Stagflation: Stagnation, Inflation, and Beyond

Since my prediction in April of 2007 of an impending economic crash, I've vowed not to risk my unblemished record with any further predictions. But a simple thing that I learned from the run-up to that catastrophe was when the “little people” -- the “every man and every-woman” -- found their way into stock market speculation, trouble was looming. Early in 2007, I recall acquaintances then announcing that they were day-traders, bragging that they were making more money buying and selling on their devices than from their regular job. 

The Wall Street Journal headlined in early October that More Working-Class Americans Than Ever Are in the Stock Market. “Among Americans with incomes between $30,000 and $80,000, 54% now have taxable investment accounts. Half of these investments have entered the market in the last five years according to…Commonwealth and the BlackRock Foundation.” 

A red flag.

And also, I learned that when the investment commentariat-- not the media cheerleaders-- sound the alarm, Marxists should listen. It’s a curious thing that academic Marxist economists, who frequently claim to foresee future crises in broad terms of overproduction and rate of profit, seldom cite the views of those solely driven by money-making realities. The Wall Street Journal, hedge fund managers, investor consultants, and others of the pursuing-alpha herd are good sources of alarm for market volatility as opposed to the capitalism-boosters of The New York Times and The Washington Post.

When a few weeks pass with the front page of The Wall Street Journal warning Credit Markets Are Hot, But Froth Is Worry and OpenAI’s For-Profit Restructuring Draws Pushback, Rattling Executives and Persistent Inflation, Soft Jobs Data Pull Fed in Two Directions and Shutdown Starting To Exact Its Toll on Business and Volatility Returns To Haunt Stock Market, it might be time to sit up and take notice.

When financial sites like QTR’s Fringe Finance-- not one to mince words-- announces Sh*t is Breaking… And it’s Going To Get Worse or when Reuters Morning Bid coins the jingle Bubble, bubble toil and trouble or when Wolf Street raises the alarm that Corporate Profits in Nonfinancial Industries Plunge by Most Ever in $, amid Massive Downward Revisions, it might be just the moment to question the health of the US economy.

More red flags.

The truth is that the US economy is strapped with two intractable, life-sucking issues.

First, the post-2007-2009 economic crisis has never been resolved. The US has foisted the damage onto its partners, subsidized sick and floundering corporations, run up enormous debts through monetary pump-priming schemes, fostered new armament production through escalating global confrontations, and sold investors on shaky, over-hyped “innovations.” That same concerted effort to overcome the deflationary tendency spawned by the financial collapse overshot the mark, generating a powerful inflationary trend. 

As I’ve argued emphatically since 2021-- contrary to the punditry-- inflation is rarely, if ever, a momentary, episodic development. It does not go away with policy tinkering or rebalancing. Once prices begin to rise, businesses and corporations try to catch up or get ahead. The floodgates of profit-taking and profit-preservation will not be easily closed. For those who fashionably love to borrow Marx’s concept of commodity fetishism, the conventional thinking on inflation fetishizes price rises, hiding the fact that inflation is the result of human decisions and human (capitalist) interests. And when capitalists see an opportunity to raise prices, they seize it.

Compounding the last four years of persistent inflation is stagnation in the non-financial economy. Economic growth-- apart from the stock market, the pocketbooks of the very rich, and the bloated military budget-- is slow and slowing. In November of 2021, I reminded readers of the dangerous return of 1970s “stagflation” in an article aptly entitled When Have We Seen This Before?. Of course, the dilemma is that government efforts to invigorate the stalling economy will only further increase inflation.

Second, the economy is currently in the hands of a helmsman without a compass. President Trump’s economic policies are decidedly a departure from the conventional reliance on the Federal Reserve as a somewhat independent arbiter and navigator of economic policy, from the reliance on and guidance from Bureau of Labor Statistics and Commerce Department data, from some self-preserving restraint of corporate and financial excess, and from muting obscenely deep and unrestrained graft and corruption. Trumpism is elite enrichment on steroids, the public be damned. Reportedly, Communist Party of China Chairman Xi believes that Trump is not ideological, but “transactional.” That would well summarize his economic program.

Whether Trump’s approach is politically sustainable is one question. Whether it will add confusion and misdirection to escaping stagflation is not in question. It will make things worse.

What are the markers, suggesting economic hardship and a rocky road ahead?

• Inflation shows no sign of a letup, still well above the consensus goal. While Trump has “declared” it defeated, consumers are even more alarmed than the numbers suggest, with grocery store prices a particularly sensitive arena for shoppers. The full weight of Trump’s tariffs has yet to spread through the economy, promising even further price elevation.

• Hiring is falling off; businesses are hiring fewer people. Though limited hiring has not yet resulted in a dramatic change in unemployment, it foretells an increase in those jobless.

• Real average hourly earnings growth is tepid, growing .7% from August 2024 to August 2025. Median household incomes remained largely unchanged last year, adjusted for inflation. When higher incomes are extracted, the numbers for most households are in decline.

• Outlandish financial schemes are back and collapsing, especially around the used-car market. As in 2007-2009, irrational, super-exploitive lending patterns have generated unserviceable debt with lower-income consumers. Car-loan delinquencies have reached 5.1%, a level approaching that of the earlier financial crisis.

• While stocks appear to be booming, their price-to-earnings ratio-- a traditional measure of overvaluation recently hit 22.5, one of the highest readings in the last forty years.

• Investor fear of market volatility is reflected in the great demand for the safety of gold, a commodity hitting its all-time high in price. Other signs of the turn toward safety are emerging. 

• The driver of stock-market growth is almost entirely artificial intelligence (AI) and its data centers. With immediate investment in AI estimated in hundreds of billions of dollars (as much as three-quarters of a trillion globally), little return on investment has materialized. OpenAI is expected to return only $13 billion this year. Morgan Stanley calculates that the entire industry only sold $45 billion in products last year. Many see a bubble much like the fiber-optic mania of 2000.

• Bank failures have prompted JP Morgan Chase’s top dog, Jamie Dimon, to quip “When you see one cockroach, there are probably more”.

