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.

Liberation Is Not Propaganda

By James Granelli, Raíra Fróes 

November 19, 2024

Source: Africa Is A Country

Image by Africa Is a Country

In the same week known climate denialist and convicted felon Donald Trump was re-elected to the White House, Africa Energy Week took place in Cape Town. Both spin lies, half-truths, and hypocrisy, claiming the benefits of fossil fuels for the poor, a sovereign state, and the key to self-determined development.

The argument against oil and gas due to their carbon emissions and resulting extreme weather across the continent has been regularly made and is now playing out materially in the form of droughts and floods that have wiped out 80 percent of Zimbabwe’s harvest and affected hundreds of thousands in Sudan respectively. However, what is missing is a rebuttal to the industry’s co-option of liberatory language and sustainable development critiques. Co-option is not unique to the African continent. As cases from Brazil show, the appropriation of sovereignty discourse by oil and gas companies never leads to equal benefits and, instead, continues to defend private (and mostly Western) interests.

Africa Energy Week, hosted by the Africa Energy Chamber, was a congregation in the supposed search for solutions to Africa’s energy crises. However, with the number of fossil fuel corporations, speakers from the African Petroleum Producers Organisation (APPO) and Organization of the Petroleum Exporting Countries (OPEC), and the number of energy ministers from across the continent, it was clearly a gathering on how to hook the continent on the false promises of oil and gas as transition fuels and argue that the environmental goals of the Global North were standing in the way of Africa’s development.

In his opening address, NJ Ayuk, the Executive Chairman of the African Energy Chamber and a convicted fraudster in the US, remarked on the importance of oil and gas for job creation and the continent’s right to energy sovereignty and economic growth. Disguised in the language of hope for Africa’s liberation and development is a new form of climate denial that appropriates progressive rhetoric in service of fossil fuel companies.

Researcher and activist Dr Alex Lenferna details in a recent publication how the appropriation of progressive causes, such as racial justice, decolonization, and anti-imperialism, was used as propaganda by Shell and Gwede Mantashe, South Africa’s Minister of Mineral Resources and Energy, to attack critiques and local opponents to Shell’s seismic surveys on the west coast of the country.

Although not as explicit as Mantashe calling environmental activism “colonialism and apartheid of a special type,” the language of oil and gas giants and their critique of northern interference is used to enable the extraction of Africa’s resources with minimal protest.

Dr Lenferna classifies this language appropriation as propaganda, specifically arguing that it classifies as undermining demagoguery propaganda. He writes: “Echoing colonizers before them, the neocolonial push for oil and gas extraction comes masked as being good for the people who are trying to resist it.” As the propaganda echoes the colonial narratives of “development,” so too do the extractive practices as the profits and products are shipped offshore.

Calling out this appropriation of language is not a disagreement with the progressive claims themselves. Yes, we need energy. Yes, the continent needs to break from the neo-colonial chains imposed by structural adjustment and other “development” initiatives. But implying that oil and gas, an industry drenched in the colonial practices of extraction, destruction, resource appropriation, violence, and racial capitalism, is the way forward is hypocritical and an insult to those who wish and work for African sovereignty on Africa’s terms.

If the industry was genuine in its message on African sovereignty and liberation perhaps they might read the likes of anti-colonial leader Amilcar Cabral, agreeing with his quote: “we can affirm, without fear of contradiction… that, to defend the Earth is the most efficient process to defend Humankind.” However, this may sit uncomfortably with the ecocidal realities of oil extraction in the Niger Delta or plans to build an oil pipeline through national parks in East Africa.

In a similar fashion to the economic liberation rhetoric, Ayuk also pointed out that Africa should not compromise its development goals to fall in line with wealthier countries’ environmental standards—another tactic to justify fossil fuel expansion on the continent.

Here we are pointed to the valid critiques of sustainable development that highlight the injustices of the climate crisis and its multilateral solutionism, whereby rich countries dictate the playbook while the Global South suffers.

Even sustainable development conferences on the continent, such as the 2023 African Climate Summit, have offered little hope of change from the status quo—brimming with corporate solutions from the global North, including loans and carbon credit schemes, and relegated civil society voices to the background. These financialised solutions rehash histories of carbon colonialism and sideline local communities dealing with crop failures, flooding, pollution, and intense cyclones.

Likewise, we must also be attentive to green colonialism already unfolding in North Africa, where people are being displaced from the land for solar mega projects that serve European energy use and the current prospectors of green hydrogen, continuing relations of extraction and resource appropriation on the continent.

