Tuesday, May 13, 2025

BRICS nations and Israel: Hype, Hope and


Helplessness



May 13, 2025

Photograph Source: Bb3015 – CC BY-SA 4.0

Patrick Bond sat down with the Media Review Network (Pretoria) to offer insights into the reality behind the rhetoric on Israel. He explains the deep-seated links between the SA elite ruling class and corporate business and how this impacts on SA’s moral stance on Palestine. Prof. Bond also talks about the ecological links in the social justice movement and illuminates why we can no longer separate issues of economic inequality and ecological exploitation.

Mariam Jooma Çarikci: Welcome to the inaugural episode of Critical Currents, the official podcast of the Media Review Network, where analysis meets activism and narratives from the Global South rise to the forefront. I’m your host, Mariam Jooma Çarikci, and in this space we cut through propaganda, challenge dominant discourses, and spotlight stories too often sidelined by mainstream media. In each episode, we’ll be joined by thought leaders, activists, scholars, and journalists who bring clarity to the chaos and help us to connect the dots between geopolitics, media framing, and the lived lives of oppressed communities – from the war zone of Gaza to the boardrooms of BRICS, from Sudan’s shifting sands to South Africa’s policy contradictions. We unpack it all, critically and unapologetically. This is not just commentary; this is resistance through reason. Welcome to Critical Currents.

And today, our first guest – our inaugural guest for our podcast – is Professor Patrick Bond. Professor Bond is a distinguished political economist, public intellectual, and author, and is currently professor at the University of Johannesburg, Department of Sociology. Professor Bond has written extensively on global justice, financialization, climate debt, BRICS, and, of course, subimperialism – which is a topic we are quite interested in today. His seminal works include Elite Transition, Politics of Climate Justice, and BRICS: An Anti-capitalist Critique. He was also a former adviser to former President Mandela’s Reconstruction and Development Program. Professor Bond is known for his sharp critique of neoliberalism and elite state capture, particularly in post-apartheid South Africa. Welcome, Professor Bond. We’re honored to have you on the show.

Patrick Bond: Oh Mariam, thank you. Salam alaikum, and what a great honor. I mean, Media Review Network doing the podcast is a wonderful expansion. I always relied on the analysis, the articles, the letters to the editor – hey, you’ve spent decades keeping us informed. So thanks to the network.

Miriam: Thank you so much indeed. It’s been a long journey – it’s 30 years of the MRN – but we’ve been invigorated by intellectuals like yourself. So today, we’re digging into South Africa’s relations with Israel, the BRICS contradictions, and the role of elites in shaping foreign policy – and, more critically, the climate crisis. Let’s start with the subimperialism and Israel trade question. So, you’ve argued that BRICS states have often reinforced the global capitalist structure rather than resisting them. How do you see South Africa’s – what some would argue – rhetorical solidarity with Palestine squaring with its continued trade with Israel, and looking at the coal issue in particular?

Patrick: Well, thanks. Lots there. I mean, the general ideological problem is one we face all the time: it’s called ‘talk left, walk right.’ That is to say, it’s easy to have a rhetorical anti-Zionism and anti-genocide position, but then, when key people are profiting from it, you kind of wonder – well, how deep is this? Once you scratch the surface. Because the BRICS – all of them – will have some statement about a two-state solution, the need to have a ceasefire. They’ll certainly have rhetoric. And South Africa, to its credit, has gone in two directions: the International Court of Justice, with the International Criminal Court arrest warrant; but also that ICJ determination that there’s a genocide underway. And backing the ICC, is the ‘Hague Group.’

Secondly, that is not just to rely upon judges – at least one of whom, from Uganda, the deputy chair of the ICJ – is very pro-Zionist, so we’re not sure what will happen. And even if it does lead to a good ruling, we know that in Tel Aviv there are two words that they use to describe what happens, and those are: ‘Hague Shmague.’ In other words, they don’t care. So, the other process – the Hague Group – is to say, governments can come together against the United States’ prosecution and persecution of International Criminal Court, with its sanctions and the attempt to delegitimize the ICC, when it has an arrest warrant against Netanyahu and others.

Now, that becomes another point of hypocrisy, because it would be wonderful if that was the, let’s say, template for standing up to Trump. That is, you put a collective together, you have the moral high ground, you stand up for international values – especially against genocide. And then, in that Hague Group declaration, January 31 this year, you say: ‘We will not provide military fuel, and we will not facilitate military fuel.’ That would be wonderful. And if we could expand that spirit, now that the tariffs, now that the climate crisis, the public health, the humanitarian food aid – all of that – is now something I think the G20 here in Johannesburg in November will have to figure out: do we even want the United States in the G20?

But unfortunately, that strength is balanced by a weakness. And the weakness is profiteers. And there are profiteers across the BRICS. And South Africa’s profiteers include an arms merchant who’s a bastion of the Zionist establishment – Ivor Ichikowitz – and he’s had deals with Elbit, deals that supply fascistic governments in Latin America – Ecuador’s army – with not only military vehicles, but Elbit souping them up for communications. And that continues. He’s also – Ichikowitz – supplying the Israeli, well, the Jewish people’s spiritual support, which is tefillin, which is a leather strip that you bind around with a verse from the Torah in a small box on your head. That – that’s what this guy Ivor Ichikowitz, who is an arms merchant and an ANC member, and, as recently as mid-2023, the number one donor to the ANC, as the public records at least have shown. And that means, when the genocide began in October 2023, Ichikowitz was schizophrenic and split. And instead of still supporting the ANC, he has come out very strongly – especially in articles in 2024 and statements the whole time – against South Africa’s support for Palestine.

Now, that’s just one angle – the arms dealing. And then we have Rheinmetall, which is the German company that owns big chunks of Denel, South Africa’s state-owned arms company. Are weapons being made in South Africa – in Somerset West or in Centurion – are they going up to not only to Rheinmetall in Germany, but onward, including to Israel? It’s an open question. We’re not sure. We have a very ineffectual National Conventional Arms Control Committee meant to look this over – and they’re not doing well. There are a few other arms dealers that we’re curious about – the extent to which, certainly historically, Armscor and Israel, and indeed going back to the 1970s nuclear collaboration.

The other big problem, though, is coal – which is very open. Because we can track the coal-bearing ships that go from Richards Bay all the way up to Hadera port, and to some extent Ashdod. At Hadera, there is the Orot Rabin power station. At Ashdod, it’s the Rutenberg station. And those are supplying Israel with about 20% of its grid-based energy. And that’s a very important part of the supply that the Israel Defense Forces would use to prosecute that genocide or to maintain apartheid. And it would therefore be against the International Court of Justice ruling in July – that was actually codified by the United Nations General Assembly in September – that says: don’t do electricity supply or any other goods crucial for the apartheid, the land grabbing of the West Bank too, not just the genocide of Gaza.

So we’ve got a couple of, let’s say, screaming contradictions. And it’s even more embarrassing, I think, for South Africa, because President Ramaphosa used to be the main partner of the main company that sells coal to Israel – both from South Africa, but also from Colombia. And they’ve continued that, even into this year, in spite of the Colombian president telling them not to.

And that company – Glencore – is notorious for bribing African governments. They were not prosecuted for the activities in South Africa, but across the rest of Africa, the prosecutions, including in the US and Britain, have shown that this is a very corrupt company. And they have chosen – particularly because their predecessor, Xstrata, was doing deals with the African Rainbow Minerals chief executive, Patrice Motsepe, who happens to be President Ramaphosa’s brother-in-law.

Now we have found – and a protest in early April confirmed this – 23% of Glencore’s ownership is of the mines in question in Mpumalanga that get the coal out and get them coal over to Israel. That would be profits to Patrice Motsepe, we estimate, out of about a $5 million profit – that is the net income after the costs – for each of the 177,000 tons of coal that are put on the ship and shipped out to Israel, Patrice Motsepe makes about a million dollars. So these are the sorts of, let’s say, contradictions that just scream out, and that we hope more pressure will allow us to resolve – resolve in favor of Boycott, Divestment, and Sanctions of Israel.

Mariam: Wow. That’s – you know, that’s a lot to process. And it definitely raises the question about civil society. So what kind of leverage do we have? Is this about complete elite state capture, where we’ve now become almost enslaved to the political system without any avenue for protest that’s meaningful? Because protests have been going on. But, you know, what is the stumbling block?

