Part I: Capitalist Equilibrium and the War in Ukraine

Using capitalist equilibrium as a guide for understanding the world situation, in this first part of the document, we analyze the main trends and tensions that define the international situation, which is being shaped primarily by the war in Ukraine and the strategic confrontation between the United States and China that lies behind it. The main definition we put forward is that the war in Ukraine qualitatively deepens the crisis of neoliberalism due to its open questioning of the world order established after the process of “bourgeois restoration,” with the emergence of China as a new pole in the global order challenging U.S. hegemony and attracting other regional powers such as Russia around it. As a result, the war further reactivates the classical trends of the imperialist epoch of crises, wars, and revolutions. 

Capitalist Equilibrium as a Guide to Action

The war in Ukraine represents a significant shift in the geopolitical situation on a world-historic scale: it has deepened the crisis of neoliberal hegemony by marking a leap in the crisis of capitalist accumulation opened up by the capitalist crisis of 2008 into the military field.

Four decades of capitalist “globalization” attempted to put forward the idea that a harmonious development of capitalism was possible. Just as the 2008 crisis threatened prolonged neoliberal hegemony in the economic field, the war in Ukraine has shattered the notion that the conflicts between great powers could be overcome peacefully and without wars.

The return of military confrontations with “classical” features in this scenario has marked a qualitative reversal of the globalizing trend toward the greater integration of capitalist states, aggravated tendencies toward economic crises (recently expressed in the foreboding collapse of Silicon Valley Bank and other banks) and thus internal crises. It has also accelerated the resurgence of class struggle, even though this continues to be the least developed aspect of the international situation. Despite the relative weakness of class struggle in relation to the other elements of capitalist equilibrium, we cannot underestimate important developments such as the dynamic struggle unfolding in France against the pension reform, which in certain moments has expressed pre-revolutionary characteristics.

In the midst of this convulsive international scenario, where the neoliberal project of the last three decades has been thrown into deeper crisis, and the working class is beginning to reenter the scene after decades of the neoliberal offensive, how can we understand the tendencies that shape the current political terrain? In the 1920s, Trotsky used the concept of capitalist equilibrium to analyze the dialectical relationship between the economy, geopolitics, and class struggle to articulate a more dynamic understanding of the prospects for revolutionary development. In other words, capitalist equilibrium is meant as a guide for action for revolutionaries, used to help situate and orient ourselves around the concrete ruptures and restorations of capitalist stability — with class struggle being the definitive aspect of these trends.

In his speech at the Congress of the Communist International in 1921, Trotsky pointed out:

Capitalist equilibrium is an extremely complicated phenomenon. Capitalism produces this equilibrium, disrupts it, restores it anew in order to disrupt it anew, concurrently extending the limits of its domination. In the economic sphere these constant disruptions and restorations of the equilibrium take the shape of crises and booms. In the sphere of inter-class relations the disruption of equilibrium assumes the form of strikes, lockouts, revolutionary struggle. In the sphere of inter-state relations, the disruption of equilibrium means war or — in a weaker form — tariff war, economic war, or blockade.

In sum, capitalism relies on an unstable equilibrium, one that constantly breaks and reforms again to its own benefits. Yet in each successive scenario, this equilibrium has the potential to become more precarious, birthing new crises and geopolitical conflicts that can also become the seeds of class struggle.

Looking at the overall situation today, where there has been a volatile panorama of geopolitical crises, renewed instability in the economy, and a developing dynamic toward class struggle. As a result of the war in Ukraine, capitalist equilibrium is under “significant impairment.” By this, we mean the level of rupture is not at peak levels, such as the 1918 Russian Revolution or World Wars, but there are significant qualitative changes in the equilibrium that express heightened tensions. This implies that as revolutionaries, we have to prepare ourselves for new forms of class struggle, more radical than what we have seen in recent times. Strategically, it signifies a more favorable terrain to do revolutionary politics as the tendencies toward revolution and counterrevolution are raised. Beyond merely thinking about the tendencies toward rupture on a global scale, these tendencies should also be analyzed in the different regions — like in Europe and Latin America, for example — to think about the uneven regional developments and the way these regional particularities interact with the broader global context.

In that sense, we can make connections between the general situation and the implications it has beyond general imbalances. As Juan Chingo recently wrote for the international document of the congress to found Revolution Permanente in France:

This dynamic has already begun and will deepen in the continent most directly affected by the crisis, Europe, where countries like Germany — which until recently and in previous crises was a pole of stability — are getting closer, by all forecasts, to a long phase of decline.

In Europe, new strike waves are emerging — most notably in France, but also in the United Kingdom and Germany, where the working class has entered the scene to fight back against decades of neoliberal austerity and worsening working conditions. In Latin America, we can see the continuation of anti-neoliberal revolts from a previous wave of class struggle in countries like Chile, to countries like Peru, where a deep organic crisis produced an institutional coup and opened up a pre-revolutionary situation. Like the war in Ukraine, the development of such regional trends in many ways marks the complicated reality of a return to the neoliberal status quo.

These general trends of the crisis of neoliberalism can be seen in the historical and strategic context of a reactivated era of crises, wars, and revolutions — a category used by classical Marxists in the early 20th century to characterize the imperialist era. In many ways, we are entering a period in which the classical trends of the imperialist era are once again the order of the day, with important historical expressions like the 2008 crisis, the pandemic, and the war in Ukraine. Through this lens, we can see the continued relevance of anti-imperialist and socialist struggles, as the process of bourgeois restoration and the neoliberal offensive not only failed to prevent crises and wars, but actually deepened the contradictions of capitalism and created historic social, economic, and environmental catastrophes. Thus, Rosa Luxembourg’s idea of “socialism or barbarism” becomes increasingly relevant to describe the current context.

Without falling into either an overly skeptical or an overly catastrophic perspective, we can use this strategic framework as a way to understand that even though the ruling class might have conjunctural solutions to crises like that of 2008, or have the strategic reserves to contain processes of class struggle through repression, concessions, and political maneuvering like in the cases of the BLM movement or the Chilean uprising, they are incapable of resolving the deepest contradictions that permeate this system. Fundamentally, this incapability lies in the difficulties in finding new motors of capitalist accumulation. This historic crisis of capitalist accumulation, which has set off crises for bourgeois regimes around the world, has in turn also given birth to both new phenomena on the left but also on the right. Thus, we have to analyze the international situation from the point of view that each process that arises in this context gives Marxists possibilities to intervene with a revolutionary perspective.

The War as the Continuation of Politics by Other Means

With the geopolitical situation undoubtedly shaped by Russia’s invasion of Ukraine, in turn the course of the war expresses shifts in the character of the conflicts between great powers. The conflict continues to have tendencies toward a prolonged conflict within Ukrainian territory, with moments of stalemate. In addition, coming off the heels of the pandemic, the war has deepened a social and economic crisis across the world, further disrupting global value and supply chains, deepening the structural crisis of neoliberalism, and having acute consequences for the working class and oppressed around the world. As a shift from the period of unequal wars of imperialist penetration prior to this moment — such as those in Iraq and Afghanistan — the war in Ukraine marks the return of conflicts between great powers.

From the strategic-military point of view, the war can be divided into three stages. In the first stage, Russia attempted a “blitzkrieg” tactic with the supposed objective of forcing the fall of the pro-Western government of Volodymyr Zelenskyy and replacing it with a government more friendly to Moscow. This was unsuccessful, however, due to a combination of factors, including the fact that Putin found Russia matched in firepower by a greater-than-expected Ukrainian resistance — propelled by significant NATO assistance — and that the Russian army experienced significant logistical and strategic failures. After the failure of achieving these objectives, a second phase was opened up, marked by the withdrawal from the siege of Kiev and the reorganization and deployment of Russian troops in the east and the south of Ukraine. In this stage, the advances of Putin’s army allowed for the conquest of the main port of the Sea of Azov (and the Donbas) and allowed it to establish a land corridor from the Crimean peninsula and up to the territories of the Donbas region under Russian control.

A third phase has been marked by the declaration of the annexation of Lugansk, Donetsk, Zaporiyia, and Kherson. In this phase, the war has increasingly taken on the characteristics of a war of attrition with moments of stalemate. With the withdrawal of Russian troops from Kherson to the other side of the Dnieper River, Russia is fighting to consolidate its position through the massive use of artillery and the deployment of the Wagner Group in the hottest areas. The battle in this phase has been to secure the strategic city of Bakhmut.

U.S. imperialism and its allies are continuing a strategy of intervening indirectly through arming Zelenskyy’s pro-NATO regime and imposing economic sanctions on Russia in the hope that the long war will wear down Putin’s reactionary regime. A slow and costly advance by the Russian army has been matched by NATO and the Zelenskyy regime, which are attempting to use their momentum in the war to push their own red lines and territorial ambitions; NATO, particularly the United States, has escalated the conflict with its intervention, sending increasingly powerful weapons to the Ukrainian government. In response, Russia has partially mobilized reservists and more openly threatens nuclear warfare. Russia, notably, has not so far been able to rely on its allies like China and India towards those ends, especially as these countries attempt to stray away from Putin’s more adventurous tendencies; China, in particular, now positions itself as a new broker of peace. Nevertheless, escalations and provocations increase the tensions of the war; even military “accidents” on either side could take this conflict to a new scale.

NATO’s recent deployment of state-of-the-art tanks mark the further integration of European imperialism into the United States’ orientation. The rearmament of imperialist powers, particularly Germany, along with greater coordination among the Western bloc, highlight the way the Biden administration has capitalized on the war in Ukraine to recover and reassert U.S. hegemony over the European powers with an eye toward its dispute with China, which is the main challenge to U.S. leadership globally.

The use of advanced tanks and even recent debates over the dispatch of fighter jets point toward even greater escalation and militarism on the side of NATO to win a more favorable strategic position in its longstanding project of encircling and containing Russia. Indeed, the war has marked one of the most significant expansions of the NATO alliance. The inclusion of Finland and the recent incorporation of Sweden into the alliance marked the largest territorial expansion of NATO since the end of the Soviet Union. However, the U.S. and NATO have yet to declare war on Russia directly; they are sticking to the shaky calculus of avoiding transforming what is currently a proxy war played out in Ukrainian territory into a direct war that would drag other great capitalist powers into the fray and which would mean more open confrontation with China. Consequently, it is not out of the question that in certain moments, the great powers will pursue a policy of moderation in the conflict, in order to dampen heightened geopolitical tensions. The meeting between Biden and Xi Jinping during the G20 summit in Bali was one expression of this.

