employed such promises as tools of deception and hypocrisy. Today, however, even maintaining this hypocrisy has become a liability.
(112) The bourgeois state itself is neither the capitalist nor the ruling class. Rather, it functions as the administrative committee of the bourgeoisie, tasked with maintaining order and formulating policies that serve the long-term interests of capital. To this end, it does not hesitate to use force—even against elements within the elite that pose a threat to systemic stability. Notably, institutions such as the judiciary often deliver verdicts that cultivate an image of being “neutral,” “respected,” and “sacred.”
(113) In this regard, states also incur many expenses that have no immediate or direct benefit. An ordinary capitalist would consider these a loss or waste. However, they have indirect and long-term benefits and are necessary for maintaining the stability and dominance of the system. Public welfare programs also fall into this category. But there can be several other types of expenditure aimed at the state’s PR and “image-building.”
(114) Imperialist states also have to bear similar expenses at the global level, including concessionary loans for poor countries, defense guarantees for allies, scholarships for students from the Third World, grants, aid, and funds for various UN projects and NGOs. These expenses do not yield immediate returns but are by no means “charity.” Rather, they are necessary for maintaining the imperialist order in the long term.
(115) However, the shortfalls of capitalism have grown to such an extent that it is increasingly unable to bear such expenses. This process has been ongoing for several decades but has intensified since 2008. The most obvious expression of this is, once again, populists like Trump and Milei.
(116) Just as Imran Khan saw everything as a cricket match, Trump and Elon Musk see every issue as a business deal. For them, the US state is a private corporation, and every economic matter should be viewed in terms of immediate profit and loss. Fundamentally, they want to exempt the state from all its regulatory, welfare, and administrative responsibilities and reduce it to just armed gangs that protect, through naked coercion, the interests of their gang. Anyone who does not accept them as messiahs and masters is a traitor and enemy. With this perspective, they are carrying out a major purge in institutions like the FBI, CIA, and the military, as well as the state bureaucracy.
(117) In line with the aforementioned agenda, the Trump clique is implementing an extremely ruthless program of privatization and downsizing in the US, which includes the majority—or at least a very large number—of the 2.4 million federal employees. Although these hostile designs are not being fully revealed at the moment, there are plans to eliminate or gut entire government sectors, including the Department of Education and the Labor Department, and institutions like USAID and VOA. For this purpose, threats and “golden handshake” like packages are being used simultaneously. According to some reports, 75,000 employees have already accepted the latter offer. However, initial signs of resistance from unions are also emerging.
(118) Just as Imran Khan, after coming to power, made a mountain out of a molehill over the buffaloes and scrapped cars at the Prime Minister’s House, Elon Musk is “uncovering” billions and trillions of dollars in alleged corruption every day through his “DOGE,” which by the way has no reasonable constitutional or legal status and is composed of even bigger charlatans and clowns than Musk himself. They are also trying to gain access to the state’s most sensitive financial matters and information. Lies, deceit, and exaggeration are rampant, but since ordinary people are usually not very familiar with complex economic data and state accounting, they are easily misled or confused.
(119) It is the same in matters of foreign economics. While they do not believe in principles such as human rights, democratic values, freedom of expression, environmental protection, and public health—including vaccination—even to the extent of maintaining a façade of hypocrisy, there are also economic motivations behind actions like pulling the US out of UN health and human rights organizations and shutting down agencies such as USAID. Or at the very least, the American public is being given the impression that the money the whole world was living off is now being saved. However, like their other actions, such claims of saving and “efficiency” are extremely vulgar and pathetic. We will elaborate on this further below.
(120) The issue of the environmental disaster and climate change is particularly serious. This entire national and international gang denies global warming. Trump has pulled the US out of the Paris Climate Agreement and has indicated unrestrained environmental destruction for profit, including unlimited petroleum drilling. It should be remembered that over the past year and a half, the Earth’s average temperature has been steadily rising, reaching 1.5°C above the preindustrial levels. This is a precursor to a major catastrophe, the effects of which are already being observed in the form of extreme weather events. While a viable solution to this issue is not possible under capitalism, environmental destruction will only intensify under people like Trump. These psychopaths are pushing humanity toward complete ruin and annihilation.