• Private, direct credit-- a growing factor in finance-- has a default rate of over 8%, the highest ever.

• Class divisions are intensifying. Annual wage and salary growth for the bottom third of households through August of this year was lower than any year since 2016. At the same time, growth for the top third grew four times faster than that of the lower third. For the first time, consumer spending by the top 10% of earners was nearly half of total consumption.

• The Black unemployment rate went from 6.1% last August to 7.5% this August, a harbinger of employment trends: last hired, first fired.

• Recent college graduates are experiencing one of the highest unemployment rates of the last decade, another harbinger of a weak labor market.

• More children are claimed to suffer from some food inadequacy than at any time in nearly a decade; the US Department of Agriculture estimated the number at 13.8 million in its 2023 report. The Census Bureau similarly reports that nearly ten million children live in poverty, the most since 2018. The Trump Administration has halted the USDA survey of hunger in the US.

The high interest rates established to contain inflation are predictably slowing real, material economic activity and large consumer purchases for the majority. Four years of rising interest rates have made debt service a growing burden, as well as making the refinancing of debt costly. 

Economic royalty and their courtiers are publicly downplaying the growing inflation in a desperate effort to convince the Federal Reserve to lower interest rates and stimulate tepid economic activity. Should the Federal Reserve comply, inflation will undoubtedly accelerate to the great harm of most working people. Historically, stagflation ends with a deep recession, like the painful Reagan recession of 1981-1982. 

Many in ruling-class circles believe that a new wave of innovation will rescue the sluggish, fragile economy with the exploitation of Artificial Intelligence. They foresee a new age of high productivity and growth. 

However, research by JP Morgan Chase economists has failed to find a significant connection yet between the use of AI and industrial productivity. So far, it has boosted stock market values enormously, without showing a concurrent return on investment.

James Meek, writing in the October 9, 2025 issue of The London Review of Books, may well have captured where AI has taken us and how far it has to go:

Leaving aside the known problems…-- their massive energy use, their ability in malign human hands to create convincing fake versions of people and events, their exploitation without compensation of human creative work, their baffling promise to investors that they will make money by taking the jobs of the very people who are expected to subscribe to them, their acquired biases, their difficulty in telling the difference between finding things out and making things up, their de-intellectualizing of learning by doing students’ assignments for them, and their emerging tendency to reinforce whatever delusions or anxieties their mentally fragile users already carry-- leaving aside all this, the deep limitations of generative AI make it hard to see it as anything but a dead end if AGI is the goal.

Faith that AI is more than a possibly malign novelty is based on confidence that the tech oligarchs have a vision of our future that benefits us all.

Not likely.

Is economic reckoning on the horizon?

Greg Godels

zzsblogml@gmail.com

“Settling Accounts” on the Question of Imperialism

Writing in 1908-- six years before the first great inter-imperialist war and eight years before writing his landmark text on imperialism-- Lenin reminded us of the many ideological roadblocks that Marxism had to overcome before consolidating its position in the working-class movement.

First, Marx had to “settle accounts” with the Young Hegelians, then with Proudhonism, Bakuninism, and so on until scientific socialism became the dominant left factor in the workers’ movement in the late 1800s. 

Subsequently, the danger to ideological unity came from left and right-- largely right-- revisions of the revolutionary kernel that Marx and Engels had left us. “And the second half-century of the existence of Marxism began (in the nineties) with the struggle of a trend hostile to Marxism within Marxism itself.”

Today, all of those misguiding tendencies have become unsettled both outside and inside the Marxist movement. Ironically, as interest in Communism has become more acceptable with young people in reaction’s heartland-- the US-- confusion over once-settled matters grows more widely; the legacy of those hard-fought ideological struggles becomes lost to the dim past. 

It is a formidable task to rebuild the Marxist tradition that dominated the anti-capitalist workers’ movement in the twentieth century, but one necessitated by the inequality, the chaos, and the destruction wrought by unbridled capitalism and its champions.

Essential to that project is ideological clarity.

One critical issue facing the left today is the nature and behavior of contemporary capitalism on the international level-- what Lenin characterized as imperialism.

Over the recent period, I have offered several interventions on the question, primarily to shed light on the two most recent and dangerous wars-- the war in Ukraine and the war in Gaza. Understanding these wars is impossible without understanding imperialism today and understanding contemporary imperialism is not possible without subjecting that understanding to the practical test of explaining these two brutal wars.

My most recent intervention on this question has been challenged by Rainer Shea via Rainer’s Newsletter posted on Substack and X. His article, The KKE/Trotskyist effort to redefine imperialism, and how it undermines the global workers struggle, is largely a defensive rehash of the position taken by Carlos Garrido and addressed in my article. While it offers little new, it does provide an opportunity to clarify further.

Shea faults my article for failing “to find alleged examples of Russia or China engaging in imperialist actions.” But that is not what I promised to do, since I chose instead to clarify imperialism, to reject multipolarity as anti-imperialism, and to suggest that action in defense of Palestinians was a good litmus test of anti-imperialism.

I have consistently argued that imperialism is a system and capitalist-oriented nation-states participate in that system in various ways, as perpetrators, victims, and many times, both. What fundamentally determines imperialism is the maturation of capitalism into monopoly capitalism, along with the merging of bank capital with industrial capital. Marxists like Eugen Varga in the Soviet Union elaborated on these developments in the 1920s and 1930s. US Marxists like Anna Rochester and Victor Perlo carefully and thoroughly tracked the merging of industrial and bank capital through intermarriage, membership on interlocking boards of directors, stock purchases, mergers, etc. They tracked the various groups in the US organized around affinitive financial institutions, industries, and monopolies. 

The hyperaccumulation of capital generated by both industrial and financial monopoly corporations necessitates the export of capital, as well as risky financial schemes that promise new investment horizons or, almost inevitably, great crashes. 

The agents of this process are predatory monopoly corporations-- both industrial and financial-- and their action inevitably leads to spheres of interest (what Lenin calls “the division of the world among the international trusts”). It is the most powerful nation states that enforce this division of the entire world to the advantage of the favored monopoly corporations through occupation, force, threat, or other schemes.

