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The crisis of global capitalism

In a May 6th article in Roar magazine, entitled “What Are the Real Reasons Behind the New Cold War,” William I. Robinson, professor of sociology, global studies, and Latin American studies at the University of California at Santa Barbara, cites the Biden administration’s recent expulsion of 10 Kremlin diplomats and new sanctions for alleged Russian interference in the 2020 US elections, “just days after the Pentagon conducted military drills in the South China Sea” as “just the latest escalation of aggressive posturing in Washington’s new Cold War against Russia and China.” Robinson believes that behind the usual conflict “over hegemony and international economic control,” actions like these are driven by “the crisis of global capitalism.” Economically, this a result of chronic economic stagnation; politically, it’s a result of states and capitalism in general increasingly being seen as illegitimate by people suffering under the current system. “All around the world a ‘people’s spring’ has taken off. From Chile to Lebanon, Iraq to India, France to the United States, Haiti to Nigeria, and South Africa to Colombia, waves of strikes and mass protests have proliferated and, in many instances, appear to be acquiring a radical anti-capitalist character. 

Economically, global capitalism faces a crisis of “overaccumulation”: a situation in which the economy has produced – or has the capacity to produce” products that few can afford to buy “because of escalating inequality. Capitalism by its very nature will produce abundant wealth yet polarize that wealth and generate ever greater levels of social inequality unless offset by redistributive policies. The level of global social polarization and inequality now experienced is without precedent. In 2018, the richest 1% of humanity controlled more than half of the world’s wealth while the bottom 80% had to make do with just 5% of it. These inequalities undermine the stability of the system, resulting, if left unchecked, in recessions, depressions, social upheavals, and war – exactly what we’re now experiencing.

Contrary to mainstream accounts, the coronavirus pandemic didn’t cause the crisis of global capitalism; it was already upon us. On the eve of the pandemic, growth in the EU countries had already shrunk to zero, much of Latin America and sub-Saharan Africa was in recession, growth rates in Asia were steadily declining, and North America faced a slowdown. The pandemic merely hastened the crisis of a global economy that never fully recovered from the 2008 financial collapse. Even if there’s a momentary recovery as the world emerges from the pandemic, global capitalism will remain mired in this structural crisis of overaccumulation. 

As I showed in my 2020 book, The Global Police State, the global economy has become ever more dependent on the development and deployment of systems of warfare, social control and repression as a means of making profit and continuing to accumulate capital in the face of chronic stagnation and saturation of global markets. This is known as “militarized accumulation” and refers to a situation in which a global war economy relies on perpetual state organized war making, social control and repression to sustain the process of capital accumulation.

The events of September 11, 2001 marked the start of a permanent global war in which logistics, warfare, intelligence, repression, surveillance, and even military personnel are more and more the privatized domain of transnational capital. The Pentagon budget increased 91% between 1998 and 2011, while worldwide, total state military budgets outlays grew by 50% from 2006 to 2015, from $1.4 trillion to more than $2 trillion, not including the hundreds of billions of dollars spent on intelligence; contingency operations; policing; bogus wars against immigrants, terrorism, and drugs; and ‘homeland security.’ During this time, military-industrial complex profits quadrupled.

The various wars, conflicts and campaigns of social control and repression around the world involve the fusion of private accumulation with state militarization. In this relationship, the state facilitates the expansion of opportunities for private capital to accumulate through militarization, such as by facilitating global weapons sales by military-industrial-security firms, the amounts of which have reached unprecedented levels. Global weapons sales by the top 100 weapons manufacturers and military service companies increased by 38% between 2002 and 2016.

By 2018, private for-profit military companies employed some 15 million people around the world, while another 20 million people worked in private security worldwide. The private security (policing) business is one of the fastest growing economic sectors in many countries and has come to dwarf public security around the world. The amount spent on private security in 2003, the year of the invasion of Iraq, was 73% higher than that spent in the public sphere, and three times as many persons were employed in private forces as in official law enforcement agencies. In half of the world’s countries, private security agents outnumber police officers. These corporate soldiers and police were deployed to guard corporate property; provide personal security for executives and their families; collect data; conduct police, paramilitary, counterinsurgency and surveillance operations; carry out mass crowd control and repression of protesters; run private detention and interrogation facilities; manage prisons; and participate in outright warfare.

In 2018, President Trump announced with much fanfare the creation of a sixth military service, the “space force.” The corporate media duly toed the official line that this force was needed to face expanding threats to the United States. Less reported was the fact that a small group of former government officials with deep ties to the aerospace industry had pushed behind the scenes for its creation as a way to hype military spending on satellites and other space systems.

In February of this year, the Federation of American Scientists reported that military-industrial complex lobbying is responsible for the decision by the US government to invest at least $100 billion to beef up its nuclear stockpile. The Biden administration announced in early April to much acclaim that it would pull all US troops out of Afghanistan. While US service troops in that country number 2,500, these pale in comparison with the more than 18,000 contractors that US government has hired to do its bidding in the country, including at least 5,000 corporate soldiers that will remain.

The so-called wars on drugs and terrorism; the undeclared wars on immigrants, refugees, gangs, and poor, dark-skinned and working-class youth generally; the construction of border walls, immigrant detention centers, prison-industrial complexes, systems of mass surveillance; and the spread of private security guard and mercenary companies, have all become major sources of profit-making and they’ll become more important to the system as economic stagnation becomes the new normal. 

But if corporate profit, and not an external threat, is the reason for expanding the US state and corporate war machine and the global police state, this must still be justified to the public. The official state propaganda narrative about the new Cold War serves this purpose.

Global capitalism operates within a nation-state-based system of political authority, and in order to attract transnational corporate and financial investments states must keep wages low, regulations few, give corporations subsidies, etc. The result is rising inequality, impoverishment, and insecurity for the working class – precisely the conditions that throw states into crises of legitimacy and jeopardize elite control. International frictions escalate as states, in their efforts to retain legitimacy, seek to sublimate social and political tensions. In the US, this has involved channeling social unrest towards scapegoated communities such as immigrants (one key function of racism ), or towards an external enemy such as China or Russia, which is clearly becoming a cornerstone of the Biden government’s strategy. The drive by the capitalist state to externalize the political fallout of the crisis increases the danger that international tensions will lead to war. Historically wars have pulled the capitalist system out of crisis while serving to deflect attention from political tensions and problems of legitimacy. 

Capitalist crises are times of intense social and class struggles. There has been a rapid political polarization in global society since 2008 between an insurgent left and a newly insurgent far-right that includes neofascist movements and authoritarian and dictatorial regimes. The contradictions of the system have reached the breaking point, placing the world into a perilous situation bordering on global civil war.

William I. Robinson is Distinguished Professor of Sociology, Global Studies and Latin American Studies at the University of California at Santa Barbara. His book, Global Civil War: Repression and Rebellion in the Post-Pandemic World, will be released by PM Press early next year.