(121) The question is: how much can they save through such schemes? To answer this, we must first look at the state of the America’s deficits and debts. Currently, the America’s internal (fiscal) deficit is approximately $2 trillion, and its external (current account) deficit is $1 trillion. Combined, these deficits amount to about 10% of GDP. Meanwhile, the federal government’s outstanding debt is $36 trillion, which is about 125% of GDP (it was only 55% in 2001!). This is a catastrophic economic situation that cannot be sustained for long.
(122) Now, compare these figures with USAID, whose annual budget is not even $40 billion. Even if we include all other forms of foreign aid and funds given to the UN, the total amount probably does not reach $100 billion. Clearly, this is not even a fraction of the deficits faced by the country. While USAID is undoubtedly an imperialist project, it should be noted that nearly 2.5 million people in extremely poor countries depend on it for food, medicine, and other basic necessities of life.
(123) Although we can expect penny-pinching and nickel-and-diming from these lumpen capitalists, they also harbor deep resentment toward liberal international institutions. In any case, behind these seemingly absurd attempts at savings lies a bigger maneuver. Their real target is the US Social Security system, whose annual expenses amount to approximately $1.3 trillion and which Elon Musk has been eyeing since day one. In this regard, “billions of dollars” in alleged “corruption” within Social Security are being uncovered, and occasionally, 150-year-old individuals are “found” to still be receiving government aid long after death. However, a few days ago, taking this intrigue and propaganda a step further, Musk outright called Social Security a “Ponzi scheme”!
(124) Now, let us turn to Trump’s tariff policy, which has further worsened the already fragile global economy. International markets are in a state of severe uncertainty. Stock markets in the US and most of the world are falling. The prospects of a deep recession are growing, and global economic growth rate figures are being revised.
(125) A tariff is essentially a type of tax on imports, which a state imposes to discourage the import of certain or most goods. The purpose of this policy is to reduce trade deficits and provide protection to local capitalists in a competition they cannot win.
(126) The general idea is that if national capitalists are protected from foreign competition, they will gradually accumulate capital and be able to compete in the future. Thus, this is a method of promoting national capitalism. India also used this method with considerable firmness until 1991. China still adopts such methods in various forms, which greatly irritate liberal economists. However, even the advanced states of the West adhered to such protectionist policies for long periods in the past. Although, after World War II, they hypocritically shifted to free trade in line with their imperialist interests, and forced underdeveloped countries like ours to open their markets.
(127) Tariffs can also target specific countries or groups of countries. For example, if the US buys steel from both Canada and China, it may impose a 25% tariff only on Chinese steel (just a hypothetical example). However, generally, tariffs are met with retaliatory tariffs. For example, if the US imposes tariffs on Chinese goods, China will also impose tariffs on US goods entering its country. This is essentially a trade war.
(128) Here, some points are worth considering. First, the economy of the country on which tariffs are imposed is negatively affected because its exports are impacted. Second, inflation increases in the country imposing the tariffs. Obviously, if a product that previously cost $100 now costs $125 due to the tariff, the additional $25 will come out of consumers’ pockets. Third, the state’s revenue increases because the additional $25 goes into the state’s treasury.
(129) Thus, the short-term and long-term implications of tariffs on national and global economies are complex. Domestically, it must also be seen on what basis the economic model of the country imposing tariffs is structured. Will this protectionist policy ultimately benefit the people, or is it merely an attempt to favor national capitalists? And if national capitalists are being favored, are they capable of standing on their own feet in the future? Nonetheless, even a workers’ state, in conditions of isolation, may have to take such measures, which would obviously be devised in the interest of the working masses.
(130) In terms of global or regional economies, an important factor is the share or weight of the country imposing tariffs in the global economy. If a major economy imposes tariffs (as is the case with the US), it has extremely negative effects on global trade and economic activity. Bourgeois economics generally concludes that tariffs are not beneficial in the long term. They reduce consumption, increase inflation, and lower growth rates. However, this is the contradiction of market competition—whether between individuals or national states, it ultimately hurts everyone.