Patrick: Yes, I mean, I think we are now looking at – if you’re a genuine anti-imperialist from civil and uncivil society – and you’re interested in Palestinian survival and solidarity, and you’re also interested in the climate catastrophe and interested in future generations’ welfare, which is something that I think obviously go together. We see activists in South Africa embody those in coming to protests against coal with both hats. That is, they don’t want to see coal as it’s combusted – a ton will create more than two tons of CO₂. And when that happens, the crisis, for example, in Palestine is not just the occupation, the genocide, the apartheid, but it’s also going to be a climate catastrophe.

In coming years and decades, we’re going to see much higher temperatures – to the point where it’s impossible to go outside. Also, more extreme weather events and the drying of soils, which I think the Israelis are now encountering, where they planted inappropriate pine trees instead of the local indigenous cedar. And that meant when fires have raged through parts of what had been Palestine – after the Nakba, 1948 – the Israelis planted pine trees, and now those are burning. That’s also because of a climate effect, we can safely say.

I mean, the scientific studies aren’t in yet. And I think if we can understand this Middle East site being, you know, where there’s so much oil and gas – gas offshore Gaza that the Israelis are already trying to figure out how to steal – and the CO₂, but also the methane that comes when you burn not just coal, but now you’re burning gas. And methane is 85 times more potent a greenhouse gas. That means that – what I can again safely predict is – we’re going to see countries like, not just Israel (which had been nearly entirely reliant on coal), shifting to gas because they have their own gas fields.

Likewise, South Africa seems to have gas fields. And the president’s spokesperson, speaking to The New York Times in February, offered those up to U.S. oil companies as a sort of peace deal with Donald Trump, because of the ideological hammering South Africa was getting from this neofascistic Trump regime. It’s very shocking to see The New York Times have this offering when we’ve had more than 100 protests on the beaches – the Indian Ocean and especially the Atlantic Ocean coastline – against offshore oil and gas drilling. And the courts are actually favorable to the activists, saying that companies like Shell, Total – you can’t go ahead. And I just fear that this is one of the issue areas that – if we are not linking Palestine and climate – we’re losing an enormous opportunity.

And one of the opportunities is to talk to others in civil society who are implicated. Let’s be frank. The main coal mining unions – there are three of them – are not yet on board. They will have good rhetoric against the genocide and against Zionism. But when you look at the National Union of Mineworkers, the Association of Mineworkers and Construction Union (AMCU), and the National Union of Metalworkers of South Africa (NUMSA), the latter, NUMSA, the biggest union, historically the most militant socialist union in solidarity with peoples under fire all over the world. But their own mineworkers, working for Glencore, have not stood up yet and said, ‘We’re going to leave that coal in the hole.’ And if it means our jobs are lost, then we also have another route, which is to go to the Just Energy Transition Partnership – which is over 150 billion rands, sitting in the presidency in Pretoria – precisely to help decarbonize. That is, to leave the coal in the hole.

Even South Africa’s Nationally Determined Contribution (NDC) – the offering that South Africa makes to the United Nations for climate control – even that document says we need to have non–fossil fuel development in Mpumalanga. The money is there. The political will isn’t – even in our own ranks – where this inability to link Palestine solidarity with being concerned about climate isn’t quite there yet.

Mariam: So Professor, you’ve definitely raised, you know, numerous issues that allow us to look at our democracy from a different perspective. Because to what extent have we – not just as you say with the rhetoric on Palestine, but also with our substantive concept of democracy – have we just allowed, you know, paper and legalese to define democracy? So I know you’ve written a lot about subimperialism, and particularly you’re critically – critical or post – about it in South Africa. If we could maybe just divert a bit and look at the idea of democracy: how would you characterize South Africa’s current position, and where do you think we need to be?

Patrick: Well, the phrase used by people like Barry Gills and Joel Rocamora and Walden Bello is ‘low-intensity democracy.’ But that’s not to say that in 1994, the victory of one person, one vote, in a unitary state – something that many Palestinians look to as a way to get around the apartheid character of Gaza and the West Bank’s geographical Bantustanization by Israel – and to have a unified project now, is for Palestinians to make that choice about a one-state solution. But certainly, we achieved that one person, one vote, when many thought it was impossible, given the adverse balance of forces. Imperialism loved the apartheid regime – until it was too late. And the apartheid collapsed partly due to internal, obviously political resistance – but also economic contradictions.

And I think if I see, then, the economic way out that the likes of Anglo American Corporation would choose – it was to go up to Zambia, to a game lodge, invited by the Zambian president at the time, Kenneth Kaunda. And this is in 1985. Here in Johannesburg, in August, P.W. Botha had created such incredible friction and volatility and crisis in the financial markets that the international banks pulled out. It was because P.W. Botha gave a speech – the Rubicon Speech. And you know, when I’ve been in Gaza and Ramallah giving talks about this, about the history of BDS – Boycott, Divestment, Sanctions – and showed a little film made by Connie Field about this: standing ovation. Not because of me, but because of this example. And the beauty of saying, through a nonviolent economic strategy that should complement all of our politics and cultural and all the other work we do – yes – that you can find things like the energy Achilles heel of Israel and begin to affect that.

We did that here, but in a way that the big business went to Zambia, met the African National Congress in exile, and began to do a deal that, as you say, left the political economic underpinning of apartheid – like migrant labor and extraction of minerals – kept that intact. The only thing that really has changed – but not to our benefit – is that there’s been some deracialization at the very top. You could think of an Irish coffee – well, maybe you don’t think of it, but you can – it’s a metaphor people have used to say: well, at the bottom of that cup is dark black coffee, and then there’s a layer of white cream, and then you sprinkle on some cinnamon or some chocolate. And that, in a way, is the metaphor as well of Zwelinzima Vavi of the South African Federation of Trade Unions. He puts it: that Irish coffee society is what we’ve been left with.

So that means that, digging deep into the soil, are exploited mineworkers. Marikana was a site where we understood very clearly that the co-owner of the mine, Cyril Ramaphosa, wasn’t the same Cyril who had organized the same mineworkers to fight for justice in the late ‘80s. And indeed, that change – the Black Diamonds emerging to take over coal. And it’s not just Ramaphosa with Shanduka Coal, allied with Glencore, Optimum Mine especially, or Patrice Motsepe, the brother-in-law of Ramaphosa and his African Rainbow Minerals, co-owner of the mines that send the coal to Israel. It’s also a few others that have, in a way, made our discussions about climate so difficult. Because their interests are to continue to dig out the coal and burn it.

The interests of your children, my children, and future generations would be: leave that coal in the hole. And let the next generations decide if they want it – not to burn, that would be crazy, because it creates CO₂ and climate catastrophes – but instead to use for plastics and synthetic materials, or pharmaceutical products, or lubricants, or tarmac, or all sorts of things that we use in daily life that depend on hydrocarbons. But right now, our generation is just burning them.

And I think it’s that inability of our new elite – they have tapped into an imperialist politics that’s both climate denialist (in the case of Donald Trump and the big project of Big Oil and, you know, Big Coal around the world) to avoid making the cuts in emissions. But secondly, it’s with the mainstream of the West – imperialist project of turning the climate catastrophe into a marketing opportunity. To privatize the air through carbon markets and emissions trading. And to deny that there’s any ‘polluter pays.’ That is what we would normally say. If I dump toxic waste on a neighbor, the neighbor says, ‘Well, you’re going to owe me a lot for that.’ And you would pay for, you know, ecological reparations.

But our government – and the West – have in common, and the BRICS do as well, the failure to, let’s say, acknowledge climate debt. To even admit that there was, not just from the U.S. – the main historic polluter – but from the main emitters now, which are, number two, China historically, and Russia, and India, and Brazil and South Africa, a little bit lower on the list. But to actually acknowledge. And I think that’s why the subimperial politics have come out – because there are so many self-interested factors.

A neoliberal financial elite. We have Standard Bank that funds projects all over Africa that promote, for example, in northern Mozambique, TotalEnergies’ extraction of gas against the wishes of local Islamic community – who’ve had an insurgency. And then we’ve seen them in Uganda and Tanzania with the East African Crude Oil Pipeline. And we’ve seen them here funding coal. So Standard is one target of combined forces of activists saying: we don’t want you to be promoting Glencore – as they have in the past – for its coal in South Africa. Nor do we want any coal or fossil fuels to be funded.

