Radhika Desai 資本主義 新冠疫情 戰爭

Capitalism, Coronavirus and War

https://library.oapen.org/bitstream/id/152553fe-23c0-4b16-a493-b44980d590d4/9781000815887.pdf

By Radhika Desai，Professor in the Department of Political Studies and Director
of the Geopolitical Economy Research Group at the University of Manitoba,
Canada, and Convenor of the International Manifesto Group.

This book will be of great interest to students, scholars and researchers of
international relations, international political economy, comparative politics and
global political sociology.

Capitalism, Coronavirus and War investigates the decay of neoliberal financialised
capitalism as revealed in the crisis the novel coronavirus triggered but did not
cause, a crisis that has been deepened by the conflict over Ukraine and its
repercussions across the globe.

Leading domestically to economic and political breakdown, the pandemic
accelerated the decline of the US-led capitalist world’s imperial power, intensifying
the tendency to lash out with aggression and militarism, as seen in the US-led West’s
New Cold War against China and the proxy war against Russia over Ukraine. The
geopolitical economy of the decay and crisis of this form of capitalism suggests that
the struggle with socialism that has long shaped the fate of capitalism has reached
a tipping point. The author argues that mainstream and even many progressive
forces take capitalism’s longevity for granted, misunderstand its historical dynamics
and deny its formative bond with imperialism. Only a theoretically and historically
accurate account of capitalism’s dynamics and historical trajectory, which this book
provides, can explain its current failures and predicament. It also reveals why,
though the pandemic—by revealing capitalism’s obscene inequality and shocking
debility—prompted the most serious critiques of capitalism to emerge in decades,
hopes of ‘building back better’ were so quickly dashed. This book sheds searching
light on the dominant narratives that have normalised the neoliberal financialised
capitalism and the dollar creditocracy dominating the world economy, with even
critics unable to link capitalism’s neoliberal turn to its financialisations, historical decay, productive debility and international decline. It contends that only by appreciating the seriousness of the crisis and rectifying our understanding of
capitalism can progressive forces thwart a future of chaos and/or authoritarianism
and begin the long task of building socialism.

PREFACE AND ACKNOWLEDGEMENTS

Capitalism is in an advanced state of decay. Nowhere is this more obvious than in
the two countries that have played a leading role in giving it its current neoliberal
financialised form, and where that form—the only form it can take if capitalism
is to survive—is most fully developed, the United States and the United Kingdom. This book examines the ashen spectrum of that decay as refracted through
the prisms of the pandemic set off by the novel coronavirus and current US-led
international aggressions including the New Cold War on China and the proxy
war on Russia over Ukraine, the latest two of the many crises that, in its state of
decay, capitalism is guaranteed to be increasingly prone to.
The decay forms two riveting contrasts: with the vigour of socialist China
and with the failure of the left in the homelands of capitalism to abandon its
century-long proclivity to imagine capitalism to be capable of ceaseless productive advance, despite decades of capitalism’s manifest decay. This book places the
two contrasts in a single frame, a necessary task if the left in the major capitalist
countries is to play its part in helping humanity break free from the death grip
of capitalism and advance towards saner ways of organising society, combining
individual freedoms with solidarity among people and peoples and the survival
of their planetary home.
These arguments rest on two distinct foundations. The first is a decadeslong intellectual evolution. It involved an ever-deeper and wider investigation
of Marxist thought, its analytical possibilities for the understanding of economy,
society, politics and culture historically, and its setting in and strong connections
with the intellectual history that preceded and succeeded it. Perhaps the main
line of that evolution was the absorption, followed by the critique, of Western
Marxism, the form in which I first encountered Marxism as a graduate student in
the mid-1980s in Canada. The critique was developed over the decades in diverse
writings—on the United Kingdom, India and the United States, on Keynes and Polanyi as well as Marx and the Marxist tradition, on Marx’s understanding of
capitalism as contradictory value production and the inability of ‘Marxist economics’ to understand either contradiction or value, on political and geopolitical
economy of capitalism as well as its politics and culture, on financialisations and
their connection with the dollar creditocracy, on nationalism and imperialism.
The standpoint of this critique was, in ways discernible to me only in retrospect,
my early intellectual formation in India at a time when the idea of its socialist
development, whose distinctive connections with Eastern, that is to say Communist, traditions of Marxism that I absorbed only indirectly, was still alive.
Many puzzles of the rather singular structure of the book and its argument will
be unlocked by this key.
A major station in this evolution was my 2013 book, Geopolitical Economy:
After US Hegemony, Globalization and Empire. In that book, I contested cosmopolitan understandings of capitalism that assume it to be capable of Promethean
productive advance and seamless worldwide spread, arguing instead that capitalism’s contradictions had led to a very different evolution. On the international
plane, they set off the process of uneven and combined development, the struggle
between dominant, imperialist, capitalist countries to maintain the unevenness
of capitalism’s development—complementarity between their own high-value production and subordinated countries’ low-value production—and their potential
or actual targets rejecting, if they can, such subordination and seeking, through
state-led and protectionist or mercantilist ‘combined development’, the similarity
of productive capacities. Whether in capitalist or, beginning in 1917, socialist
forms, such ‘combined development’, not the expansion of markets or imperialism, has spread productive capacity around the world, leading to ever-greater
multipolarity. A decade of further capitalist decay with austerity and political
disarray domestically and socialist China’s challenge internationally had already
led me to expect a major crisis—for instance, I began a February 2020 public
talk I gave on ‘Does Capitalism Have a Future’ by saying ‘the short answer is
no’—when the pandemic triggered it.
From the start, my focus, since at least Geopolitical Economy, on the domestic
disarray and international decline of the major capitalist countries made it very
clear to me that the principal issue was not the pandemic but capitalism. Whether
adverse weather events lead to famine is a question of social organisation: wellorganised societies invest in food storage and distributions systems to ensure that
inevitable weather-related shortfalls in food production lead, at worst, to difficulties but not widespread hunger and death. Similarly, a pandemic only leads to
economic and political disarray and international decline if social arrangements
are already considerably weakened. This was already clear to me when I wrote
‘The Unexpected Reckoning: Coronavirus and Capitalism’, the first of my writings on the subject the weekend after the World Health Organization declared
the novel coronavirus a global pandemic. Nothing was clearer to me than that
the pandemic was going to rock the foundations of already weakened neoliberal financialised capitalism, accelerating its internal disarray and international

xiv Preface and acknowledgements
decline. Amid the din of crashing asset markets and the clanging of businesses
and organisations shuttering down,
It became clear that whatever the origins, paths, and lethality of the virus
now named COVID-19, it was going to sorely test Western capitalism and
its coping mechanisms. Almost certainly, they were going to be found
wanting. After all, problems and imbalances have accumulated in the
Western capitalist system over four decades, essentially since it took the
neoliberal road out of the 1970s crisis and kept going along it, heedless of
the crises and problems it led to.
Secondly, this book and its arguments rest on the intense attention I gave to
events, domestic and international, as the pandemic began. This attention took
at least four important forms. First, over the past two years and more, I have been
riveted to the mainstream media as well as the plentiful alternative information
and media sources that are available today in the West and internationally in an
effort to understand the pace and pattern of the unfolding crisis.
Secondly, beginning with ‘The Unexpected Reckoning’, I kept up a steady
stream of journalism, written and spoken commentary, in many outlets, inter
alia, Canadian Dimension, China Global Television Network, Sputnik, RT and
The Real News Network. In these outlets, I tracked the domestic unfolding
of the pandemic, particularly in the United States and the United Kingdom
with their public health failures, financial ructions calmed by oceans of central
bank liquidity that only re-set asset markets on the precipitous ascent that now
diverged even more unreally from plunging economies, and deepening economic and political crises. I also tracked international developments, particularly
the New Cold War on China declared by the Trump administration in mid2020 and pursued by the Biden administration with equal if not greater zeal,
including by withdrawing—in an inglorious spectacle of military, political and
intelligence incompetence—from Afghanistan in order to concentrate resources
on China and then targeting Russia from the fall of 2021 onwards.
Thirdly, in early June 2020, Dimitri Lascaris, the well-known lawyer and
activist widely esteemed for his principled stance on many issues of international
concern, from Palestine to Venezuela, asked me to be part of his team for his
ecosocialist and anti-imperialist campaign for the Green Party of Canada leadership. Ending up as the chair of the Platform Committee, I oversaw, and largely
drafted, his campaign platform, including all-important documents on economic, ecological, foreign, Indigenous, health and social equity policies. Doing
this against the background of the pandemic only underlined the scale of the task
before us if major capitalist societies had to be put on the path to ecosocialism.
The final and most important form was the International Manifesto Group.
From the start of the pandemic, Dimitrios Konstantakopoulos, editor of Defend
Democracy Press, and I were in increasing communication. Over a Skype conversation, we decided to start an international discussion group focused on
Preface and acknowledgements xv
understanding and analysing the fast-paced events we were living with a view
to answering the eternal political question, ‘What is to be done?’. This orientation suggested the name, International Manifesto Group (IMG), and we started
meeting fortnightly that April. By the fall of 2020, we were publishing recordings of parts of our deliberations on the Geopolitical Economy Research Group
website and, in the runup to the November 2020 US presidential elections, we
began organising fortnightly webinars on topical subjects. By the spring of 2021,
thanks to the simple but important suggestion from Glenn Michalchuk, we were
writing our manifesto. ‘Through Pluripolarity to Socialism: A Manifesto’, the
work of a drafting committee which I chaired and for which I served as the principal drafter, was launched in October 2021.
The IMG has been and remains a source of critical important intellectual,
political and personal connections and I can only list the most important here.
In the Manifesto Drafting Committee, I benefitted from wide-ranging and penetrating discussions with Jane Akatay, Keith Bennett, Claudia Chaufan, Bruno
Drweski, Mick Dunford, Alan Freeman, Carlos Martinez and Jean-Pierre Page
while many others sent in detailed and illuminating comments including Arnold
August, Renate Bridenthal, Michael Brie, Mick Burke, Jenny Clegg, Judith
Dellheim, Salvatore Engel Di Mauro, Peter Fleissner, Dimitrios Konstantakopoulos, Chris Matlhako, Attila Melegh, Glenn Michalchuck, Carol Mowat, John
Riddell, Ariela Ruiz Caro, Ken Stone and Suzanne Weiss.
In the intellectual and practical discussions that took place in the running
of the IMG, I have benefitted greatly from the contributions of Jane Akatay, Arnold August, Oleg Barabanov, Keith Bennett, Roland Boer, Aleksandr
Buzgalin, Jenny Clegg, Renfrey Clarke, Mick Dunford, Bruno Drweski, Paul
Graham, Danny Haiphong, Brandon Love, Carlos Martinez, Attila Melegh,
Glenn Michalchuk, Ben Norton, Jean-Pierre Page, John Riddell, John Ross,
Joel Wendland Liu and Suzanne Weiss.
The work of the IMG also put me in touch with a host of intellectually fascinating and politically critical people and networks of anti-imperialist activism
and scholarship: Ajamu Baraka and Margaret Kimberly of Black Agenda Report,
Friends of Socialist China, Brian Becker of the Party of Socialism and Liberation, Qiao Collective, Nodutdol, No Cold War, Sara Flounders and Joe Lombardo of the United National Anti-War Coalition, Kiyul Chung and Ju-Hyun
Park of Nodutdol, Derek Ford, Gabriel Rockhill, Circulo Bolivariano and Winnipeg Venezuela Peace Committee. Speakers, too many to thank individually,
at the many and ongoing webinars made critical contributions. Let me end this
already long list—it has been my very good fortune to compile—by apologising
for any omission.
Finally, I would like to thank Keith Bennett for reading and commenting
carefully, with his inimitable political savvy, on the entire manuscript in record
time, Mick Dunford for his careful comments on the introduction, Henry Heller
for his enthusiastic reaction and Barry Gills, the series editor, for his comments
and support. Thanks also to Brendan Devlin and Aziz ul Hakim for their help
xvi Preface and acknowledgements
with some tables and figures. Above all, my deepest gratitude for Natalie Braun’s
competent, intelligent and warm assistance with the references and many tables
and figures. It was a great pleasure working with her.
I dedicate this book to Alan Freeman, my partner in life, love, thought and
politics for a decade and a half. So many of the ideas and arguments presented
here are inextricable from our many conversations and joint endeavours. And I
It is a mark of his admirable political acuity and commitment that it was he who
suggested that I also dedicate it to new generations of socialists and communists,
some of whom we are fortunate to know, who are creating new understandings
from hard practical struggles. 