(131) During periods of economic boom, imperialist states sing the praises of globalization and free trade, as we have seen in the decades before 2008. However, in times of crisis, the return of protectionist policies becomes inevitable. Everything turns into its opposite.
(132) However, consider this: today, it is not a weak, dominated or insignificant state talking about tariffs. Rather, it is the world’s largest and historically most powerful imperialist state, which has been the boss of the liberal model of free-market economics for nearly 80 years. What more compelling evidence could there be of this system’s failure?
(133) In light of this entire discussion, Trump’s tariff policy is a complete recipe for pushing the already declining global economy into a deeper crisis.
(134) Trump justifies tariffs by claiming that drugs and illegal immigrants are being smuggled into the US from Canada, Mexico, and China, and therefore, they must be punished. He is now threatening to impose heavy tariffs on European goods as well. Obviously, lying and exaggeration are his habits. However, these tariffs are, in any case, a clumsy and crude way for a declining US imperialism to assert its dominance over the world.
(135) Beyond bullying and boasting, Trump also aims to achieve some concrete economic goals through tariffs. First, he believes that this will not only reduce trade and current account deficits but also benefit US domestic industry and force affected foreign companies to relocate their production to the US. This will create new jobs and boost the economy. However, perhaps an even more important goal is that the increase in government revenue from tariffs—according to his fantastic claims, amounting to trillions of dollars—will reduce the internal deficit and enable major tax cuts for his clique.
(136) However, this is only one side of the picture. Obviously, the countries on which the US imposes tariffs will retaliate with their own tariffs. This will further shrink international trade, and reduce global economic growth rates. It is no accident that stock markets are falling and fears of a drastic decline in economic growth are being expressed. Sensible economists have been consistently warning that the situation could escalate into a major trade war, triggering a vicious cycle from which it may become impossible to pull the economy out.
(137) The tariffs will also increase inflation. We know very well that since the COVID crisis, inflation has become a major problem worldwide. Declining purchasing power has caused severe unrest even in Western countries. For example, between 2020 and 2024, the prices of basic necessities in the US have increased by of 21.1%. 52% of Americans believe that their economic condition has worsened since 2020. It should be remembered that inflation was a major issue in the recent US elections.
(138) Not only in the US but worldwide, inflation is resurfacing. In 2024, the global inflation rate was 5.76%, the highest since 1996. However, the trade war Trump is fueling will further increase inflation in the US and elsewhere, necessitating another increase in interest rates. As a result, the debt burden on fragile national economies and companies will increase, and bankruptcies will rise. Not only will the bubbles in real estate and stock markets burst, but investment in productive sectors will also decline. Thus, a severe form of stagflation will emerge.
(139) The commentary of relatively farsighted policymakers of capital regarding Trump’s rise and the successive assaults on the liberal imperialist order is not without interest. In this context, we would like to present some excerpts from recent issues of The Economist. In its issue published on March 8, The Economist, while reassessing the economic situation and prospects, writes:
In his speech to Congress on March 4th President Donald Trump painted a fantastical picture. The American Dream, he declared, was surging bigger and better than ever before. His tariffs would preserve jobs, make America richer still, and protect its very soul. Unfortunately, in the real world things look different. Investors, consumers and companies show the first signs of souring on the Trumpian vision. With his aggressive and erratic protectionism, Mr. Trump is playing with fire. By imposing 25% tariffs on goods from Canada and Mexico… Mr. Trump is setting light to one of the world’s most integrated supply chains… He has also raised tariffs on China and has threatened the European Union, Japan and South Korea. Some of these duties may also be deferred; others may never materialize. Yet in economics as in foreign relations, it is becoming clear that policy is being set on the president’s whim. That will cause lasting damage at home and abroad.
When Mr. Trump won the election in November, investors and bosses cheered him… Alas, those hopes are going up in smoke. Elon Musk’s DOGE is causing chaos and grabbing headlines, but with little sign yet of a deregulatory bonanza.
No wonder that, despite Mr. Trump’s talk of a roaring comeback, the markets are flashing red.