This, in essence, is Lenin’s theory of imperialism. It is an explanation of how a global capitalist system operates under specific, evolving conditions. It is not a criterion for which nation-state is or is not imperialist or anti-imperialist. Imperialism is capitalism beyond its infancy operating on the international stage and not merely a club of exclusive members. That is why today, as in Lenin’s time, it will not disappear as long as capitalism exists. 

Lenin can shed further light on the flawed “new imperialism” embraced by Shea and Garrido. Writing late in 1916 in Imperialism and the Split in Socialism, Lenin scorns Kautsky’s claim that, with an anticipated weakened England (the overwhelmingly dominant global capitalist power of the time, like the US today), ‘there is nothing to fight about’.

On the contrary, not only have the capitalists something to fight about now, but they cannot help fighting if they want to preserve capitalism, for without a forcible redivision of colonies the new imperialist countries cannot obtain the privileges enjoyed by the older (and weaker) imperialist powers. [Lenin’s emphasis]

Lenin was right and Kautsky was wrong. After World War I, England continued to descend as the dominant power in the imperialist system, to be supplanted by the US within decades. And the US behaved with an even more overbearing global swagger than its predecessor.

Is there any compelling reason-- contra Lenin--- to believe that “In this era, one of our foremost missions is to defeat U.S. dominance in particular, which would thereby cause the imperial system as a whole to unravel” [my emphasis], as Shea contends? Like Kautsky, Shea believes that with the US knocked off the system’s pedestal, there would be nothing to fight about…

Our best efforts to defeat imperialism is not to applaud rivals to US domination, but to fight capitalism at home, the engine of both US domination abroad and the imperialist system. 

Both Garrido and Shea-- in their determination to cast Russia and the PRC as bulwarks against imperialism-- distract from the fight against capitalism. While we all --that is, all peace-loving people-- must stand against US aggression against Russia, the PRC, or any other country; we should not confuse that stance with the struggle against imperialism which is, in its essence, a fight against capitalism.

For those of us who profess Marxism, socialism, or Communism, nothing is gained by detaching imperialism from capitalism; nothing is gained by imagining that there can be a capitalist world without imperialism, if only the US were brought to its knees. 

Exploitation of labor and the appropriation of profit are still the engine of the capitalist mode of production, including in its current stage: imperialism. We are not, as Garrido contends, in a new stage, with imperialism based upon “debt and interest.” The workers in the so-called “Global South” are primarily exploited by their bourgeoisie and/or multi-national corporations (Lenin’s cartels), not by banks issuing credit cards or mortgages or by greedy insurance companies. The national debt and costly interest payments that plague less developed nations are akin to the personal debt of workers insofar as their subjugation will not be resolved by reforming banks or international institutions. The idea that debt, onerous interest payments, or labor exploitation will disappear under any restructuring of the global capitalist order is naïve, at best. Does anyone believe that debt, interest, or exploitation would dissolve if banks were reformed on the national level? If Goldman Sachs were dissolved?

It was a dream of post-World War II social democrats and many “popular-fronters” to construct a global trade architecture that would be “fair” to large and small, powerful and weak. They imagined institutions that would guarantee a fair playing field, while retaining capitalist exchange relations. Of course, those institutions have failed as they did with the earlier post-World War I project, the League of Nations. In both cases, the big and powerful came to dominate the institutions and continued to dominate the small and the weak. Why would anyone-- including Garrido-- expect a different result if the US would vacate its current position of dominance? Does history teach us nothing? 

Garrido has fallen under the sway of bourgeois economists like Michael Hudson, who dream of a debt jubilee under existing national and international conditions, thought to be attainable with the dethroning of the US as imperialism’s hegemon. Such memories of an ancient practice are distractions from today’s most urgent struggles.

It would be unconscionable to leave this question without noting Shea’s gratuitous slander of the Greek Communist Party (KKE). Shea’s identification of KKE with Trotskyism shows that he has little understanding of either. 

While the KKE is certainly more than capable of defending its position on issues that are critical for the left without my help, I must remind tweet-Communists of the long, principled, and illustrious history of Greek Communism, the Party’s role in defeating German, Italian, and Greek fascism, its sacrifices for national liberation and socialism, its ideological steadfastness, and-- most recently-- its determined effort to build Communist unity.

One can be critical of KKE without associating it with Trotskyism, without resorting to an anti-Communist slur. It diminishes the discussion and diminishes a participant with little or no experience or knowledge of the Communist movement.

Greg Godels

zzsblogml@gmail.com  

Is This a Horst Wessel Moment?

For several days, while Wessel lay critically wounded in a Berlin hospital, Goebbels issued daily health bulletins on his new hero. And since Ali Höhler belonged to a Communist street gang, Goebbels portrayed the gun battle as an infamous act of political terrorism. The Gauleiter wrote an emotional account of his visit to the hospital, and he quoted from the hero’s song: “Comrades shot dead by the Red front and Reaction march in spirit with our ranks!” When Horst Wessel finally died, Goebbels staged a tremendous funeral. “His song made him immortal,” Goebbels cried, and, echoing the line about the marching dead, he called out “Horst Wessel!” And the assembled Storm Troopers shouted: “Present!” Goebbels… said of the dead youth “...Come to me: I will redeem you.” Then everyone sang the “Horst Wessel Song,” which, after Goebbels had produced enough pamphlets and posters, was to become the Nazis’ official anthem. Before the Deluge, Otto Friedrich (1972)

The murder or assassination of Charlie Kirk has become an event threatening to radically reshape the political landscape, with the MAGA right exploiting Kirk’s violent death occurring at an outdoor event at a Utah university. 

Immediately after Kirk’s demise a storm of controversy arose over its meaning. For most US citizens, Kirk was not a well known figure. As with other instances of political violence, the fact that attacks are growing in frequency draws more concern, more discussion than an identification with the victim.