Those, to me, are the politics that get you around that problem: talk left, walk right. Where the government has a strong nationalist prestige of winning democracy, but then being co-opted by fossil capital, mining capital – which, frankly, loots the country. If you do a measure of the extraction of the minerals – which I do regularly and contest this with professionals and other scholars – you find that there’s more that’s taken out, for example, under this city, Johannesburg – half the world’s historic gold taken out – and then the reinvestment of the proceeds is inadequate to compensate for that loss of wealth. That is, there’s a net loss of our natural capital. Even when you add the produced capital – machinery, or the built environment – and our educational capital, our human capital, and our financial capital.

You put it all together and it’s less than what we’ve taken out. And that’s the case for all these minerals, including coal. And I hope that we can do those kinds of calculations and ask the likes of Patrice Motsepe and Glencore – this very, very corrupt company, whose number two listing is the Johannesburg Stock Exchange, number one is in London – and to ask them: ‘If you’re looting us, don’t we have a polluter pays responsibility to get reparations?’ I think the reparations we should be demanding from Glencore, Patrice Motsepe, and others who’ve profited from coal to Israel should somehow fund good work for Palestine, first and foremost. So I hope that’s one of the areas where we can say: reparations for the profits you’ve made. And we can count the profits because we know – we can track the ships that are taking them.

Mariam: Yes, certainly. So, of course, this extends to areas like the Congo, and then we talk about Mali. And we’ve seen interesting movements in West Africa with regard to Guinea, Mali, and Niger. But let’s go back to what you were saying now about offering, you know, the prestigious position of being a champion of the oppressed, but at the same time profiting from that. Let’s look at BRICS. So what does it say about BRICS? I mean, we’ve looked to BRICS – when I say ‘we,’ I mean the Global South – as somehow seeing BRICS as an alternative. In your view, where do they stand?

Patrick: Yeah, having studied this very closely – lots of books and articles, dozens and dozens – I certainly would say that the hype about BRICS, and hope for BRICS, leading to ultimately helplessness: from hype to hope to hopelessness, is fairly common once you realize what they’re doing. And it’s so tragic, because there has been hype about de-dollarization, about the abuse of the imperialist financial institutions – the IMF, the World Bank – imperialist trade, the World Trade Organization. And then, when you actually look at the way that the BRICS tap in.

Now, I could start obviously with Israel. Because Russia – as Vladimir Putin estimated – has 2 million Russian citizens that he’s responsible for who live in Israel. They’re some of the most right-wing, pro-genocidal, and IDF-active citizens of Israel. I think there are about 7.2 million Jewish Israelis, and of those, 2 million according to Putin – 1.3 million according to other sources – but you’d regularly find them, you know, as hostages, you find them in the IDF, you find them in the right-wing parties. And then you’ve got Russian coal going there.

Then we could go from Russia to Brazil. Brazil has Petrobras in league with Total to send oil to Israel – and they’re about 9% of the supplies from Brazil. And Brazil has also had a long-standing military relationship with Elbit Systems.

Then we could go to China, which is the biggest – and it’s so tragic that Yahya Sinwar of Hamas is known in his last minutes, his last seconds, because of a drone. And these drones, by and large, are coming from the consumer markets from state-owned companies in China that have been able to flood the world with drones. And Israel is one of the big buyers. And they worry that, okay, maybe there’s some software or there’s some problems. So, they deconstruct the drones, put them back together, and they send these drones in – for surveillance but also for actual attacks. Then you have about $20 billion a year of trade between China and Israel at peak. And the privatization of the Haifa Port and the Ashdod Port – privatization that’s both from the Chinese – a Shanghai state-owned company doing the Bayport, which is a major port for Haifa – and then an Indian company, Adani, which has got the other part of the Haifa Port. And the Indians are supplying lots of military, you know, supplies as well – and workers that have replaced Palestinians.

So then, I think those are the main five BRICS. And we look at ourselves in South Africa as the main supplier of coal – but also of raw diamonds. They come back sometimes processed. And grapes.

So these are the sorts of relationships that mean when you hear ‘two-state solution’ and you hear the calls for ceasefire – well, what pressure is being put on? Like Turkey – when the leader Erdoğan has said, ‘We’re not going to have trade’ – well, it turns out there are a lot of ways that the profiteers in Turkey can go ahead and get their activities continuing into Israel. And I fear that’s what the likes of Ivor Ichikowitz, with his – you admitted – tefillin supplies to the IDF, or deals with Elbit, or this coal supply, or the diamond dealers or the grape dealers… they’re all able to do without a second thought because we haven’t yet got the BDS movement to the point where we’ve embarrassed this government to stop it.

It would be easy to stop. The, you know, the Trade and Industry Minister, Parks Tau, said, ‘We can’t stop the coal trade because of the World Trade Organization non-discrimination clauses.’ But when you see what Donald Trump’s doing with trade, you can just say: forget it. The WTO doesn’t even really have an adjudication panel anymore, because the US sabotaged it. So I don’t think there’s any basis for South Africa – which has the ability to regulate dangerous exports – and the danger of coal going to Israel to fuel a genocide is so obvious. Parks Tau looks like one of those in this government who’s ready to bend over backwards to Donald Trump and do deals with Israel. And it’s, I think in his case, an ideological problem. He’s – you know, he’s drunk the Kool-Aid, as they say. They’ve taken over.

I think those other new BRICS – like, with the exception of Iran – all the others, even Indonesia, the newest one, which has the largest Muslim population – even they have deals. And their new leader had done some time in Jordan and had done some Israeli military deals.

But particularly the UAE and Egypt are very, very close allies. Also Ethiopia. And Ethiopia supplies soldiers into the IDF. And Egypt, of course, subject of a recent protest here at the Pretoria Embassy, because of their failure to open the Rafah border. But also, they generally support Israel when it comes to the big geopolitical arrangements. For example, when Israel and Iran were trading missiles – relatively non-fatal, but a show of force by both sides in 2024 – it was the UAE and Egypt, from the BRICS (Jordan as well), that helped Israel and the US to keep that Iron Dome going.

And so, when you look at all of this – and you look at some of the new BRICS coming in as well – I would say there’s, like, Nigeria. It’s also a partner in the BRICS. But it will also be subject to concern by environmentalists and by pro-Palestine activists in Nigeria – that this is also a major problem. Nigeria is one of the three major African oil suppliers to Israel.

And I hope that’s the basis for us continuing to network critics of the BRICS. Because I do think, by and large, when you look not just at Israel but the multilateral institutions – the World Bank, IMF, WTO – certainly the IMF: when they recapitalize, they need more money, they turn first to the BRICS. The BRICS get more shares in the IMF. By doing so, they push down other countries. Venezuela lost 41%. Even South Africa and Nigeria lost shares – when China, Brazil, India, and Russia – four of the five BRICS – got much greater shares of the IMF in 2015.

And the IMF hasn’t changed. I mean, we are subject to IMF austerity as we speak. Finance Minister Enoch Godongwana is repeatedly being told – like 100 times in three documents – to impose ‘fiscal consolidation.’ So when USAID pulls out its AIDS medicine support – PEPFAR more or less closes – that’s around 8.5 billion rand. And you know, Godongwana looks the other way, because he’s so tied up with Western financial markets.

Speaking of which – I mean, the BRICS Bank as well. It’s the New Development Bank, where here in Sandton we have a branch. But when Russia invaded Ukraine illegally and was subject to financial sanctions, the BRICS bank actually sanctioned its 20% member, Moscow, because the credit rating agencies in New York – Standard & Poor’s, Moody’s – and Janet Yellen, the US finance minister, told the BRICS Bank: you better join us in the sanctions against your own member. Which is quite extraordinary.

And the whole sense that maybe we could get de-dollarization – we could get the financial markets here in Johannesburg, or in São Paulo, or Mumbai, or Shanghai – to stand up and get some alternative to SWIFT, the interbank system. Unfortunately, that was part of the hype and the hope – and ultimately, the helplessness. Even Ebrahim Rasool, when he gave his infamous seminar presentation to MISTRA, the Mapungubwe Institute, basically said: ‘Don’t even talk about it. It will get us punished. Don’t even mention de-dollarization.’