1
INTRODUCTION
Resumption of history, return of choice
Like lightning, crises can momentarily illuminate dark landscapes. The US-led
North Atlantic Treaty Organization (NATO) proxy war against Russia over
Ukraine, the latest of US-led capitalism’s wars against countries not amenable
to imperial subordination, did just that in early 2022. As self-proclaimed allies
incited Kyiv from the sidelines, demonised Russia to the point of precluding
the negotiations that must end wars, imposed sacrifice-lite sanctions on Russia
and supplied profit-heavy weapons to Ukraine, recklessly risking a wider, even
nuclear, conflagration, the edifice of capitalism was lit up by the lightning bolt
of war.
It revealed an unexpectedly diminutive structure. For all the high-decibel
rhetoric about a world-girding capitalism relentlessly expanded by ‘globalising’
markets and empires, two and a half centuries of capitalist expansion had left it
quite compact. If measured by the countries following the US lead in imposing
sanctions on Russia or giving lethal aid to Ukraine, as shown in Figure 1.1, it
was confined to the North Atlantic, with a few toe- and foot-holds scattered
across the Pacific: Japan, South Korea, Singapore, Australia and New Zealand,
essentially the triad of North America, Western Europe and North-Eastern Asia
with eastern and southern European and Pacific Ocean fringes.
True, the US-led West’s immediate target was a capitalist country dominated by an oligarchical ‘big-insider’ capitalism (Dzarasov 2013). True also that
the overwhelming majority of the world’s governments, representing the overwhelming majority of its people, that did not impose sanctions or supply weapons
were not distinguished by their commitment to socialism. However, not even the
United States’ Latin American ‘backyard’ or India, often ranked among the most
pro-US countries in the Third World, joined the ranks of the capitalist world.
Whatever the successes or failures of these countries’ development projects, they
had historically required deviations from capitalism—that is, economies in which
private capitalists determine the pace and pattern of investment and polities in
DOI: 10.4324/9781003200000-1
2 Introduction
which they hold the reins of political power. These projects had also required
foreign policy commitments that leaned towards the Communist world through
international organisations such as the Non-Aligned Movement or the Group
of 77. In the twenty-first century, moreover, the capitalist world’s unattractive
imperialist offer had them inclining towards socialist China and most supported
its call for a negotiated solution that took account of Russian security interests.
Gauged thus, the capitalist world had hardly expanded since its imperialist core
was fully formed on the eve of the First World War. Notwithstanding either the
45-year Cold War the West fought against the Soviet Union for the allegiance of
the Third World ( Kolko and Kolko 1972 ; Desai and Heller 2019 ) or the demise of
that first socialist system, the most fundamental threat the capitalist world faced was
still/again a socialist country, China. When the Cold War ended, Francis Fukuyama had stunningly proclaimed that history, humankind’s quest for the good society, had ended with ‘the universalization of Western liberal democracy as the final
form of human government’ ( Fukuyama 1992 , 4). With socialism defeated, no
alternatives remained. Barely two decades later, however, history appeared to have
resumed and socialism was once again on humanity’s horizon as the 2008 North
Atlantic Financial Crisis sent the major capitalist economies into a mire of low
growth and austerity while socialist China continued its historic growth spurt.
Socialism remained capitalism’s Big Other destined to absorb and annihilate it.
This crisis-illuminated reality of capitalism requires a serious reconsideration
of its historical evolution. Cosmopolitan accounts of its relentless onward march
subjecting the whole world to its laws, whether as ‘globalisation’ or ‘US hegemony’ or even ‘empire’ were never credible (Desai 2013; see also Duong 2017).
Now that US-led capitalism’s grip on the world is slipping and socialist China
appears to be winning friends and influencing peoples all over—by 2018, for
instance, 70% of the world’s countries traded more with China than the United
States, up from 20% in 2001 (Leng and Rajah 2019), capitalism’s history appears
less like triumphal advance than a parabolic trajectory. Its upward escape orbit
was already slowing as capitalism entered its monopoly phase and, beginning
with the Bolshevik Revolution, socialism emerged to add to the gravity, forcing
it into its downward capture orbit, notwithstanding the most strenuous efforts of
the United States, in particular, to reverse or at least slow the descent.
That is not all. The US-led proxy war against Russia also brought deep
historical fractures within the capitalist world into play, particularly between the
United States and the United Kingdom, the two countries most enthusiastically
prosecuting the war (ably assisted by Canada) on the one hand, and Germany,
France, Italy and Japan, on the other. The United Kingdom and the United States
have historically, one after another, sought to create a seamlessly unified capitalist world economy under their domination, with the former remaining and the
latter becoming more commercially and financially (as opposed to productively)
oriented to do so. The latter group, particularly Germany and Japan, do not just
have formatively different, regionally- and productively-focused orientations, but
they also stand to lose more by imposing sanctions on Russia, thanks to deeper
economic ties dating back to the height of the Cold War and more extensive
Introduction 3
FIGURE 1.1 The capitalist world.
Sources:Data from Funakoshi, Minami; Lawson, Hugh; and Deka, Kannaki. 2022. ‘Tracking
sanctions against Russia’, Reuters, 9 March (Accessed 5 June 2022) https://graphics.reuters.com/
UKRAINE-CRISIS/SANCTIONS/byvrjenzmve/
Map created using AMCHARTS, www.amcharts.com/visited_countries/#AT,BE,BG,HR,CY,
CZ,DK,EE,FI,FR,DE,GR,HU,IS,IE,IT,LV,LT,LU,MT,NL,NO,PL,PT,RO,SK,SI,ES,SE,CH,GB,
BS,CA,US,JP,SG,KR,TW,AU,NZ
Compiled using Canva, www.canva.com
Created by Brendan Devlin, using Canva, used with permission.
productive economies. While the United States and the United Kingdom claim
that the US-led proxy war on Russia has forged a new unity within the capitalist
world, the historically rooted differences in the two sets of countries’ approach
to Russia—expressed best in the refusal of France and Germany in particular to
stop talking to the Russians and Japan to maintain its energy investments in that
country—remain clearly visible and will widen if, as seems increasingly likely,
Russia achieves its announced military objectives in Ukraine.
The conflict over Ukraine revealed the capitalist world’s finitude and division
just when the still-unended pandemic had revealed its incapacity. In the leading
capitalist countries, that incapacity turned a manageable, if serious, public health
emergency into a chaotic combination of catastrophic public health failure, economic crisis, social division and political breakdown. It was the cumulative result
of the neoliberal road these countries took out of the stagflationist crisis of the
1970s and kept going, ignoring mounting problems and contradictions, uncaring that, rather than reviving them, neoliberal policies were weakening their
productive structures, while expanding predatory finance explosively. While the
United States and the United Kingdom led the way, other capitalist countries
followed, though with differences in enthusiasm and implementation. After
the 2008 financial crisis, these economies went critical. The drip feed of fiscal
4 Introduction
austerity and monetary laxity kept the patient alive but without vigour, leading
many to speak of ‘zombie capitalism’. Public attitudes towards capitalism soured
as popular protest worldwide was matched by corporate and business loss of faith
with mass resignations of executives.
This was the capitalism that the novel coronavirus hit. The pandemic performance of capitalist countries, particularly the neoliberal leaders, the United
States and the United Kingdom, formed a profoundly unflattering contrast with
socialist countries, led by China. Its competent handling of the pandemic permitted continuing economic stability and growth1
 and even increased social cohesion and political legitimacy domestically and international influence abroad.
Naturally, most public discourse and scholarship in capitalist countries refused
to acknowledge the contrast, going from blaming China for the ‘Wuhan virus’
early on to blaming its dynamic zero COVID policies for the economic problems
of the capitalist world. They failed, therefore, to locate the roots of the contrast
in capitalism’s neoliberal and financialised course. Worse, they also joined their
governments’ aggression against socialist countries, pre-eminently China, as
President Trump escalated his trade and technology wars into a New Cold War
against China a couple of months into the pandemic.
If Trump’s actions raised the possibility of war, Biden’s realised it. China
remains the main target, but Russia has also been in the United States’ sight.
President Obama had already launched a New Cold War against Russia in 2014
for resisting the increasingly threatening eastward expansion of NATO. Flailing
against the pandemic, Biden not only escalated it into his proxy war but linked it
to a potential proxy war against China over Taiwan. When capitalism must risk
its greatest war ever, a planet-annihilating nuclear war, to meet its challenges, it
is surely facing its most profound, most existential crisis.
The gap between the capitalist world’s capabilities and its challenges widened
continuously over the neoliberal decades and may have reached breaking point.
Neoliberalism was the only way capitalism could survive the crisis of the 1970s.
It could not, however, address the economic crisis and prolonged it instead into a
Long Downturn ( Brenner 1998 ) of languishing production and thriving financialisations. Most fully at work, and on display, in its leading countries, the contradictions of prolonging capitalism’s life through neoliberalism lie at the heart of the
capitalist world’s diminishing capabilities, whether in pandemic or war.
Neoliberalism was diminishing the capitalist world’s economic dynamism just
when market socialist China was clocking up some of the highest growth rates for
any sizeable economy and some other countries, applying a modified neoliberalism