But with the elites of the right and their media servants, Kirk was a rising star, a charismatic youth leader poised for future greatness. He was credited with bringing young people into the MAGA movement, though polls still show young people leaning more and more left. With a dysfunctional Democratic Party, his role was to herd dissatisfaction rightward, especially with college students. His death has elevated him into a martyr of the MAGA cause. He has been canonized in ruling MAGA circles.

For their most prominent political foes-- the liberal elites and their covey of pundits-- Kirk was a dangerous character, especially on social and lifestyle conversations that obsess them. They recognize that he was good at selecting lightning rod issues that challenge liberals. He was not such an easy target with centrists as Trump, since Kirk offered a self-confident, reasonable style that separated him from Trump’s bombast and arrogance. 

While fear was central to his message, it was buffered by a nostalgia for an imagined earlier time when everyone got along, worshiped the same God, and basked in patriotic light. Kirk sought to hide the racism and sexism that flowed freely beneath the surface with denial and artfulness.

In short, Charlie Kirk was a MAGA con man, in a political universe filled with con artists and wannabee con artists.

In the aftermath, MAGA hucksters have manufactured a remarkable narrative that has elevated Kirk to a national status that he never earned; they have constructed an elaborate network of blame that links everything and every one who stood in opposition to MAGA to Kirk’s murder; and they have frightened easily frightened liberals into condoling Kirk’s death and attesting to his great “human” worth.

 But most disgustingly, MAGA shock troops established an atmosphere so thick with fear that virtually ANYONE can be banished from status, employment, or reputation who dares challenge the sainthood of Charlie Kirk.

This demonstrates to all the unbridled power and ruthlessness of the MAGA camp.

But there is another side to this story, a chapter of equal, perhaps, more significance.

That is the role of the institutional enablers. A cornerstone of liberal democratic theory is the structural guide rails of political life supposedly established by the constitution, the body of law, the court system, the security sectors, the regulatory agencies, the educational system, and-- perhaps most importantly-- the media. These rules and institutions are hailed as barriers to abuse, corruption, and anti-democratic acts; they are alleged guarantors of universal and absolute personal rights and protections. 

Their citation and their celebration are instilled early and often in the citizenry of Europe and North America. Citizens are told that living under the umbrella of these guarantees is what separates the civilized West, from the unfortunates in the rest of the world.

Curiously, they have always failed when they are most needed; they collapse before the weight of powerful forces-- the forces that they are meant to resist. The failure of the guard rails to protect outspoken or dissident voices from the wrath of university administrators, government bullies, anti-immigration thugs, or media executives at this moment is only the latest example of a long history of failure. The Alien and Sedition Acts of 1798, the systematic abridgement of the thirteenth and fourteenth Constitutional amendments after Reconstruction, the anti-Red repression after World Wars I and II are among a host of anti-democratic turning points that left the US democratic reputation tarnished and left an indelible stain on political life.

Those who speak most fervently about the virtues of our system, those who manage and govern the institutional guide rails are often the first to surrender to the challenges to free speech and open advocacy. The University presidents and administrators who turned campuses into bastions of thought conformity, the government bureaucrats who quietly watched their colleagues cast into unemployment, the union leaders who vigorously “regretted” the stripping of union rights from hundreds of thousands of government employees, and the employers-- from school boards to corporate media executives-- who fired employees who dared to speak against the ludicrous beatification of Charlie Kirk-- fall in line without a fight. 

One of the US’s better writers, Dalton Trumbo, writing in 1949, called the early anti-Red hysteria of the time “The Time of the Toad”. Trumbo-- himself a top Hollywood writer who was fired, jailed, and blacklisted for his Communist Party membership-- recalled a story by Emile Zola involving a man “inuring himself against  newspaper columns” by devouring a raw toad everyday “so he could face almost any newspaper with a tranquil stomach… and actually relish that which to healthy men not similarly immunized would be a lethal poison.”

  Trumbo and Zola were correct to see the news media and the commentariat as administering “a lethal poison”. Their thirst for sensationalism, scandal, and vulgarity played a significant role in pushing Trump onto the political stage. Their uncritical embrace of bipartisan, imperialist foreign policy accounts for widespread national disinterest in the US’s bloody hand. They have shown themselves dutiful puppets of wealth and power. And now the owners, editors, script writers, and faces of the media are enthusiastically bending a knee to MAGA’s assault on the little independence that they have retained. 

In early 1930 Germany, the Hitlerites sought to turn the death of a contemptible, minor SA leader into an affront to the entire German nation. Through Goebbels unprincipled, unscrupulous propaganda campaign, through the support of big business, military leaders, opportunist “mainstream” politicians, and a sensation-seeking media, they succeeded. 

The only barriers to their further success in 1930 stood a powerful labor movement, a dominant Social Democratic Party, and a growing, popular Communist Party. Nonetheless, in the September 1930 election the Nazi party became the second largest party, gaining 95 seats in the Reichstag.

What barriers do we have? 

Greg Godels

zzsblogml@gmail.com

Imperialism, Multipolarity, and Palestine

It is a continuing source of frustration that an important segment of the left holds the view that weakening the United States’ long-established grip on the top rungs of the hierarchical system of imperialism is-- in itself-- an attack on imperialism. 

Many of our friends, including those who claim to aim at a socialist future, mistakenly see an erosion in the US position as the imperialist system’s hegemon as necessarily a step guaranteeing a just future, lasting peace, or a step towards socialism.

While it is true that those fighting the most powerful nation-state in the imperialist system for sovereignty, for autonomy, for a path of their own choosing always deserve our enthusiastic and complete support, victory in that fight may or may not secure a better future for working people. They may, as happened so often in the anti-colonial struggles of the post-war period, find themselves cursed with a power-hungry, exploitative, undemocratic local ruling class continuing or expanding the oppression of the people, but maybe with a more familiar face.

Or they might suffer the replacement of a former, declining or defeated great power by another more powerful great power. Germany and Turkey, defeated in World War I, lost many of their colonies to the victors; after World War II, some of Japan’s colonies were recolonized, falling into the clutches of another superior power; and, of course, Vietnam defeated France, only to be oppressed into the US sphere of interest-- a result decisively overturned by heroic Vietnam.

