Boris Kagarlitsky’s ‘The Long Retreat’: Capitalism, crisis and the left’s challenge

By Dmitry Pozhidaev

Published 23 November, 2024MastodonFacebookTwitter

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The Long Retreat: Strategies to Reverse the Decline of the Left
By Boris Kagarlitsky
Published by Pluto Press

Boris Kagarlitsky, a prominent leftist thinker, political prisoner and fierce critic of neoliberal capitalism, has consistently offered a critical lens on global capitalism and Russia’s position within it. His latest work, The Long Retreat: Strategies to Reverse the Decline of the Left (Pluto Press, 2024), emerges at a moment of acute crisis for both global and Russian capitalism, compounded by the war in Ukraine — a conflict Kagarlitsky has resolutely opposed. Imprisoned for his anti-war stance, Kagarlitsky remains committed to his homeland, as his recent public refusal to participate in potential prisoner exchanges with the West testifies. His book is a timely, sobering and, paradoxically, hopeful examination of capitalism’s decline and the left’s prospects for renewal.

I write this review from the vantage point of someone who has been in regular contact with the author over the past few months of his incarceration. As we work on joint research projects, most of our conversations revolve around the themes explored in the book: the deepening crisis of contemporary capitalism, its different manifestations domestically and internationally, unequal relations between the capitalist core and the periphery, and, inevitably, the new forms of social and economic organisation that may replace capitalism in the future.

The crisis of capitalism: A system imploding

At its core, The Long Retreat situates contemporary struggles within the context of a deepening systemic crisis of capitalism, which Kagarlitsky identifies as beginning in the 1980s and ’90s. This era marked the rise of neoliberalism, with its dismantling of welfare systems, privatisation of public assets, and destruction of organised labour. These policies, initially hailed as modernising reforms, were, as Kagarlitsky notes, “a desperate attempt to stave off collapse by sacrificing social stability.”

Kagarlitsky traces the roots of this crisis to the exhaustion of the post-war welfare state. From the 1940s to the ’70s, this model had temporarily stabilised capitalism by balancing class compromise, union strength and reduced inequality. Yet globalisation, technological shifts and diminishing profit margins ultimately undermined this framework. Neoliberalism emerged as a reactionary response, prioritising profitability over social cohesion. This restructuring was not confined to the West. It extended its grip globally, shaping the trajectories of former socialist states, including Russia, as they transitioned to market economies.

Kagarlitsky’s analysis challenges the conventional narrative that democracy and capitalism are intrinsically linked, as argued by such scholars as Torben Iversen and David Soskice (2019) and Martin Wolf (2023). Kagarlitsky objects, saying that “…the bourgeoisie has never had any need of democracy; its social interests consist in the formation of a law-governed state with independent judges, reliable information, guarantees that contracts will be observed, clear legislation, a disciplined and predictable bureaucracy, and secure property rights.” He highlights the efficiency of autocratic regimes, such as China, in delivering these key components of capitalism (a phenomenon largely ignored by the champions of the umbilical link between capitalism and democracy). For him, “The belief in democracy as a necessary companion to capitalism is a dangerous illusion, blinding us to the realities of autocratic capitalism’s successes.”

Kagarlitsky highlights the hollowing out of Western democracy, which is progressively transforming into “a façade embellishing the ugly edifice of the corporate state.” Kagarlitsky argues that weakening ties between citizens and political parties, coupled with the diminished capacity for grassroots organisation, have eroded meaningful political engagement. Traditional roles such as organisers and ideologues have been replaced by media-savvy spin doctors who prioritise superficial messaging over substantive discourse. Attempts to foster meaningful public discussions are increasingly seen as disruptions to a system that prioritises commercial interests, predictability and the minimization of risks, stifling any debates that challenge societal stability or the status quo.

Dialectics of decline and renewal

A central strength of The Long Retreat is Kagarlitsky’s application of Marxist dialectics to contemporary issues. He consistently examines the contradictions between appearance and substance, production and consumption, and crisis and opportunity. For example, in his critique of neoliberalism, Kagarlitsky highlights how financialisation appeared to resolve capitalism’s consumption crisis by enabling households to borrow extensively. In reality, this shift merely postponed the contradictions, deepening systemic instability as financial obligations replaced workplace exploitation as the dominant form of oppression.

Kagarlitsky’s analysis of the Green New Deal offers another example of his dialectical method. While some capitalists embrace green technologies as a solution to ecological and economic crises, Kagarlitsky argues that their primary motivation lies in countering declining capitalist profits.

He demonstrates the dialectical interconnectedness between capitalism and socialism. Thus, Kagarlitsky argues that capitalism owes its most attractive features — such as social protections and democratic rights — not to its intrinsic vitality, but to competition with socialism and pressure from labour movements led by strong trade unions and visionary left structures. “Capitalism’s finest hours,” he writes, “were forged not in isolation but in response to the challenge posed by socialism.”

The left in retreat: A movement in crisis

If capitalism is faltering, why has the left not been able to mount a meaningful challenge? Kagarlitsky does not shy away from hard truths. He argues the left has become disconnected from its roots in the working class, prioritising political correctness, identity politics and cultural debates over bread-and-butter economic issues.