Underlying the alarm is a dawning realization that Mr. Trump is less bound by constraints than investors had expected…
Just as important, the people around the president also appear to lack influence. Scott Bessent, the treasury secretary, and Howard Lutnick, the commerce secretary, are both financiers, but if they are trying to rein in Mr. Trump, they are not doing very well… Few businesspeople want to speak truth to power for fear of drawing Mr. Trump’s ire. And so the president and reality seem to be drifting ever further apart.
The world economy is at a dangerous moment… As the message that Mr. Trump is harming the economy grows louder, he could lash out at the messengers, including his advisers, the Fed or the media. The president is likely to inhabit his protectionist fantasy for some time. The real world will pay the price.
(140) In its March 15 issue, The Economist commented as follows regarding the allied countries facing Trump’s wrath:
For decades America has stood by its friends and deterred its enemies. That steadfastness is being thrown upside down, as Donald Trump strong-arms allies and seeks deals with adversaries. After freezing all aid to Ukraine on March 3, his administration restored it when Ukraine agreed in principle to a 30-day truce. It is unclear how hard the White House will press Vladimir Putin to accept this. On the same day, Mr. Trump briefly slammed even more tariffs on Canada…
Mr. Trump and his supporters believe his frenetic actions enhance American power, breaking deadlocks and shaking up deadbeat or parasitic allies. The proposed ceasefire in Ukraine is evidence that he can change countries’ behavior. But at what cost? His trade war is panicking financial markets. The 40-odd countries that have put their security in America’s hands since 1945 are suffering a crisis of confidence. They dread Team Trump’s inconsistency and short-termism: a ceasefire in Gaza that is rather like the Ukrainian one may soon collapse… Allies are asking whether they are certain that Mr. Trump or a President J.D. Vance would fight alongside them if the worst happens. Unfortunately, the answer is: not certain enough.
Asian allies worry that Mr. Trump will turn on them next. Australia, Japan, South Korea and others hope his hostility to China runs deep enough that he will not abandon them. But his grievances over trade and defense treaties do not have geographic limits. Given his determination to avoid world war three with Russia over Ukraine, negotiations with China or North Korea could see him offering concessions that weaken allies and make Taiwan more vulnerable.
America’s allies should try to avoid that dismal outcome, starting today. One idea is to deter America from mutual harm. That means identifying unconventional retaliatory measures while calibrating their use to avoid a 1930s-style downward spiral.
America’s allies should seek strength in numbers. Europe needs a plan to take over the leadership of NATO, join the CPTPP, an Asian trade deal, and co-operate with Japan and South Korea more closely on military and civilian technology. That would create scale and help manage rivalries. It would also preserve an alternative liberal order, albeit vastly inferior to the original. Allies should be ready to welcome back America under a new president in 2029, though the world will not be the same. Nuclear proliferation may have been unleashed, China will have grown stronger and America’s power and credibility will have been gravely damaged. For its allies, there is no point whingeing: they need to toughen up and get to work.
(141) The March 1 issue also reflects similar thoughts:
The rupture of the post-1945 order is gaining pace. In extraordinary scenes at the UN this week, America sided with Russia and North Korea against Ukraine and Europe. Germany’s probable new chancellor, Friedrich Merz, warns that by June NATO may be dead… Team Trump claims that its dealmaking will bring peace and that, after 80 years of being taken for a ride, America will turn its superpower status into profit. Instead it will make the world more dangerous, and America weaker and poorer.
The world will therefore suffer. What Mr. Trump does not realize is that America will suffer, too. Its global role has imposed a military burden and an openness to trade that has hurt some American industries. Yet the gains have been much greater. Trade benefits consumers and importing industries. Being the heart of the dollar financial system saves America over $100 billion a year in interest bills and allows it to run a high fiscal deficit. The foreign business of American firms is worth $16trn. Those firms thrive abroad because of reasonably predictable and impartial global rules on commerce, rather than graft and transient special favors—an ethos that suits Chinese and Russian firms far better.
Advocates of dealmaking assume that America can get what it wants by bargaining. Yet as Mr. Trump exploits decades-old dependencies, America’s leverage will rapidly fall away… Congress, financial markets or voters could yet persuade Mr. Trump to walk back. But the world has already started planning for a lawless era.