as India did or reversing its more extreme elements after suffering deep setbacks,
such as Russia or Brazil did, were also growing rapidly, shifting the world economy’s
1 By growth, I mean the expansion of the production of goods and services that remains necessary to
provide the world’s people with an acceptable standard of living. I take it for granted that it is critical
to achieve it while at the same time work to reverse climate warming, pollution and biodiversity
loss. Arguments that pit environmental protection against growth forget that nearly all the indices of
environmental destruction began rising steeply precisely in the neoliberal low growth era.
Introduction 5
centre of gravity away from the United States and the West ( O’Neill 2001 ). After
2008, these BRICS countries also institutionalised their cooperation in many ways
that recalled a previous era of South–South cooperation, once again inflecting
international economic governance away from the capitalist and imperialist directions that capitalist countries desired and even towards socialist China’s attractive
example (Desai 2020b), the foundation of a ‘Beijing Consensus’ opposed to the
neoliberal ‘Washington Consensus’. However, by the late 2010s, Brazil and India’s
growth slowed down under authoritarian neoliberal governments, and Russia
was challenged by sanctions, while China’s growth remained high and chalked up
social, environmental and technological achievements. This only made the contest
even more clearly one between an enervated neoliberal financialised capitalism and
socialism. While the United States, once again aided by the United Kingdom, tried
hard to reverse the resulting loss of world influence militarily, it failed.
The pandemic contrasts between capitalism and socialism’s leading countries
that so damn the former and the perilous wars they are leading to distract and
compensate demand a reconsideration of the history of capitalism, and this book
attempts to provide it. It rescues that history not only from the deceits of capitalist ideology but salvages it from under the debris that the intellectual irresponsibility and political compromises of the Western left and Western Marxism have
heaped upon it. This is not an antiquarian exercise. It is critical for the future,
of the denizens of the Western capitalist countries and, thanks to their power—
dwindling but still capable of intolerable harm—of humanity as a whole. It is
also critical if humanity is to understand where the international cooperation
necessary to end the ecological emergency of climate warming, pollution and
biodiversity loss is going to come from. After all, not only has US-led neoliberal
financialised capitalism contributed the most to that emergency but the political
disarray of these countries domestically and their wars internationally are setting back efforts to deal with it even as socialist countries have demonstrated
their greater abilities to deal with it (Engel-Di Mauro 2021). Our reconsideration
leads to some surprising and surprisingly simple conclusions for socialists simply
because crises also clarify historical choices.
In this introduction, I first elaborate on what war and pandemic revealed about
capitalism and socialism. Then, looking more closely at the latest phase of their
intertwined history, I argue that neoliberal financialised capitalism, best exampled
by its leading countries, the United States and the United Kingdom, is the only
form in which capitalism—a society in which the state ensures that the investment prerogative remains in the hands capital, which today means monopoly and
financialised capital—can exist today. The more productively oriented capitalism
of the sort that still lingers in countries like Germany and Japan, had always been
in danger of serving as a stepping stone to socialism. There follows a brief outline
of the parlous position of the left in the major capitalist countries after four decades
of neoliberalism as the background to its failures amid the twin crises of pandemic
and war. These failures underline why this book’s approach, which I then outline,
is so necessary. The introduction ends with a brief outline of the book.
6 Introduction
War clarifies
In retrospect, 1914 constituted the peak of the capitalist world. With the outbreak
of the inter-imperialist Great War, it entered the great Thirty Years’ Crisis (1914–
1945). Spanning two world wars and a Great Depression, it was bookended by
the first and second revolutions against capitalism, the greatest so far. Before this
great crisis, imperial Britain had led the capitalist world. After its end, the United
States sought to take over this role and to impose its order on the rest of the
world. However, it lacked the military, economic, political resources to achieve
this in even more unpropitious circumstances than ever, and failure was inevitable
( Desai 2013, Kolko and Kolko 1972). The United States failed to intimidate the
Soviet Union into submission by using atomic bombs on Hiroshima and Nagasaki
( Alperovitz 1998; Desai 2022) and, in the ensuing the Cold War, countries ruled
by Communist parties subtracted vast territories and populations from the ambit
of capitalism entirely and supported the great ‘revolt against the West’ (Barraclough 1964) in which the Third World of countries emerging from colonialism
sought, more and less successfully, to throw off colonial shackles through autonomous national development that was not only state-directed but often professedly
socialist. In the major capitalist countries, capitalism had to be radically reformed
and regulated with socialistic and welfare measures to avoid relapse into depression and to legitimise a discredited capitalism.
However, these socialistic measures had been mounted onto economies that
remained capitalist and, inevitably, they ran into crisis. As additional productive capacity of the recovering and developing economies saturated even the
expanded demand that the socialistic measures created (Desai 2015), enabling the
three-decades-long post-war ‘golden age’ or Long Boom (Brenner 1998), capitalism entered the ‘stagflation’ of the 1970s, a multifaceted crisis of overproduction,
saturated demand and inflation with wage and commodity price rises. Now, the
United States and the United Kingdom led the neoliberal response, claiming that
it would revive capitalism. Though initially this claim appeared credible, with
even many critical observers believing it as late as the mid-2000s (Duménil and
Lévy 2004), neoliberalism could not have reinvigorated capitalism.
Its free market doctrines—whether of Friedman or Hayek, of supply side economics or public choice theory—were rooted in neoclassical economics. It had
arisen in the late nineteenth century to glorify competitive markets precisely
when capitalism had outgrown them and entered its monopoly phase (Clarke
1991; Bukharin 1914/1972). While competition once developed the forces of production, however brutally and chaotically, it was now heavily dampened. Capitalism’s monopoly phase, Marx anticipated and some of his must acute successors
confirmed, marked the exhaustion of capitalism’s historical utility: it had developed the forces of production as much as it possibly could and was now ripe for
socialism. This view was not, moreover, confined to Marxists. As it culminated
in the Thirty Years’ Crisis (Mayer 1981) of 1919–1945, John Maynard Keynes, for
one, proposed an end to liberal policy and market calculation in ‘nationally selfsufficient’ economises to solve the problems of capitalism the Great Depression
Introduction 7
had exposed, particularly unemployment (Keynes 1933). Discussing prescriptions
for smoothing out capitalism’s cyclical ups and downs, he warned that monetary
policy would soon reach its limits and ‘a somewhat comprehensive socialisation of
investment’ would become necessary (Keynes 1936/1967, 378). Karl Polanyi, for
another, looked forward to the ‘new pattern of international life’ after the Second
World War that was expected to ‘greatly improve [the] chances of democratic
socialism’ (Polanyi 1944/1985, 1945) while the ideologically opposed Hayek
warned of precisely this (Hayek 1944; Desai 2019 analyses the opposition between
the latter two). More broadly, the experience of wartime planning generated public conviction that the days of capitalism were numbered and history was pointing
towards socialistic national planning ( Addison 1982).
These views were at least partially confirmed. The ‘golden age’ or Long
Boom that capitalism enjoyed after the Second World War was possible only
because ‘the politicians, officials and even many of the businessmen’ of the time
were convinced that
. . . a return to laissez-faire and the unreconstructed free market were out
of the question. Certain policy objectives—full employment, the containment of communism, the modernization of lagging or declining or ruined
economies—had absolute priority and justified the strongest government
presence. Even regimes dedicated to economic and political liberalism now
could, and had to, run their economies in ways which would once have
been rejected as ‘socialist’.
( Hobsbawm 1994, 272–3)
It was the crisis of this post war order that gave neoliberalism its chance. However, it failed to revive capitalism, inaugurating its Long Downturn instead, a
slowly unfolding economic disaster of the capitalist world that also made its victory over Soviet socialism pyrrhic. Both the expectations at the end of the Cold
War—that the world would be unified under a US-led capitalism and enjoy a
peace dividend—were belied.
Expecting unipolarity assumed that neoliberalism was reviving capitalism
when, in fact, capitalist economies malingered productively—growing slowly,
boosting inequality, increasing misery, dividing societies, hampering meaningful politics and, not least, losing ground in terms of economic weight and world
influence. Only their speculative and parasitical financial sectors prospered,
worsening their other problems. While Germany and Japan were productively
stronger, they could not correct the worldwide demand deficit that caused the
Long Downturn and that neoliberalism exacerbated, particularly given that large
elements of their own capitalist classes were sold on neoliberalism of one or
another variety. The neoliberal capitalist world’s failure to subordinate China,
Russia and a widening circle of other countries became clear in the new century.
On the other hand, emerging economies, led by socialist China, were growing
precisely because, and to the extent that their economic policy deviated from
neoliberalism (Desai 2013). As the world economy’s centre of gravity moved