Kagarlitsky recognises that defence of the rights of minorities is an indissoluble part of the modern democratic order, but the essence is the right of these minorities along with the majority to be free from persecution and discrimination. It is not an entitlement to special rights and privileges, which grant these minorities particular advantages. Kagarlitsky argues that positive discrimination, on which a section of the left insists, is not just in contradiction to democracy but, like other neoliberal reforms, is an instrument serving to destroy it. This leads to a disastrous outcome when “the majority disappears, to be replaced by a mass of minorities who need to be protected, no longer from the majority but from one another.”

Take the Canadian trucker protests of 2022 analysed in the book. While mainstream media outlets painted the protesters as reactionary, Kagarlitsky argues the real failure lay with the left. Instead of engaging with these workers and their legitimate grievances, the left dismissed them outright. This, he says, reflects a broader tendency to socialise with elites rather than organise among the working class.

The same conclusion is perfectly applicable to the outcome of the 2024 US elections, which Kagarlitsky analyses in a recent interview. “In 2016, both the liberal establishment and liberal left received a very serious lesson,” Kagarlitsky observes. “But they did not learn from it. Worse, they doubled down on implementing principles of political correctness against the backdrop of dismantling the welfare state and pursuing market reforms.” This abandonment of working-class interests has created fertile ground for right-wing populism, which channels anger not at capitalism but at scapegoats like immigrants and minorities.

Russia’s crisis: A case study in neoliberal collapse

Kagarlitsky’s critique of capitalism is uniquely informed by his decades of research on Russian society and politics. He views Russian capitalism not as a deviation from the global norm but as a direct product of neoliberal restructuring. After the collapse of the Soviet Union, the remnants of the decayed and degraded Soviet social and political structures, along with the practices that characterised them, became combined in their own organic fashion with the relationships and practices peculiar to late capitalism (Jameson, 1991). In his earlier works, such as Empire of the Periphery and Restoration in Russia, he argued that Russia’s trajectory reflects the broader trends of capitalism’s peripheralisation. In The Long Retreat, he expands on this, situating Russia’s ongoing challenges within the broader systemic crisis of global capitalism.

For Kagarlitsky, the war in Ukraine is yet another manifestation of the ongoing crisis in the global capitalist system, where economic imbalances and competition for scarce resources drive states towards militarisation and aggression. Kagarlitsky argues that developments occurring in Vladimir Putin’s Russia — marked by steadily rising state expenditures on coercive institutions, an increase in personnel within these structures, and their growing involvement in various aspects of life — are not an outlier but rather a pronounced example of a broader trend. Moreover, as has often been the case in Russian history, these processes stand out as a particularly striking or extreme expression of this general pattern.

Kagarlitsky argues that the driving forces of the conflict in Ukraine are primarily corporate and economic, stemming from structural issues within the neoliberal capitalist system. According to Kagarlitsky, both Russian and Western elites have vested interests in securing profitable sectors of Ukraine’s economy, such as grain production and remnants of Soviet infrastructure, which make Ukraine a site of economic competition rather than ideological confrontation. Far from acting on ideological whims, the Russian ruling class is pursuing material interests through territorial expansion.

The neoliberal reforms of the 1990s, Kagarlitsky asserts, created an elite class that views power solely as a vehicle for personal enrichment. “The key to this paradox,” he writes, “lies in the fact that power is viewed solely as a technical resource … to gain access to an unlimited amount of money.” This instrumental view of governance has compounded Russia’s social and economic fragility, especially in the wake of the war in Ukraine. Sanctions, economic isolation and structural stagnation have intensified the contradictions of Russian capitalism.

Negative convergence: The worst of both worlds

Kagarlitsky introduces a striking concept to describe post-socialist states: negative convergence. When socialism collapsed, these nations were promised prosperity through integration into global capitalism. What they got instead was the worst of both systems: social protections and collective ownership were dismantled, but the promised democratic and economic benefits of capitalism never materialised.

A former East German once remarked, “Now we know that everything Communist propaganda told us about socialism was a lie, but everything it told us about capitalism was true.” This anecdote captures the disillusionment of millions in the former Socialist world, so vividly described by Kagarlitsky, who saw their societies transformed into peripheral capitalist economies, marked by inequality and exploitation.

Russia epitomises this trajectory. The post-Soviet transition dismantled public systems, eroded labour rights and exacerbated inequality, replicating the worst features of early capitalism. Kagarlitsky critiques this process as a failure of both domestic and international elites, who prioritised short-term profit over sustainable development. His analysis underscores the interconnectedness of global and national crises, highlighting how neoliberal policies in one region can reverberate globally.

Kagarlitsky sees Russia’s ruling elite as a product of neoliberalism’s global crisis. Far from being an aberration, Russian capitalism reflects the same patterns of corruption and inequality found elsewhere — only intensified by its authoritarian veneer.

Opportunities amid crisis

Despite his grim diagnosis, Kagarlitsky remains optimistic about the potential for systemic change. In his opinion, the deepening crisis of ruling class hegemony creates new opportunities for the left. As more people become disenchanted with the existing system that had earlier suited them well enough, the need for a new social bloc uniting diverse social groups emerges more clearly. Kagarlitsky argues that political unity under the conditions of a heterogeneous society inevitably takes on the form of a coalition, even if in technical terms the representatives of various social groups and currents can be kept within the framework of a single party.