The prospect of a prolonged war, which seems to be the most probable scenario, could also deepen the contradictions of the alliances in this conflict. Although it has had an acute effect on Europe, deepening the cost of living crisis, the worst aspects of the crisis were avoided by a relatively warm winter and less need for Russian fuel. Within the Western bloc, however, there are competing interests between the imperialist powers with countries like Germany (the largest economy in the EU) expressing opposition to the Biden administration’s “technological strangulation of Beijing” due to its impact on German industries.

On the other hand, the recent crisis with the Wagner group and Russian warlord Yevgeny Prigozhin demonstrates the vulnerabilities of Russia’s military operations and the weaknesses of Putin’s regime – despite having contained the crisis conjuncturally. Overall, however, on a tactical level, Russia has many advantages and had some tactical victories, though strategically, Russia’s invasion of Ukraine has in general tended to favor NATO’s strategic ambitions, not without contradictions, rather than reasserting Russia as a military power in response to NATO encirclement. These elements point to an unstable scenario in the context of a war with prolonged tendencies and without a clear “exit.”

Based on the elements above, how, as Marxist revolutionaries, do we understand the conflict that unfolds in Ukraine? On one side, there’s the front formed by the Ukrainian government and all the imperialist powers of NATO under U.S. leadership, pursuing its strategy of encirclement of Russia. On the other side, we have the reactionary invasion of Russia, which is a regional power in its own right and has the largest military in Europe. In addition, though China has not entered actively into the war on Russia’s side, the two countries are developing a deepening geopolitical front as represented by the recent meeting between Putin and Xi Jinping and joint military exercises, for example.

Thus, the war in Ukraine takes on the character of a proxy war that is taking shape against the backdrop of the hegemonic decline of U.S. imperialism, which continues to be the main imperialist power but is facing a growing confrontation with China’s emerging power on a global scale. The war in Ukraine accelerates these tensions, though for now it has not resulted in direct confrontation between these powers.

A proxy conflict is not the same as an inter-imperialist war, like World War I and World War II, but neither is it a classic example of a war of national liberation against imperialism — like so many wars throughout the 20th century, including the Vietnam War.

Returning to the definition of a proxy war, as the Trotskyist Fraction (TF) we have made clear since even before the 2022 Russian offensive that there are no progressive sides to the conflict in Ukraine and that the only solution to the war is through the revolutionary action of the working classes of all the states involved — Russia, Ukraine, and of course, the United States and its NATO allies in Europe.

But the war in Ukraine cannot be understood in the military field alone. As the specter of great confrontations and, with it, great wars, return to the fore, it is important for us to go back to Lenin’s appropriation of Prussian war general Carl Von Clausewitz’s conception of war as a continuation of politics by other means. In a lecture delivered in May, 1917, he says:

War is a continuation of policy by other means. All wars are inseparable from the political systems that engender them. The policy which a given state, a given class within that state, pursued for a long time before the war is inevitably continued by that same class during the war, the form of action alone being changed.

Lenin used Clausewitz’s formula to show that war wasn’t simply alternating cycles of conflict and peace, but a means by which the instigators of war seek to advance their political goals through physical struggle. Especially in the midst of the first great war that dragged the world’s powers and its peripheries into violent warfare, it was necessary for Lenin to stress that the war was simply the continuation of the policies of the different imperialist blocs as they fought over the redivision of the world. In the context of the war in Ukraine, what politics does the war continue?

As we’ve previously elaborated, the war in Ukraine is the continuation of NATO’s politics of encircling Russia to contain the country’s regional influence and keep Europe subservient to the interests of U.S. imperialism. NATO is an imperialist alliance founded in 1949, in the context of the Cold War, to protect the interests of U.S. imperialism and its European allies against the Eastern Bloc, which had a military alliance organized after the Warsaw Pact. After the fall of the USSR in 1991, despite the social and economic catastrophe in capitalist Russia, NATO pursued an offensive strategy to prevent the accession of a country which had one of the most important nuclear arsenals in the world. Far from having stopped or dissolved, NATO doubled its membership by expanding eastward and incorporating a large part of the former Soviet Republics.

This went hand in hand with the objective of incorporating Russia into circuits of global capitalism. Boris Yeltsin and the emerging oligarchy within Russia, under the guidance of the West, implemented a series of policies which led to a dramatic drop in productivity. Russia’s economy transformed from an industrial power to primarily exporting oil and gas. However, the United States was not capable of turning Russia into a semi-colonial country. When Putin came into power, the cycle of increasing hydrocarbon prices in the 2000s allowed him to use the high prices of these commodities to rebuild Russia’s army. Though Russia did not achieve the status of a great power, as Emilio Albamonte explains

a kind of platypus was formed that is Putin’s Russia, a nation with one of the most important nuclear arsenals in the world, which on the other hand is economically backward. A world power in energy, gas and oil, and a major arms manufacturer but with its economy almost completely underdeveloped. This does not correspond to the structure of the imperialist countries that have their economies quite developed in different aspects.

Thus, Russia emerges with contradictory characteristics as a capitalist state that’s far from sharing imperialist characteristics economically but has some trace of imperialist characteristics at the level of its military. Despite not being a great power, it is a regional power with limited international influence, such as its role in the Syrian conflict.

Putin’s regime has put forward a policy of trying to slow down or resist the offensive policy of Western powers over its closest sphere of influence. Therefore, the politics Putin continues through the invasion of Ukraine is a means to the political end of reasserting Russia’s historic military prowess in the face of NATO advancement, obtaining a more favorable outcome for the expansion of the interests of the Russian oligarchy and their economic influence, and increasing the reactionary national oppression of the people of bordering countries in the face of the historic decline of U.S. imperialism.

However, even before the conflict in Ukraine, the growing confrontation between NATO and Russia was expressed in the “color revolutions” like the “Orange Revolution” in Ukraine in 2004 and its continuation in the Maidan uprising of 2014, which brought to power pro-Western governments after Washington’s promotion of opposition movements against pro-Russian regimes. 

After Maidan, a low-intensity civil war broke out in the regions of Luhansk and Donetsk, as a result of the deepening divisions between the local oligarchies. This also led to the rise of extreme right-wing nationalist groups. The Russian-speaking minority in Ukraine, which is geographically concentrated in the Donbas, became the target of oppressive measures, like restrictions on the use of their language and attacks by far-right groups sponsored by the state. At the same time, Russia promoted, trained, and armed separatists as part of a nearly decade-long separatist war in the Donbas. Today, although the civil war in the Donbas continues, it is not one where the self-determination of the people of the Donbas is the order of the day, especially given the vast exodus of the population in the region. It is one that is completely subordinated to the interests of the Russian bourgeoisie that sees it as a way to expand and consolidate Russia’s influence in the region.

Thus, the Zelenskyy regime is the product of this scenario where Ukraine has followed a back-and-forth trajectory, marked by confrontations between the “pro-Russian” and “pro-Western” wings of its capitalist oligarchies. Consequently, Clausewitz’s formula can also be applied to the pro-NATO Zelenskyy regime, as the war continues the hostilities between the two sectors of the Ukrainian oligarchy which are subordinated to either NATO or to Russia. This definition is important because it explains why it is difficult to separate the military policy of the Ukrainian government from that of NATO. And the subordination of Ukraine to U.S. imperialism also extends to the economic field, as Ukraine, like many other semi-colonies, is indebted to the IMF. 

The War and the Left 

The war, especially as it continues, has reactivated old debates on the Left, bringing them off the page and into reality. In the United States, there have been strong illusions in the role of NATO and, consequently, adaptation to NATO policies. This explains, to a certain extent, the largely passive response to the war by the U.S. Left. Against a Marxist logic, much of the support for NATO, whether implicit or explicit, comes from the interpretation of the war as a struggle against “Russian authoritarianism,” which denies the self-determination of the Ukrainian people — a moral obfuscation of the conflict that disregards or downplays Zelenskyy’s subordination to U.S. interests and the imperialist ambition of the U.S. in particular.

In this context, the reformist Left — the tendency that holds the most weight on the U.S. Left — is making appeals for a more “moderate” escalation of the war and to propose a negotiated exit for the conflict, similar to the bourgeois pacifist proposals of neoreformist currents in Europe. Early in the war, for example, Jacobin and the progressive “Squad” in the House of Representatives proposed sanctions as a “lesser evil” to militaristic policies. And while the Squad has made pacifist appeals and criticized the military budget, they’ve continued to fall in line with Biden’s policies and vote for historic defense budgets. While campaigning for the Democrats before the midterms, Sanders even went as far as to say: “Democrats, war mongers? When you have Putin breaking all kinds of international laws, unleashing an incredibly disgusting and horrific level of destruction against the people of Ukraine?” As the war has dragged on, this sector acknowledges the economic impact of the war and argues for more domestic spending, with a rhetoric that speaks to the “American worker,” while at the same time supporting the United States’ role in the conflict.

Even some sectors of the revolutionary Left have aligned themselves with Zelenskyy and NATO against the Russian invasion. Seeing this as a war of national liberation from the tyranny of Russian “imperialism,” groups like Workers’ Voice, part of the LIT-CI, and the Tempest Collective, for example, rely on an opportunist reading of Lenin and Trotsky to justify calling for more imperialist arms to Ukraine.

On the other side, a spectrum of campist ideas have influenced various sectors of the Left — from open campism, which agitates for Russia’s triumph, to a “soft” campism which considers Russia the “lesser evil” or in some way offering a progressive solution to elements of the conflict. Some of these more explicit campists base their logic on the vision of an alternative progressive multipolar order counter to U.S. imperialism, a view which blatantly ignores Russia’s geopolitical ambitions and, in some cases, ignores China’s imperialist ambitions as well. Although they are fewer, those who insist that Russia and China represent a progressive alternative to U.S. and Western imperialism also disregard the repressive Bonapartism of Putin’s regime, which today is reacting with particular brutality to anti-war activism in Russia.