8 Introduction
away from the United States and the West, it accelerated the trend towards multipolarity that began in the late nineteenth century (Desai 2013, 265), a trend
that Hugo Chavez more accurately termed pluripolarity to denote a world whose
multiplying poles also sported meaningfully different economic systems, capitalist and socialist.
The peace dividend evaporated in tandem with fading prospects of unipolarity
as never-ending US-led wars followed the removal of the deterrence exercised
by the Soviet Union (Desai 2022) and, in the new century, as neoliberalism’s
economic toll grew heavier, these wars became desperate attempts to stall or
reverse the displacement from the centre of the world economy that came with
economic decline. This militarism has reached a peak in the war over Ukraine
though another, in the form of an even more dangerous war against China over
Taiwan, may yet be in the offing.
Until now, US militarism had targeted smaller powers, largely without success, and treated China and Russia with greater circumspection if also barely
concealed hostility. However, New Cold Wars against Russia and China were
formally launched in 2014 and 2020, respectively, and the current proxy war
against Russia marks a dangerous new turn for an unexpected reason. It appears
that, alongside war as a means to an end—that of stalling and reversing the
decline of the United States and the West it still leads—war appears to have
increasingly become an end in itself, with the profits of the US war industries,
one of the handful of productive sectors that remain vital in the United States, as
much a consideration as any military aim.
Desperation never ensured victory and the increasingly mixed motives of the
United States are unlikely to help. It is already clear that the capitalist world has
overplayed its hand even against Russia and can only fare worse in any analogous
confrontations with China. Most broadly, rather than uniting some putative
‘democratic’ (in reality neoliberal financialised capitalist) world against Russia,
with most of humanity refusing to participate in sanctions against Russia and
lethal aid to Ukraine, US actions are accelerating the ongoing division of the
world between a declining, economically unattractive and militarily aggressive
neoliberal and financialised capitalism centred on the United States and a rising,
economically attractive market socialist China whose programmes for building
mutual prosperity have been widening its circle of friends.
Worse, even the shrunken capitalist world revealed by the lightning of crisis
is cleft by historically deep fault lines. Capitalism had expanded not through
‘globalisation’ or successive ‘imperial’ hegemonies (Desai 2013) but through
struggles between dominant and contender powers. In these dynamics, which
Marx and Engels and later Marxists understood well but are best known by the
label Trotsky gave, uneven and combined development (Trotsky 1934), dominant
centres of capital accumulation are driven by capitalism’s contradictions to maintain
capitalism’s uneven development, that is to say, to create and maintain the structures of imperialism. Countries threatened by these efforts challenge them, if they
can, through state-directed and protectionist efforts at combined development
Introduction 9
to build national productive capacity. Initially capitalist, after 1917, combined
development also began to take socialist forms.
This pattern of expansion has not only cleft the world into capitalist and
socialist economies but ensured that the capitalist world is no seamless or uniform entity but a congeries of national capitalisms, each marked by its distinctive
history and struggle to avoid subordination and achieve its own domination.
Britain’s original industrial and imperial dominance, based on empire and ‘free
trade’, was challenged by contenders pursuing nationally distinct state-directed
industrialisation behind protectionist walls, giving each capitalism distinct
national and quite statist economic structures. As these struggles intensified in
the late nineteenth century, they produced what Karl Polanyi called ‘crustacean’
nations (Polanyi 1944, 202), national economies with hard statist shells.
These capitalisms were also productively more powerful, emerging just when
capitalism was entering its monopoly phase which, as Marx and anticipated, and
Hilferding had argued (Marx 1894/1981, 567–73; Hilferding 1910/1981, 367–8),
ripened and readied capitalism for socialist transition. However, with Britain
remaining committed to free trade and the United States seeking to take over
its role of imposing economic openness on the world as Britain’s abilities were
manifestly declining, capitalism’s life was prolonged, albeit through resort to
‘socialistic’ measures. For a time, they made even the comparatively far more
liberal United States and the United Kingdom resemble the statist economies
though, as the United States and the United Kingdom led the way in rolling
these measures back from the 1980s onwards, the diversity of capitalisms reemerged to be studied by a veritable cottage industry of its models (Coates 2000)
and varieties (Hall and Soskice 2001).
Among their many fascinating differences, one was fundamental. The original liberal economy, the United Kingdom, and the United States, which turned
increasingly liberal as it continued its quest to emulate British nineteenth century dominance even after the failure of its first post-war attempt in 1971 in new
ways, were the countries that advanced farthest down the neoliberal road that
was also the road towards financialisation. Many others, while hardly unaffected
by neoliberalism and financialisation, continued to prioritise their substantial
productive sectors, pre-eminently Japan and Germany (Dore 2000; Hutton
1995; Lapavitsas 2013). This difference was, in turn, rooted in contrasting bank–
industry relations, governing the key question of where profits are invested, in
production or in predation and speculation.
While capitalist countries did band together in NATO against the Soviet
challenge, differences between productively weaker liberal and productively
superior statist economies often turned into tensions. For instance, statist France
with persisting imperial ambitions and Wirtschaftswunder Germany sought to
assert their autonomy in the international sphere, whether during the Cold
War—in Willy Brandt’s Ostpolitik or in France’s absence from NATO military
command structures from 1966 to 2009)—or after (van der Pijl 2006) in European attempts to build an autonomous security structure that, critically, included
10 Introduction
post-Communist Russia (Gowan 1999, 93). Japan too has often driven hard bargains with the United States, for instance, market access in return for financial
support in the 1980s.
The much-trumpeted unity capitalist countries found in their war against
Russia may have been aided by the election of compliant governments and
unprincipled political leaders, but it papers over these historically rooted cleavages, which the conflict is deepening in critical ways. Capitalist countries have
imposed very different sanctions and offered different types of lethal aid and
pursued different aims in the conflict, depending on what suited their economies
and international ambitions. While these differences prompt the United States
to put greater pressure on them to comply, they also prevent them from doing
so: Russian gas continued to arrive in Germany and Japan refused to cancel a
major gas development with Russia (Lyon 2022). Meanwhile, the United States
and the United Kingdom contributed the shrillest rhetoric aided by Baltic and
East European countries while German and French preference for a negotiated
settlement was expressed in their continued dialogue with Russia (Adams 2022).
Even the more limited unity of an ‘Anglosphere’ is likely to prove elusive.
Essentially involving the United States and the United Kingdom pulling Canada, Australia and New Zealand into an alliance tighter than their intelligencesharing Five Eyes alliance that dated back to the 1941 Atlantic Charter, it seemed
to acquire greater definition with the formation of AUKUS in late 2021. However, the exclusion of Canada and New Zealand already indicated formative
problems and Australia’s willingness to sacrifice a beneficial relationship with
China to US aims may prove fickle (Murphy 2021).
The uneven and combined development of capitalism had created a structure
of world capitalism considerably more ramshackle than most dominant discourses
allow. For decades, the United States, still its weightiest element, has pulled in the
direction of neoliberal, financialised and militarised capitalism while most of the
capitalist world’s other tenuously articulated components are pulled by the momentum of their own histories and orientations, not to mention the need to maintain
some modicum of political legitimacy, if not in the opposite direction, at least at
tangents. As capitalism’s crises unfold, this disarticulation can only become jolting.
Pandemic reveals
When the pandemic punched in, it caught societies claiming to be at the forefront of science unawares. Once hit, the leading neoliberal financialised capitalisms, the United States and the United Kingdom, proved so incompetent that
ruinous nationwide lockdowns had to be imposed repeatedly, causing the worst
economic slumps in decades, in the case of the United Kingdom, the worst ever,
and among the worst cumulative death rates. The problems lay in the priorities
and capacities of public authorities.
US and UK priorities, articulated as the need to balance ‘saving lives and livelihoods’, lay in protecting the interests of their financialised capitalist classes, chiefly
through massive injections of liquidity into the financial sector and parts of the
Introduction 11
productive sector on which it relied for its choicest assets. After initially considering doing nothing on the public health front, letting the pandemic rip, taking whom it would, they settled for the still-murderous course of ‘flattening the
curve’ because doing nothing would prove ruinous for their economies and overwhelm public health infrastructures already weakened by four decades of neoliberal
cuts and corporatisation. The historically unprecedented fiscal outlays that led so
many to think that neoliberalism had finally been abandoned aimed only to save
its essentials without addressing either these economies’ productive debility or their
inequality, without even addressing the inadequacies of their public health infrastructure. The funds went chiefly to the biggest corporations and the wealthy, with
ordinary workers aided only to repay debts and to keep demand from plunging
unacceptably.
Hospital systems creaked and traumatised doctors and nurses had to perform
rough and ready triage. Belly-up societies revealed undersides of obscene inequality and disgusting racism and misogyny. Thanks to the decades-long weakness of
left forces and government mismanagement and misinformation magnified by
unregulated social media, conspiracy theories proliferated and provoked uncomprehending opposition easily manipulated by the well-funded and -organised right.
Politically insecure governments sitting atop unstable electoral coalitions—electoral
or social—that had only just managed to put them in power were either immobilised before their protests against vaccines and restrictions or responded by invoking
emergency powers that smacked of authoritarianism. Amid all this, having come
to rely exclusively on vaccines to fight COVID-19, erecting a veritable vaccine
apartheid internationally by appropriating the bulk of the world’s vaccines in the
process, they nevertheless remained exposed to dangers of new variants, thanks
to substantial sections of their own populations and much of the rest of the world
remaining unprotected hosts to the still-raging virus.
By the spring of 2022, eager to return to some sort of economic normalcy,
that is, to restore capitalist accumulation, most Western capitalisms were lifting
restrictions and claiming it was time to learn to ‘live with the virus’ against the
warning of leading medical authorities. This was the strategy their capitalist and
corporate paymasters now wanted, and they were willing to fund right-wing
protests to reinforce their point (see, for instance, Lardner et al. 2022). However,
much of the economic damage of the pandemic—disrupted supply chains, business closures, job losses, workforce shrinkage, increased public debt and, not
least, the return of inflation—was here to stay.
Moreover, having already witnessed more than a century of attempts to build
alternatives to capitalism, humanity was now to witness how the pandemic performance of these alternatives could not have contrasted more.
With a per capita income about a fourth that of the United States, disdained as
much by the left as the ruling classes of Western capitalisms, China, the first country to face the full assault of the novel coronavirus not only overcame the initial
shock of the outbreak and successfully suppressed COVID-19 in Wuhan city and
Hubei province, its ‘dynamic zero COVID strategy’ kept infections to a minimum and eliminated occasional local outbreaks in short order through localised