And I must confess, even with Brazil hosting the BRICS, with a progressive leader – Lula – they are frightened. And they’re unwilling to challenge anything, even that probably the worst president for the Third World, Donald Trump, has given, which is dropping out of climate, dropping out of the World Health Organisation, cutting all this medicine and medical support, cutting food to places like Sudan where it’s desperately needed, and wrecking world trade and world finance.

There, to me, is an argument that the BRICS could be anti-imperialists. And South Africa could say to Donald Trump, ‘You obviously have no interest in multilateralism. Why are you in the G20?’ We could make it the G19. Everybody – with maybe two exceptions, Argentina and Italy – everybody else would say, ‘We vote Donald Trump off the G20 island.’ And the G19 in 2026 won’t be held in the U.S., hosted by Trump – maybe in Mexico, hosted by Claudia Sheinbaum. So I would hope that’s the sort of spirit that comes through. But the fact that I’m having to suggest it – and there are very few others in the country who are – shows you that we’re a long way away.

Mariam: Well, certainly. That’s definitely what I wanted to ask you, Doc, in that about the G20 as a missed opportunity. But before we get there, let’s look a little bit to the question of Zionism as racism. Should South Africa push for this revival of the UN 1975 resolution? Because I think the challenge was to accommodate the Oslo Accords, and in order for the Israelis to come on board, that’s how it had to be rescinded. Do you think there’s now a case for it to be put forward again in order to give Israel, you know, a much firmer push in the right direction – against the genocide?

Patrick: Oh yes. I agree with Edward Said’s critique of Oslo, because that was already clear – unfortunately – Yasser Arafat bought into a bad deal. And it was already, with the breaking up of Palestine and the acknowledgment of those borders, a travesty. But then, when you think that ‘Zionism is racism’ – that very clear message that was coming from the majority of UN members – had to be reversed. And now, if you’re anti-Zionist, you can also be accused, in many jurisdictions, officially in the courts, of being anti-Semitic. Which is outrageous. For Palestinians, who are Semitic people, this is an extraordinary abuse of phraseology.

And as someone whose own great-uncle served in the Rote Kapelle in Germany fighting the Nazis, and was caught and executed – he was the leader of that group, Harro Schulze-Boysen – and Jewish members of my academic family had to go to the United States during that period. So these are extraordinary distortions of a reality, when we could have absolute solidarity with Jews who are being oppressed on the one hand, and a critique of Israel coming up in Palestine in the way that it did – and then through theft and dislocation and massive destruction and death.

And there is a group – South African Jews for Palestine – and their allies all over, who are saying that very clearly. It’s outrageous to say that if you’re against the Zionist project of settler colonialism in Palestine, then that makes you anti-Semitic. And I think it’s terribly important to keep contesting that. And certainly, I would welcome a move to say, yeah, ‘Zionism is racism.’

Mariam: Right. And now, talking about the role of social movements, Prof, you’ve now emphasized this power of grassroots mobilization. What role should movements like BDS – which you are very involved in – how should they engage with government in terms of policy? What has been your experience? How have you been received by government?

Patrick: Well, because we have an extremely progressive group in DIRCO – the Department of International Relations and Cooperation – I think there’s no question that the message is getting through. The question is: have we got enough pressure outside to overcome that huge contradiction, where there are people at the very top of our government – the President and his brother-in-law – who’ve had deals with Glencore, the main profiteer from selling fossil fuels to Israel over all these years. How do we do a combination – let’s call it – of the tree-shakers outside and the jam-makers inside? To quote Jesse Jackson, the great U.S. civil rights leader – sort of looking for that division of labor in which the right pressure points are applied.

And there is a tendency – because we have a great tradition in the African National Congress, of winning democracy, and because the former Foreign Minister Naledi Pandor had such courage, with the then Justice Minister, her replacement Ronald Lamola – to go to the International Court of Justice in late 2023. A lot of respect, a lot of prestige, goes with the South African government – and thus, let’s call it, a reticence to be openly critical. But I think being, let’s say, too tolerant – too gentle – with that contradiction, and not bringing it forward means, I think, there’s only been one time, for example, in Parliament, where Al Jama-ah asked the question: why are we still selling coal to Israel? That’s the only time, I think, that on at least this BDS question, we’ve seen a challenge in Parliament.

It just means that the streets have to get hotter. Street heat is desperately needed. And we’ve seen it against Glencore in August 2024, and against Patrice Motsepe’s African Rainbow Minerals – Glencore’s ally – in April 2025. So we need to see much more of it. And the U.S. Consulate is very close to African Rainbow Minerals – literally across the street. Ivor Ichikowitz’s office is right down the road. As we’re speaking now, we have an opportunity because the great Palestinian liberation leader, Leila Khaled, is in a coma – after a life-threatening stroke. And I think, before she passes us, winning the renaming of Sandton Drive – on the one part, Ichikowitz; on the other part, the U.S. Johannesburg Consulate – would be the right sort of tribute. And I think we just need to be up in that space quite a bit more.

Mariam: Prof, finally – are there any books or publications that we should look out for from yourself, or anything that you think our readers and our listeners should delve into?

Patrick: Yes. I think this is a great moment for us to be aware of ideology – soft power. Sometimes, people like myself – trained in Marxist theory – are focusing on what we’ve talked about a lot: material interests, flows of capital, flows of commodities. But actually, there’s a period now of fluidity in ideology.

And the neo-fascist movement – the Zionist movement – has its own new ideology. It’s not new, but it’s a very fresh way of saying: ‘We can work with nationalism.’ The working-class interests of white men in the U.S. or Britain, who support – they call it, by the way, paleo-conservatism or right-wing populist nationalism. And we have to be aware that this is a disease of, let’s say, false consciousness – by workers – that they would support someone like Donald Trump. Or, as has happened now in Britain, the Reform Party.

This is a very, very dangerous problem. We’ve seen it in lots of parts of the Third World – like Brazil, with Bolsonaro; the Philippines with Duterte and now Marcos. And we’ve seen, in a sense, a right-wing Christian evangelism that’s fed into that. And I think, ideologically, we have to be careful. There is a strain of it in South Africa. We see it in the cabinet with Gayton McKenzie. We see it in white business and, you know, BizNews, and especially Rob Hersov. And we see it with xenophobic tendencies in Operation Dudula. So we’d sort of say, well, there’s some xenophobia and isolationism and protectionism that doesn’t speak to this vital spirit of solidarity.

Likewise, the other ruling class ideologies – neoliberalism and neoconservatism – are under threat. They’re changing. They’re becoming less diverse, less tolerant. They’re used to being neoliberal capture of ‘diversity, equity, inclusion’ – so you would find black neoliberals, women neoliberals, gay – you’d find a whole set of, let’s say, neoliberal assimilation. And that is a little bit harder because of the threat from this very fascistic right-wing – the paleocons.

And then, on our left, we have people who would say the BRICS still represent an anti-imperialism. I disagree with them profoundly, but it’s great to have these debates. They’re all good comrades – plenty of them in this country, in major groups like the ANC, the Communist Party, the Economic Freedom Fighters, MK Party, NUMSA, COSATU. You know – major, major leadership of our own political terrain would say the BRICS are an ally; that Russia’s anti-imperialist; China’s socialist – things I completely disagree with.

And then you’ve got Keynesians – those are people who would see global reform and would be hosting some of those in the G20 debates from the left. They don’t have much chance to succeed, but it’s terribly important.

And I think of those, the most important is what we’re doing in Palestine solidarity, climate solidarity, Black Lives Matter solidarity, feminist solidarity, economic justice and debt cancellation. And we could go on and on. All of these grassroots and progressive movements that include some intellectuals – like myself – who can have a little bit of free space to contemplate these links. And we would call that the Global Justice Movement. It’s got, I think, a spirit still that began in the mid-1990s, in a place in Mexico called Chiapas, with the Zapatistas. It peaked in a place called Seattle, when the World Trade Organization was shut down. And we could say, well, the greatest success was getting anti-retroviral medicines, for – we have about 7.8 million South Africans who are living with HIV. And they can get their medicines because we defeated the World Trade Organization in the early 2000s, to get those off of intellectual property – made generically, given out free by the South African government.

