The crisis of global capitalism and Trump's march to war

By William I. Robinson
Posted in late spring, 2017, first in Spanish at https://www.rebelion.org/noticia.php?id=227261 and later in English translation at www.greensocialdemocracy.org under a Creative Commonwealth license.

The escalation over the last few weeks of American intervention in the Middle East occurs at a time when the Trump regime faces a growing scandal over presumed Russian intervention in its 2016 electoral campaign, coincident with the historically lowest approval ratings for an incoming President and growing popular resistance. The United States government has often launched military adventures abroad to distract attention away from the political crisis and problems of legitimacy it faces at home.

In addition to intervention in Syria, Iraq and Afghanistan, Trump has proposed an increase of $55 billion dollars in the budget of the Pentagon. He has threatened to use military force in various powder kegs around the world, including Syria, Iran and Southeast Asia, the eastern flank of NATO with Russia, and in the Korean Peninsula. To the extent that competing centers of power might emerge in the international system, any military adventure could lead to a global conflagration with devastating consequences for humanity.

Journalists and political commentators have centered their attention on geopolitical analysis in their effort to explain the growing international tensions. As important as this focus might be, there are profound structural dynamics in the capitalist system that push the governing groups towards war. The global crisis of capitalism is evidently intensifying, notwithstanding the optimism of the traditional economists and elites disoriented by recent indices of growth and sudden inflation in stock prices traceable to the election of Trump. In particular, the system faces an insoluble crisis of over-accumulation and legitimacy.

The current crisis, more than cyclical, is structural, which is to say that the only solution is a restructuring of the system. The structural crisis of the 1930s was resolved by a new type of redistributive capitalism, or rather, social democracy, Keynesianism, and corporatism. Capital responded to the crisis of the 70s by globalizing. The emerging transnational capitalist class (TCC) undertook a vast neo-liberal restructuring, commercial liberalization, and integration of the world economy.

Globalization facilitated a boom in the global economy in the last decade of the 20th Century to the extent that the former socialist countries were integrated into the global market and transnational capital, liberated from the nation-state, launched an enormous round of plunder and accumulation at the world level. The TCC unloaded its formerly excess accumulation and resumed the generation of profits in the emergent globalized system of production and finance by means of the acquisition of privatized goods, the extension of investments in mining and agro-industry as a result of the dispossession of hundreds of thousands of persons from the countryside in the ancient Third World, and a new wave of industrial expansion aided by the revolution in Information and Computational Technology.

Nevertheless, capitalist globalization has given rise to unprecedented world social polarization. The British development agency Oxfam reports that just one percent of humanity owns half of the wealth of the world and 20 percent controls 95 percent of that wealth, while the remaining 20 percent has to settle for just 5 percent.

Given this extreme polarization of income and wealth, the global market is not able to absorb the production of the global economy. The financial collapse of 2008 marks the start of a new structural crisis of over-accumulation, which means that the accumulated capital cannot find profitable outlets for the reinvestment of profits. The data for 2010 indicate, for example, that US companies found themselves in that year with $1.8 trillion dollars in cash not invested. Corporate profits have reached near record levels while corporate investment has declined.

To the extent that this capital continues accumulating without being invested, enormous pressures are created for finding profitable outlets for the excess. Capitalist groups, and especially transnational financial capital, pressure states to create new opportunities for profitable investment. Neo-liberal states have utilized four mechanisms in recent years to assist the TCC to unload the excess and sustain accumulation in the face of stagnation.

One is the assault and sacking of public budgets. Public budgets have been reconfigured by means of austerity, the bailout of corporations, state subsidies to capital, state indebtedness, and the global bond market, all of which results in the direct and indirect transfer on the part of governments of wealth from the working classes to the TCC.

A second mechanism is the expansion of credit to consumers and governments, above all in the rich countries, in order to sustain consumption. In the United States, for example, the country that has served as "the market of last resort" for the global economy, the indebtedness of working class families has reached a record level for the entire post Second World War era. American households reached a total debt in 2016 of $13 trillion dollars in student and car loans, credit card debt, and mortgages. Meanwhile the global market in bonds – an indicator of global governmental debt – had already by 2011 exceeded $100 trillion dollars.