(142) The gravity of the situation is clearly reflected in the concern expressed in these lines. However, several points are worth considering. For instance, they themselves acknowledge that the ceasefire in Gaza is not sustainable. Like most other conflicts in the world, this issue, created by imperialism, is a continuously festering wound. But the “solution” proposed by Trump—entailing the complete displacement of the Palestinian population and the transformation of Gaza into a “resort”—reveals the depth of bigotry and vileness to which the imperialist bosses have descended. In Gaza, Trump does not see genocide and devastation but rather a profitable real estate deal. However, if we ponder, he has only articulated what “civilized” imperialist leaders have been hesitant to say openly. But since Trump is boorish and impatient, he wants to settle decades of work in months or years. Nevertheless, this is the first time since World War II that the complete eradication of a nation—basically ethnic cleansing— is being proposed and discussed openly.
(143) Displacing the Palestinians is certainly not easy. However, the heavy losses suffered by Hezbollah and Hamas in the recent conflict with Israel—including the killing of key leaders— and the fall of the Bashar government in Syria have dealt a significant blow to Iran. But even before that, Iran has been unable to take any concrete action in favor of the Palestinians beyond hollow rhetoric and controlled confrontations with Israel. Behind this lies the internal crisis of the Iranian state, as well as its technical, military, and economic weaknesses compared to Israel. More importantly, the corrupt Iranian clergy has long weaponized the Palestinian cause and anti-American rhetoric to legitimize its tyranny. How can one expect an anti-imperialist struggle from a reactionary and exploitative state that leaves no stone unturned when it comes to oppressing its own people? In any case, these events have dispelled many illusions associated with Iran.
(144) Although Zionism itself is suffering from a deep internal crisis and decay, it has gained some confidence from Iran’s weak position and Trump’s full backing. However, while Hamas and Hezbollah have indeed been weakened, their complete elimination through military means is nearly impossible. In this regard, the recent ceasefire is only a temporary arrangement, which could collapse at any moment. The contradictions driving the conflict remain intact. As long as the malignant tumor called Israel exists on the body of the Middle East, the region will continue to writhe in pain and suffering.
(145) But Trump wants to “resolve” the Ukraine issue in the same way he wants to handle Palestine. His “proposal” is that the part of Ukraine occupied by Russia (about 20%) should be permanently ceded to Russia, while the remaining Ukraine should hand over all its mineral resources to the United States, which could then be looted in collaboration with Russia. This is essentially a plan for the imperialist partition of Ukraine between Russia and the US. In this context, the public spat between Zelensky and Trump at the White House, witnessed by the entire world, is also a unique event—one that was unimaginable beforehand.
(146) The Ukraine war has laid bare the ideological bankruptcy of many on the left. These campist tendencies have utterly failed to grasp the complex historical context of the issue, the national question, the ground realities of the region, and the crucial distinction between the Ukrainian state and its people. Reducing this conflict to merely a consequence of NATO’s expansion or dismissing it as simply a proxy war between two imperialist powers is not only incorrect but a criminally negligent stance. Many of them refuse to even recognize Russia as an imperialist power, or at best, consider it the “lesser evil.” Similar flawed reasoning has characterized their stance on the Bashar al-Assad regime. Therefore, we believe it is essential to analyze the situations in Syria and Ukraine separately. In this regard, two appendices have been included at the end of this document.
(147) If we consider the excerpts from The Economist mentioned above, it becomes clear that they are more concerned about Trump’s style and methods than his actual policies. For example, he doesn’t listen to anyone, is uncontrollable, lacks consistency, and acts arbitrarily. This is why he is unreliable, and long-term planning is impossible under him. Despite supporting internal deregulation policies, The Economist complains that there is more noise than action.
(148) The excerpts also emphasize the planning to save the remnants of the liberal order. European policymakers are already seriously considering the situation in this context. After Zelensky’s scolding by Trump, the EU foreign policy chief openly stated, “The free world now needs a new leader.” These are unusual words.
(149) However, running this order without the US is not only very challenging but also expensive. Europe will have to rearm itself, massively expand its militaries, and take over the defense guarantees previously provided by the US. This requires heavy expenditures, which is not a good omen for already crisis-ridden economies and populations suffering from austerity.