He identifies crises as moments of rupture that expose capitalism’s contradictions and create openings for alternative models. For example, he highlights how technological advancements could empower workers and facilitate democratic planning, provided they are harnessed to challenge capitalist alienation.

But Kagarlitsky warns against quick fixes like Universal Basic Income (UBI). He sees UBI as a band-aid solution designed to stabilise capitalism rather than transform it. Similarly, while he is sympathetic to Modern Monetary Theory (MMT), he acknowledges its limitations, particularly its failure to address capitalism’s structural contradictions. “The real obstacle,” he writes, “is not a lack of ideas or political will but the entrenched interests of capital, which resist any meaningful reform.”

One of Kagarlitsky’s most innovative discussions centres on the politics of time and leisure. He revisits Karl Marx’s concept of the “economy of time,” arguing that modern technologies could enable a reimagining of work and leisure. However, he warns that without structural change, increased leisure risks being commodified, reinforcing consumerism rather than liberating individuals. “Modern technological conditions,” he writes, “make it possible to undermine the monopoly of the ruling classes on managerial power … to make the bourgeoisie unnecessary to the reproduction of the economy.”

Kagarlitsky’s analysis of the war in Ukraine is particularly compelling. He views the conflict not as an ideological or geopolitical aberration but as a systemic outcome of neoliberalism’s contradictions. The war, he argues, reflects the declining hegemony of Western capitalism and the reconfiguration of global power dynamics.

Kagarlitsky is sceptical about the prospects of Russia's economic “de-linking” from the West as conceptualised by Samir Amin (1990). While the war and sanctions have forced some degree of import substitution and capital retention, these measures remain superficial without a broader shift in class power and systemic priorities. True transformation, he argues, would require mobilising resources for public investment in education, healthcare and regional development — a far cry from the current regime’s agenda.

Yet Kagarlitsky sees potential for change amid the turmoil. Drawing on Lenin’s analysis of World War I, he suggests that wars often “tear apart the veil of illusions” surrounding capitalism, exposing its contradictions and creating openings for radical change. While critical of Russian elites, Kagarlitsky identifies opportunities for grassroots movement to push for systemic reforms. He argues that societal fragmentation creates opportunities for organised and strategically focused groups to emerge as new centres of power. “In a context where society lacks cohesion and direction,” he writes, “a group that demonstrates unity, organisation, and clarity of purpose can leverage the crisis to gain disproportionate influence.” Incidentally, some representatives of the Ukrainian left (Ishchenko, 2024; Kyselov, 2024) believe that this war also offers a glimpse of hope for systemic socio-economic reforms in Ukraine that could benefit future generations.

A call to action

Throughout The Long Retreat, Kagarlitsky emphasises the inseparability of theory and practice. His critical analysis extends to the realm of practice beyond the moralistic solutions disconnected from class realities by contemporary critics of capitalism, such as Paul Collier and Martin Wolf. For Kagarlitsky, socialism is not a distant utopia but a practical necessity. He advocates for creating “institutional enclaves of socialism” within the capitalist system — initiatives that reclaim public ownership, democratise credit and empower local communities. Drawing on the lessons of Yugoslav self-management, he emphasises the importance of balancing worker control with strategic economic planning. These initiatives, he argues, can serve as foundations for broader systemic transformation.

Kagarlitsky’s personal commitment to these ideals is evident in his recent statement on his imprisonment. Refusing to participate in potential prisoner exchanges, he declared, “If staying means being in prison, then I will stay in prison. After all, imprisonment is a normal professional risk for a left-wing politician or social scientist in Russia.” This unwavering dedication underscores the stakes of his analysis and the urgency of his call to action.

The Long Retreat is more than a critique of capitalism’s decline — it is a blueprint for renewal. Kagarlitsky challenges the left to move beyond lamentation and engage in strategies that respond to the crises and opportunities of our time. By integrating historical analysis, dialectical critique, and a pragmatic vision for action, the book offers a roadmap for reclaiming the future.

 

Ilya Matveev: ‘Lenin’s theory only goes part of the way towards explaining Russian imperialism’

By Ilya Matveev

Published 22 November, 2024

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[Editor’s note: The following is an edited transcript of the speech given by Ilya Matveev on the “Imperialism(s) today” panel at the “ Boris Kagarlitsky and the challenges of the left today” online conference, which was organised by the Boris Kagarlitsky International Solidarity Campaign on October 8. Matveev is a political scientist formerly based in St Petersburg, Russia. Currently a visiting scholar at UC Berkeley. Transcripts and video recordings of other speeches given at the conference can be found at the campaign website freeboris.info, from where the below is republished.]

Thank you. It is a pleasure to be speaking at this event, in such esteemed company, and to be able to support Boris in this way. To continue this theoretical discussion of imperialism, I want to take up some of the themes discussed by Robert Brenner in his presentation, but I think I have a slightly different perspective on the nature of Russian imperialism. What I propose to do is to use three authors who wrote about imperialism and to look at the Russian case through the lens of three different theories.

The first has already been mentioned, that is Vladimir Lenin’s theory. For Lenin, imperialism was ultimately an outgrowth of contradictions and tendencies inherent in capitalism, such as a tendency towards monopoly. The tendency towards overaccumulation of capital drives capital’s need for external expansion, and this in itself leads to inter-imperialist rivalries and ultimately world wars. This is Lenin’s theory in a nutshell.

