Internationally, capitalism has entered a new phase of crisis.
The IMF predicts that 2023 will be “tougher” for the world economy even than 2022, a year when global stocks and bonds lost more than $30 trillion, the heaviest losses in asset markets since the 2008 worldwide financial crisis.
The economies of China, the US, and the EU are all slowing simultaneously.
The war in Ukraine continues, and has markedly increased the already existing tensions between the major powers.
The 1990s era of globalisation is now definitively behind us.
That is not to suggest that world trade overall has fallen dramatically.
On the contrary, for example, the volume of world container shipping reached an all-time high in September 2022.
What is past is the period when US imperialism really was, for a short period, a hyperpower.
The central feature of ‘globalisation’ was, in reality, the capitalists, particularly US capitalism, restoring profits by taking advantage of the collapse of Stalinism to step up an offensive against the world’s working class.
They were able to do so because of the billion plus additional workers added to the world capitalist economy, coming together with the weakening of workers’ consciousness and organisation.
When, for example, Chinese factories began on a large scale to act as assembly plants for Western capitalist companies, with workers paid a tiny proportion of the wages of workers in the US or Europe, it was a powerful means to increase profits and to drive down wages globally.
Of course, like all capitalist ‘solutions’, it intensified other problems.
It exacerbated the inability of the working class to buy the goods it produces, and helped lay the basis for new capitalist crises.
For a period this was partially overcome with low interest rates and ‘cheap money’.
Sections of workers in Britain, for example, were able to spend beyond their means via mortgaging and re-mortgaging their homes as well as accumulating credit card debt.
There was an enormous accumulation of debt globally.
Even after the financial crisis triggered the ‘Great Recession’, new financial bubbles were created via Quantitative Easing and other measures.
Huge state intervention during the pandemic further increased the amount of debt.
Today, world debt is equal to more than 350% of global GDP.
Now, however, with inflation soaring globally, central banks are taking the road of ‘quantitative tightening’, desperately trying to squeeze inflation out of the system by reducing the amount of money in circulation.
They are compelled to do so, but are deepening the developing world recession.
Capitalist commentators are busy debating whether the era of ‘cheap money’ is over for ever.
Clearly, it is likely that, under the impact of economic crises, and above all mass movements against their effects, at different stages some central banks will have to reverse their current direction regardless of the consequences for inflation.
Inflation, after all, is a ‘tax increase without a vote’, cutting the value of workers’ wages.
However, there will be no return to the previous period of prolonged low interest rates and ‘cheap money’, seemingly without serious consequences, which was only possible in a world situation that has now vanished.
The US remains the most powerful capitalist country, economically and militarily, but is in decline, and is progressively more unable to call the shots.
China is no longer content to act as an assembly plant for the West, but is an increasingly powerful rival which US capitalism is desperately trying to prevent climbing up the value chain (i.e. developing advanced manufacturing).
Inter-imperialist rivalry, instability and conflict are on the rise.
The Ukraine war, with the resulting sharp rise in world energy prices, will not be the last geopolitical event to trigger increased economic turbulence.
Nor are geopolitical events the only possible shocks.
New financial crises globally, or economic shocks to any of the major economies – not least Britain – can also act to trigger broader economic crises.