(150) European “rearmament” means a new arms race. Another alarming aspect is that several European countries may seek to acquire nuclear weapons. Previously, the US had taken responsibility for their defense in case of nuclear war (only France and the UK in Europe have nuclear weapons). However, in the new situation, the wicked tendencies of nuclear proliferation will intensify.
(151) NATO is already in a state of dysfunction. Trump is taunting Europe for not spending enough on NATO. But he has also thrown in a new twist: he wants NATO to support him in seizing Greenland. In other words, NATO would have to help a member state seize a large part of another member state! Denmark has already strongly condemned the US talk of occupying Greenland. The Danish Prime Minister has indirectly told Trump to stop his nonsense. Similarly, the Canadian government, political figures, and public have reacted strongly to the idea of making Canada the 51st state of the US
(152) However, the problem is not just with NATO but also with the European Union. The EU is already facing centrifugal inclinations. But Trump’s support for far-right governments and political parties will only strengthen these propensities. If we examine the situation, European countries are already divided in terms of their relations with Trump. If far-right parties come to power in more countries, this division will only deepen.
(153) Interestingly, even outside Europe, Trump’s attitude is relatively warmer toward authoritarian states or governments. He even unexpectedly invites historically anti-American countries to negotiations. For example, this was the case with North Korea in the past, and now he has invited Iran to talks on nuclear issues, while simultaneously launching attacks on Iran’s allied Houthi rebels, which could escalate into a major conflict. Although Iran has ostensibly rejected this offer to save face after its humiliation at the hands of Israel. After the recent events, the Iranians might seriously consider developing nuclear weapons or at least give the impression of doing so to strengthen their bargaining position. At any rate, behind-the-scenes efforts to reach some understanding are certainly ongoing. Similarly, in his recent address to Congress, Trump surprisingly praised Pakistan!
(154) In a similar vein, Trump’s policy toward China during his second term is still unclear. He is imposing tariffs even on his allies. So, the tariffs imposed on China are nothing extraordinary—at least so far.
(155) Some believe that one reason for his policies of shaking hands with Russia, adopting a relatively softer stance toward Pakistan, and fueling extreme nationalist tendencies in the US is that he wants to gradually isolate and encircle China. This would obviously include efforts to sabotage projects like CPEC, BRI, and China’s foreign investments. However, as we have seen above, even imperialist policymakers fear that he might reach out to China (or, as they put it, “make concessions”). Therefore, this issue is also fraught with uncertainty. Anyway, in the next part of the document, we will examine China in a relatively detailed historical context.
(156) In recent years or decades, two extreme trends have emerged in Marxist circles regarding the rise of the far/hard right. The first exaggerates the danger, paving the way for alliances and compromises with liberal bourgeois or left-wing reformism. In contrast, there are trends that either do not recognize the far-right as a distinct phenomenon or do not consider it a threat (because it does not fit the classical definition of fascism, or the conditions are not the same!).
(157) Time has proven both positions wrong. The far-right tendencies that have emerged in recent times are quite different from the traditional right and may intensify and expand in the coming days, posing serious threats to working masses. However, since their rise has been facilitated by the very failure of reformism, reformism cannot stop them.
(158) Nor can much hope be placed in the judiciary. Some lower courts are trying to block Trump’s actions, but most higher courts are filled with Trump supporters. Those who are not will be removed or sidelined by him. Thus, the judiciary cannot block his path for long. Force can only be countered by force. This is a battle that workers will have to fight themselves.
(159) What further moves Trump will make in the coming days cannot be sufficiently predicted. For now, a large part of the American ruling class is enamored with him—particularly the tech millionaires. In the hope of increase in their profits and wealth, they are tolerating his impudence. However, as conditions worsen, the situation could change rapidly. The possibility of Trump and his cronies being ousted—or even eliminated—cannot be ruled out.
(160) In any case, we have examined the socio-economic foundations and ambitions of Trump and similar figures in the context of the character of the current era and objective conditions. This makes the future possibilities largely clear.
To be continued…