Interestingly, a few years after Lenin published his famous essay on imperialism, the liberal thinker Joseph Schumpeter put forward a kind of liberal interpretation of imperialism in response to Lenin’s theory and the theories of other Second International Marxists such as Rudolf Hilferding and Rosa Luxemburg. According to Schumpeter, imperialism is inimical to capitalism, especially capitalism in its pure form, and imperialist impulses represent ideologies and social structures from the pre-capitalist past. This was Schumpeter’s major thesis, namely that imperialism is essentially a legacy of the absolutist state and ruling classes and ideologies from the absolutist period. They survive in a new capitalist era. And this is why states adopt aggressive imperialist policies. For Schumpeter, imperialism could ultimately be compatible with capitalist interests, but it is a sort of artificial combination. And like other liberals, Schumpeter thought that the development of capitalism somehow would lead to the withering away of imperialism and war. So that is the second theory I want to look at.

The third theory is that of John Mearsheimer, a contemporary of ours, unlike Lenin and Schumpeter. His main point is that country-specific factors are ultimately irrelevant for this whole discussion; internal capitalist contradictions are irrelevant, and ideologies and social structures are irrelevant because imperialism, or what he calls “great power politics,” stems from the very nature of the international system. In this view, every state struggles for security and makes other states insecure. Thus inter-imperialist wars are built into the international system. When one state threatens another state, the threatened country will respond with aggressive measures. This is basically inevitable and does not depend on the domestic, social and geological structures in the threatened country.

So here we have three kinds of guiding ideas. And we can analyze Russian imperialism using these three perspectives.

I want to start with Mearsheimer because I think this is the easiest sort of case to consider. We can ask whether Russia was actually threatened when it initiated its aggression against Ukraine in 2014. Objectively speaking, Russia was not threatened by NATO. It was not threatened by Western imperialism. The major argument for the proposition that Russia and its security interests were somehow threatened by the West is the expansion of NATO. But this should be seen in the context of actual developments on the ground, which demonstrate that NATO was in fact becoming weaker as a conventional military alliance. It was expanding, but it was also becoming weaker.

NATO presence in Central/Northern Europe, 1991-2016

This chart shows that NATO armies were becoming smaller, and the US was withdrawing its troops from Europe. Back in the 80s, there were 300,000 American soldiers in Western Europe, and by 2014 it was something like 30,000, or ten times fewer. It is the same story with equipment. The chart comes from a report published by the Rand Corporation, a US national security think tank. The report states that Russia was, in fact, becoming stronger than NATO in the specific Eastern European potential theatre of war.

Mearsheimer himself admitted this fact. In his famous — or infamous — article in 2014, he stated that NATO was expanding, but that it was also very careful not to provoke or threaten Russia in terms of conventional military strength. But he went on to make an interesting argument. He said that it does not matter that NATO was not objectively a threat. What matters is that Russia felt threatened, so the Kremlin perceived the situation as threatening. But this is a different argument, of course. It is not about objective developments anymore. It is about perceptions and, therefore, about ideology. So, I think that Mearsheimer’s theory is actually the weakest of the three theories we are looking at in terms of explaining Russian imperialism.

Then we have Lenin. His theory is actually stronger, in my opinion. We can see the emergence of certain criteria for imperialism in Russia in the post-Soviet period, especially during the period of economic recovery in the 2000s and the early 2010s. The criteria that Brenner already mentioned began to appear in Russia: the concentration of capital, capitalist monopolies, the over accumulation of capital, and the need for external expansion. This was all present in Russia in the 2000s. 

Russian companies were extremely interested in post-Soviet countries because they could rebuild Soviet-era supply chains under their control. They could benefit from those old Soviet industrial economic ties. And they also sought new markets in post-Soviet countries. This economic expansion created pressure for political assertiveness as well. I would argue that any Russian government, and not just Putin’s government, would feel some pressure to be more assertive, maybe even more aggressive, in the post-Soviet space because of the needs of capital accumulation. So, this argument is valid to a certain extent.

But at the same time, what is different from the pre-1914 period, for example, is that Russia was integrated into global capitalism in a very specific way. On the one hand, it was quite influential in its region, the post-Soviet region. On the other hand, Russian capitalism was a dependent form of capitalism. In fact, it is dependent on Western centres of capital accumulation. And so Russia was in an intermediate position: a classic case of semi-periphery. So, I do not believe that the impulse for this extreme confrontation with the West could have come from the economic sphere, from the sphere of capital accumulation. Russian capitalism was just not built for this confrontation.

The impetus could only come from outside the economic sphere, probably from the political sphere. So, the impulse not just towards imperialism, but towards a specific form of imperialism that would not only break with the West but engage in this extreme confrontation with the West, could only come from elsewhere, not from Russian capitalism, because Russian capitalism really benefited from the way it was integrated into the global economy.

The Russian ruling class derived huge benefits from this intermediate position, or what we could call its sub-imperialist position in post-Soviet countries, where Russian corporations were very influential and sometimes even dominant. At the same time, Russian corporations had deep ties with Western companies and Western centres of capital accumulation. In fact, Western capital was exploiting the post-Soviet region through Russian capital — not directly, but through Russian capital. And this is the essence of a sub-imperialist position. So, speaking strictly in economic terms, that was the essence of Russia’s global integration. 