To contend that the decline or fall of the US as the leading great power in the imperialist system could close the book on imperialism is to grossly misunderstand imperialism. Imperialism lingers as a stage of capitalism as long as monopoly capitalism exists.The ultimate battle against imperialism is the struggle against capitalism.

We must not confuse the participants in the global imperialist system with the system itself, any more than we should equate individual capitalist corporations with the capitalist system itself.

History offers no example of a global or semi-global power falling or removed from the heights of its domination leading to a period of world-wide peace and prosperity. Neither the fall of the Roman or the Eastern Roman Empire or the Holy Roman Empire ushered in such a period of harmony. Nor did the rise and fall of the Venetian Republic, the Dutch Republic, or the Portuguese or Spanish colonial empires of the mercantilist era. In Lenin’s time, the rivalries challenging Britain’s global dominance brought world war rather than peace. And its aftermath brought no harmony. Instead, capitalist rivalries with Germany and Japan generated even more devastating aggression and war. And with the dissolution of the once dominant British Empire after the war, the US assumed and brutally enforced its position at the top of the hierarchy of global powers.There is no reason to believe that matters will change with the US knocked off its reigning perch. Capitalism and its tendency toward war and misery persist.

Thus, history provides no evidence for the supplanting of a unipolar world with a sustainable multipolar capitalist world of mutual respect and harmony. Multipolarity alone, as a solution to the oppression of imperialism, is, in fact, never found in world history.

Of course it may be factually true that United States dominance of the world imperialist system may be on the wane. Certainly, the decisive defeat in Vietnam was an enormous setback to the US government’s ability to dictate to weaker states. Further the defeat in Afghanistan after a twenty year war shows a weakening. The defiance of the DPRK and Cuba’s resilience also show limitations to US imperialism today.

Further, the rise of Peoples’ China as an economic powerhouse and as a sophisticated military power is perceived by the US government as both an economic and military adversary, though there is no reason to believe that the PRC presents any greater threat to the imperialist system than does the Papal State. Both today express well-deserved outrage at the worst excesses of imperialism, but make little material contribution to its overthrow.

Marginalizing, weakening, or defanging the arch-imperialist power is to be welcomed, though the left should suffer no illusion that the action would be an end to imperialism, a decisive blow against the capitalist system, or of long-lasting benefit of working people.

A recent example of the multipolarity fallacy-- the romantic illusion that imperialism is only US imperialism-- is the many leftist reports on the early September meeting of the Shanghai Cooperation Organization (SCO) attended by President Xi, President Putin, Prime Minister Narendra Modi and other Eurasian leaders. Professor Michael Hudson enthused that:

The principles announced by China’s President Xi, Russian President Putin and other SCO members set the stage for spelling out in detail the principle of a new international economic order along the lines that were promised 80 years ago at the end of World War II but have been twisted beyond all recognition into what Asian and other Global Majority countries hope will have been just a long detour in history away from the basic rules of civilization and its international diplomacy, trade and finance.

Hudson foresees a new economic order fulfilling a promise made eighty years ago. But he doesn’t tell us how a new capitalist international order will be different from the earlier capitalist international order, apart from the idealistic words of its advocates. He doesn’t explain how the inter-imperialist rivalries associated with capitalist great powers are to be avoided. He fails to show how the competitive, cut-throat nature of capitalist social-relations can be somehow tamed. He builds his case around high-minded words uttered at a conference, as if those or similar words were not uttered eighty years ago at the Bretton Woods conference.

Much has been made of the warm announcement by Xi and Modi that they are “partners not rivals”. But as the insightful Yves Smith relays:

A new Indian Punchline article, India disavows ‘Tianjin spirit’, turns to EU, reviews the idea that India is jumping with both feet into the SCO-BRICS camp is overdone. Key section from that post: 

….no sooner than Modi returned to Delhi, External Affairs Minister S. Jaishankar had lined up the most hawkish anti-Russia gang of European politicians to consort with in an ostentatious display of distancing from the Russia-India-China troika.

To underscore the skepticism of the Indian Punchline article, Modi chose not to attend the virtual BRICS trade summit subsequently called by Brazilian President Lula da Silva.

In his place, minister Jaishankar chose the occasion to raise the issue of trade deficits with BRICS members, noting that they are responsible for India’s largest deficits and that India is expecting to secure a correction-- hardly a gesture of mutual confidence in India's BRICS brothers and sisters. It is more an example of geo-political bargaining.

Nor does Peoples’ China embrace the romantic idealism of our leftist friends”, as the following quote asserts:

“China is very cautious about working with these two countries [Russia and PDRK]. Unlike what is depicted in the West as them being allies, China is not in the same camp. Its view of warfare and security issues is very different from theirs,” said Tang Xiaoyang, chair of the department of international relations at Tsinghua University, pointing out that Beijing hasn’t fought a war for more than four decades. “What China wants is stability on its borders.”

One might conclude that the left’s hope in a BRICS led new, more just international order is little more than a chimera. BRICS appears to be, at best, an opportunistic economic alliance, with neither the political or military weight to press multipolarity on a unipolar world.

*****

There is. as well, a theoretical argument for a left investment in the idea of multipolarity as an answer to imperialism. It is an old argument. It was crafted by Karl Kautsky and advanced in an article entitled Ultra-imperialism and published in Die Neue Zeit in September, 1914, just a month after the beginning of World War I.

In short (I deal with the arguments more fully here, here, and here), Kautsky argued that the great powers would divide the world up among themselves and resolve to avoid further competition and rivalry. They would recognize the irrationality and counterproductiveness of aggression and war, opting for a harmonious imperialism that Kautsky called “ultra-imperialism”. He maintained that:

The frantic competition of giant firms, giant banks and multi-millionaires obliged the great financial groups, who were absorbing the small ones, to think up the notion of the cartel. In the same way, the result of the World War between the great imperialist powers may be a federation of the strongest, who renounce their arms race.