 

12 Introduction
restrictions. With social and political life back to near normal levels, it managed
to host a successful Winter Olympics, aid poor countries against the pandemic
and, as even the International Monetary Fund (IMF) had to concede, lead world
growth (See Figure 1.2).
China, now clearly the world’s economic powerhouse, was not alone. As
Table 1.1 shows, as of 22 July 2021, alongside China’s 3.21 deaths per million,
FIGURE 1.2 Divergent recoveries, 2019 Q4–2022 Q4.
Source:Data from International Monetary Fund. 2021. ‘Policy Support and Vaccines Expected to Lift
Activity’, World Economic Outlook, World Economic Outlook Update, January. (Accessed 19 June 2022)
www.imf.org/en/Publications/WEO/Issues/2021/01/26/2021-world-economic-outlook-update
Created by Natalie Braun, used with permission.
Note: AEs = advanced economies; EMDEs = emerging market and developing economies; WEO = World
Economic Outlook.

 

 

 

 

Introduction 13
TABLE 1.1 Cumulative COVID deaths per million: selected capitalist and socialist countries
Capitalist Deaths Per Deaths Per Socialist Deaths per Deaths per
country million (22 July million (17 June country million (22 July million (17 June
2021) 2022) 2021) 2022)
United States 1,824.25 3,043.89 China 3.21 3.62
United 1,892.27 2,634.81 Vietnam 3.77 438.87
Kingdom
Canada 703.85 1,096.75 Cuba 188.82 753.61
France 1,655.08 2,211.56 Venezuela 119.94 199.41
Brazil 2,557.85 3,124.83 Nicaragua 28.95 35.96
Germany 1,090.08 1,670.74 Laos 0.68 102.58
Japan 119.85 245.93
South Korea 40.27 476.11
Source: Our World in Data.
https://ourworldindata.org/grapher/total-covid-cases-deaths-per-million?tab=table
Created by Natalie Braun and Aziz Hakim, used with permission.
Vietnam, Laos (the most bombed country in the world), Cuba, Venezuela and
Nicaragua limited COVID-19 deaths per million to 3.77, 0.68, 188.82, 119.94
and 28.95, respectively. This is despite being far from perfect socialisms, despite
some of these societies being quite poor and despite economically debilitating
economic sanctions on some of them. Though, thanks to myriad difficulties,
including sanctions and lower vaccine access, the performance of some of the
socialist countries deteriorated thereafter; they still contrasted starkly with those
of the major capitalist countries with 1,824.25, 1,892.27, 703.85 and 1,655.08
for the United States, United Kingdom, Canada and France, respectively, as of
21 July 2021 and 3,043.89, 2634.81, 1,096.75 and 2,211.56 as of 17 June 2022,
respectively. Among capitalist countries, only the two major East Asian countries, Japan and South Korea, compared well with the socialist countries though
they both performed worse than China. Though this was widely put down to
‘Confucian’ social cohesion, as we will see, their distinct, far more regulated,
capitalisms played an important part. Developing capitalist countries, such as
Brazil, fared far worse with 2,557.85 (3,124.83) deaths per million.
The pandemic’s damning verdict on capitalism and extolling one on socialism is
not incidental. It is deeply rooted in their intertwined history—a history of compulsive imperialism rooted in capitalism’s contradictions and inevitable opposition to
it, one that the ongoing war against Russia highlights. That history constitutes the
most glaring indication that the more than century-long contest between capitalism and socialism has come to a (another, if one considers the Thirty Years’ Crisis
the first) tipping point where people and peoples must choose between reorienting
their societies away from capitalism and towards some sort of socialism or endure
more instalments of capitalist barbarity. The countries that embody the worst of
what capitalism can inflict are the leading neoliberal financialised economies, the
United States and the United Kingdom.

14 Introduction
Neoliberal financialised capitalism: the end of the
capitalist road
Their prominent role today has deep historical roots. The United Kingdom
became committed to free trade when it achieved industrial supremacy (through
statist and protectionist means, as Chang 2002argued) and remained so even
after the rise of its industrial challengers began eroding that supremacy. This
was not, as often argued, because of its ideological commitment to free trade
but because its originally agrarian capitalist class, which turned to financial and
commercial activities and retained its dominance even as the industrial capitalist class rose ( Anderson 1964; Ingham 1984; Leys 1990) and because the archaic,
short-term financial system that capitalist Britain inherited formed the foundation of its commercial activities in the Empire and beyond and eventually of the
gold-sterling standard. It too was imperial: surpluses extracted from non-settler
colonies were turned into the famous ‘capital exports’ to the United States,
Europe and settler colonies (Patnaik and Patnaik 2016). It was, however, was
faltering well before the outbreak of the First World War thanks to the rise of
challengers internationally (De Cecco 1984) and to the political assertion of
working classes domestically (Desai 2015).
With the rise of its industrial challengers, with their vastly more productive,
because state-directed, protectionist as well as more advanced, capitalisms, that
had made the world pluripolar already in the late nineteenth century, Britain
became caught between two strategies—securing its future by attempting
to transform its loose and far-flung empire into a disciplined protectionist
bloc in the world market, the equal of both Germany and the United
States; and accepting the wider responsibilities of maintaining a liberal
world economy that the success of commercial expansion and the adoption
of free trade had imposed on Britain.
( Gamble 1994, 63)
Its choice of the latter ‘long after the conditions which had originally recommended it [Britain’s industrial supremacy] had disappeared’ determined a second
choice: ‘the decision to fight Germany rather than the United States’ ( Gamble
1994 , 59) in the First World War. That choice was consequential: ‘In two world
wars the British helped destroy German ambitions to become the dominant world
power. But instead of Britain’s power being preserved, that of the United States was
established’ ( Gamble 1994 , 59). While the United Kingdom certainly lost power,
how much power the United States acquired can be exaggerated.
It is true that, already in the early twentieth century, US business and political
elites, witnessing the United Kingdom’s faltering power, began nursing the ambition
to replace it as the ‘managing segment’ of the world economy ( Parrini 1969 ) in the
new century. However, this would have to be done by replacing sterling with the
dollar, not by acquiring a comparable empire, something that was now impossible.
Introduction 15
It is also true that, in pursuit of this ambition the United States timed its late entry
in both wars so as to maximise the benefit to its economy by acting as the unscathed
supplier of war materiel ( Lens 2003 , 252–3) and the wager succeeded, with US GDP
actually doubling between 1939 and 1945 (Desai 2013 , 74–87). Even so, liberal victory against fascism in the Second World War, umbilically linked to the First by the
Versailles settlement that settled little ( Keynes 1919/2004 ), would not have been
possible without Soviet Russia and Chinese Communist and nationalist forces.
So though, at the end of the Second World War, Karl Polanyi acutely intuited
that, while most of the world was inclined in more or less socialist directions, the
United States remained vested in capitalism’s pre-1914 liberal, ‘universal’ (or imperialist) form ( Polanyi 1945 ), new forces limited its abilities. The advance of pluripolarity
had already weakened UK dominance ( De Cecco 1984 ) and it continued advancing,
now along Communist lines too, leaving the United States’ memetic ambition unrealised, though not for lack of trying ( Desai 2013 ). In the immediate post-war period,
US power faced many constraints: the power of Communism and the associated need
to permit recovering capitalist allies and the Third World emerging from colonialism many deviations from liberal economic policy. Indeed, retaining the productive
advantages secured from war required the United States to adopt at least some of the
socialistic measures widely adopted elsewhere ( Desai 2013 , 96–102). The United
States was able to impose the dollar on the world by rejecting plans for the alternatives (Block 1977), though it had to promise to back it with gold. Without an empire
comparable to Britain’s, it was able to supply the world with liquidity only by running deficits, rather than exporting capital, subjecting the dollar’s world role to the
Triffin dilemma: the greater the deficits the greater the downward pressure on the
dollar. Inevitably, European recovery and currency convertibility by 1958 led to a
dollar glut and a drain on US gold reserves. After trying one device after another to
save it through the 1960s, the link with gold had to be broken in 1971.
Only now were the foundations of the volatile and unstable dollar creditocracy (Desai and Hudson 2021) that has supported the dollar’s world role since
through a series of unstable and volatile financialisations—expansions of financial activity and asset bubbles—laid with the lifting of US capital controls in
1973 and the Volcker interest rate shock of the late 1970s. The resulting financial
expansions would also aid, and shape, the shift to neoliberalism.
The crisis of the 1970s confronted the major capitalist countries with a choice.
Deepening the socialistic measures that had enabled the Long Boom could have transcended the remaining limitations of capitalism as a productive system, but would certainly bring them closer to socialism. Freeing capital from its ‘socialistic’ fetters on the
grounds that they were the problem, as the advocates of neoliberalism argued, promised productive redemption that was capitalist. While the distributional consequences
would be criticised from the start, few foresaw that the neoliberal promise was empty.
While, enhancing the capitalist character of these economies, neoliberalism would not
restore productive dynamism.
Led by Thatcher and Reagan, major capitalist countries opted for the latter,
inaugurating the neoliberal era. It was never about free markets and competition
16 Introduction
but about freeing capital, and in the late twentieth century even more than at
its start, that meant freeing giant monopoly corporations, from state and social
regulation and obligation, a freedom that required tremendous state effort to
create and maintain as early and recent analysts observed (for instance, Gamble
1978, Crouch 2011). This effort is critical for capitalism’s survival. Understood
thus, neoliberal capitalism is nothing more or less than the only form in which
capitalism can survive today. The alternative of a reformed ‘socialistic’ capitalism
would put it back on the ramp to socialism.
Since freeing monopoly capital was never going to restore competitive vigour
to capitalism and revive its productive economy, the slump of the 1970s turned
into the Long Downturn from which the capitalist world is yet to recover. While
the sharpest edge of neoliberalism’s destructiveness was reserved for the Third
World, much of which experienced economic havoc and retardation in the 1980s
and 1990s, neoliberalism’s record in major capitalist economies was, to say the
least, woeful. Growth remained low, wages stagnated, inequality soared and
public institutions and services were privatised, commodified and corporatised
for private profit with visible declines in the quantity and quality of delivery.
Worse, as the productive economy was increasingly outcompeted by lower cost
producers elsewhere, facilitated by Western multinationals’ outsourcing, financial activity exploded instead, indebting households, firms and governments and
enriching an ever-narrowing elite through predation and plunder and through
speculation in mushrooming asset bubbles, the greatest of which burst in 2008.
Internationally, the expansion of financial activity supported the dollar’s world
role while domestically, it provided one financial fix after another to compensate
for, rather than resolving, neoliberalism’s demand problem ( Streeck 2014).
The shifts to neoliberalism and financialisation were the results of the decisions of individual governments and not all major capitalist countries went as far
as the United States and United Kingdom towards neoliberalism or financialisation. In the productively strongest economies like Germany and Japan, doing so
would have been costly—to domestic capital historically oriented to production
rather than finance and to political legitimacy. However, even they were affected
by its international manifestations—saturated worldwide demand and the growth
of international finance headquartered in New York and London. This book will
focus on the United States and the United Kingdom as the leading and exemplary
neoliberal financialised capitalisms, though suitably adapted, its arguments can also
illuminate the experiences of other major capitalist countries.
Classes and nations against neoliberalism and towards socialism
Left forces capable of tackling capitalism’s mounting contradictions were missing in action. Rather than producing a socialist critique of neoliberal financialised capitalism, having already forsaken socialism as the goal, the historic
parties of working people in the major capitalist countries now capitulated to
neoliberalism, moving their parties further rightwards and leaving vast swathes
of working people with no serious political representation. Inevitably, some of
Introduction 17
their discontent found political expression, in a distorted and inadequate manner, in the morbid right-wing politics exemplified by Trump and Brexit. While
often termed populist (Rodrik 2017; Eatwell and Goodwin 2018; Mudde and
Kaltwasser 2017), these politics are better seen the hard edge of the right-wing
resurgence that has gathered strength for decades.
Might the multifaceted crisis of pandemic and war in the capitalist world
finally prompt genuine left opposition? In the early months of the pandemic,
political hope rose, with much talk of not going back to the unbearable prepandemic normal and ‘building back better’. More than two years into the crisis
with a war making it even more urgent, however, a left critique of neoliberal
governments’ shambolic, not to say murderous, handling of the pandemic and
cynical and hypocritical war was not much in evidence. While neoliberal politicians, such as Biden, appropriated the ‘building back better’ slogan, the hard
right opposition made all the running in terms of a critique of governments’
handling of the pandemic. As the United States led its war against Russia over
Ukraine, not only did most historic parties of the left and working classes line
up to support it, so did vast swathes of the farther left that have long denounced,
in an ‘anti-anti-imperialist’ vein, all who those who support struggles against
US and Western imperialism on the grounds that the countries leading them are
‘authoritarian’ or ‘imperialist’ or both. Too many who are still pleased to sport
this or that left banner jump on to the ‘democracy and human rights’ bandwagon
of Western imperialism, a tendency that remined strong enough for Jean-Luc
Mélenchon to moderate his opposition to it in the 2022 French parliamentary
elections.
Thus, pandemic and war seem only to have deepened the rut into which neoliberal financialised capitalisms have led the capitalist world for decades, increasing
their domestic dysfunction and international malevolence while at the same time
shrinking it back to its imperial core of 1914 with very few additions. Moreover,
substantial parts of it feel the gravitational pull of China’s socialist market economy.
In the rest of the world, the emerging international alliance centred on China has
been offering alternatives, to avowedly socialist countries and to those that simply
seek to avoid subordination to the United States and the West.
Considering that actually existing socialisms are disdained by the Western left
and Western Marxism as, at best, premature and insufficiently socialist and, at
worst, authoritarian and dystopian, the domestic blockage of socialist politics in
the capitalist world forms an ironic contrast with socialism’s international prominence. The latter points to a rather different road map to socialism than the one the
Western left and Western Marxism have been using, in which revolution must first
occur in the homelands of capitalism and lead the rest of the world. The fall of the
Berlin Wall and the demise of the Soviet Union appeared to vindicate it. However,
three decades later, not only do large numbers in former Communist countries
regret what they lost with the demise of socialism, not only has capitalism failed to
integrate them into itself in an acceptable, let alone desirable manner, not only are
major capitalist countries now at war with Russia to subordinate it, the challenge
of actually existing socialism has returned with a vengeance.