Those on this side also tend to evaluate all of Putin’s foreign policy moves as “defensive maneuvers” against hegemonic U.S. imperialism and see no qualitative change with the opening of a hot war in Ukrainian territory, thus openly and shamefully justifying the reactionary and offensive Russian invasion of Ukraine and its national oppression.

The more subtle forms of campism put forward a political line that is critical of U.S. imperialism and NATO expansion, but which raises no criticism or perspective towards Russia’s reactionary offensive and fosters illusions in a negotiated exit from the war rather than a strategy rooted in class independence and class struggle. Even when they recognize the war as a proxy war, like the DSA International Committee, they raise no criticism of Russia, which invaded Ukraine with the firepower of the biggest army in the region with the goal, at the very least, of winning a favorable regime sympathetic to Russian capital instead of Western imperialism. While groups like the Internationalist Group openly raise the slogan of the military defense of Russia, others, like the Party of Socialism and Liberation, temper their position by calling for a negotiated solution out of the crisis and the removal of NATO troops from Ukraine — as if the removal of NATO troops alone would bring an end to this war.

The war, however, is not one of Ukraine’s national liberation against Russia, as Zelenskyy and the Ukrainian side are entirely subservient to and part of the politics of U.S. and European imperialism, who want to make Ukraine their own semi-colony. Nor is the war just one by an imperialist aggressor on a “lesser,” dependent nation. Today, the war in Ukraine is a proxy war between two capitalist powers, played out in Ukrainian territory, happening against the backdrop of a greater crisis of neoliberalism and trends towards conflicts between great powers. This is why we raise the perspective: Not NATO, not Putin, and not the Zelenskyy regime; none of these camps today represent any path toward liberation for Ukrainians, and lesser still for the world’s proletariat, who are caught between the geopolitical tensions that have deep roots in the crisis of neoliberalism and the tendencies towards greater militarism. Concretely, the war in Ukraine points to deepening geopolitical crisis amid the decline of U.S. hegemony, with parallels to some of the most violent episodes of interstate confrontations of the 20th century.

The war in Ukraine undoubtedly renews challenges for the working class and the strategic positions of the vanguard, and puts into focus the tests that Marxists and revolutionaries will face in the context of the reactivated era of crises, wars, and revolutions that the Trotskyist Fraction (FT) has characterized. In that sense, coming back to the definition that we are in a preparatory period, we have opportunities to intervene and push the sectors we are in dialogue with toward revolutionary conclusions. Contrary to a reformist framework for doing politics, we know the answer to this crisis is not a new bourgeois political project or set of policies. We see with clear eyes that the crises and wars of our time can give birth to acute cycles of class struggle and even revolutionary processes.

To prepare ourselves to intervene in these phenomena, in the context of growing confrontation between great powers, we must maintain an independent position, against the pressure to give in to the opposing blocs and with a perspective that bets on the development of the mobilization of the working class. In relation to the war in Ukraine, we see the possibility of the war generating instabilities that will allow the entry of the proletariat and the international proletariat to change the very reactionary trend that has been imposed by the war and allow the opening of revolutionary situations, against Putin’s invasion and all NATO interference. In the early months of the war, the actions of workers in Greece and Italy, who went on strike to oppose NATO arms shipments to Ukraine and similarly, the actions of workers in Belarus, who sabotaged Russian military equipment, are essential examples of how we can strategically leverage our class power and use every crisis fostered by this prolonged war to fight back.

The groups that comprise the FT have been promoting, from the very start of the war, the development of an international mass movement against the war with an independent policy linked to self-organization. Contrary to the idea that ending the war at any cost should be our sole goal and that organizing a movement against the war is an end in and of itself, our perspective is that mobilizations against the war could become a springboard for the fight against the capitalist system that engenders these wars in the name of capitalist profit-making. In the end, our perspective is that in the imperialist epoch, the question of national self-determination, as in Ukraine, is intrinsically linked to the struggle for socialism. In other words, true independence for Ukraine can only come from an independent workers’ and socialist Ukraine. This implies that a military victory for neither side would be a favorable outcome for the working class. In fact, as Marxists, we understand that wars are inherent to capitalism and that the fight for a socialist perspective and the establishment of workers’ governments is key to putting an end to this social system that leads nowhere but barbarism.  

Ukraine and the Fight for Global Hegemony 

As we mentioned previously, in this historical context, the novelty of the conflict in Ukraine, in relation to the wars of the last three decades, is that it marks a return to “conventional” interstate warfare — or the “battle between man and machinery” — and more importantly, an open questioning of the world order that emerged after the Cold War. 

Since 2017, the main national security priority for the United States is its rivalry with China and Russia (and secondarily Iran) which it calls “revisionist powers.” This means that these powers seek to undermine the unipolar “liberal order” helmed by the United States without even going to a direct and global confrontation — as the technological arms race and economic “war” between the United States and China underscore.

In the case of China, the growing confrontation is linked to the country’s imperialist ambitions — continuing the CCP policy that restored capitalism in China. Capitalist restoration in China was carried out under the auspices of international financial capital, particularly that of the United States (we expand on this process in the second part of this document). However, due to the specific importance that China’s economy has acquired after the process of capitalist restoration, the Chinese bourgeoisie increasingly needs to project Chinese capitalism in imperialist terms. As the FT, we’ve been developing our characterization of China and its imperialist traits which have strengthened in recent years. Though China is not yet imperialist and U.S. imperialism still maintains an important level of hegemony over the world order, the possibility of any kind of “succession” of U.S. hegemony will not be peaceful or evolutionary — as the proxy war in Ukraine and growing tensions in Taiwan show. 

The geopolitical and military tensions in Taiwan and the South China Sea have become one of the most important expressions of the way the confrontation between the U.S. and China could develop. Neither the U.S. nor China seems to want a war over Taiwan in the immediate future. However, a series of escalatory actions (Nancy Pelosi’s visit; military exercises around Taiwan; the advance of the AUKUS military alliance; joint military exercises between China, Iran, and Russia in the Gulf of Oman) and trade measures such as restrictions on the international microchip market against China since October 2022 have deepened hostilities and are putting into question the policy of strategic ambiguity that has defined the way the U.S. orients itself toward Taiwan since the process of rapprochement with China under Nixon. 

In the conjuncture, in the context of the decline of U.S. hegemony since 2008, the Ukrainian conflict is an attempt for U.S. imperialism to recover and consolidate its hegemony, which was weakened somewhat by its chaotic withdrawal from Afghanistan and the Trump presidency. For the United States, the war is a tactical episode through which it can recover and consolidate its strength towards the larger strategic goal of confronting China. Of course, this by itself is not enough to reverse the United States’ hegemonic decline or to found a “new world order” led by U.S. imperialism, as Biden claims. At the same time, there are geopolitical contradictions that test, as we mentioned, whether U.S. allies will completely align themselves with the United States in the framework of its hegemonic crisis. The recent Saudi-Iranian détente organized by China, and Saudi Arabia’s collaboration with Russia to set oil prices, is just one example of the “relative” autonomy some traditional U.S. allies have taken advantage of in the context of U.S. imperialism’s decaying influence and the way Russia and China can act as a pole of attraction for various national interests.

In terms of contradictions, there are also the internal frictions that affect the ability of the United States and China (and their allies) to respond to these geopolitical tensions. While there is bipartisan consensus over the strategic importance of China at the level of the regime — indeed, Biden’s administration has continued many of Trump’s trade tariffs and export controls — the open elements of organic crisis between the parties and within the parties adds a level of instability. Although both parties are united in this strategic goal, there is less agreement within the regime, or even within the ranks of the parties, on how best to move forward. In the United States this is best expressed through the Trumpist wing (including DeSantis, though to a lesser degree) which advocates for a pivot away from Ukraine in favor of a more direct focus on China and “domestic policies.” The prospect of the Republican Party — with a strengthened Trumpist wing -– winning the White House in 2024 is a factor of instability because it raises uncertainty over the orientation of the foreign policy of U.S. imperialism and whether it will return to the unilateralism of “America First.”

Likewise, the growing domestic crisis in China, marked by recent protests among the middle class and workers’ actions against the Zero Covid policy, as well as slowed economic growth, have created incipient fractures in the Chinese bureaucracy (as expressed by the CCP’s recent Congress). Xi, who just won his third five-year term and has doggedly pursued a revival of Chinese nationalism to achieve national unity and give his political program on the world scale a boost, finds his support fraying — especially within the middle classes who have so far formed his popular base. The recent uprising at Foxconn marks a new chapter, with the working class entering the scene with its own methods, fighting back against both the dire conditions imposed upon them by the imperialist bosses, as well as against the ruling regime. The latter is particularly important to note as, although there have been a significant number of strikes since 2015, the Foxconn strike squarely took aim at the central bureaucracy and its implementation of hyper-exploitative labor standards which serve foreign capital.

Further, as the pandemic and the war in Ukraine have exposed, global supply chains are deeply intertwined, and this new period of geopolitical confrontations threatens the very stability of capitalism. What is clear, however, is that for both the United States and China to assert themselves with the military apparatus each is building towards this conflict, it is essential to decouple their economic relationship, which still makes them somewhat dependent on each other. China, while advancing policies such as the Belt & Road Initiative to expand its own markets, is still largely dependent on foreign investment and a market of goods in the U.S. and in the rest of the world which is still under the United States’ influence. Likewise, for the United States, the pursuit of production in China came hand-in-hand, not only with the lack of industrial development in the United States, but also with the further destruction of its existing capacities as production moved abroad. Towards this decoupling, it is now necessary for the United States to rebuild its industrial strength — a task which, unlike the tasks of rebuilding the military and pursuing diplomacy, doesn’t have full support within the ranks of the regime, especially in the midst of greater polarization in the national sphere. 

Tensions in The Economy 

In terms of the economy, the war in Ukraine has deepened many existing trends. The exhaustion (or at least the deep crisis) of neoliberal globalization, revealed by the Great Recession of 2008, gave rise to nationalist and protectionist tendencies in the core countries, with Trump in the United States and the Brexit crisis in the UK, for example. 