Similarly, today’s multipolaristas/ultra-imperialists envision a world in which a covey of powerful countries will expel the US from its leadership of the global capitalist system for its bad behavior, with its EU satrapy falling in line. In its place, they will create a new “harmonious”, “win-win” order that will eliminate the inequalities between the “global north” and the “global south”. The en-actors and enforcers of this new order will be a motley crew of class-divided, capitalist-oriented states led by an equally motley crew, including despots, theocrats, and populists. All but one of the BRICS+ espouse anything other than a firm allegiance to capitalism; most are hostile to any alternative social system like socialism.

Lenin, in a 1915 introduction to Bukharin’s Imperialism and World Revolution, mocked Kautsky’s argument and ideas like ultra-imperialism:

Reasoning theoretically and in the abstract, one may arrive at the conclusion reached by Kautsky… his open break with Marxism has led him, not to reject or forget politics, nor to skim over the numerous and varied political conflicts, convulsions and transformations that particularly characterise the imperialist epoch; nor to become an apologist of imperialism; but to dream about a "peaceful capitalism." "Peaceful" capitalism has been replaced by unpeaceful, militant, catastrophic imperialism… In this tendency to evade the imperialism that is here and to pass in dreams to an epoch of "ultra-imperialism," of which we do not even know whether it is realisable, there is not a grain of Marxism… For to-morrow we have Marxism on credit, Marxism as a promise, Marxism deferred. For to-day we have a petty-bourgeois opportunist theory -- and not only a theory -- of softening contradictions (quoted in my article cited above)

The key relevant thoughts here are “peaceful capitalism”, “Marxism on credit”, and “softening contradictions”. Lenin is shocked at Kautsky-- a self-styled Marxist-- even entertaining the notion of a peaceful capitalism, an idea that violates the very logic of capitalist social relations; it should be a wake-up call to multipolaristas.

“Marxism on credit” is a mockery of the notion that counting on some hoped for agreement between capitalist great powers to tame imperialism is as foolish as running your credit card to its limit. For multipolaristas, it is pushing the day of reckoning with capitalism off into the far, far distant future.

Likewise, Kautsky “softens” the contradiction between rival capitalist states by imagining an impossible agreement to guarantee “harmonious” relations, a proposition Lenin completely rejects. Concisely, Lenin sees Kautsky’s opportunism as a retreat from the socialist project. The same can be said for the multipolarity project.

Far too many on the left refuse to look at multipolarity through this lens of Lenin’s theory of imperialism, especially as expressed with considerable clarity in his 1916 pamphlet, Imperialism.

Regarding the promise of multipolarity, Lenin here offers a hypothetical scenario where imperialist powers do manage to cut up the world and arrive at an alliance dedicated to peace and mutual prosperity. Would that idealized multipolar system-- what Kautsky calls “ultra-imperialism”-- succeed in eliminating “friction, conflicts and struggle in all and every possible form”?

The question need only be stated clearly enough to make it impossible for any other reply to be given than that in the negative… Therefore in the realities of the capitalist system, and not in the banal philistine fantasies of English parsons [Hobson], or of the German “Marxist,” Kautsky, “inter-imperialist” or “ultra-imperialist” alliances, no matter what form they may assume, whether of one imperialist coalition against another, or of a general alliance embracing all the imperialist powers, are inevitably nothing more than a “truce” in periods between wars. Peaceful alliances prepare the ground for wars, and in their turn grow out of wars; the one is a condition for the other, giving rise to alternating forms of peaceful and non-peaceful struggle out of one and the same basis of imperialist connections and the relations between world economics and world politics. [Lenin’s emphasis]

Thus, while capitalism persists, Lenin makes the case for unabated intra-class struggle on the international level, struggles that manifest as inter-imperialist rivalry and war.

Of course it is possible to reject Lenin’s argument, even Lenin’s theory of imperialism. It is also possible to praise Lenin’s views as relevant for its time, but inapplicable today, in light of the many changes in global capitalism. That would be to say that the system of imperialism that Lenin set out to analyze no longer exists, replaced by a different system.

There is a precedent for correcting Lenin’s theory. Kwame Nkrumah, writing in 1965, showed that imperialism had largely abandoned the colonial project in favor of a more rational, efficient, but still brutally exploitative form of imperialism: neo-colonialism. His book, Neo-Colonialism: The Last Stage of Imperialism makes that case persuasively.

One cannot assume that Lenin’s is the final word on today’s imperialism.

And that is the tactic that Carlos Garrido takes in his recent essay, Why Russia and China are NOT Imperialist: A Marxist-Leninist Assessment of Imperialism’s Development Since 1917. Garrido ambitiously explores many subjects in this brief essay, including the errors of “Dogmatic Marxist-Leninists”, the place-- if any-- of Russia and the PRC in the imperialist system, Marxist methodology, the contemporary status of finance capital, Michael Hudson’s notion of super imperialism, the significance of Bretton Woods and the abandonment of the gold standard, as well as the relevance of Lenin’s theory of imperialism to today’s global economy.

Addressing all of these issues would take us far away from the current discussion, though they deserve further study.

To the point, he writes:

It appears to me that the imperialist stage Lenin correctly assessed in 1917 undergoes a partially qualitative development in the post-war years with the development of the Bretton Woods system. This does not make Lenin “wrong,” it simply means that his object of study – which he correctly assessed at his time of writing – has undertaken developments which force any person committed to the same Marxist worldview to correspondingly refine their understanding of imperialism. Bretton Woods transforms imperialism from an international to a global phenomenon, embodied no longer through imperialist great powers, but through global financial institutions (the IMF and the World Bank) controlled by the U.S. and structured with dollar hegemony at its core.

He adds that with Nixon’s move from the gold-standard, “imperialism becomes synonymous with U.S. unipolarity and hegemonism.”

This is wrong. As Garrido affirms, “Imperialism [in Lenin’s time] was not simply a political policy (as the Kautskyites held), but an integral development of the capitalist mode of life itself.” [my emphasis]

Likewise imperialism today is not a set of political policies, but an essential expression of contemporary capitalism.