18 Introduction
It had to because it is rooted in the deeper logic of the international relations of
the capitalist world, its geopolitical economy (Desai 2013), involving what Marx
called ‘the relations of producing nations’ (Desai 2021), particularly the dialectic
of uneven and combined development that has advanced pluripolarity since capitalism’s beginnings. The principal drag on this to advance in recent decades has been
the US attempt, dressed up in the ideology and rhetoric of ‘US hegemony’ or
‘empire’, to emulate the sort of dominance the United Kingdom briefly enjoyed
over the world economy. It has never succeeded but, so far at least, the United
States has persisted, even at the expense of its productive decline.
Pandemic and war have not only brought this challenge to the fore, they
promise, underneath the much-trumpeted appearance of Western unity, to
divide the Western alliance along historic lines, between the countries in the
vanguard of the march towards neoliberalism and financialisation and others,
such as the continental European countries or Japan, that remained more state
regulated and production oriented.
This political configuration of the world—with the capitalist world in advanced
decay and disarticulation, its domestic socialist forces missing in action and socialist societies’ demonstrated competence against the pandemic and opposition to
the US-led war—demands that the Western left re-visit its roadmap to socialism.
The waskness of left analyses of the pandemic so far only underline the urgency
of doing so.
The crisis and the opportunities?
That the pandemic was going to deal the financialised neoliberal capitalist economies of the Western world a historic blow was clear from the start. In Act I,
Scene I of the coronavirus and capitalism drama, as markets for every kind of
financial asset, risky and safe, nosedived even before the WHO upgraded the
Public Health Emergency of International Concern to a global pandemic on 11
March 2020, nothing preoccupied public authorities in the United States and the
United Kingdom more than saving asset values. The Federal Reserve responded
with liquidity injections historic both in scale and variety (Brenner 2020; Leonard 2022). Corporate chief executive officers (CEOs) and governments went into
huddles and announcements of bailouts and subsidies, and even some measure
of income support for ordinary working people to keep demand from collapsing
completely, came thick and fast.
The weekend after the WHO’s declaration of the pandemic, it was already
clear to me that the new virus
was going to sorely test Western capitalism and its coping mechanisms.
Almost certainly, they were going to be found wanting. After all, problems
and imbalances have accumulated in the Western capitalist system over
four decades, essentially since it took the neoliberal road out of the 1970s
crisis and kept going along it, heedless of the crises and problems it led to.
( Desai 2020a)

Introduction 19
Over the previous decade, even the mainstream media had resonated with concern
over the health of capitalism. After the private debt of the big financial institutions
that caused the 2008 financial crisis was socialised, not that of ordinary people
who lost homes and jobs, austerity followed. Public expenditure, already dwindling over the neoliberal decades, was cut even more drastically in preference
to raising taxes on the rich, wages stagnated, public services decayed, inequality
topped the list of public concerns and made Thomas Piketty’s (2017) 1,000-page
dry data-packed tome on the subject an international bestseller, popular protest
mounted and at least one quite mainstream academic wrote a book titled How Will
Capitalism End? ( Streeck 2017). Inevitably, the advocates for this or that reform
that had proliferated in this environment saw the new crisis as an opportunity for
promoting their respective brands as reform.
In a short video for The Intercept on 16 March, Naomi Klein warned that the
pandemic would become just another opportunity for ‘disaster capitalism’, the
theme of her bestseller The Shock Doctrine, unless the public seized it to challenge
corporate power and realise the Green New Deal (Klein 2020). For Mariana Mazzucato too, the pandemic was an opportunity to apply her preferred solution: to
‘do capitalism differently’ with governments not just fixing market failures but
moving ‘towards actively shaping and creating markets that deliver sustainable and
inclusive growth’ and partner with business for ‘public interest, not profit’ (Mazzucato 2020).
Meanwhile Paul Mason, who had been ploughing a rather different furrow
in the putrid intellectual fields of decaying capitalisms, proclaimed his ‘postcapitalism’ thesis vindicated. Policies considered unthinkable because they
would ‘kill capitalism’ had arrived as never before: ‘Universal payments, state
bailouts and the funding of state debts by central banks have all been adopted
at a speed that has shocked even the usual advocates of these measures’ (Mason
2020). His ultimate proof of post=capitalism? A wealth manager complaining
that ‘Conventional capitalism is dying, or at least mutating into something closer
to a version of communism’. Mason’s vision of capitalism spontaneously mutating into some sort of neo-Proudhonist ‘post-capitalist’ utopia is just another of
the recently burgeoning imaginings of the Western professional managerial class
( Desai 2011). In it, capitalism is doing so well, all that remains is to re-label it
socialism. Changing anything is the farthest thing from their minds. Couched in
apparently radical language, using terms like Communism and exploitation, they
are, in reality, at once frivolous and deeply conservative.
Demand for writing on the pandemic was clearly rising as evidenced by rising
news readership and the big publishing houses had to rush to fulfil it or others
would challenge their dominant market position. At the same time, the pandemic had raised many uncertainties about the medium (paper or electronic),
distribution (bookshops and launches or electronic) and even politics. So, sticking to authors they had already (literally) invested in, rather than critiques of
capitalism they brought out a form of pandemic porn, claiming to feed the genuine appetite to understand the economically and emotionally painful crisis but
incapable of providing anything more than a simulation of satisfaction.