An illustration of this was Russia’s participation in the Davos forum. Take Dmitry Medvedev, for example; he was not a bloodthirsty nationalist back then. He was a kind of a moderate semi-liberal politician. And he spoke at Davos. This demonstrates that the Kremlin’s intention was to maintain its sub-imperialist role.

In sum, Lenin’s theory goes some of the way towards explaining Russian imperialism, but not all the way, in my opinion. Then we have Schumpeter, who offers not just a non-Marxist explanation, but to some extent an anti-Marxist explanation. Nevertheless, I think it is compelling in some respects, because Schumpeter emphasises historical elements in imperialist policy. He sees it as a kind of revenge of the past.

And if we look at Russia’s imperialist discourses we find in them an echo of the Soviet and especially the imperial past. The arguments that the Kremlin and Putin use resemble the arguments of the Russian Empire and specific ideological tropes about how Ukrainian identity was somehow invented by foreign intelligence specifically to weaken and destroy Russia. All that was already present some 120 years ago. These discourses have made their reappearance in Russian politics. So, the idea that Russian imperialism is a product of the past is compelling.

One obvious argument is that Putin is preoccupied with the past. He is constantly reading history books, and his obsession with Russia’s place in history and his own place in history is evident in his thinking, in his public speeches, and in the articles that he publishes. In terms of ideology, the influence of the past is very clear.

But then there’s the question of Putin’s transformation from a cynical materialist into an ideological imperialist. Why did he suddenly develop this interest in historical ideas? For me, that points to limitations of Schumpeter’s theory, as it does not really explain how the past reasserted itself in the present in Russia. I think that the explanation ultimately lies in contemporary events and not just some kind of metaphysical revenge of the past.

More specifically, the Kremlin’s ideology is based on the experience of primitive accumulation in the 1990s, when people, including Putin, participated in a kind of dog-eat-dog free for all in which you need to be on the offensive all the time or else you will be destroyed by your competitors. This was the essence of Russian capitalism in the 1990s, and this kind of experience was projected by the Kremlin elites onto the world stage. In Putin’s view, the world works just like Russian capitalism in the 90s: it is the Wild West. You cannot show weakness. You need to take the offensive at every opportunity, and you can never bluff. Bluffing is a sign of weakness, and weakness means you will be destroyed.

Based on this kind of experience and habitus, to borrow Pierre Bourdieu’s term, the ideology was fashioned after the Kremlin was radicalised by the Arab Spring and by the colour revolutions in the post-Soviet space. The Kremlin felt threatened by these events, and they interpreted them as an attack by the West — not as genuine popular protests, but as something inspired by the West to weaken these countries and destroy these political regimes. The conclusion was that the West is plotting the same thing against Russia, and so the Kremlin needs to strike first in order to neutralise the threat of a colour revolution or something similar to the Arab Spring. These were the triggers that dredged up those discourses and ideologies from the past and made them so relevant to the Kremlin in the present moment.

This ultimately explains the ideological consolidation of the Kremlin. In my opinion, ideology is the crucial factor in Russia’s aggression in 2014 and 2022. It cannot be accounted for simply with reference to objective contradictions, such as the contradictions of capital accumulation or geopolitical contradictions. By themselves they cannot explain the Kremlin’s decisions and actions, such as the decision to annex Crimea or the decision to invade Ukraine. Ultimately, the explanation lies in the sphere of ideology.

Trump’s Victory and Collapse of Liberal Centre

Prabhat Patnaik | 16 Nov 2024

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The roots of the ubiquitous collapse of the political liberal Centre lie in the fact that it remains tied to economic neo-liberalism which itself has run into a crisis.

Donald Trump’s victory in the US Presidential election conforms to a pattern presently observable across the world, namely a collapse of the liberal Centre and a growth in support either for the Left, or for the extreme Right, the neo-fascists, in situations in which the Left is absent or weak. This was visible in France where Emmanuel Macron’s party lost substantially, and the ascendancy of neo-fascism was prevented only by a hastily-formed Left alliance. This is also evident in our own neighbourhood, in Sri Lanka, where a Left candidate emerged as president through a sudden and substantial increase in his vote share, defeating the incumbent president who belonged to the liberal Centre.

This ubiquitous collapse of the liberal Centre, indicative of a crisis of liberalism, is the most striking phenomenon of contemporary times. Its roots lie in the fact that political liberalism today remains tied to economic neoliberalism which itself has run into a crisis.

The political philosophy of classical liberalism, which provided the basis for liberal political praxis, was sustained by a long tradition of bourgeois economic thought, straddling both classical political economy and neo-classical economics. Both these strands believed, notwithstanding significant differences between them, in the virtues of the free market, whose shackling by State interference had to be removed on a priority basis.

The vacuity of this entire line of reasoning was exposed by the First World War (whose economic roots belied all claims relating to the virtues of the market) and even more blatantly of course by the Great Depression.

Keynes showed that laissez faire capitalism, leaving aside “brief periods of excitement”, systematically kept large numbers of workers involuntarily unemployed, that the free market, far from being the ideal institution it was portrayed to be, was so flawed that it exposed capitalism to the danger of being overthrown by the rising tide of socialism.