In the more immediate term, the economic sanctions that the United States and the European powers have imposed on Russia have had an almost instant impact on the global economy, which in many ways is still recovering from the economic consequences induced by the pandemic in 2020. Not only are Ukraine and Russia two of the world’s main exporters of grain, causing food crises across much of the world, but Russia is also one of the world’s largest exporters of oil, gas, and fertilizers. Even the IMF compares the impact of the war to an “earthquake.”

One of the most important features that emerged in the economy after the post-pandemic slump was the rise in inflation, which is no longer a temporary feature of the economy but instead an important characteristic of the international economy and opens up the prospect of a global recession in the immediate future. These inflationary trends are driven by global supply chain blockages from Covid-19 and the energy crisis, the geopolitical tensions exacerbated by the ongoing war in Ukraine, and weakened low-productivity economies. 

The consequences of the war in Ukraine have led to new debates among economists on the trends that mark the world economy. On the one hand, there are economists like Nouriel Roubini who hold a more catastrophic perspective of the economy and the potential for a stagflationary scenario. On the other hand, another sector of mainstream economists is putting forward the idea that inflation is easing, and the real problem is dealing with the expected recession. They base their analysis on the fact that the U.S. economy slowed down at a slower pace than expected in the last quarter of 2022, ending the year at 2.1 percent growth. Against this backdrop, and based on the latest prospects for the world economy, the IMF continues to predict slow growth, about 3 percent, for the next five years, which would be the lowest medium-term projection since 1990. 

Finally, despite predictions of a global debt crisis, a financial crash did not ensue in 2022 in part because inflation has lowered the “real” value of borrowing costs, although the recent collapse of banks like the Silicon Valley Bank (SVB) have reintroduced the prospect of a financial crash in the medium term and have become one of the most dynamic features of the economic situation. The banking crisis spread to the other side of the Atlantic, to Credit Suisse, an important European bank which was rescued by the Swiss National Bank. After that, First Republic Bank, again in the United States, received an injection of funds from other financial corporations to prevent a run. Deutsche Bank shares also tumbled to around 8 percent (after a 14% peak during the same day). By the end of the week, the storm seemed to have abated, but the crisis exposed vulnerabilities of the banking system after Trump, with the support of a sector of Democrats, freed it in 2018 of the post-Great Recession regulations, such as the so-called “stress tests” for mid-sized banks like SVB. 

Despite the rapid bailouts by the Fed and other central banks, the situation has not stabilized, and it is not clear how this round of bank failures will develop or if the crisis will open more catastrophic scenarios, such as a full-blown financial crash. Added to this is the over-indebtedness of the economy, particularly in the private sector, which has been particularly reliant on debt-driven growth as part of the post-2008 easy money policies, as we can see with the growth of the startup bubble and so-called “zombie companies” rely on the refinancing debt to stay afloat. Rising interest costs as part of the Fed’s (and other Central Banks’) attempts to control inflation are creating more risks for bank failures, corporate bankruptcies, and even an economic slump.

While in the short term this has led to a containment of some inflationary trends, energy and food prices still remain at all-time highs, all while energy and oil firms made historic profits in 2022. Although Europe in particular avoided the worst of the energy crisis deepened by the war due to a warmer winter, the struggles with new sources of energy persist. Global forecasts predict that global real GDP growth will be between 2.2-2.7 percent in 2023. According to Marxist economist Michael Roberts: “That is officially not a recession in 2023 – ‘but it will feel like one.’” And looking at the big picture, if global real GDP grows at about 2 percent next year, per capita GDP growth will be just 1 percent — as low as during the 2008-2009 capitalist crisis. While there is still open debate over whether major economies will go into outright slumps in 2023 or narrowly avoid it, leading economists agree on the historic trend of slowed growth, which was exacerbated by the pandemic and now the war. 

Undoubtedly, the consequences will be particularly dire for the semi-colonies, which face a “prolonged crisis” following the pandemic. The world’s poorest countries are also deeply impacted by a major credit crisis with defaults on debt already happening in Sri Lanka, Zambia, Ghana, and others like Egypt and Pakistan on the brink. “Emerging market” debt to GDP increased from 40 percent to 60 percent during the pandemic and about half of these economies are now in danger of default. High unemployment, hunger, and poverty are particularly severe in regions like Latin America. 

Imperialist sanctions have also been an aggravating factor in the economy, unevenly affecting countries like Iran but also the international economy as a whole. The sanctions implemented as a result of the war have become a double-edged sword, causing high inflation around the world including in imperialist countries and threatening famine and catastrophic situations in the poorest countries that depend on the import of grains and energy. They’ve also had a contradictory impact in countries like Argentina and Russia, which are both affected by the inflationary impact of the sanctions but benefit from the rise in prices of raw materials. 

It’s important to note that even if short term trends emerge that aren’t recessionary in some places in the world, this doesn’t change the general crisis of capitalist accumulation. In the face of the exhaustion of the spaces of accumulation acquired by neoliberalism, the structural crisis that the capitalist economy is entering can accelerate even the most underdeveloped aspect of the political situation: class struggle. As Trotsky explained at the Congress of the Third International, the more the material base is restricted, the more the struggle between the classes and the different groups for the distribution of the national income will grow. Thus, the question becomes: who will pay for this crisis of accumulation? 

A New Wave of Class Struggle Emerges

As history has shown, wars are often the handmaidens of revolutions. Returning to the definition of war as the continuation of politics by other means, as Marxists we understand politics in terms of class struggle. In that sense, as the tendencies toward greater military confrontations grow, in turn, we can expect to see greater prospects for clashes between revolutions and counterrevolutions. 

Already, with the outbreak of the war in Ukraine and its consequences for economy and the geopolitical situation, we find ourselves to some extent in a third wave of class struggle since the 2008 crisis, with the first two waves including processes from the Arab Spring to the Yellow Vests and the Chilean revolt (with many of the processes that began in 2019 stalled by the pandemic or politically diverted). However, the conditions created by the post-pandemic scenario and the war in Ukraine have already led to the deepening of the crisis of the bourgeois democratic regimes and to a resurgence of class struggle. 

Most significantly, these processes are not only restricted to semi-colonies which are disproportionately affected by these crises, but have also extended to imperialist countries, including the two that were at the core of the neoliberal offensive: the U.S. and UK. In the latter, which is also still reeling from the effects of Brexit, the cost of living crisis and greater questioning of neoliberal policies has opened up a scenario of historic strikes and workers actions. The working class has been intervening in the structural crisis with strike actions not seen since the height of Thatcherism, all while there continues to be instability at the level of the regime given the deep organic crisis and loss in faith in the existing political leadership. While in the United States there has not been a widespread response to rises in the cost of living, since the pandemic, the working class here too has reentered the scene. 

For the first time since the 2008 crisis, the U.S working class is able to intervene in the organic crisis. Concretely, the wave of unionizations (including in strategic sectors controlled by the private sector like logistics, as we saw with the ALU), the uptick in strikes, and the convergences of the Generation U phenomena and experience of BLM, have created the conditions for confrontations with traditional business unionism in particular. While this incipient working class activity is still largely contained in the activity of a new and active vanguard and has not expressed itself in historic unionization numbers, it provides an important point of reference for generations of workers who’ve undergone a shift in the ways of thinking and are coming to realize their own strategic power. This also comes in a context in which the imperialist governments have less space to go on the offensive than they did at the end of the 70s when they launched their offensive against the labor movement. 

Elsewhere in the imperialist core, we can also see important processes emerge in countries like France, where there is currently a struggle against Macron’s pension reforms. In this struggle, which is a key aspect of intervention for the comrades of our recently launched French section, Revolution Permanente (RP), protests advanced to the extent that they showed pre-revolutionary elements. After Macron’s bonapartist decision to impose the pension reform, the movement radicalized, many strategic sectors of the economy went on strike and confronted the police, and the student movement jumped into the fray. Even as the bureaucracy intervened to pacify the movement, hundreds of thousands continued to take to the streets. As Chingo writes:

This situation is also developing in the context of the deepening organic crisis of French capitalism. Against the backdrop of the crisis-ridden two-party system that had previously ensured France’s political stability, the Bonapartist Macron administration had tried to win some gains for the dominant class by attacking the retirement system. Macron’s inability to do so democratically not only weakens the essential role of the presidential regime of the Fifth Republic — it opens the way to a polarization and political tension that is increasingly difficult to resolve within the institutional framework.

Breaking with the centrist and reformist Left that continues to look for institutional ways out of the crisis by aligning with sectors of the progressive bourgeoisie, or to relate to the struggle with a perspective of mere trade unionism, our comrades in RP have been putting up a bold fight to encourage class struggle and emphasizing that it is only the self-activity and organization of the working class that can carve a way out of this crisis. To this end, they fought to organize Committees of Action to build a general strike and to break with the control of the inter-union. That network is also deeply engaged in one of the central struggles of the moment: to prevent state repression from defeating the hard strikes in strategic places, through the so-called “requisition of workers.”

To characterize our general orientation in France, we can quote our comrade Juan Chingo once again:

With Révolution Permanente, we affirm the need to advance in the construction of a democratic representation of the sectors in struggle, coordinated at the base to equip themselves with a common politic. This is the only way to go towards a real general strike, and to offer a revolutionary alternative to the timid politics of class conciliation of the inter-union.

The post-pandemic uprisings have also manifested in several semi-colonies with processes of revolts in countries like Sri Lanka and Myanmar, where class struggle exhibited many classical features, like the working class going on strike and taking to the streets. In sanctions-battered Iran, a feminist uprising grew into a larger anti-government protest and incipient pre-revolutionary situation continuing the wave of class struggle in Iran opened up in 2019 against neoliberal policies and the regime. 