That would be the sort of spirit I would look to – to continually inspire us: to decommodify and to deglobalize capital through international solidarity. And I think the social movements of the world, and the labor movements, and the feminist movements, and the Palestine support movements especially – have been exemplary. And I’m hoping the climate movement catches up, because in a way, that’s the greatest threat of all. And in a place where South Africa has so much coal – and that coal is going to Israel to fuel a genocide – it’s an absolute imperative that we all get involved, and bring that to a halt.

Mariam: And I think exactly as you’ve said – the environment is almost the core issue that all the other issues almost rotate around. So if we’re able to then focus on the environment and how it impacts every aspect – economically, politically, socially – then we’d be able to create perhaps a more cohesive global justice network. Because as you’ve said, there are so many different movements, and perhaps finding a common theme around the environment would give it a greater cohesiveness.

Patrick: Yes – so long as it’s not merely an environmental and conservationist movement. It has justice. Because where we’re speaking from – Johannesburg – the most unequal city in the world, based on having been utterly looted, now falling apart in many crucial respects, in the country that’s the most unequal, and the third most contributing to the climate crisis, that is, by emissions per person, per unit of output in the economy. It’s a great place to do this work. And we’re very blessed by all of the different activists – from economic justice, climate justice, and especially justice for Palestinians – that can come together.

Mariam: Thank you so much, Professor Bond. It was such a pleasure to have you, and we hope to host you again – and indeed, to engage on more Critical Currents coming up. We hope to have one every week. And if you’d like to follow us, please do so on YouTube, Instagram, and TikTok. Our website is mediareviewnetwork.com. Thank you so much.

Patrick Bond is professor of sociology at the University of Johannesburg in South Africa. He can be reached at: pbond@mail.ngo.za

From the front line: a critical look at Indo Pak War 2025

Sunday 11 May 2025, by Farooq Tariq

On the morning of 7 May, when I answered my doorbell and went outside looking for who rang, my neighbor loudly asked me to turn off all my lights. This command signaled to me that we are living in a moment of war.

Living near the Wahgha border, we heard a deafening noise around 8.30 am, followed by a blast. An Indian Harop drone, made by Israel, struck a close by military installation. We later heard that four soldiers were injured.

Armed with a 50-pound warhead, the Harop uses its camera system to track and engage moving targets. The drone can fly for about six hours or about 600 miles after being launched from a truck.

Apart from the target near our homes, many of the Harop drones were brought down by Pakistani armed forces before they hit their targets. But in most cases, they fell on civilians. Out of curiosity, hundreds of people then gathered to see where these drones were brought down. People seem to be worried but not panicked.

Many friends and comrades have asked if I thought a full-fledged war is now erupting between two nuclear-armed neighbors. I replied that war had already erupted.

The Modi government launched “Operation Sandoor” to hit nine sites inside Pakistan. The intended targets were madrassas and mosques Modi believes are the base of religious terrorists.

According to figures released by the Pakistani army, most of the 31 who died in the one-hour attack by over 125 Indian jets were civilians, including children and women. There would have been more casualties had madrassas not evacuated just after the religious fundamentalist attack in Indian-occupied Kashmir. Twenty-six people, mainly tourists, were killed in the Pahlgam area on 22nd April 2025.

At that time my brothers and sisters encouraged me to move from my home in Lahore. I refused since there are military installations or cantonments in most Pakistani cities. In fact, Unlike the previous wars between Pakistan and India in 1965 and 1971, there has been no mass exodus from the cities.

This is first time that Indian missiles have hit nine Pakistani cities. A violation of Pakistan sovereignty, it has been condemned by almost all of the country’s political groups from right to left. But unlike the right-wing political religious parties, most of the left groups demand an immediate halt to the war. Although much smaller in proportion to the Indian left, the Pakistani left was unanimous.

Unlike the mainstream Indian community parties who have given up any independence from the Modi’s BJP government, there is no warmongering in Pakistan. A 8th May Gallup Pakistan survey reported that the majority of Pakistanis are not in favor of war with India; peace should be the goal under all circumstances. However, this may change when the war escalates.

This is second time that India and Pakistan has gone to full fledge war despite having the nuclear weapons, the other time was Cargill war in 1999. India carried out its first nuclear test in May 1974 and in May 1998, conducted another five tests, declaring itself a nuclear weapon state. Pakistan carried out its nuclear tests on 28th May 1998, thus officially becoming a nuclear state. In reality, it means nuclear weapons are not a deterrent to war.

Pakistan has an estimated 170 nuclear warheads, roughly equivalent to those in India. With such undeniably high stakes, the India decision to strike inside Pakistan for the third time (2016, 2019 and now in 2025) reveals that all the pride of having nuclear bombs is not a deterrent to war between the two.

Nuclear weapons are the most inhumane and indiscriminate weapons ever created. They violate international law, cause severe environmental damage, undermine national and global security and divert vast public resources away from meeting human needs. It is not a weapon of war but a weapon of total destruction. A single nuclear bomb detonated over a large city could kill millions of people.

While both countries bear responsibility for proxy warfare, the Modi regime has clearly instrumentalized the Pahalgam tragedy to divert from its failures in Kashmir, boost domestic popularity, and advance strategic goals regarding the Indus River system and regional hegemony.

Pakistan is accused of supporting the terrorist group that has led to the terrible loss of lives in Pahalgam Kashmir. However, the present realities paint a different picture.

Although there is no doubt that Pakistan government had supported and promoted these religious fanatic groups for decades after the Saur revolution of Afghanistan in 1978, this was with the wishes and whims of U.S. imperialism. Since 2022, when the Imran Khan government was dissolved after a vote of no confidence, the relationship between the military establishment and these fanatic groups has been at odds. There has been an escalation of attacks by the fanatics on Pakistan state institutors since Taliban has returned to power in Afghanistan.

The Taliban government in Afghanistan supports the Pakistani Taliban in its attempts to capture the government.

This includes carrying out bomb blasts, suicidal attacks, occupying areas and forcing people to support them. The Pakistani Taliban were strengthened by the Afghan Taliban by giving them NATO weapons left behind when the Americans left Afghanistan.

In 2024, Pakistan experienced one of the most violent years in over a decade. The religious fanatics took over control of several areas of Pakhtunkhwa province. Almost every day, there were attacks and causalities the Tehreek Taliban Pakistan (TTP) inflicted on the Pakistan armed forces.

Contrary to cooperating with each other, there are now open hostilities. The Pakistani state now longer supports these fanatic groups, who are now relying on the Afghan Taliban.

Of course, there are religious fanatic groups still active in Indian-occupied Kashmir and the question about the extent local support to large extent may still be strong. But it is difficult to believe that the current Pakistani government had anything to do with the April 2025 attack.

The Pahalgham terrorist attack seems to be an act of an independent religious fanatic group.

The danger is that the war can linger on. Both governments have claimed victory. But if it were to continue, it will not be like the one in 1965 and 1971, when the ground forces fought. Instead, India is using the same tactics as Israel is using in Gaza. Missiles and drone attacks could destroy infrastructure, perhaps only then introducing ground forces. Pakistan is not Palestine. It has a large, well-trained and equipped army. Yet it lacks the modern weapons India has.

Clearly the situation is very volatile and unstable. This means anything is possible.
What we do know is that war brings destruction and no one wins. Continuing the war will only result in more loss of lives. But if you listen to the Indian and Pakistani mainstream media, each side claims victory.

Yet a durable peace requires respecting sovereignty, ending proxy warfare, and demilitarizing Kashmir. Any war between nuclear-armed nations would be catastrophic regionally and globally.

Progressive forces throughout South Asia must unite against war hysteria and work toward a peaceful future.

We demand an independent inquiry into the Pahalgam attack in order to establish facts and accountability.


Attached documentsfrom-the-front-line-a-critical-look-at-indo-pak-war-2025_a8989.pdf (PDF - 910.7 KiB)
Extraction PDF [->article8989]

Farooq Tariq
Farooq Tariq is General Secretary, Pakistan Kissan Rabita Committee.
and President Haqooq Khalq Party. He previously played leading roles Awami Workers’ Party and before that of Labour Party Pakistan.