But being a liberal, and apprehensive about the socialist threat if the system was not rectified, Keynes proposed a new version of liberalism (which he called “new liberalism”) that was to be characterised by perennial State intervention to boost aggregate demand and to achieve high employment, rather than an avoidance of it that had been the hallmark of classical liberalism.

Keynesianism, however, was never accepted by finance capital. Keynes himself was intrigued by this and attributed it to a lack of understanding of his theory. The real cause, however, lay deeper, in the fear that any systematic State intervention would delegitimise the social role of the capitalists, especially of that section of capitalists which was engaged in the sphere of finance and whom Keynes had called “functionless investors”; this is a persistent fear and remains to this day.

Keynesianism became State policy only after the war, since the war had weakened finance capital and had led to the ascendancy of social democracy, which had embraced Keynesianism.

The post-war boom in advanced capitalist countries saw a consolidation of finance capital and an expansion in its size to a point where it became increasingly international. At the same time post-war capitalism, even though supplemented by State intervention, ran into a different kind of crisis, not one caused by inadequate aggregate demand but one that consisted in an inflationary upsurge that occurred in the late 1960s and early 1970s.

This crisis was rooted in the twin phenomena that characterised post-war capitalism: high employment that diminished the reserve army of labour and removed its “stabilising influence” in a capitalist economy, and decolonisation that removed the mechanism for compressing third world demand to keep primary commodity prices low. It allowed the new international finance capital to discredit the regime of Keynesian demand management (aided and abetted by a revival of apologetic bourgeois economics re-propagating the virtues of the free market) and to promote neoliberal economic regimes everywhere.

Since in the new situation, retaining the “confidence of the investors” (that is, preventing capital flight by kow-towing to the demands of international finance capital) was the overriding concern of State policy, Keynes’ “new liberalism” had to be jettisoned; the liberal Centre, much of social democracy and even certain sections of the Left, lined up behind neoliberalism.

Neoliberalism, however, brought immense suffering to the working class in advanced capitalist countries and still greater suffering to the working people in the Third World, even before it had run into a crisis; and the suffering increased greatly when it did run into a crisis.

The growth rate of the world economy slowed down significantly in the neoliberal era compared with the dirigiste period; and it slowed further in the period after 2008 when the last of the US asset price bubbles burst.

This crisis, a result of inadequate aggregate demand caused by the massive increase in income inequality under neoliberalism (which invariably produces a tendency toward over-production) had only been delayed by the US asset price bubbles that had kept up world aggregate demand through a wealth effect; the crisis manifested itself with the bursting of the bubble.

The crisis cannot be overcome within the bounds of neoliberalism, because neoliberalism eliminates the scope for Keynesian demand management; and a new bubble that could mitigate somewhat its intensity, is ruled out by the very experience of the previous ones that have made people more circumspect. In fact, monetary policy aimed at stimulating a new bubble has only succeeded in stimulating inflation through higher profit-markups even in the midst of stagnant demand, which only aggravates the crisis even further.

Contemporary liberalism, in short, committed as it is to the neoliberal order, does little, and indeed can do little, to alleviate the people’s distress. Not surprisingly, the people are turning away from it toward other political formations to the Right and to the Left.

The Right, too, can do little to alleviate the people’s distress: its pre-election rhetoric is invariably at variance with its post-election policy which is neoliberal, as Giorgia Meloni in Italy has shown, and as Marine Le Pen’s prime ministerial candidate, Jordan Bardella, was beginning to show even before the elections in France through a shift in his party’s stand vis-à-vis international finance capital.

But the Right whips up rhetoric against the “other”, typically some minority religious or ethnic group, or immigrants, to produce a semblance of some sort of activism in the face of the crisis, while the liberal Centre barely acknowledges the existence of the crisis. Monopoly capital in this situation shifts its support toward the Right, or the neo-fascists, in order to maintain its hegemony in the face of the crisis, which is another reason for the weakening of the liberal Centre and the crisis of liberalism.

Trump, it may be argued, does have an economic agenda, of protecting the US economy against imports not just from China but even from the European Union. He cannot be accused of merely adhering to the old neoliberal script like Meloni. But several points must be noted here: first, even while moving away from liberal trade to protectionism, Trump has never mentioned putting restrictions on the free cross-border flow of international finance capital, so that the crux of the neoliberal arrangement remains unchallenged by him even in his pre-election rhetoric. 

Second, protectionism is not Trump’s original idea; it had begun even under Barack Obama. Besides, protectionism alone would not revive the US economy; it can at best encourage domestic production at the expense of imports from competing economies, but it cannot per se expand the size of the domestic market, for which an expansion of State expenditure, financed either through a fiscal deficit or through taxes on the rich, is essential.

But with his penchant for corporate tax-cuts revealed from his last presidency, Trump will not resort to higher State spending, so that at best, after a temporary blip caused by greater protection, the US economy will settle back into stagnation and crisis.

While Trump’s victory was, therefore, expected, being in conformity with the globally-observed phenomenon of a collapse of the liberal Centre, it does show that the people have not seen through his economic agenda, of adherence to the basic tenets of neoliberalism (other than introducing greater protectionism which can at best produce a temporary increase in jobs while worsening the inflationary situation because of the absence of cheap imports).