Most recently, the pre-revolutionary situation opened up by the institutional coup in Peru has raised the possibility of the fall of the Boluarte regime. In countries like Peru, where the FT has a new and very tiny group, there are many possibilities for us to intervene with a revolutionary policy, advance in the construction of an organization, and also transmit our politics through our international current and publications. The development of the crisis in Argentina, as expressed most recently by the performance of right-wing candidate Javier Milei in the primaries and the subsequent currency devaluation, alongside the development of class struggle in regions like Jujuy, also point to a deepening of tendencies toward organic crisis and class struggle in a country where we have some of the most advanced examples of our intervention as the FT and are preparing a militant campaign against the imperialist adjustment policies that only bring austerity, advance of the Right, the lesser evilism of Peronism toward the October elections. 

One of the most important characteristics of these processes of class struggle is that they have continued the trend of remaining in the realm of revolts and rebellions, rather than advancing towards revolutions that would pose an existential threat to capitalist states. In that sense, from a strategic and ideological perspective, it will be important to follow the evolution of the processes of class struggle since the shifts in the global situation we’ve outlined above, and pose the question of how to strategically approach the road from revolt to revolution and the hurdles to overcome therein. Matias Maiello’s new book, From Mobilization to Revolution, tackles questions concerning socialist strategy for the 21st century; it can arm us ideologically to take up these debates. 

Part II: Understanding the Crisis of Neoliberalism 

Back to Lenin and Imperialism

The debates opened by the war are not new. In the early 20th century, the outbreak of World War I marked the beginning of a new point in history. It dragged all the great powers of Europe and their territories into the battlefield, opening a period of unparalleled bloodshed and violence in the name of nationalism. Such was the nature of this war that the leading socialist tendencies in Europe, organized in the Second International, were split on the question of the nature of the war, with many, including the biggest organization of the international — the German Social Democratic Party — siding with their own national ruling class in the war and voting in favor of a military project aimed to destroy the working class of other countries. 

For Lenin, who was aghast at the development of this national chauvinism among the Left, it was essential to grasp the actual cause for this war, which had nothing to do with national self-defense or self-determination in the abstract, and everything to do with the shift in the relation of forces in global capitalism, which he establishes as having passed into the age of imperialism. In Imperialism: The HIghest Stage of Capitalism, Lenin writes: 

in which the dominance of monopolies and finance capital is established; in which the export of capital has acquired pronounced importance; in which the division of the world among the international trusts has begun, in which the division of all territories of the globe among the biggest capitalist powers has been completed.

Unlike social democracy and its leaders like Karl Kautsky, who saw imperialism as a matter of policy that can be discarded for a less violent, “non-imperialist” policy, Lenin, in his treatise, firmly establishes imperialism as capitalism at its present stage of development. With the world’s territories completely divided up, Europe and its territories were plunged into not just one, but two wars of world-historic proportions. These wars not only sought to redistribute the world’s territories among great powers, but also destroy existing productive capacities and rebuild them for capital to find new motors of growth. It wasn’t a question of this or that policy or the decision-making of weak-willed statesmen, but a feature of this monopoly stage of capitalism, where the growth of banking and financial apparatuses would deepen the tendency for capital to become more centralized and concentrated. This tendency towards monopoly capital would concentrate economic and political power in the hands of a few who would shape the world, and create the conditions for clashes between these great powers to win such a hegemonic position. Unless capitalism was destroyed, any peace agreement would only be temporary, giving way to more violent confrontations. 

The imperialist epoch, indeed, marked the epoch of crises, wars, and revolutions. This was true at the time of Lenin’s writing — as the failure of world revolution following the events of 1917 only strengthened the forces towards WWII — and it gains renewed validity now. This is especially evident now with the current war, and as new confrontations heat up in the midst of a decline of U.S. hegemony and the crisis of neoliberalism.

The Rise of U.S. Hegemony

The outbreak of war in Ukraine marked by the Russian offensive marks a significant shift in the nature of warfare that defined the last three decades. It marks a break from the period of unquestioned U.S. hegemony following the fall of the Berlin Wall and the end of the Yalta order imposed following World War II.

The end of WWII in the U.S. marked a post-war boom that was geared towards establishing U.S. hegemony across the globe, having replaced the supremacy of the British empire at the top of the capitalist world order. While much of Europe lay destroyed by the vestiges of the war industrially and socially, the U.S. emerged relatively unscathed, with much of its productive capacities intact. The 1944 Bretton-Woods agreement established the dollar as the dominant currency of the world, and the Marshall Plan laid the groundwork for economic penetration in Europe in the name of post-war economic reconstruction. These gave the U.S. significant economic and political hegemony in the capitalist world order.

In the domestic sphere, the productivity of labor, real wages, and social spending increased due to a combination of factors. On one hand, the labor struggles in the 1930s and the formation of new industrial unions under the CIO, as well as the wave of wildcat strikes during the final years of the war, had won significant gains for labor. On the other hand, the growth of Fordism in the early 20th century marked a new chapter for world capital, streamlining the mass production of consumer goods using assembly-line techniques to create a cycle of mass production and mass consumption. This was supported by the post-war Keynesian compromise, wherein in order to keep labor in check and stabilize the economy, the state not only guaranteed relatively high wages, but also undertook immense social spending to build a welfare state, and managed inter-capitalist rivalries by exercising price controls, among other measures, all of which also fueled consumption, and thus compounded capitalist profitability. It was, as Gramsci said, a “hegemony born in the factory” — for Fordism and Americanism, in order to rationalize both production and labor, making the task of production central to the whole life of the nation itself. 

It is important to note that, although relative wages and consumption increased, this stability wasn’t without contradictions and crisis. While there was a general increase in the standard of living for the working class, these gains were uneven, especially across racial and gender lines. While millions of women entered the workforce during WWII, the end of the war forced them back out, relegating them to the reserve army of labor. Wages for women workers, in particular, fell drastically, especially as most were now pushed out of factory jobs into the role of social reproduction. Black people continued to face violent racism, segregation, and discrimination that guaranteed more precarious forms of labor. In auto and manufacturing — the linchpins of the post-war economy — Black (largely male) workers formed second and third tiers of the labor force and faced more precarity than their white counterparts, especially over “first in, last out” norms. This was worse for Black women, who faced the dual oppression of race and gender, and were overwhelmingly employed in the service industry and domestic work. And it is in these sectors left out of the social contract of the post-war boom that would emerge, by the 60s and amid a context of uprisings across the globe, huge social movements that would threaten the political stability of the regime.

Nonetheless, it is this model of mass production and consumption that the United States exported and used to consolidate its hegemonic influence. It was able to use its relative industrial and technological advancement, along with the power of the dollar, to reconfigure a capitalist world order with the U.S. at the center. The United States became the chief investor, source of credit, and supplier of new technologies across the world.

But U.S. hegemony was far from unquestioned at this time. The Red Army, having defeated Nazism, had granted renewed prestige to Stalinism. Following Germany’s surrender, in the Yalta and Potsdam conferences, the Soviet Union, Britain, and the United States agreed to divide the world among themselves into zones of influence and not start a new war. For Stalinism, this marked a further move towards a strategy of negotiating in the name of “peaceful coexistence” with imperialism. The economy of the Soviet Union at this time grew steadily, especially in alliance with China, and a new world order emerged in the post WWII period that clashed with U.S. imperialist aspirations as it emerged as the capitalist hegemon. The Yalta-Potsdam accords codified the USSR’s position in Eastern Europe, and the capitalist mode of production was replaced by planned economies. Yet, this expansion of capitalist expropriation and expansion of the influence of the USSR was largely a process imposed by a bureaucracy trying to preserve itself, not on the basis of working class self-organization. At the same time, the prestige of the Soviet Union further swelled the ranks of Communist Parties across the globe, but influenced by Stalinist bureaucracy, these parties eventually played a role in containing revolutionary processes, especially in the West. For the United States and Britain, although peace had been brokered, this post-war order necessitated the containment of the Soviet Union to defend the interests of capital. It pursued this not only through post-war reconstruction as outlined above, but also by leading a geopolitical bloc in a cold war to isolate the USSR. To maintain the boundaries determined at Yalta, Western imperialism also advanced partial wars in Korea and Vietnam. A nuclear arms race developed between the United States and USSR that constantly threatened to transform tensions into a hot war that could beget unparalleled destruction.

On the eve of WWII, Trotsky wrote in the Manifesto of the Fourth International on Imperialist War and the Imperialist War: “If the bourgeois regime comes out of the war with impunity, every revolutionary party will suffer degeneration. If the proletarian revolution conquers, those conditions that produce degeneration will disappear.” By the end of the war, however, this conclusion was delayed: as Emilio Albamonte writes, “imperialism did not go unpunished, for the bourgeoisie was expropriated across one third of the planet after the war; but neither did the proletariat win power and do away with the conditions which lead to the degeneration.” The Yalta Order had birthed a contradictory situation: over the last decades, the working class had, at best, been able to expropriate capitalists across a third of the world, or at “worst,” been able to greatly improve living conditions through class struggle. These events had led to huge leaps in class consciousness. Yet, they also had the additional effect of strengthening the Stalinist and social-democratic leaderships, who played the role of either containing or crushing revolutionary processes over the next decades. This occurred especially in the colonies where, although the working class waged historic battles for political independence, these processes remained contained to bourgeois democracy under the influence of Moscow, instead of advancing toward socialist revolution. 

Where revolutions did succeed (most notably with the cycles of expropriation in China, Vietnam, Yugoslavia, and Cuba), it confirmed Trotsky’s hypothesis that he laid out in The Transitional Program: “under the influence of completely exceptional circumstances (war, defeat, financial crash, mass revolutionary pressure, etc.), the petty bourgeois parties, including the Stalinists, may go further than they wish along the road to a break with the bourgeoisie.” Yet, far from advancing international proletarian revolution, these revolutions were also contained within national borders.

This equilibrium imposed by Yalta experienced its first significant disruptions with the defeat of the U.S. in Vietnam as well as the implosion of revolutionary processes in both imperialist and peripheral countries through the 60s and 70s. These processes, however, were again either derailed or crushed with the cooperation between the Socialist and Communist Parties in the West and the bourgeois regimes (most notably with the advance of the “historic compromise” by the Italian Communist Party), and in the semi-colonies as a result of the alliances between the national bourgeois and petty-bourgeois forces. Furthermore, the relative strengthening of Stalinism following the end of WWII also left the Trotskyist movement significantly disoriented, and significant currents adapted to social democratic or Stalinist leaderships. In the face of this growing upsurge and betrayals by those leaderships, these revolutionary Marxists were unable to mount a serious challenge to these misleaders.