International Viewpoint is published under the responsibility of the Bureau of the Fourth International. Signed articles do not necessarily reflect editorial policy. Articles can be reprinted with acknowledgement, and a live link if possible.

 

The declining rate of profit: Avoiding the key issue


Published 

Karl Marx Friedrich Engels

James Doughney’s latest contribution to the discussion around Karl Marx’s tendency of the rate of profit to fall largely avoids the key point — the relationship between the proportional rise in the mass of physical capital and productivity rate rises. Leaving aside other issues (what is investment, whether Marx finished his theory, if something is considered a stock or flow, whether demand creates supply or supply creates demand, etc.) for the Okishio/Kalecki critique to hold water it must be shown that any rise in the amount of means of production used in one industry must be more than offset by rises in productivity in sectors supplying those means of production, such that the rise in the mass of constant capital is more than offset by the reduction in its unit price. 

James expresses confusion over this point. Really there is nothing to be confused about: productivity reduces the unit cost of output. The question is whether productivity must reduce the unit cost of output enough to reduce the unit value/price of the accumulated capital by more than its increased amount. Demonstrating this mathematically is as simple as putting the appropriate numbers into the equation; demonstrating it in reality is a different matter altogether. 

Let us assume that the physical proportion of constant capital relative to living labour doubles (twice as many machines, stocks of raw materials, etc, are used in the labour process relative to the number of workers who use them, meaning the technical composition of capital doubles the proportion of means of production relative to labour). If, due to productivity more than doubling, the cost of means of production more than halves, then certis paribus the proportion of spending on constant capital must fall. 

Nobuo Okishio and Michał Kalecki merely assume this is necessarily always true; that it must always occur. They reduce a real but essentially arbitrary phenomena — that productivity cheapens the means of production and therefore offsets the rise in the organic composition of capital — to a tautology — that offset will always be larger than the physical rise in its mass, so the rate of profit (the difference between profits and costs) must rise. Mathematical attempts to refute the theorem are necessarily futile. It is akin to assuming that if the runner with the longest legs always wins the race, then runner X with the longest legs must win the race. The real question is: must the runner with the longest legs always win the race?

Alfred Marshall in his 1895 Principles of Economics sought to prove diminishing marginal utility by assuming a shower of diamonds fell from the sky like rain, but only once. On this assumption, Marshall claimed the scarce diamonds would be rapidly used up and therefore their value would rise, irrespective of production (in this case there is no production). Hence, he claimed, value was determined not by supply but demand and that there was no relationship between labour values and prices. 

Assuming this, David Ricardo’s labour theory of value, which is predicated on conceptually unlimited production, was therefore wrong. The labour theory of value was refuted! But as diamonds do not fall from the sky (not once or ever), Marshall refuted nothing. Similarly, neither have Okishio or Kalecki, as there is no necessary relationship between the rise in the mass of means of production used in one industry and changes in productivity of the different suppliers of those means of production. 

Classical political economy sought an explanation for an observed empirical phenomenon that capitalist cycle profit rates tended to fall. Adam Smith attributed the fall to intensifying competition. Ricardo, in contrast, considered it the result of rising labour costs due to the fall in the marginal quality of agricultural land. Neither explanation stood up, as competition merely redistributes value but does not create it. Although there are differences in the marginal productivity of land, this is not necessarily reflected in the price of staple food stuffs, as the existence of these differences does not exclude changes to their absolute level; that is, the absolute amount of production can go up or down, even while the relative differences remain the same. 

Marx, in contrast, explained falling profits as due to the accumulation process itself. Over time the proportion of dead or constant capital to living labour — the source of all surplus value and, therefore, profit — tended to rise. Hence, as capitalists of necessity accumulate in the search for profits higher than the maximum, falling profit rates were “just an expression peculiar to the capitalist mode of production of the progressive development of the social productivity of labour”. However, if this were a unilinear law, then capitalism would be in a perpetual slump. So, Marx continued, the explanation of

the falling rate of profit, gives place to its opposite, namely to explain why this fall is not greater and more rapid. There must be some counteracting influences at work, which cross and annul the effect of the general law, and which give it merely the characteristic of a tendency, for which reason we have referred to the fall of the general rate of profit as a tendency to fall. (Marx 1894, Capital III, chapter 14

Five offsetting factors reduce the law to a tendency: raising the intensity of exploitation, reducing wages below their value, cheapening elements of constant capital, expanding the population that could be exploited by capital, and foreign trade. These factors are almost a list of the key changes that occurred in the world capitalist economy during the 1990s as a result of the Soviet Union’s collapse and China’s transition to the market. The relevance of the law is, ironically, demonstrated in the operation of these factors in causing a rise in profit rates during the period of globalisation (roughly 1991 until 2021), and their current exhaustion as globalisation transitions towards a phase of multipolar crises that defines world capitalism today. 

The current period and analyses of the present crises for capitalism echo the original discussion around collapse or Zusammenbruch in the Second International, in the period leading up to World War I. In 1899 Alexander Parvus, Leon Trotsky’s close collaborator, defined the longer phases in the world economy as periods of “Sturm und Drang” (storm and stress) for capitalism. These periods resulted from a combination of the extension or opening of new markets, the rise of new sectors of capital accumulation, the reduction in turnover times, and the advent of new technological advances,

This does not abolish the periodical alternation of upswing and crisis, but the upswing develops in a stronger progression, while the crisis sharpens but its duration is shortened. This continues until the forces of development have unfolded to their full potential. Then a sharp commercial crisis takes place, which finally turns into an economic depression. (cited in Jefferies 2025, War and the World Economy: Trade, Tech and Military Conflicts in a De-globalising World

In 1995 Ernest Mandel, a post-war Trotskyist leader, identified the conditions to end the long depression of the 1970-80s as,

A massive “system shock” which combines a sharp rise in the rate of profit (induced by an even steeper rise in the rate of surplus value) and a considerable broadening of the market. The latter could only occur, in the present world situation, through total integration of the former USSR and the People’s Republic of China into the capitalist world market. (Mandel 1995, Long Waves of Capitalist Development

This expansion, if combined with major defeats of the working class and Third World national liberation movements, could enable a new period of upswing. Mandel thought it “unlikely,” but in fact these defeats had already occurred by 1995. 

Marx noted

Accumulation can have a rapid effect on the demand for labour only if accumulation was preceded by a large increase in the labouring population, and wages are therefore very low so that even a rise of wages still leaves them low because the demand mainly absorbs unemployed workers rather than competing for those fully employed. (Marx 1861-63, Theories of Surplus Value, chapter 18)

In the newly globalised world, the populations of the former Centrally Planned Economies (CPEs), previously excluded from the world market, were now available for capitalist exploitation. US free market economist Richard Freeman estimated the restoration of capitalism doubled the labour capable of being exploited by the market from approximately 1.46 billion workers to 2.93 billion. The means of production of these states — whole cities (Prague, Moscow, Berlin, Dresden, Warsaw) and attendant infrastructure (electricity, roads, railways, docks, etc) — were appropriated by capitalists free of charge. Barriers to trade attendant on multipolar competition vanished and the expanded market enabled the computer, phone and internet technological revolution. 

Capitalism escaped the slump of the 1970-80s and experienced its most rapid period of growth in history. However, the expansion of the world market during the 1990s was systematically, albeit inadvertently, concealed by the application of neoclassical statistics. Far from a critique of these statistics being “overreaching,” as James puts it, it is necessary, first, to understand the world and, second, to show the absurdity of neoclassical economics. 

Neoclassical statistics do not differentiate between modes of production, as they consider all production to be a form of market economy, albeit “distorted”. CPEs measured the output of the plan through the Material Product System (MPS), which took physical aggregates and allocated them a “value” according to planners’ preference. There was no market mechanism and no value or price, as understood in a market economy. As a result there was no national income, which is a measure of changes in production measured in price. 