The international context, it follows, is favourable for the ascendancy of the Left, which alone can bring an end to the ongoing crisis by bringing an end to neoliberalism, and which alone can bring about an end to the wars that are currently going on (and for which the liberal centre is culpable, a matter to be discussed on a later occasion). The Left, however, has to be prepared for this task.

Prabhat Patnaik is Professor Emeritus, Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi. The views are personal.

 

The logic of imperialism’s ‘Maritime Great Game’ in the Southeast Asian Sea

By Rasti Delizo

Published 21 November, 2024

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First published at Amandla!.

The states with a coastline adjoining the Southeast Asian Sea are all facing a sharply rising regional quagmire. They are witnessing a soaring economic-diplomatic-security confrontation between the world’s top two imperialist powers. The United States of America and the People’s Republic of China are destabilising Southeast Asia by forcefully projecting their respective geostrategic objectives throughout the area. And by doing so, the region’s social majority — its working-class masses — are now becoming dangerously embroiled in this escalating great power collision.

A strategic competition

This imperialist rivalry is defined by the intensifying strategic competition between the US and China. They are both aiming to secure increased regional hegemony. So, they have unleashed parallel initiatives to thwart each other’s sweeping geopolitical designs for the immense Afro-Eurasia-Indo-Pacific as a whole — the Eastern Hemisphere.

In fact, these imperialist states are in relative decline. Only through international rivalry can they negate their weakened domestic conditions. Their reactions aim to protect their bourgeois socioeconomic formations from the fallouts of the chronically ruptured global capitalist system of production.

What is SEAS?

The Southeast Asian Sea is the vast expanse of salt water that lies within the southeastern region of Asia. Given its location, using the name ‘Southeast Asian Sea’, or ‘SEAS’, is more precise than the traditional name, the ‘South China Sea’. Another reason to use the name is to counter lingering inter-state frictions, which are encouraged by the use of nationalist-oriented place names for this marine realm. This readily breeds the reactionary phenomenon of national chauvinism and its destructive behaviours.

The Southeast Asian Sea remains one of planet Earth’s most diverse biospheres. It is a colossal aquatic ecosystem, covering approximately three and a half million square kilometres. It has over two hundred coral islets, an abundance of hydrocarbon deposits, and huge amounts of marine life. This organic wealth of natural resources is enough to sustain these states’ economies.

The Southeast Asian Sea is also a historically strategic marine domain that connects the Indian and Pacific oceans. As the region’s preeminent maritime corridor, its natural sea lanes provide crucial passage daily to enormous volumes of the world’s seaborne trade. It has key chokepoints in the straits of Malacca, Sunda and Lombok, and therefore acts as a vital channel for the trade between the economies of Europe, Africa and West Asia, and those of East Asia. And as a strategic sea spanning a zone of the Eastern Hemisphere, there is also a massive amount of shipping trade originating from the Western Hemisphere (i.e., North/Central/South America and the Caribbean).

Maritime Southeast Asia has consequently become a focus area for the competing interests of the world’s imperialist powers. Its regional security environment is now a turbulent arena of contestation for the major powers. They essentially seek to carve out additional space for capital accumulation through military means. This has turned the SEAS into an acute, perilous, global flashpoint.

A struggle between two imperialisms

The imperialist competition between the US and China is a particular manifestation of a generalised systemic crisis materially rooted in the inherent contradictions of the prevailing imperialist world system. Southeast Asia is being impacted by a strategic shift underpinning the bourgeois international order.

This great power engagement is unlike the last century’s Cold War. It is clearly not an international struggle between opposing ideological poles, supporting the strategic visions of contending socioeconomic systems. The first Cold War (1946-1991) was a clash of starkly counterposed systems — the capitalist camp (led by American imperialism) versus the communist camp (led by the former Soviet Union).

In contrast, the contemporary inter-imperialist conflict is being waged through a singular ‘capitalist unipolar order’. The contesting imperialist powers belong to the same capitalist pole. Together, they principally direct the monopoly capitalist agenda of the global core — albeit in an adversarial way.

Neither of them challenges the fundamentals of the capitalist system of production and distribution. Neither of them opposes globalised finance-monopoly capitalism’s exploitative norms of extracting surplus value through unequal exchange mechanisms to guarantee incessant capital accumulation for the imperialist core. Nor do they even attempt, in any serious way, to break imperialism’s circuits of global capital that oppressively control the periphery. Both American and Chinese imperialisms openly support the capitalist logic of guaranteeing the net flow of value (wealth) from the dominated countries to the centres of world capital.

Imperialist competition is mainly driven by the slow global pace of capitalist development due to stagnant growth with falling rates of profit. These negatives are made worse by other disruptive factors of the capitalist world economy, especially its generalised crisis of overproduction, along with overaccumulation, chronic underutilisation of capacity linked to constant mass unemployment, and global conditions of uneven and combined development. Thus, the central dynamics fueling this neo-Cold War moment stem from the contradictions intrinsic to the imperialist world system itself.

This system principally functions through the logic of super profits based on the eternal accumulation of capital. Its structure is built on exploitative and oppressive systems based on a global core-periphery model. In plain terms, this comprehensive socioeconomic formation supports and reinforces the capitalist, unipolar order.