By the late 1970s, the fiscal crisis that hit various states showed that the relative equilibrium achieved during the post-war period could no longer remain in place. The fall in the rate of profitability resulted in stagflation that reached a fever pitch by the 1970s. A situation of incredibly high inflation resulting in rising cost of living, along with high unemployment, made the situation tenuous. Inflation had started to skyrocket starting in March 1973, especially when, in the face of rising oil prices following the 1973 oil crisis and budget deficits following the loss in Vietnam, President Richard Nixon disengaged the dollar from the gold standard. Inflation then increased from 4.7 to 12.3 percent by the end of 1974. During this period, the Federal Reserve increased the interest rate from 7 percent in March to 11 percent by August, ultimately increasing it to 16 percent by March 1975, before dropping it drastically to 5.25 percent the next month, spurring recessionary trends. The capitalists, in order to stay ahead of rising interest rates, kept prices high, further spurring inflation. However, amid the 1979 fuel crisis — which was marked by a sharp rise in oil prices due to disruptions caused by the eruption of the Iranian revolution — this double-digit inflation in advanced countries, including the United States, was pushed even higher. This resulted in the Fed increasing and maintaining high interest rates to squeeze out inflation, ultimately spurring the 1980s recession. Unemployment rates hit a post-war high, reaching 10.8 percent in November and December of 1982, the highest since the Great Depression.

Among the ruling class, the message was clear: the post-war model was no longer beneficial for them, especially in the face of the crisis of productivity and falling rate of profit. Once the revolutionary processes of the 1970s had failed to pose a solution from the left, the neoliberal offensive was unleashed. It was time to abandon the old compromise and find new avenues of capital accumulation, and thus establish a new system that could deepen the class war against the proletariat and make the most out of the growing international production and trade.

The Expansion of Neoliberalism

In the face of economic recession 1975, two years after he carried out a bloody coup to depose Salvador Allende in Chile, Augusto Pinochet turned to the Chicago boys — a group of economists trained in the University of Chicago under Milton Friedman, one of the architects of a free monetary policy that formed the foundations of neoliberalism. These economists were products of a training program that was part of the Chile Project organized by the U.S. State department through the 1950s, and were staunch advocates for privatization, deregulation, and other free market policies to liberalize closed economies. During the dictatorship, these economists became close advisors to the Pinochet regime, unleashing a period of massive deregulation and liberalization of the Chilean economy. This was a disaster for the Chilean working class — especially with the destruction and privatization of healthcare, the pension system, education, and more — but made it fertile ground for imperialist penetration. This ability for capital to recover so aggressively and reinstate profitability, and to do so on the backs of dismantling the working class, would soon become a model for the rest of the world.

In the West, the neoliberal offensive set in, particularly following the recession in the 1980s, and began with a string of strategic defeats for the working class. In 1984, Margaret Thatcher, strengthened by the British victory in the Malvinas war, crushed the miners’ strike with force. In the United States, Ronald Reagan’s defeat of the air traffic controllers’ strike set the grounds for the regime to launch an anti-worker offensive and roll back the gains of the last decades. Neoliberalism did not just mean a deregulation of the economy, but privatizations, penetration of new markets in the global south, weakening of unions, as well the welfare state, and the strengthening of the free market in the name of restoring the rate of profitability. Social costs fell on the backs of workers by gutting social programs. 

At the level of production, this period meant technical changes and finding new ways of extracting surplus labor — systems such as lean production, increasing the rate of exploitation, and finding cheaper means of production, all of which were made possible through the destruction of trade unions. This model of production finds new ways to precarize labor and deepen labor market flexibility; examples include two-tier wage systems, subcontracting work, and outsourcing work both abroad and to non-union small factories. On the other hand, the turn to neoliberalism was deeply based on the deregulation of banks and the financialization of the economy, and reorienting away from productive to nonproductive sectors to increase the rate of profit. This increase in autonomy of finance capital led to an explosion of financial products and a drive to “securitize” everything: that is, to transform debt (from mortgages to pensions) into financial instruments which can be publicly traded. This greater financialization and tendency towards short-term profit maximization was based on the foundations of cutting labor costs and decreasing the labor share of income. 

In the domestic sphere, this offensive played an immense role in disorganizing the working class. The breaking of these strikes and the permanent replacement of employees marked a strategic defeat for the working class: it gave employers wind in their sails to go on an offensive against organized workers, to dismantle union power and organization.

And it was this model that was now exported across the globe. Under the “Washington Consensus” and through institutions like the IMF, the World Bank, the World Trade Organization, and other institutions of U.S. imperialism born and strengthened in the Yalta order, neoliberal policies were imposed across the world over the next decades, as well as by regimes on both the Right and the “Left.” Far from the “small state” and free enterprise that its champions paint it as, neoliberalism ultimately required a huge extension of the state apparatus to impose its will. It was a model that was imposed with fire and fury, with the power of a state that had strengthened its military apparatus and diplomatic organizations in the service of monopoly capital. Far from the state not intervening in the lives of people, it intervened actively with a reactionary character, dismantling the institutions of the working class, breaking down unions, carrying out coups, and strengthening its armed wing, both with the police and the military, to keep the working class in check while it rolled back basic rights. 

The growth of neoliberalism was in no way a natural evolution of post-war Keynesianism. The defeat of the revolutionary movements of the 1960s and 1970s through violent counterrevolutions in the semi-colonial countries, and deviation in the central countries, the strengthening of counterinsurgency operations through the Cold War with the policy of containment of the USSR, and the disciplining of the working class at home paved the way for this new imperialist offensive. As we will also develop later, capitalism was able to exit this crisis and impose itself relatively “peacefully” without interstate or civil wars, in the face of betrayals of the Stalinist, social democratic, and labor bureaucracies that not only failed to mount any meaningful defense against this offensive, but also played an active role in containing and, at times, crushing them.

For capital, it wasn’t simply a question of defeating and disciplining the working class at home, but using its resources to deepen the levels of exploitation abroad and maximize surplus value. Imperialism was able to extend its model of liberal democracy on the basis of expanded consumption — a deformed democracy based on sectors of the working class that were more privileged in the West. And where capital found it difficult to enter new territories, it used the strength of the state apparatus of imperialist nations under the leadership of U.S. imperialism to clear the way for it. This is particularly evident in the military incursions in the Middle East to secure access to oil, from coups in the Middle East to the more recent military campaigns in Iraq and Afghanistan. And this came hand-in-hand with the period of globalization and the opening of new international markets, especially the new opportunities that were opened by the implementation of structural adjustment programs through the IMF in countries like India, as well as the capitalist restoration in China and the Soviet bloc, which added 1.4 billion people to the world’s workforce and doubled the world’s working class.

The Project of Bourgeois Restoration at the Heart of the Neoliberal Project

At the heart of the neoliberal offensive and the recovery of capitalism in the face of the crisis of the 1970s was the project of capitalist restoration in China and the Soviet bloc, which offered virgin lands for capitalist expansion and new sources of capital accumulation and surplus value extraction.

The restoration of capital in China — a process that began with the rapprochement and normalization of relations by Nixon and Mao, and came to fruition during the Deng Xiaoping era of market reforms — added, by itself, almost a billion workers to the world’s working class. This marked the end of the era of a China as a deformed workers state, established after the great struggles of the Chinese masses through the first half of the 20th century and which culminated in the revolution of 1949. After the revolution, Mao, who had led the CCP and the revolutionary process, created a bureaucracy modeled on Stalin’s Russia, but in a country that was far more economically backward and isolated. To generate growth, the CCP turned to the huge agriculture sector, generating revenue for industrial growth by buying grain from peasants for lower prices and selling them back at higher costs. In the decades that followed, the Communist Party was able to extract and concentrate rural surplus and direct it toward urban industrial growth through a process of rural collectivization and price scissors. This resulted in high growth rates until the mid-1970s, when the momentum generated by a centralized planned economy began to stall, and paved the way for the restoration of capitalism that accelerated during the reign of Deng Xiaoping. 

China, which at the time had a rural population of over 800 million and was still quite economically backward, was fertile soil for capital penetration and the so-called global value chains that were beginning to take shape. It was, as Esteban Mercantante writes:

getting out of the so-called “race to the bottom” that characterizes the type of competition the most backward economies have been forced to enter in order to attract capital — offering the best conditions for businesses (lower taxes, lower wages, customs-free zones, limited environmental regulations) in exchange for environmental and social dumping — so it can join the “race to the top”, in terms of value generation and development.

China was integrated into the new world order by providing the largest and one of the world’s most exploited working classes. This global labor arbitrage was particularly profitable for capitalism as it was able to use the cheap labor abroad to drive down workers’ wages across the board. China’s economy implemented an export-oriented industrialization, which was paid almost entirely by foreign capital. “With its gigantic availability of labor power, which transnational capital could put to use by paying low wages,” Mercantante writes, “China played a central role in so-called productive internationalization, in which many industries were relocated from the imperialist countries to the dependent economies and production was subdivided into several partial processes taking place in different countries.” 

Coupled with the restoration of capitalism in China, a key motor of neoliberalism was the eventual collapse of the Soviet Union. Although it was a key geopolitical force following WWII, the USSR was unsuccessful in counterposing bourgeois hegemony with its own. As outlined earlier, under the policy of peaceful coexistence, the Stalinist bureaucracy (even beyond Stalin) either played a role in containing revolutionary processes within the realm of national liberation, or used revolution as a bargaining chip to win diplomatic concessions from imperialist powers. The bureaucracy’s “defense” of the revolution was not precipitated on building the strength of the working class and fostering class struggle, but on dismantling it and countering imperialism with military strength. The global arms race between the U.S. and USSR (which, in the backdrop, had a nuclear race that threatened to transform the Cold War into an unprecedented hot war — along with market reforms carried out by Mikhail Gorbachev starting in 1979 further eroded the gains of the revolution and worsened economic conditions. Yet, the defeat of prior political uprisings against the Stalinist regime had further disoriented the working class which, frustrated with the dead ends of the bureaucracy and without their own organizations and leaderships, was easily co-opted by pro-capitalist forces. This ultimately led to the uprisings of 1989-91 which, without revolutionary leadership and thus shaped by those pro-capitalist forces that peddled the ideas of “democracy,” opened the way towards the restoration of capitalism in the USSR, Eastern Europe, and the reintegration of Germany. 