20 Introduction
Once such author, Adam Tooze, had turned from his world war histories to
the 2008 crisis in Crashed ( 2018). In Shutdown, he grandly pronounced the 2020
crisis ‘a comprehensive crisis of the neoliberal era—with regard to its environmental envelope, its domestic social, economic and political underpinnings, and
the international order’ and ‘the end of an arc whose origin is to be found in the
1970s’. So far so good. However, he then disappointingly confined himself to
‘the moment itself’, pleading the necessity of ‘coping with the intellectual and
psychological stresses of a moment that was otherwise overwhelming’ (Tooze
2021, 22). A survey of the public health emergency in various parts of the world
was followed by discussion of economic and financial developments, providing
details of the activities of the financial and monetary authorities and powers of
neoliberal financialised world. Here Tooze had clearly graduated from a hesitant
and none-too-analytical chronicler of the activities of powerful financial and
political elites in Crashed to their court historian. His narrative, he claimed, was
‘critical in intent’ ( Tooze 2021, 303) and ‘cast as a “grand narrative”’ (Tooze
2021, 304) that ‘wrestle[s] with power and knowledge in time’ (Tooze 2021,
304). However, by his own admission, it is also ‘entangled and indeed complicit
with its subject matter—the efforts of elites around the world to master the crisis’
( Tooze 2021, 303). Complicity clearly trumps any wrestling in the breathlessly
admiring ‘grand narrative’ of their actions (Chapter 6on Federal Reserve Chairman Jay Powell’s actions is an excellent example).
Niall Ferguson (2021) discoursed ponderously on the critical importance of
human institutions to coping with a long historical line of great catastrophes. His
lofty perch disguised his condescension towards non-Western and socialist societies only barely, while the apparent erudition of his existential reflections on death,
unpredictability, science, globalisation and the international order simply drew
attention away from the incompetence of neoliberal governments. Indeed, the book
was little more than an attempt to exonerate the Western world and its leaders, even
those of the worst performing of major capitalist countries, Trump and Johnson: ‘to
turn COVID-19 into a morality play—The Populists’ Nemesis—is to miss the more
profound systemic and societal failure that occurred, in a way that future historians
will surely see as facile’ (Ferguson 2021, 208). More interesting to him was ‘[t]he
behaviour of ordinary people [, which] . . . can matter even more than the decisions
of leaders or orders issued by governments in the event of a disaster. What leads
some people to adapt rationally to a new threat, others to act passively as bystanders,
and others to go into denial or revolt?’ ( Ferguson 2021, 10–11), preparing the way
nicely for the neoliberal financialised capitalisms finally thrusting their responsibility onto individuals and blaming them for the failure to master the pandemic.
Nowhere in all this writing about the pandemic were capitalism’s permanence
and desirability questioned. After all, over the previous decade, a genre of literature had emerged to investigate and expose capitalisms’ multiplying atrocities
and scandals only to proclaim that no alternative was available.
The German sociologist Wolfgang Streeck exemplified it. After an impressively damning account of how neoliberal financialised capitalism had raised