The imperialist struggle for domination

Inside the global core lies a very small group of advanced capitalist economies. They are arranged into contending blocs led by the leading imperialist powers. These imperialist blocs directly compete with each other for economic control and political dominance over most of the world’s dependent semi-colonial states, which lie at the periphery. The power struggle between the US and China represents the current phase of the international system.

The imperialist blocs continually seek to increase the scope of their power through constantly expanding their respective spheres of influence and domination. In advancing their schemes for predominance, the imperialists try to reshape the international division of labour to favour their own geostrategic goals and interests. As a result, worldwide disputes, strife and wars inevitably erupt between them as they fight for global ascendancy.

These imperialist powers are always prepared to wage relentless acts of aggression beyond their frontiers. They do so to achieve a competitive advantage for their ruling classes. They engage in harmful and destructive economic competition, political schemes, and aggressive wars worldwide, regardless of the social cost. This is a general characteristic of monopoly capital. And during crisis moments, the imperialist states readily strike at each other in attempts to attain economic-political-security superiority for their own financial-oligarchic national regimes.

Unquestionably, the world suffers from the consequences of global polycrisis, which results from this in terms of the economy, politics, security, health, and climate emergency.

Following the ‘global capitalist crisis-depression’ that flared in September 2008, the US worked to regain and stabilise its international strategic position. It pursued this by strengthening its regional spheres of influence via attempts at reshaping the global economic and political order to align with its interests.

US strategy

US imperialism’s main goal remains the rejuvenation of American capital, chiefly through a revitalised global network of ever-expanding national markets in pivotal regions of the world. Combined with this, US imperialism robustly restimulates and weaponises monopoly capitalism for higher growth. It does so by producing enormous amounts of war materiel and using it in wars overseas. After the conflicts end, American capital then rebuilds the devastated countries. Through this coercive cycle, Washington aims to continually reshape the capitalist world order to maintain its global dominance. 

In functional terms, American imperialism currently advances a redesigned, long-range, foreign-security policy framework. Driven by the Biden regime’s central mantra, “We are in a competition with China to win the 21st Century”, the US’s geostrategy is based on building strong regional economic and military alliances to counter China in the Asia-Indo-Pacific region. Guided by its dual 2022 geostrategic blueprints — the ‘National Security Strategy’ and the ‘Indo-Pacific Strategy’ — Washington’s main goal is to secure ‘free and open’ access to the region’s air and maritime arenas while limiting China’s opportunities for expansion.

By now, US imperialism has effectively extended the ambit of NATO into the Asia-Indo-Pacific. In also promoting market access initiatives, the ‘globalised NATO’ project aligns American monopoly capital’s economic and military priorities. To implement this strategy, Washington integrates the neoliberal Indo-Pacific Economic Framework for Prosperity (IPEF), along with alliances like the Australia-United Kingdom-United States (AUKUS), Quadrilateral Security Dialogue (Quad), and the Japan-Philippines-US political-military partnerships. Together, these coordinated efforts jointly form American imperialism’s battering ram to oppose Chinese imperialism in the region.

China’s strategy

To foil this, China has built up its own network. These include the Shanghai Cooperation Organisation (SCO), the Belt and Road Initiative (BRI), the Maritime Silk Road (MSR), the Conference on Interaction and Confidence-Building Measures in Asia (CICA), the Asian Infrastructure Investment Bank (AIIB), and the BRICS (Brazil/Russia/India/China/South Africa) grouping.

China’s comprehensive national power is not just a counterbalance to that of the US; it is also aimed at maintaining the global bourgeois system along imperialist lines.

Despite this, the US is succeeding in enticing other East Asian states to join its imperialist project to deny/degrade/damage the Chinese imperialist bloc’s regional strategic agenda. Integral to this, Washington regularly affirms its diplomatic narrative of “upholding the rules-based international order” (a code phrase for globally propping up US imperialist interests). So, it enlists blatantly pro-American states — like the Philippines — to openly provoke China. This is exemplified by the deployment of American troops and weaponry inside US-controlled military bases on Philippine territory.

The Philippines as a puppet in the struggle

Washington has a clear strategic plan, but Manila’s foreign policy planners fail to consider how China’s leadership thinks. Filipino leaders assume China will see their actions as harmless, even when the Philippines cooperates with the US. However, what really matters is how China (as a great power) views its external security environment — not what Manila claims. This allows Washington to strongly take advantage of Manila’s blind loyalty to the US to provoke China.

China’s social-chauvinist militarism in the Southeast Asian Sea should be condemned. Equally, the international communist movement must also denounce the joint US-Philippines military manoeuvres. Clearly, all imperialist wars of aggression must be opposed.

At present, US imperialism is already preparing for a possible limited war with China, using the Philippines as a trigger point to reshape Southeast Asia’s geopolitical landscape. Washington aims to strengthen its influence in the region to boost American economic growth and power. This will lead to a risky and significant shift in the ongoing imperialist competition within the area. And so, today, this is now Southeast Asia’s ‘Maritime Great Game’.

Rasti Delizo is a global affairs analyst. He is a member of the Bukluran ng Manggagawang Pilipino (BMP/Solidarity of Filipino Workers); BMP is a revolutionary socialist political centre of the Filipino working-class movement.