A third mechanism is frenetic financial speculation. The global economy has been a gigantic casino for transnational financial capital, while the gap between the productive economy and "fictitious capital" grows ever wider. The Gross World Product, or the total value of goods and services produced in the world, reached $75 trillion dollars in 2015, while speculation in foreign currency alone reached $5.3 trillion per day in that year and the global market in derivatives is estimated to be a fantastic $1.2 trillion.

These three mechanisms can solve the problem momentarily but in the long run ends in an aggravated crisis of over-accumulation. The transfer of wealth from workers to Capital constrains the market even more, while consumption financed by increasing debt and speculation augments the gap between the productive economy and "fictitious capital". The result is increasing instability underlying the global economy. Many now consider that another collapse is inevitable.

Nevertheless, there is another mechanism that sustains the global economy: militarized accumulation. There is here a convergence of the necessity of the system for social control and its necessity for perpetual accumulation. Inequalities without precedent can only be sustained by systems of social control and repression that are everywhere more expansive and ubiquitous. But besides political considerations, the TCC has acquired an interest in war, conflict and repression as means of accumulation in their own right, including the application of a wide range of new technologies and a new fusion of private accumulation with state militarization.

While war and organized repression by the state are being increasingly privatized, a wide range of capitalist groups, acting in their own interests, are deployed in changing the political, social and ideological climate towards the generation and sustainment of conflicts – such as in the Middle East – and in the expansion of the systems of war, repression, surveillance and social control. The so-called wars against drugs, terrorism and immigrants; the construction of border walls, centers of detainment of immigrants and jails; the installation of systems of mass monitoring and surveillance; and the expansion of companies of private mercenaries and security personnel – all of these are being converted into principal sources of accumulation and generation of profits.

The American state took advantage of the attacks of 11 September 2001 to militarize the global economy. U.S. military spending exploded, reaching trillions of dollars to unleash the "war against terrorism" and the invasions and occupations of Iraq and Afghanistan. The "creative destruction" of the wars served to add fuel to the smoldering coals of a stagnant global economy. Between 1988 and 20ll the Pentagon budget climbed in real terms by 91%, and even without including the special assignment for Iraq, increased by 50% in real terms in this period. In the decade from 2001 to 2011, the profits of the military industry almost quadrupled. At the world level, military expenditure grew by 50% from 2006 to 2015, from $1.4 trillion to $2.03 trillion dollars.

The vanguard of accumulation in the real economy around the world changed from Information and Computation Technology before the stock market bubble exploded in 1999-2000 (known as "dot-com") to the new "military-security-industrial-financial complex" – this complex itself integrated into the conglomerate of high technologies. This complex has accumulated enormous power in the halls of power in Washington and in other political centers around the world. An emergent bloc of power that unites the global financial complex with the military-security-industrial complex tended to crystallize as a result of the collapse of 2008. There is a dangerous conjuncture around militarized accumulation of the interests of the TCC with geopolitical and economic questions. The more the global economy comes to depend on militarization and conflict, the greater is the impulse towards war and the higher the risks to humanity.

The day after the electoral triumph of Trump, the price of the stocks of "Corrections Corporation of America," the principal private contractor for centers of detention of immigrants in the United States, shot up by 40%, given the electoral promise of Trump to deport immigrants in mass. The great military contractors Raytheon and Lockheed Martin register sudden hikes in their stocks each time there is a new outbreak of conflict in the Middle East. Hours after the American marines bombarded Syria with Tomahawk missiles this past 6th of April, the value of the stocks of Raytheon rose by a billion dollars. Hundreds of private firms around the world made offers for the construction of the sadly notorious Trump wall on the US-Mexican border.