How then to measure an economy without a market when national income is a measure of market exchanges (however modified)? By simply pretending that planned economies were in fact a form of market. British economist Angus Maddison, who founded the Maddison World GDP Project, followed the CIA’s Abram Bergson to develop a “counterfactual” — that is fictional — analysis of the Soviet Union’s output, which simply assumed away the difference between planning and the market. These estimates of Soviet national income,

create a counter factual [sic] estimate of what Soviet prices would have been if the economy were run on capitalist lines, removing the ‘distortions’ created by the command economy, and getting a better picture of the real cost of production. (Maddison 1998, “Measuring the Performance of a Communist Command Economy: An Assessment of the CIA Estimates for the U.S.S.R”, Review of Income and Wealth, Series 44, Number 3, September)

The problem was that the difference between central planning and the market was objective, not subjective. There was a real, material, objective difference between planned and market prices. Planned prices were not really prices at all, but applied (insofar as they were at all) post factum by planners according to political criteria. They were subjective not objective; they were not tested in the market through exchange. 

When the market was introduced by Boris Yeltsin’s 1991 Big Bang, centrally planned output collapsed. But the collapse of centrally planned material products represented the creation of market output; of market production and national income. The System of National Accounts (SNA) of neoclassical statisticians obliterated the distinction between planned and market output, thereby measuring the creation of the market as its collapse. Hence, the 1990s, which laid the basis for the hyper-globalisation of 2001-08 was, according to the statistics, a period of contraction and slump. Yet it was central planning that was contracting and slumping, not the market, which was in fact increasing or growing

Just as neoclassical statisticians mismeasured the transition of the CPEs to capitalism, so too did the use of their fictional valuations of fixed capital stock to estimate the rate of profit yield lead to completely false results. Their use by Marxist economists shows a basic failure to appreciate the categorical distinction between costs and opportunity costs. This really elementary mistake is conceptually absurd. It treats estimates of future profits as identical to, analogous with or somehow a reflection of, past costs, when there is essentially no relationship between the amount of profit that may be made and the cost of constant fixed capital advanced. 

Leaving aside the conceptual question, there is also a more practical problem. Opportunity cost valuations grossly overestimate the value of fixed capital stock when compared with the Internal Revenue Services (IRS) measures of actual business costs. The stock of fixed capital advanced, or its book value, is estimated by the IRS as Depreciable Assets Less Depreciation (DALD). Depreciable assets are those assets that may be depreciated. In general, they are assets before depreciation has been subtracted from them, just as an inflatable balloon may be inflated but, in general, has not yet been. The subtraction of Accumulated Depreciation (the accumulated reduction in the value of those assets through use) reveals the assets net or book value. This is the amount of fixed capital advanced. 

Using the neoclassical SNA’s opportunity cost fictional data sets overvalues the amount of fixed capital advanced by between five and seven-fold. There use duly measures a rise in the mass of profit as a reduction in the rate of profit by multiplying estimated rises in profits by their anticipated service life. Of course, these conceptual and practical problems do not stop neoclassical statistics from being used. A widely disseminated example of this is World Profit Rates, 1960–2019, authored by Deepankar Basu, Julio Huato, Jesus Lara Jauregui and Evan Wasner this year. It shows US profits slumping between 2001–08 — the period of hyper globalisation and perhaps strongest period of US economic growth in history.

James insists that once we accept “the causal priority of demand” then “rigour demands consistency,” but demand is the result of production; that is, demand is determined by production. He was both bewildered and amused, he said, by my reference to Thomas Malthus. Malthus explained the necessity for a parasite class to consume the social surplus created by workers in production. As workers are only paid a fraction of the value they create, they cannot pay for the surplus out of their wages, leading to an implicit disproportional and inadequate effective demand. 

How then to realise the social surplus? James’ reference to borrowing merely kicks the problem down the road, for where do the lenders get their money from? For Malthus, unproductive consumers provide the demand necessary to pay for the surplus workers cannot afford. Marx remarked what Malthus 

required therefore are buyers who are not sellers, so that the capitalist can realise his profit and sell his commodities “at their value”. Hence the necessity for landlords, pensioners, sinecurists, priests, etc, not to forget their menial servants and retainers. How these “purchasers” come into possession of their means of purchase, how they must first take part of the product from the capitalists without giving any equivalent in order to buy back less than an equivalent with the means thus obtained, Mr. Malthus does not explain. (Marx 1861-63, Theories of Surplus Value, chapter 19

The causal priority of demand does not explain — indeed cannot explain — how the purchasers come into possession of the means of purchase. It is a theory predicated on the absence of explanation; that is, the generalisation of amused bewilderment.

I discuss these issues in greater detail in my book 2025 book War and the World Economy and this short introductory video






 

Should we expect a new world war? Two prison letters from Boris Kagarlitsky


Published 

Boris from prison Spichka

First published in Russian at Spichka. Translation and introduction by Dmitry Pozhidaev for LINKS International Journal of Socialist Renewal.

The following text is based on two letters sent from a Russian penal colony by sociologist and Marxist thinker Boris Kagarlitsky, who is currently imprisoned on charges of “justifying terrorism.” The first letter is comprised of responses written on October 4 to questions posed by the Marxist media platform Spichka (Match), which initiated a correspondence with Kagarlitsky in late 2024. The second letter, written on October 24, includes some further comments by Kagarlitsky to Spichka regarding the specific topic of the potentials for a new world war.

Spichka is a Russian left-wing media collective committed to reviving Marxist theory and making it accessible. Initially focused on socialist countries, it now covers capitalism, culture and leftist strategy through articles, podcasts, and a visually distinctive online presence.

Many Russian Marxists began considering the threat of a new world war at the very outset of the “Special Military Operation” (the official term for Russia’s aggression against Ukraine). Since 2022, a series of long-smoldering local conflicts have flared up — in Ukraine, Gaza, Nagorno-Karabakh, Syria, and among the Turkish Kurds — reinforcing the belief that the present moment echoes the run-up to 1914, when a proliferation of local tensions ultimately culminated in World War I.

From the start, however, Kagarlitsky took a different view. He argued the present moment more closely resembles the Crimean War of 1853–1856, in which a "small victorious war" turned into a disaster for Russia, ultimately triggering sweeping reforms — including the abolition of serfdom.

Spichka directly asked Kagarlitsky: should we expect a new world war? In his letters, he reflects on that question by drawing on historical analogies, analysing China’s place in the global system, and uncovering the deeper structural crises that underpin today’s international conflicts.

Kagarlitsky laid out his analysis in his responses written back in October 2024, six months ago. Is it still relevant? The answer appears to be yes.

While written in response to immediate questions, Kagarlitsky’s letters focus on underlying structural and geopolitical trends rather than momentary developments. His central argument — that we are not heading toward a Third World War, but rather toward an era of intensifying regional conflicts and systemic crises — remains strikingly consistent with global events in 2025.

His reflections on the Sino-American relationship have proven especially prescient. Kagarlitsky argued China, unlike Germany before 1914, is not seeking global hegemony but is instead building a China-centric economic zone while continuing to rely heavily on access to US and European markets. The recent escalation of the US–China tariff dispute supports his view: rather than leading to open confrontation, the conflict has played out as an economic tug-of-war — disruptive but carefully managed by both sides, underscoring the interdependence neither can afford to sever outright.

Similarly, Kagarlitsky warned that the Israeli-Palestinian conflict, though severe, would not spiral into a global war — primarily due to the disinterest of major powers, such as China, and the strategic restraint shown by regional actors, such as Iran and Hezbollah. That assessment still holds: despite ongoing violence and immense human cost, the conflict has remained regionalised, not globalised.

Kagarlitsky identifies a new condition of modern warfare: wars not fought to win, but to prolong power. This applies to Israel, to Russia, and — potentially — to other declining regimes. In these cases, war is not a continuation of economics by other means, but of domestic politics — a desperate attempt to sustain fragile legitimacy through external conflict. When peace threatens power more than war, the very logic of political survival becomes destructive. It is a grim insight — but a necessary one for understanding the dynamics of today’s fragmented and protracted conflicts. 

It is always interesting — and often instructive — to revisit earlier political forecasts. Kagarlitsky’s letters do more than offer short-term commentary; they frame today’s crises in the context of long-term systemic contradictions. That alone is a compelling argument for translating and revisiting them now.*


‘For many elites, peace is more frightening than war’

In recent years, long-smoldering conflicts have been intensifying. Doesn’t this resemble the situation before World War I?

I have seen comparisons to World War I — or rather to the period that preceded it — in many different texts for some time now. And indeed, there are similarities. World War I was preceded by an unprecedented globalisation of the economy, which eventually reached the limits of available markets. As a result, competition increased and, as Marxists of the time said, inter-imperialist rivalry intensified. Naturally, only libertarians believe that markets operate on their own. In reality, market competition inevitably fuels political confrontation — in its most extreme forms.