Yet Garrido follows Kautsky in confusing today’s imperialism with a set of political policies: Bretton Woods and the US withdrawal from the gold- standard. The entire post-war trade and financial infrastructure was the result of policy decisions. They were shaped not by a “new” imperialism, but by the overwhelming economic power of the US after the war. As Garrido knows, that asymmetry is being challenged today, but it is a challenge to the policies or the power enjoyed by the US and not to the imperialist system.

The “transformation” that Garrido believes he sees is simply a reordering of the international system that existed before the war with New York now replacing London as the financial center of the capitalist universe. It is the replacement of the vast colonial world and the bloody rivalries and shifting alliances and hierarchies of the interwar world with the creation of a neo-colonial system dominated by the US and reinforced by its assumption of the role of guardian of capitalism in the Cold War. The monopoly capitalist base is qualitatively the same, but its superstructure changes with historical circumstances. The Bretton Woods system and the later discarding of the gold standard reflect those changing circumstances.

How does Garrido’s “new” imperialism function?

What matters is that capitalism has developed into a higher stage, that the imperialism Lenin wrote of is no longer the “latest” stage of capitalism, that it has given way – through its immanent dialectical development – to a new form marked by a deepening of its characteristic foundation in finance capital. We are finally in the era of capitalist-imperialism Marx predicted in Volume Three of Capital, where the dominant logic of accumulation has fully transformed from M-C-M’ to M-M’, that is, from productive capital to interest-bearing, parasitic finance capital.

Garrido’s reference to volume III of Capital would seem to be at odds with mine and others’ reading of that volume. In chapter 51, the last complete chapter, Marx, via Engels, brings matters back to the beginning, to commodity production. He dispels the view that there is any independent source of value in distribution-- in circulation, rent or “profit”. It is wage labor in commodity production that produces value in the capitalist mode of production. That is why Marx notes in Volume III that “The real science of modern economy only begins when the theoretical analysis passes from the process of circulation to the process of production.” (Vol. III, International Publishers, p.337).

Of course Marx acknowledges stock markets and would not be shocked by the financial sector's suite of exotic instruments like derivatives and swaps. Marx explains them under the rubric: "fictitious capital”. By “fictitious” Marx means forward-looking-- promissory notes against future value or “bets”. They circulate among capitalists and are acquired as contingent value. They become attractive in times of overaccumulation-- the super-concentration of capital in few hands-- when investment opportunities in the productive economy grow slim. And they disappear miraculously when the future that they depend upon does not materialize.

Garrido’s misunderstanding of the international role of finance capital leads him to make the claim that “...the lion's share of profits made by the imperialist system are accumulated through debt and interest.” At its peak before the great crash of 2007-2009, finance (broadly speaking, finance, insurance, real estate) accounted for maybe forty percent of US profits; today, with the NASDAQ techs, the percentage is likely less. But that is only US profits. With deindustrialization, industrial commodity production has shifted to the PRC, Indonesia, Vietnam, India, Brazil, Eastern Europe, and other low-wage areas and the US has become the center of world finance. If commodity production sneezes, the whole edifice of fictitious capital collapses, along with its fictitious profits.

As all three volumes of Capital explain in great detail, commodity production is the basis of the capitalist mode of production and wage-labor is the source of value, not the mystifying maneuvers of Wall Street grifters.

Garrido joins many leftist defenders of multipolarity in decoupling imperialism from the capitalist system, whether through revising the mechanism of exploitation, denying the logic of capitalist competition and rivalry, or redefining its characteristics. Garrido’s unique contribution to this maneuver is to locate the injustice of imperialism not in labor exploitation, but in “debt and interest”.

In the world of left multipolaristas, the real anti-imperialists are the BRICS states (for Garrido, Russia and the PRC). But for those of a lesser theoretical bent, for those reluctant to go into the weeds of theoretical debate, we have a handy litmus test: Palestine. If a genocidal assault on the Palestinian people by a greater-Israel theocratic state is the signal imperialist act of this moment, where are these anti-imperialists? Have they organized international opposition, stopped trade, imposed sanctions, withdrawn recognition or cooperation, sent volunteer fighters, or otherwise offered material resistance?

In the past, Chinese and Soviet material, physical aid benefited Vietnam fighting imperialism; the Soviets pushed to the brink of war to support Cuba against imperial threats in the early 1960s; the Cubans fought and died in Angola against imperialism and apartheid in the 1970s and 80s. Even the US joined the Soviet Union in thwarting British, French, and Israeli imperial designs on the Suez Canal in 1956.

Will today’s acclaimed “anti-imperialists” step up or is multipolarity all talk?

Greg Godels

zzsblogml@gmail.com

The Cold War and Anti-Zionism

Most if not all of the contradictions that are maturing today emerge from long ago events shaped by the US’s national religions of anti-Communism and racial supremacy. The Cold War and its deeply embedded assumptions account for a great share of the waste, irrationality, brutality, and chaos that we are living through today.

The fanatical consensus that the US was engaged in a life and death struggle with the specter of Communism provided a bulwark against any but the most insipid challenges to the reigning capitalist order.

Our spineless labor leaders-- today faced with Trump’s cancellation of union contracts across the Federal sector-- owe their impotence to the Cold War compact that defanged a promising, vibrant, militant union movement. Trading the purging of Communists, leftists, even international unions and locals, and the most ardent of fighters in return for long periods of labor peace and an uncontested slender piece of the economic pie, generations of labor union “managers” collaborated with both the boss and wild-eyed Cold Warriors. Their answer today to this existential threat to hundreds of thousands of workers stripped of their union rights? The AFL-CIO politely asks me to call my legislator: “Will you call your representative and urge them to sign the discharge petition and speak out in support of the Protect America’s Workforce Act (H.R. 2550) right now?” The idea of a general strike, a sit-down strike, a march on Washington, or other forms of mass resistance is beyond their imagination, a faint memory of a bygone era when the labor movement had a left.