The defeat of the Soviet Union and the incorporation of Eastern Europe and especially China into the global circuits of capital meant that the United States emerged as an undisputed leader of the world order at this time. But, unlike during the period of the Great Wars, it had managed to do so by avoiding wars between Great Powers, relying largely on technological advancement and capitalist penetration, and thus maintained a military order where the United States led the rest of the world.

A significant triumph of neoliberal regimes throughout this period, especially over the ashes of the erstwhile worker states, was to transform this imperialist success of the bourgeoisie into an official ideology. The free market, globalization, and capital penetration had shown its ability to “recover” from capitalist crisis. The Cold War was over: it had triumphed over the forces of communism, and bourgeois democracy was now hegemonic across the world, especially with the United States playing a protagonist role in establishing this hegemony. Through her years in office, Thatcher declared that “there was no alternative” to capitalism, that the free-market economy had shown itself to be the correct and only system that works, and all the debate surrounding it was over. This was given further wind by ideologues like Francis Fukuyama, who triumphantly declared “the end of history” — in other words, that capitalism had won over socialism. It was the death of ideologies: fascism and communism had been defeated, liberal democracy and the free market had triumphed, and nothing would stop their long march.

This ideological offensive was further sustained by a right turn among the intelligentsia, many of whom, after the defeats of the revolutionary processes of the 1960s and 1970s, gave up on the goals of socialist revolution and Marxism, and ultimately embraced postmodernism, which declared the death of the grand narrative and the triumph of the individual. Collective power thus came to be seen as an impediment to society and to the liberty of people. Freedom from trade unions meant the freedom to suppress wages; freedom from regulation was the freedom to endanger workers, destroy the environment, and design predatory industrial practices; and freedom from taxation meant the freedom to hoard wealth and deepen inequality. Unions and social democracy, having suffered severe defeats and under tepid leaderships, fell in line, often either passively watching, or even actively participating in the rollback of social gains, demobilizing its ranks to establish civic peace all while helping the ruling class cement the unquestioned hegemony of the upper classes. Neoliberalism became, as Perry Anderson describes, the most successful ideology in world history.

Yet, although neoliberalism had grown tremendously as a social, political, economic, and ideological system, it was not without its own contradictions. Although it had arrested the falling rate of profits in the short term, productivity — even at its peak — never bounced back to pre-1970 levels. And, like a snake eating its tail, it would only be a matter of time before this period of capital accumulation would show its own signs of exhaustion and birth its own monsters — an increasingly defining feature of the political, social, and economic realm today.

On the Crisis of Neoliberalism

The fall of the Lehman Brothers in 2008 and the ensuing collapse of banking capital that precipitated the Great Recession opened a crisis in neoliberal hegemony. Capital exited the crisis by deepening the exploitation and oppression of the working class globally, and was spurred by the development of new technologies that helped capital significantly reduce labor time. Capitalism, however, still faces the strategic hurdle of finding new motors of growth, especially after the outbreak of a worldwide pandemic and a war in Europe that has rocked global value and supply chains. Unlike in previous periods, capital cannot recovery peacefully from this impasse, especially since it faces the strategic challenge of China, which, fueled by the technological and industrial advances made possible by the influx of foreign capital during the period of capitalist restoration, now poses a major challenge to U.S. hegemony. Today, the outbreak of war not only confirms these trends, but it also marks an escalation of this crisis in the military field. We are now threatened with violent confrontations between Great Powers not seen in almost a century.

“Neoliberalism,” Emilio Albamonte writes, “was a reactionary solution to the indeterminate relation of forces resulting from the contradictory outcome of the Second World War, which had been deferred by the Yalta order, hence its historical significance.” Yet it was not without crises, both economically and socially.

In the first wave with the Asian crisis of 1997, the fall of the baht in Thailand triggered a huge economic crisis across Southeast Asia. Imperialism had mined the region for cheap labor, and to fulfill its aspirations, it installed and supported autocratic regimes in the region. Ample cheap labor, technological advancements, and the advancement of industry, particularly in China, led to a crisis of overproduction that triggered a fall in the rate of profit. When markets were unable to absorb this increased output, production started to slow, leading factories to operate at 60 to 75 percent capacity. Ultimately, the fall of exports led to companies to default on their loan payments, and foreign investors who rushed in with great speed quickly withdrew funds as the financial crisis deepened. Although the crisis spread across much of the globe, it had a less profound economic effect in the United States and Europe, or at least postponed the crisis. In the United States, tax cuts and low interest rates set by the Fed continued to feed the flow of credit, and domestic consumption, by generating demand, played a critical role in recovering the world economy.

Although the crisis of 1997 and even the dotcom crisis of 2000 was relatively contained in the economic sphere, it did deliver a first blow to the illusion of neoliberalism and led many to question an empire that had championed it. The discreditation of globalized capitalism brought about by the suffering of the masses in what was termed as the Newly Industrialized Countries (NICs) following the collapse of their economies gave rise to anger and rejection among a sector of youth and workers against financial speculation and the hyperprofits of multinationals. This sentiment found expression in movements across the globe: In Southeast Asia, which was the center of the crisis, movements emerged denouncing the autocratic corrupt regimes as well as imperialist plunder; in the United States and Europe, anti-globalization protests emerged and led to the political of awakening of millions of youth, from the Battle of Seattle to the movement against the war in Iraq; across Latin America, there emerged a series of direct actions that, while failing to develop into revolutionary processes, showed a significant shift in public sentiment over the last decades.

Economically speaking, the United States and Europe remained relatively unscathed. But they had only postponed the crisis. That moment would arrive in 2008. Through the 2000s, economic growth, powered by debt, kept advancing. Businesses took in trillions of dollars of loans, and free-trade agreements on an international scale continued to open new labor markets for capital to exploit. Personal debt allowed the continued increase of production despite declining incomes. Investor demand for mortgage-backed securities propelled banks to extend more mortgages, slice them up, repackage them, and resell them. Along with the demand for more mortgage lending, speculators took advantage of the vast availability of subprime mortgages to buy up property and drive up real estate prices. This constant generation of credit continued to inflate the housing bubble, especially as people used their homes as collateral to accrue more credit — and banks were more than happy to increase these predatory loans to extract more profits.

The overheating of the housing market eventually led to mortgage defaults and vacant homes, which put downward pressure on housing prices. The demand for mortgage-backed securities fell with great speed, and investors were forced to sell them at a loss. Ultimately, by 2008, this crisis in the U.S. subprime mortgage market would lead to a global credit crunch as capitalists were forced to reckon with the fact that much of their assets were overvalued. Stock prices crashed, and overindebted companies were unable to access or discharge sufficient cash; many were forced shutter.

Over these last decades, the capitalist state has had to contain this crisis at the heart of the global financial system. It has done so with massive, trillion-dollar bailouts given to the banks and to the biggest culprits to keep the whole system from collapsing onto itself. These bailouts have come at a great social and political cost to the regime, especially as the working class and poor across the world have been forced to pay for this crisis with crippling austerity measures that led to a painful recession. While there were bailouts for the rich, the working class not only lost their homes but were met with a huge drop in production, massive layoffs, and further cuts to social spending.

Although neoliberalism is still the order of the day, the crisis opened by the 2008 crisis is yet to be resolved and points to a deeper trend: the exhaustion of capital accumulation under the neoliberal model. While the bailouts temporarily stunted the freefall of the market, the rate of productivity did not bounce back to pre-2008 levels. This came in tandem with the wealth gap, which continues to increase, reaching record highs. This crisis of neoliberalism further exposed larger systemic crises that had deepened through this period and, in a few years, would lead to the development of trends toward an “organic crisis” in several imperialist countries, including the United States and the United Kingdom. In semicolonial countries, there were clearer manifestations of this crisis. Bourgeois hegemony was threatened, but without the presence of revolutionary forces (which were dismantled and co-opted over the past decades), this discontent was expressed through polarization on both the Left and the Right.

In 2011, a new wave of class struggle broke out across the world, first with the Arab Spring, and followed by the Indignados in Spain and Occupy Wall Street in the heart of U.S. imperialism, raising slogans against corporate greed. The defeats and deviations of these uprisings (especially seen in the counterrevolution that defeated the Arab Spring and installed the Sisi regime in Egypt), combined with the continued implementation of adjustment plans in favor of the banks and large capitalists to mediate the crisis, would deepen the elements of organic crisis in countries across the globe. For the vast masses, it was clear: it was no longer possible to go on with business as usual and the political regime had shown itself incapable of resolving it in any way outside the benefit of capitalists.

In the political arena, it manifested in a polarization both to the left and the right. On the left, the wave of class struggle had deepened a crisis of representation, in which neoreformism found a solid foundation, especially with parties like Syriza in Greece and Podemos in Spain, or the phenomena of Corbynism in the UK. In the U.S., the same sentiment gave wind to organizations like the Democratic Socialists of America and the Sanders campaign, even though, unlike in Europe, it was expressed through the Democratic Party. Yet, in the years since, instead of encouraging the development of class struggle and fostering breaks with the capitalist system, these parties have increasingly acquiesced to the bourgeois state, leading (as in the case of Syriza) or becoming junior partners (as with Podemos). Alongside this manifestation, the organic crisis also birthed new monsters. From the United States to Thailand, India, Brazil, and England, it led to expressions of right populism as well as the rise of far-right Bonapartist figures who attempted to raise themselves above the ruling regime to manage the crisis. This, given the position of the United States in the world order, perhaps found its most acute expression in the rise of Trumpism, whose reactionary “America first” program mobilized vast sectors of the American masses who no longer saw themselves reflected in the political regime. This wasn’t “fascism” but a reaction to the deep structural crisis that failed to pose a revolutionary alternative. In the years since, instead of posing an alternative to this Far Right amid the structural crisis of capitalism — one based on class struggle and the power of the working class — neoreformism has instead helped towards the recovery and recomposition of the political regimes that were in complete crisis. The only thing they’ve been able to “stop” is the independent mobilization of the working class, all while strengthening the hand of the regime and opening the way to the strengthening of the Right.