But that is the similarity. There are also fundamental differences. For one, in the early 20th century, relatively stable blocs had formed: Germany and its allies versus the old empires (Britain, France and Russia), later joined by the US, whose ruling class at the time pursued a non-aggressive strategy. Rather than trying to push Britain out of its hegemonic position, the US chose to support it, gradually replacing it in that role — at first only partially.

It is important to note that the arena of rivalry used to be the same territories, the same markets. Today, the situation is qualitatively different. Only the Russian elite continues to play by the rules of the late 20th century, and only a few domestic Marxist dogmatists persist in analysing the situation through those categories.

The fact is, China is not striving for hegemony within the world-system at all. Rather, it is constructing a China-centric economic space around itself, using the rest of the world merely as a source of resources. Naturally, it needs to export goods — to Europe, the US and Russia. But Chinese capital does not consciously seek to create or reshape new markets; it simply exploits them. China’s rise is becoming destructive for the world-system precisely because there is not even an attempt to struggle for hegemony. After all, hegemony is not merely about domination — it is about organising and developing the system in an orderly way. And that is entirely absent here.

For the US, a war with China holds no real prospects — but that does not solve the main problem: as long as the neoliberal regime of global trade persists, China will continue to take advantage of it. And if you want to change that, then you need to radically overhaul the entire system. Trump [during his first term] tried to introduce protectionist measures (which were painful for Chinese capital), but he never intended to reform the system — not even in a reformist sense (let alone a revolutionary one). That approach will not work.

The crisis is deepening. It will be accompanied by local wars and eventually a wave of revolutions. In short, as the old Soviet joke goes: "There won’t be a war — but the struggle for peace will be so fierce that no one will be spared."

Do you see the threat of a new world war? Could the war between Israel and Palestine become the cause of a world war?

From what I have already said, it logically follows that the conflict in the Middle East will not escalate into a world war. Not least because of China’s position — it has no need for war. China is not trying to reclaim anything from the West. This is not pacifism — it is arrogant indifference. China needs calm, especially since the internal situation in the Middle Kingdom is far less stable than it may appear.

The paradox is that military conflicts today are being initiated by regional players who are trying to drag in the great powers — the US, China and basically anyone they can. The ruling clique in Israel is defending itself from growing domestic discontent by diverting public attention to a war with an external enemy. That is [Benjamin] Netanyahu’s policy. But in reality, neither the US nor China, nor even Iran needs this war. It is a paradox: the forces once considered irresponsible and radical — Hezbollah, Iran — have shown restraint, while Israel (supposedly a civilised democracy) is displaying complete irrationality.

I have written before about the similarities between our own situation and what is happening in Israel. Netanyahu understands that any end to the war would mean the end of his power.

In Russia, we see influential forces thinking along the same lines. And if we look at the situation in Lebanon, the war is not being waged to defeat Hezbollah, but to prevent peace — because peace would mean having to answer for everything. Including the war itself.

What would have to happen for a world war to begin?

As I have said before, we are not facing a new world war. What we are facing is the prolongation and expansion of numerous (or regional) conflicts that consume enormous human lives and resources.

The cumulative casualties could be monstrous. They already are. But this is not a world war with two opposing global camps. And, moreover, I very much hope that the warring sides, each suffering from deep internal crises, will gradually slide toward peace. You cannot fight forever — especially when, from a geopolitical perspective, these wars have neither purpose nor meaning. No one can win — and no one really wants to. 

But war for the sake of continuing war — that is a dead end. If holding on to power depends on endless war, then power itself will not last much longer. Alas, for many today, peace is more frightening than war. In the long run, peace means revolution. Or, at the very least, radical reforms.

We stand on the brink of major changes. I think old [Immanuel] Wallerstein was right when he predicted the end of the current world-system — which, by the way, included the world wars themselves.


‘The West cannot afford to suddenly break ties with China’

I would like to continue the discussion on the fundamental differences between the situation in 1914 and the current state of affairs. The fact is that in the early 20th century, the struggle between the major imperialist powers was over access to the markets of third countries. Colonial protectionism played an important role — Germany and Italy were simply denied access to the markets of the British Empire, the French colonial empire, and, notably, the United States, which pursued a strict protectionist policy.

For Germany, the territorial redivision of the world became a pressing issue due to purely commercial problems — particularly the issue of access to cheap resources in those same colonies. At the same time, Germany’s domestic market was extremely strong, which made the country well-prepared for war under conditions of commercial isolation (although by 1917–18 it was the looming economic catastrophe that forced Berlin to essentially capitulate).

In our time, however, the main markets for China are precisely the US and Western Europe, and China’s grievances toward them centre on the fact that they are limiting Chinese capital’s access to their markets. As [University of Massachusetts economics professor] Jayati Ghosh noted several years ago, both India and China are already being forced to indirectly subsidise the West in order to prevent a collapse in demand for their goods. China’s (relative) weakness in terms of domestic consumption makes it objectively peace-seeking. Of course, the domestic market has grown impressively over the past 20 years — but for it to make a real qualitative leap, not only would social policy have to change, but the social structure itself.

However, transitioning to a high-cost labour model undermines (in the short term) the country’s export potential. China still depends on exports, and despite rising labour costs, it remains a country with relatively cheap labour. The real competitive pressure China faces in this regard does not come from the West, but from India and, to some extent, Vietnam. By contrast, in 1914, the conflict was between countries with expensive labour, and capital needed new markets to offset the high cost of labour.

Right now, China’s agenda is dominated by domestic changes, social and political. And yes, the desire to postpone or avoid these changes makes the Chinese party elite aggressive, prone to seeking external enemies to consolidate the nation. In such situations, leaders often try to launch a “small victorious war,” but Beijing currently has no such option: a conflict in Korea or around Taiwan would automatically escalate into a major war, one that China is not prepared for — and the elite understands this.

Vietnam remains a possibility, but there is no pretext, and Beijing still remembers the humiliation of the previous [1979 Sino-Vietnamese] war [when Vietnam repelled China’s invasion]. Vietnam is, as some Vietnamese have put it, “the Prussia of East Asia” or “the Israel of the Far East.”

Then there is the factor of the “Asian slowdown”. In the 1970s, we saw rapid growth in Japan (along with predictions of Japanese hegemony in the 21st century), followed by stagnation. Twenty years later, the same pattern repeated in South Korea. The same is true of the Asian Tigers. The reasons are:

  1. At a certain point, the original growth model exhausts itself and must be replaced;

  2. The socio-demographic composition of the population changes.

In part, stagnation softens the internal crisis, buying time to restructure the system.

China's situation, however, is specific. On the one hand, the scale and momentum of its economic growth are unprecedented, which means the process can be prolonged, and the transition to a new phase of development delayed. But on the other hand, the disproportions, imbalances, and contradictions are accumulating on such a scale that collapse, not stagnation, may follow. This is why China’s leadership, aware of the growing threat, is interested in maintaining economic growth at virtually any cost. It will not risk losing access to its core markets.

Nor can the West, despite its emphasis on reindustrialisation through new “green” technologies, afford to risk a sudden break in ties with China — even if Chinese exports can, to some degree, be replaced by Vietnam and India. Russia, however, cannot substitute Western markets for China.

The conclusion is clear: The Chinese leadership, due to internal political reasons, is interested in preserving ideological tension with the West, but has no intention of crossing the line that would lead to a full-scale military conflict.

And if you are looking for a historical analogy to today’s situation, it is not 1914 — it is the late Cold War-era between the Soviet Union and the United States, when both sides continued to build up their arsenals and even clashed in local conflicts, yet simultaneously expanded trade relations with one another. The only difference is that the Soviet Union, with its state-run economy, did not depend on selling surplus goods to Western Europe and the US, whereas for China, this is a matter of survival.

As we know, even Cold Wars have winners and losers — but that is already a different story.

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    Spichka only published an excerpt from the first letter, in which Kagarlitsky focuses on the differences between the situation before World War I and today. The full letter can be read at https://links.org.au/boris-kagarlitsky-us-elections-trump-peace-talks-and-prospects-world-war