Beyond populist rhetoric, the economic program of Trump constitutes neoliberalism on steroids. Reductions in corporate taxes and accelerated deregulation will come to exacerbate over-accumulation and augment the propensity of the power bloc for military conflicts. Active and retired military personnel who control the American machinery of war occupy numerous posts in the Trump regime and enjoy increasingly greater autonomy of action. Nevertheless, behind the Trump regime and the Pentagon, the TCC seeks to sustain accumulation by means of the expansion of militarization, conflict and repression. Only a counter-movement from below, and in the long term, a program for the redistribution of wealth and power downwards, can counteract the spiral upwards of international conflagration.

William I Robinson
Professor of Sociology and
Global and International Studies
University of California - Santa Barbara
web page: www.soc.ucsb.edu/faculty/robinson
photo web page: www.flickr.com/photos/wirobinson
Facebook blog page: https://www.facebook.com/williamirobinsonsociologist

This English language translation is by C. McFadden, based on the Spanish original as posted on https://www.rebelion.org/noticia.php?id=227261 and is posted here (www.greensocialdemocracy.org) with permission of the author, William I. Robinson, under a Creative Commonwealth license.

Welcome!

This website was launched September 1, 2010 in support of a green social democratic alternative to neoliberal capitalist policy and practice. The primary result is a work by Charles and Karen McFadden of seven chapters, grouped under the title, Towards a Green Social Democratic Alternative to Capitalism available here in pdf and html formats.

Below under the heading What’s New can be found the most recent materials posted on this website, including opinion pieces, book reviews, articles and selections from the 2017 edition of the main work.  For the interest of new and returning visitors, new materials will be included quarterly.

What's New

NEW & REVISED

Authors' Preface

1.6 The epochal nature of the period we are entering

6.0 The socialism we need against the "socialism" of the 20th century

6.8 Additional concerns about 20th century variants of "socialism"

6.9 The people united!

7.1 Policy alternatives and political movements to advance them

OPINION

Charles and Karen McFadden, Is revolutionary transformation on the agenda

Charles and Karen McFaddenHumanity on the Brink

Charles and Karen McFaddenMovements of Resistance to Movements for System Change

Charles McFaddenTranslating Green Principles into Education Policy and Practice

Charles and Karen McFadden, The Role of Revolutionaries in the Labor Movement

REVIEWS

Charles McFadden, The People United for a More Just Sustainable Future

Karen and Charles McFaddenCan emergent early 21st century neo-fascism be defeated without coming to grips with late 20th century restructuring of capitalism into a global system

Karen and Charles McFaddenA Dominant Capitalism or a Sustainable Environment? Why we can't have both.

US CORNER

William I. RobinsonThe Crisis of Global Capitalism and Trump's March to War

William I. RobinsonTrumpism, 21st Century Fascism, and the Dictatorship of the Transnational Capitalist Class

CANADA CORNER

George HewisonWINNIPEG 1919 & THE COLD WAR

George HewisonArt Manuel - "Unsettling Canada

George HewisonThe NDP and LEAP

RECOMMENDED

Albert Einstein, David Swanson, Jill Stein, Chris Hedges, William I. Robinson, and others Selected articles for Winter 2018

FEATURED WORK

ECONOMICS

1.7 The dynamics of capitalism as a system and the limits of single issue reforms

2.11 The economy in transition towards a new deal for labor and the community

3.1 The challenge of a moribund economic system

3.7 Public banking: A cornerstone of a green social democracy

4.7 Economics and culture

6.5 Using the non-market economy as an opportunity to begin moving beyond capitalism

HISTORY

1.6 The epochal nature of the period we are entering

2.0 Theoretical Perspective: Defining Green Social Democracy

2.5. Socialism and green social democracy in historical materialist theory

4.3 Culture in historical perspective

5.1 Contrasting a green social democratic world with the currently prevailing, but challenged neo-liberal one

6.2 Socialism and capitalism as coexisting social systems

LABOR

2.11 The economy in transition towards a new deal for labor and the community

5.7 Defeating neo-liberal capitalism: The role of social movements

7.3 Justice: Creating a just society, based on the right of all to a dignified, secure existence

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