On the other hand, the lack of political, social, and structural resolution in the last period led to the emergence of a second wave of class struggle and new populist movements across the globe. From the Yellow Vest uprising in France to the wave of class struggle in 2019 that emerged across Latin America and the Middle East, the masses took to the streets, fighting austerity measures and demanding a transformation of society. In Chile, which was the laboratory of neoliberalism and where class struggle was most developed, the masses clearly said, “It wasn’t 30 pesos but 30 years,” clearly putting the blame on the implementation of neoliberal adjustment plans that had completely eroded the social safety net.

This cycle of class struggle was interrupted with the emergence of the Covid-19 pandemic, which, instead of neutralizing the movements, only deepened the crisis of neoliberalism. With the world economy grinding to a halt, millions across the world falling sick and dying as the virus spread through global supply and value chains, and hospital systems that were already creaking at the neck pushing far beyond their capacities, the structural crisis of capitalism was laid bare, especially that of neoliberal globalization. While many were pushed to shelter at home, it was the workers who kept the gears running — a reality that even sectors of capital had to acknowledge as they gave incentives to workers and valorized them as heroes. Yet, with the pandemic easing and the need for markets to bounce back to normal, it was these same workers who were made to pay for this crisis, as they still do. On the one hand, in order to curb inflation, the state implemented high interest rates, even if it meant job cuts across industries and threatening a recession. On the other hand, as inflation continued to rise following the pandemic and then with the eruption of the war in Ukraine, wages fell back, and a cost-of-living crisis deepened across the globe, leading to the reemergence of class struggle.

Tthe geopolitical situation (marked by the Covid-19 pandemic and the beginning of a new period of warfare, marking a significant disruption in the world order) and the volatility of the economy (which hasn’t been able to recover to even pre-2008 levels and faces a historic crisis of profitability and productivity), combined with the shifts in the ways of thinking, has led to the emergence of a new subjectivity among the working class that, although still in an incipient way, is willing to enter the political scene as class struggle returns to the world stage.

Once More on Bourgeois Restoration

Deepening this crisis of neoliberalism is that U.S. hegemony is no longer unquestioned, and there have emerged new threats at the top. The neoliberal model of capitalist growth was based on the conquest of new spaces, made possible by the restoration of capitalism in the former bureaucratic workers’ states. It used the incorporation of billions of workers from China, India, and other countries into a global labor market to lower real wages around the world and increase profits. Yet there are now real limits on new profitable investment.

Most acute here is the relationship with China, which in this period has taken center stage. The period of globalization and capitalist restoration in China provided U.S. capital with a large and cheap workforce that proved immensely profitable. Although much of its essential industries, like banking, are still nationalized and under the control of the Communist Party bureaucracy, private and foreign capital have been the biggest motors of growth, spurring foreign trade, which drives China’s economy. This export-oriented capitalist development transformed China into a world market of goods, and advanced alongside the deindustrialization of imperialist countries.

Industrial and technological advancement in this period came on the backs of development in China, which ultimately laid the foundations for it to emerge as a strategic competitor to U.S. hegemony, with the conflict deepening post-2008. China’s export-oriented economy was largely supported by U.S. consumption, which was, in turn, largely propelled by debt. Although demand eventually recovered to a pace that was enough to sustain China’s growth, for Beijing, it was necessary to find new and more stable markets and to reduce its dependency on U.S. capital. As domestic consumption remained weak due to significantly low wages of the working class, it became imperative for China to find new markets for its goods. Since then, from the Belt and Road Initiative and the construction of a new Silk Road to the proliferation of foreign investment in Africa, China has pursued its own political and economic agenda on the international stage to reconstitute a pole with it at its center. As U.S. capital faced slow economic growth and recovery post-2008, China has emerged as a key force, using its relative stability to enter new markets, gaining a stronghold in Africa and the Middle East. In addition, over the last two decades, China has held up the growth of its “national champion” companies like Alibaba, Tencent, and Huawei. As Esteban Mercatante writes,

By supporting the expansion of these firms around the world, China increasingly seeks to play the same game the imperialist powers have played in recent decades: the concentration and centralization of capital around the world, which allowed multinational firms to consolidate their dominance of the value chains and take advantage of wage differences and competition between countries to attract capital by lowering taxes and granting other concessions, and thus appropriate a larger share of the surplus value generated around the world (which ends up sheltered in tax havens).

And with China’s emergence as a new power, playing the great game to stack the pieces in favor of its own bourgeoisie, China and the United States have squarely positioned themselves as competitors. In 2011, Obama launched the “Pivot to Asia” program, aimed at containing China’s growth. A containment strategy that began under Obama with new trade agreements and alliances like the Trans-Pacific Partnership aimed at excluding China from global exchange, continued during the Trump years, especially as he ramped up a trade war. And this hostility between China and the United States particularly heats up in the technological arena, where the United States was previously unchallenged. Indeed, this is a strategic confrontation pursued with bipartisan consensus, especially as Biden has not only continued, but deepened the Trump-era trade war. Now, as the war in Ukraine rages on, Washington has used its renewed prestige within the Western alliance to broker new deals, especially in the Asia-Pacific, in order to contain the rising influence of China.

In China, President Xi Jinping has attempted to leverage “national unity” to generate consensus behind the country’s international agenda. In its project to expand its influence across the globe to challenge U.S. hegemony, China has found allies in second powers, longtime victims of Washington’s policies. This is most notable in the case of China’s rapprochement with Russia since the fall of the Soviet Union and the strengthening of bilateral ties between the two countries economically, politically, and militarily. While the United States pursued a policy of capitalist penetration in China — a more backward country — during the neoliberal offensive, it assumed a more hostile relationship with Russia, even after the fall of the Berlin Wall, especially given the military might of the erstwhile Soviet Union, which Russia had now inherited. Over the decades, the United States, with the NATO alliance, has continued to expand its territories to encircle and contain Russia.

Yet, while some currents would like to present this emerging bloc between Russia and China (along with other regional powers like Iran) as an alternative to U.S. imperialism and a challenge to its hegemonic influence, they represent nothing but a dead end for the world’s proletariat.

In 2005, Putin called the collapse of the Soviet Union “the greatest geopolitical catastrophe of the century.” The defeat of the first successful workers’ state was, indeed, a great geopolitical tragedy. Yet what Putin reminisces about is not a Soviet Union based on socialist revolution and a society based on the power of bodies of self-organization of the working class. He longs, rather, for the multipolar world and military might of the USSR, which today could enable Russia to compete with the United States and advance the interests of its own oligarchy. Indeed, the oligarchy, of which Putin is a part, built a new regime on the ashes of the old workers’ state, dismantling national industry to transform the country into an export-oriented industry relying on the export of commodities such as fuel, gas, and fertilizer, of which it is a key provider across Europe. China, with its pursuit of new markets for its own bourgeoisie, follows the same economic and political tactics in the Global South that imperialists have done previously. It has also established itself as a major trading ally for advanced economies like Germany , and through brokering new alliances and treaties, it is firmly trying to prove itself as a contender to lead the capitalist world order. Especially as the tendencies toward a new bloc around China increase, they threaten further and greater confrontations, militarism, and conflict.

Again on the Crises of Capitalism

As we have outlined, the war in Ukraine opened a new historical period in the geopolitical situation, one that makes real again the battles between man and machinery. The crisis opened up by the war in Ukraine, at its forefront, marks a shift in the geopolitical situation toward a period of interstate wars and has, in its background, the larger strategic confrontation with an ascendant China amid the decline of U.S. hegemony and a growing fight at the top of the world order. This marks not a crisis of liberal democracy in the face of authoritarianism, but the crisis of capitalism, which, without challenge, is going to plunge the world’s working class into new and violent struggles. Unlike what “post-capitalists” believe, there is nothing inevitable about the end of capitalism. Without a strategic way out, this capitalism, even when in decay, can still find new ways of squeezing the working class, deepening exploitation and oppression, plunging the world into war and bloodshed, and breeding new monsters. For the working class, it is a question not of defending democracy in the abstract, but of fighting for a new world order that gains renewed importance. Capitalism has shown itself to offer nothing but misery for the world’s population and for the earth. Without building its own institutions and waging a fight for a socialist future — one based on the institutions of self-organization of the working class and with the perspective of the socialist reconstruction of society — there is nothing but misery for the masses. As Rosa Luxemburg writes in The Junius Pamphlet in 1915,

Friedrich Engels once said: “Bourgeois society stands at the crossroads, either transition to socialism or regression into barbarism.” What does “regression into barbarism” mean to our lofty European civilization? Until now, we have all probably read and repeated these words thoughtlessly, without suspecting their fearsome seriousness. A look around us at this moment shows what the regression of bourgeois society into barbarism means. This world war is a regression into barbarism. The triumph of imperialism leads to the annihilation of civilization. At first, this happens sporadically for the duration of a modern war, but then when the period of unlimited wars begins it progresses toward its inevitable consequences. Today, we face the choice exactly as Friedrich Engels foresaw it a generation ago: either the triumph of imperialism and the collapse of all civilization as in ancient Rome, depopulation, desolation, degeneration — a great cemetery. Or the victory of socialism, that means the conscious active struggle of the international proletariat against imperialism and its method of war.

For the working class, it is vital to make the most of this preparatory moment to consolidate its ranks, and it is the task of revolutionary leadership to mark a way out of the crisis. Decades of centrist adaptations, especially in the face of capitalist growth, have not only delayed the task at hand, but have played, as we see too in the centrist support for NATO over the war in Ukraine, a role in actively demobilizing our ranks. As revolutionaries, we must take up this task with renewed vigor: to fight to recover the institutions of our class, organize its militant force in a party that fights through every avenue toward realizing our goals of socialism, and to reconstitute the Fourth International, which can coordinate such a struggle on an international scale.