Introduction 21
inequality and entrenched corporate power, undermined liberal democracy, disabled society’s collective capacities and turned citizens into customers, Streeck
threw up his hands in Weberian despair. Citizens of Western democracies can
only look forward to ‘a long and painful period of cumulative decay: of intensifying frictions, of fragility and uncertainty, and of a steady succession of ‘normal
accidents’—not necessarily but quite possibly on the scale of the global breakdown of the 1930s’ (Streeck 2017, 72). He had a clear idea of how matters would
unfold. Neoliberalism had hyper-individualised an already individualistic social
order and only when ‘the prevailing disorder will begin on a large scale and
seriously to frustrate individual projects and ambitions’ that ‘a new order may
emerge’ (Streeck 2017, 46). However, he could not say what it might be.
Thomas Piketty had followed up his rather economistic analysis in Capital in
the Twenty-First Century ( 2017 ) with a considerably more political one in early
2020 in which he came down in favour of ‘participatory socialism’. However, distanced from any actually existing socialism, it referred to a hodgepodge of worker
involvement through co-determination, steeply progressive taxes on inheritance
and income to finance increased social services, a ‘universal capital endowment’ to
every person attaining majority, educational justice and a vague internationalism
that assumed that not only had liberal capitalism failed but so had nations. He was
conscious these proposals were far from complete, showing only that ‘human societies have yet to exhaust their capacity to imagine new ideological and institutional
solutions’ and that ‘the political-ideological repertoire is vast’ ( Piketty 2020 , 1034).
Some left analysts did go further. Grace Blakeley (2020) argued that the
unprecedented scale and scope of government intervention in the major capitalist
economies were transforming ‘finance capitalism’ into ‘state monopoly capitalism’. It was a very centralised form of capitalism in which
markets are dominated by a few large firms . . . state action is the only
thing that stands between a firm and bankruptcy . . . [and] decisions about
the production and allocation of resources are effectively made by a small
number of people at the top of the world’s largest corporations.
( Blakeley 2020 , 32)
Such capitalism was extended through ‘the long arm of the imperial creditor’ also
to peripheral states ‘subject to the discipline of capital’ ( Blakeley 2020 , 52–3). In
this context, admonished Blakeley, traditional socialist agitation against cuts in government spending and for more government intervention ‘will ring hollow in the
war economy created by the pandemic’ and ‘we must concern ourselves with how
state power is being used—and who is wielding it’ ( Blakeley 2020 , 35). The only
way to ‘wrest control back’ from these elites is
a radical democratization of national and international economic and
political institutions, giving workers, consumers and communities a say
in decision-making within public owned companies, central banks and
22 Introduction
throughout local government and the central state—and in giving the
poorest states in the world a voice in international governance.
( Blakeley 2020 , xvii)
The apparent mountain of Blakeley’s critique produced the mouse of ‘radical democratization’ to give people and the poorest nations ‘a voice’ in decision
making. For Blakeley, socialism is associated with outdated demands while capitalism only needs radical democratisation. China is not discussed and imperialism is taken as a given.
None of these analyses recognised that the pandemic had made transforming
capitalism into socialism (rather than just reforming it or doing it differently or
radically democratising it) urgent. Nor did they recognise that attempts to do
this may differ in detail from previous efforts to build socialism but not in their
broad thrust and had to be organised in solidarity with them, however critical.
Without recognising these things, even the best left-leaning analyses can, at
most, serve as the mood music to the tempo of which the neoliberal political
establishment will patching up the collapsing, systematically crisis-prone neoliberal, financialised capitalism for further disastrous decades. As Western governments swept the pandemic under the carpet of their hostilities against Russia
and, through it, against the alternative pole of world economies open to socialist
China, even questions of reform were swept off the table.
What the current crisis requires is a far more radical analysis of capitalism and
its trajectory, one that Marxism can supply but only after decades of misinterpretation are removed from it, and its historical understanding of capitalism and
relation to socialism re-established. This is what the book seeks to do.
Outline of the book
The next chapter argues that Marx and Engels’s original understanding of capitalism as contradictory value production—of how it emerged and how its transition to the monopoly phase was ripening it for socialism—was historical in a dual
sense. Capitalism was, of course, a historically specific form of social production.
However, being contradictory, it was also historical in a second sense: its own
history was driven forward, and its geography outwards as imperialism, by its
many contradictions in processes managed by states. This was the understanding,
of capitalism’s political and geopolitical economy, that was eclipsed by the rise of
a Marxist economics.
Marxist economics was the result of the failure to contest neoclassical economics, which emerged in the late nineteenth century, and was methodologically and theoretically antithetical to Marxism, designed to undermine it and its
antecedent, classical political economy. Instead of contesting it, most Marxists
sought to reconcile it with Marxism. Though they criticised many aspects of
the new discipline, they accepted its fundamental wager: that capitalism had a
self-regulating ‘economy’ separate from other social realms. Neither contradictory nor reliant on other social realms to cope with its contradictions, it needed
Introduction 23
neither state management nor imperialism. In reality, as the chapter argues, capitalism needed both and these needs have long propelled the unfolding of its
profoundly historical political and geopolitical economy. The chapter ends with
a systematic discussion of the myriad contradictions of capitalism arising in two
forms along the two principal axes of value production, class struggle and competition, not only in the core realms of value production, production and realisation, but also beyond them in the various realms of society—money, finance, the
natural environment, the state and the international—that capitalism transforms
by putting contradictory demands on them. The last two sets of contradictions,
arising from the realms of the state and the international, are left for the next
chapter to form the theoretical framework for the discussion of the historical
evolution of capitalism’s political and geopolitical economy.
After that discussion, which emphasises the limits of capitalist states’ abilities
to manage contradictions and crises, and the dialectic of uneven and combined
development capitalism sets off internationally, Chapter 3 goes on to outline
the main lines of capitalism’s evolution relevant to our argument, including its
early entwinement with socialism. It covers the period from the mid-nineteenth
century until the end of the post-war Long Boom. Early in that evolution, the
historical transition to monopoly capitalism also proved a geographical one as the
more advanced forms of capitalism emerged not in Britain, the original industrial
capitalist country, but in her industrial challengers, chiefly Germany, the United
States and Japan. As productive power migrated elsewhere, Britain reacted not
by advancing hers in ways they had. Instead, she leaned more heavily on her
empire to compensate for her decreasing competitiveness and to provide the
surpluses that formed the foundation of her commercial and financial supremacy
and of the gold-sterling standard. In doing so, Britain also prolonged the life
of the archaic form of finance that had elsewhere been overtaken by forms of
finance better able to facilitate the expansion of capitalist accumulation in the
monopoly era of immense capital outlays.
Indeed, industrial and imperial competition of the now pluripolar world was
challenging Britain’s preeminent world role already in the early twentieth century, and US ruling circles had begun nursing the ambition to displace sterling
with the dollar, when that competition erupted into the First World War. It set
off the Thirty Years’ Crisis of 1914–45, a veritable international civil war encompassing two world wars and the Great Depression. A crisis of both capitalism
and imperialism, it released immense popular energies, socialist and nationalist,
which transformed the world. Although the world did not turn to socialism,
as many astute observers expected, it certainly took a marked turn to the left
with socialistic reforms in the capitalist world that enabled capitalism’s post-war
Long Boom, Communist party ruled societies building socialism from Prague to
Pyongyang and newly independent Third World countries embarked on autonomous national development, often at least avowedly socialist.
Though the United States styled itself the leader of the capitalist part of this
world, its power was constrained. It had, for instance, to tolerate nearly worldwide economic interventionism and promise to keep the dollar convertible
24 Introduction
into gold even though it succeeded in thwarting alternatives to it at Bretton
Woods.
Notwithstanding the socialistic turn taken by the major capitalist countries,
their underlying character remained capitalist and the inevitable crisis—one involving constrained demand and falling profitability leading to low investment—arrived
in the 1970s as productive capacity expanded, particularly in the recovering economies, faster than demand. As these economies took market shares from the United
States and the United Kingdom, and demanded gold instead of the devalued dollars
the United States issued to cover its current account deficits, the dollar was put on
the rocky road to the end of convertibility in 1971.
The ‘Second Slump’ of the 1970s led to much contestation and placed the
capitalist world before a choice: deepen that socialistic reform to continue and
improve on the broad-based growth of the previous decades or roll back the
reform and set capital free of the regulation and social obligations placed on it
after the Second World War on the flimsy grounds that they had led to the crisis
and that removing them would set capitalism free to create growth and prosperity. Since the former option would have taken the capitalist world even closer
to socialism, the latter option was the only one if capitalism was to survive.
Thanks to the intellectual and political weakness of the left, and the availability
of a virulently free market version of neoclassical economics kept alive by small
bands of true believers, the capitalist world, led by the United States and the
United Kingdom, took the latter, intellectually vacuous, option, now labelled
neoliberalism. It could not end the Slump (chiefly because capitalism had long
ago ceased to be the competitive capitalism of the neoliberal imagination and
entered its monopoly phase) and did not, prolonging it into the still-unended
Long Downturn instead. That is the subject of Chapter 4.
Rather than resolving the problems of profitability and demand that had
led to the crisis, neoliberalism exacerbated them. It provided capital the easy
choices of financial investment and state-sponsored opportunities for risk-free
profits absolving it from the need to invest and exacerbating the demand problem by increasing inequality and maldistributing income. At the same time,
even as the fullest exercise of imperial power—which imposed economic retardation on much of the developing world in the 1980s and 1990s—could not
prevent additions to capacity abroad. The greatest of them was, of course, in
China, and the neoliberal era witnessed the shift in the centre of gravity of the
world economy away from the major, chiefly Western, capitalist countries, and
towards China.
It was probably fitting that the turn to neoliberalism was led by the United
Kingdom, losing competitiveness for well over a century by the 1980s, and the
United States, which had also been losing competitiveness since the 1950s. Other
major capitalist economies, particularly the industrial powerhouses of Germany
and Japan, applied the policy prescription less fully or enthusiastically not least
because they sought to preserve their productive advantages and, particularly as
the United States began deregulating its financial sector, effectively transforming
Introduction 25
it into something resembling the United Kingdom’s archaic predatory and speculative financial system to give the dollar a new financial foundation, contrasts
between them and the more productive and industrial capitalisms, particularly
Germany and Japan, re-emerged.
In the leading neoliberal economies, neither growth nor profitability recovered and, while production languished, finance grew meteorically, drawing
investment away from production into speculation and serving as the basis of
the dollar creditocracy that now supported the dollar’s world role by attracting
funds into dollar-denominated financial activity and asset bubbles, thus counteracting the downward pressure on the dollar created by US deficits. Not only
did their inevitable crash make more and more countries’ financial regulators
wary of the system, supported by the Federal Reserve, its deregulation and its
support for asset markets, which became systematic by the 2000s, over time,
these asset bubbles or financialisations became the sole motors of economic
growth.
The parlous condition in which neoliberalism left the major capitalist economies and their public health system, especially in the two neoliberal leaders, the
United States and the United Kingdom, set the stage for their failures in the face of
the pandemic, failures that formed such a contrast with the successes of China and
other socialist economies. They began with the choice of strategy. Discarding the
murderous strategy of ‘herd immunity’, the United States and the United Kingdom
settled for the only slightly less murderous one of ‘flattening the curve’ so as to not
overwhelm weakened public health systems. Even this far-from-effective strategy
was further compromised by the decision to balance the saving of lives with ‘saving livelihoods’, essentially saving what they could of the neoliberal financialised
economy, particularly its financialised and corporate commanding heights. This
doubly compromised strategy inevitably led to heavy losses of both lives and livelihoods because the unsuppressed virus returned in waves, requiring economically
devastating lockdowns and restrictions to be imposed repeatedly, exposing shocking levels of fragility and inequality. Meanwhile, China, focused on saving lives by
employing time-tested methods, saved its economy too.
The monetary and fiscal responses—the former now expanding the ‘monetary policy’ toolkit to include bailouts for the non-financial corporations whose
debt was critical to the asset base of the financial sector and the latter focused on
aiding corporations over people even under Biden with his ‘build back better’ campaign slogan—have only deepened the rut in which these neoliberal economies
have been for decades, with no signs of productive revival and even the return
of inflation, exacerbated by the war, to testify to their weakness and posing the
choice between allowing it to rip or engaging in recession- and financial crisisinducing monetary tightening that can only weaken the productive economy
further.
All this was already clear when the proxy war against Russia began in early
2022 and definitively buried hopes of ‘building back better’ that arose early in the
pandemic. It now appears as if, at best, those hopes and discourses will only grace
26 Introduction
moves to engineer a shift to a new phase of neoliberalism. What it might be is
the subject of Chapter 6 . It tackles debates over whether the fiscal and monetary
policy responses heralded the end of neoliberalism and argues that, while there is
no evidence that neoliberalism’s essence—not competitive markets but the preservation of the power of capital, in our time big corporate, financialised capital—has
changed, what we are witnessing efforts to shift to a new phase of neoliberalism.
There have been previous such shifts, about one a decade. There were early signs
that it could take a ‘pseudo-civic’ form, involving the state being the customer-inchief for corporate capital producing allegedly ‘essential’ goods and services allegedly ‘efficiently’ for the state to provide to citizens free or very cheap. There is
no doubt that powerful capitalist forces, such as the ubiquitous Bill Gates, have
precisely such a scenario in mind. What is not clear is whether it will triumph.
The opposition to this form of neoliberal capitalism, the option favoured by the
neoliberal establishment backed by ‘house-trained’ capitalists that have come to
dominate all established parties, comes not from any left force, which was on the
intellectual backfoot throughout the pandemic and has been pushed back further by
the war, but from a new breed of ‘warlord’ or ‘lumpen’ capitalists bankrolling political forces even further to the right, forces that Trump and Johnson have brought to
prominence. They are quite capable of tilting the political balance in favour of an
even more authoritarian scenario than pseudo-civic neoliberalism. The likelihood
is underlined by the alliance between the far-right politics of Trump and Johnson
with fascistic mobs domestically, by their ability to pull the establishment towards
their politics, as Biden’s replication of so many aspects of Trump’s politics shows,
and by neoliberal financialised capitalisms’ alliance with openly neo-Nazi forces in
Ukraine, complete with media and scholarly discourses whitewashing them as mere
nationalists and dangerously revising twentieth century history.
While the future of neoliberal capitalism hangs in this balance between an
establishment pseudo-civic neoliberalism and an insurgent hard right domestically,
internationally, it hangs in the balance of power between the surprisingly small
capitalist world revealed by the proxy war on Russia and the rest of the world to
whom socialist China increasingly provides leadership. Chapter 7deals with how
and why the proxy war against Russia and the New Cold War on China can be
expected to tip the balance further against capitalism. As the latest in a long line
of US wars waged for its impossible imperial project and, by the new century, in
increasingly desperate attempts to compel militarily the dominance it has failed to
secure economically, the war against Russia is not just failing but proving counterproductive vis-à-vis its principal goals. It is not destroying but strengthening the
Russian economy and its ties with a stable and growing China while leading to
intolerable inflation in the major capitalist economies. It is not demonstrating the
power of the dollar creditocracy but undermining its already challenged structures
further. It is not defeating Russia militarily but ensuring the dismemberment of
Ukraine. It is not strengthening its alliances but, by putting far too much strain
on them, it is testing them to breaking point. While the world watches its shabby
treatment of Ukraine, the US-led West can only lose credibility in the rest of the
Introduction 27
world. As neoliberal failures, domestically against the pandemic and internationally in the war, mount, socialist China’s economic successes and, very likely, Russia’s economic resilience and military successes can only accelerate the shift of the
world’s economic centre of gravity from the West towards China and from capitalism to socialism.
As it does so, the conduct of the left in the homelands of capitalism will be
critical and the conclusion addresses that matter. It argues that the weakness of left
forces there was revealed by the timidity of the major proposals for social change
that have been produced in the crisis set off by the pandemic, whether it was the
‘mission economy’ of ‘doing capitalism differently, or modern monetary theory or
universal basic income. Having exposed their timidity, and their likely conscription
to the project of effecting transition to a new phase of neoliberalism, the conclusion
goes on to outline the political trajectory that has brought the Western left to this
point, that of ever greater compromises with capitalism, including neoliberal capitalism, along paths traced by the original compromise with neoclassical economics.
Sociologically, that trajectory is also marked by the takeover of the major parties,
including the historic parties of the left, by a professional managerial class converted
to neoliberalism where their counterparts in earlier eras had been to socialism and
Marxism. The result has been a left politics that, regards capitalism as the pinnacle
of productive success against the arguments of Marxism and the evidence of history,
attributes the prosperity of the major capitalist powers to capitalism’s productive
vigour, not their imperialism, and refuses to contemplate how to organise production in socialist societies and how to do so against the inevitable opposition of imperialism’s remaining bastions. Refusing both socialist planning and party organisation, this left is neither capable of leading a truly socialist politics in the homelands of imperialism nor building alliances with actually existing socialisms that are so necessary to advancing the class and national forces building socialism in our time.
However, like all crises of capitalism, this one too is throwing up new forces
and mobilisations which are quite capable of shedding long histories and taking
new directions. If this work contributes to that, in however small a part, I will
have achieved my purpose.