It was the Cold War that smashed the popular front and the New Deal legacy in the US. Rabid anti-Communism, guilt by association, and callow opportunism derailed the 1948 Progressive Party, an attempt to rescue Roosevelt’s social democratic coalition. Roosevelt’s party-- the Democrats-- relied on a compromised coalition between social liberals and unreconstructed segregationists until the 1970s, a tenuous coalition only held together by a common battle against Communism. The Johnson era Great Society provided the last gift from the New Deal. The Democrats soon realized that they could not afford to conduct an anti-Communist crusade in Southeast Asia and deliver a social safety net to its people. They choose guns over butter.

Thanks to the Cold War, US citizens became inured to endless war and dangerous aliens under every bed-- Communists, Muslims, Foreigners, terrorists, and again-- today-- Russians and Chinese Communists! The once promised peace dividend from the end of the Cold War has been drowned by waves of new faux-threats manufactured to pose the same existential threat as the once feared Soviets and their allies.

The Cold War established the universal truth that defense of “liberty” and “our democracy” would require enormous sacrifice by all. Indeed, even “our democracy” might need to be sacrificed or closeted to protect the US from its imagined foes, a continuing fear that persists today in the forms of illegal immigrants and urban violators. As civil liberties decline, we can thank the Cold War for mass passivity and submissiveness in its face.

The broadly subscribed ideas of “the military-industrial complex” and “the deep state” owe their common usage to social structures that expanded dramatically in the Cold War.

Less well-known, perhaps, is the Cold War antecedents of the current weaponizing of anti-Zionism as antisemitism. Today, the genocide in Israel is understood by growing numbers as a Zionist project, a product of an ultra-nationalist, settler-colonial ideology. Since its origin in the late nineteenth century, Zionism has sought a homeland for Jews, scattered through a vast diaspora. For some, that homeland was envisioned aspirationally. Still others brought a democratic, egalitarian vision to the notion of Zion. But the dominant thread-- boosted by the maneuvers of the British Empire-- was the creation of an exclusive, theocratic state in Palestine.

Other efforts to create a Jewish homeland-- for example a Jewish Autonomous state in the Soviet Union-- were scorned by the Zionist leadership. It was to be Israel: installed shamefully by the victorious powers after World War II in a land already occupied by a nation long suffering under British domination. Over decades, Israeli leaders sought to displace more and more indigenous Palestinians to create a Greater Israel (from the river to the sea!). Any resistance to this displacement (what we now call ethnic cleansing) was met with the cry of “antisemitism!”.

In the mid-nineteen sixties, the Israelis, along with their powerful friends in the US, devised a devious, but ingenious plan to both populate Greater Israel and discredit and disrupt the Palestine Liberation Organization.That the US security apparatus was likely involved should come as no surprise. As Kit Klarenberg and Wyatt Reed uncovered recently, after scrutinizing a recent release of CIA files, the Agency’s Counter-Intelligence Division under James Jesus Angleton was deeply engaged with Israeli interests, Mossad, and “the thousands coming from the Soviet Union”.

Beginning in 1963 with the Cleveland Council on Soviet Anti-Semitism, a movement swept across the US to “Save Soviet Jewry”. In a few short, remarkable years, banners were hanging from every synagogue and a host of other buildings throughout the US. The media decried Soviet antisemitism, portraying the Soviet Union as a hotbed of Jew-hating. Politicians of both parties joined the crusade, calling for economic sanctions against the USSR, culminating eventually in the Jackson-Vanik amendment. Students were mobilized in a “human rights” campaign to condemn the Soviets.

As the chief international material and moral sponsor of Palestinian liberation-- arming and training the Palestine Liberation Organization-- the Soviet Union argued that its foreign policy rejected the Zionist project and aimed at defending the fate of an oppressed nation pushed off its land. The relentless propaganda campaign waged in the West sought to create the opposite impression-- that opposing the Zionist ideology was tantamount to antisemitism, a conflation that weighs heavily today.

The campaign furthered another goal: the wholesale exodus of privileged, educated Soviet Jewish citizens to Israel to help build Greater Israel. It became less of a campaign to attack alleged antisemitism in the USSR and more of a ruse to direct Soviet Jews to Israel.

Consequently, the main slogan of the movement became: Let My People Go!. That is, remove any emigration barriers that Soviet authorities might place in the way of a brain drain. At the time, Jews held seventeen-times more highly honored Ph.Ds as their percentage of the population. As quoted by William Mandel, Professor Zvi Gitelman of the University of Michigan wrote in his article The Jewish Question in the USSR since 1964 that Jews “play social, political, cultural, and economic roles greater than their numbers would indicate.” In fact, at the time of the “Save Soviet Jewry” campaign, Jewish cultural life was undergoing somewhat of a renaissance.

One rare voice in the US resisting the Cold War entangled stereotypes of Soviet Jewry (Congress appropriated $50 million in 1972 “to assist in the movement and resettlement of Soviet emigrants”-- code for stimulating immigration to Israel) was author William Mandel. A Jewish-American who was once the United Press International expert on the Soviet Union and a Hoover Institute fellow at Stanford, Mandel wrote two well-informed books that dealt extensively with Soviet nationalities with a strong focus on Soviet Jews: Russia Re-examined (1964) and Soviet, but not Russian (1985).

Mandel acknowledged that “The overwhelming majority of Soviet Jews, like the overwhelming majority of American Jews, have no desire whatever to leave their native land. Zionism cannot admit that, because it would undermine U.S. government economic and military aid as an ally against the USSR. Therefore it maintains an unending campaign against non-existent persecutions of Jews in the Soviet Union.”

Of course sane, informed voices like Mandel’s carried little weight against the media and the punditry’s relentless charge of Soviet antisemitism. Once again, hysteria, ignorance, and political calculation trumped the truth. The “Save Soviet Jewry” movement became a further example of how official anti-Communism turned the truth on its head.

Thus, it was the Cold War and its intrigues that brought the idea that anti-Zionism is antisemitism into the US mainstream and established it as an unassailable truth.

Overcoming these Cold War myths and indoctrinations remains one of the biggest obstacles to building a formidable left in the US.

Greg Godels
zzsblogml@gmail.com