Notwithstanding these notable critiques of profiteering environmental policy, to claim that oil and gas are aligned with the climate justice critiques is a disservice to Global South activists, communities, and researchers who continue to counter climate solutions that perpetuate resource appropriation and skirt the issue of reparations from colonial plunder. Simply put, oil and gas are not part of the deep and radical Just Transition needed to avert climate catastrophe and ensure African prosperity.

The appropriation of Africa’s right to development subverts real concerns and aspirations about what kind of development we want. The case of TotalEnergies gas exploration in Cabo Delgado, Mozambique is a perfect example of the type of “development” the industry wishes to bring. Displacement, radicalization, war, suppression of the press, human rights violations, thousands killed, and a French corporation eventually pulling out of its “development” plans after leaving a region in chaos. This is by no means the radical, African-led, development that the likes of Kwame Nkrumah and others spoke about in their opposition to neocolonial development in the 1960’s and 70s. The “development” of Cabo Delgado, and many other places on the frontlines of extraction, is not the revolution the fossil fuel industry spins it to be.

Africa Energy Week 2024 had the slogan: “Making energy poverty history by 2030.” Energy poverty is a timely issue on the continent, and it needs solutions and infrastructure that ensure sovereignty as well as security. However, we have seen time and time again that fossil fuels are not aligned with such democratic or riotous principles. Betting on oil and gas, predominantly explored and extracted by foreign companies, for African energy sovereignty is like betting on the colonizer’s cannons to sink its ships. This bet is not unique to the continent and there are lessons to be learned from others in the Global South who have made these fairytales a reality.

Brazil’s Petrobras was founded in 1953 and conceived under the “Oil is ours” slogan – a movement focused on resource and financial sovereignty. The oil company was key to the Brazilian industrialization movement and held a monopoly over oil extractivism for a few decades as a state-owned company.

After decades of toe-dipping in international markets, a neoliberal shift turned it into a mixed capital enterprise in the 1990s, pushing Brazil’s oil economy into the murky waters of profit accumulation. Since then, its scope has expanded to oil, natural gas, and petrol derivatives. Truth be told, great efforts were made to maintain petrol economies outside of the hands of Western giants, but within a highly commodified market escaping its claws is a hard task.

Decades after its birth, Petrobras has been the protagonist of corruption scandals, has failed to meet sustainability goals, and kept profit margins high. Between 2014 and 2015, Operation Car Wash became globally known for its uncovering of one of the world’s largest corruption scandals—the accompanying media coverage was later captured by polarized political discourse, pushing community interests and ecological impacts to the background of the conversation once more.

This neoliberal turn was also felt by the national electricity provider, Eletrobras, where the privatization of service providers marked its lack of commitment to community interests. Although the company strives to be known for its role in expanding the Brazilian electricity grid and bringing affordable power to urban and rural areas alike, recent research shows that over 45% of Brazilian households spend at least half of their income to keep the lights on.

Today, Brazil faces climate disasters almost daily, including soaring deforestation rates, destructive wildfires, droughts, and floods. Ongoing developments may worsen this crisis: Petrobrás is currently expanding plans for deep-sea drilling off the Brazilian equatorial coast, closing in on the Amazon river mouth and dozens of indigenous communities who strongly oppose the project. The dangers of deep-sea extractivism are growing in South Africa; both oil and gas licenses continue to be negotiated in the Orange Basin, their ongoing efforts hard to track. Multinationals continue to pull in and out of contracts, while the majority of South Africans remain out of the loop when it comes to control of the country’s natural resources.

As yet another climate conference begins in the petro-state of Azerbaijan, the lessons from Brazil should be front and center of the Global South delegations displeased with the Global North’s reluctance to pay up for loss and damage while demanding shifts in energy regimes across the South. The fossil fuel industry will continue to spin its “solutions” as anti-imperial and for the people. However, like in Brazil, the industry will never be revolutionary but will forever be tied to a business model that places profit over habitability. We must ask what kind of development we want and need, implementing solutions from and for the continent that improve habitability for all.

James Granelli  is a MPhil candidate with Environmental Humanities South at the University of Cape Town, researching multi-species politics and relations in the Cape Town critical zone.

Deconstructing State Capitalism

David S. D’Amato

 November 15, 2024
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The term state capitalism does not have a single definition that is used with consistency and uniformity. The definitions that have been used depend on the context of the discussion, both historically and in terms of discipline or field, and the ideological commitments of the speaker or author. To understand state capitalism, it is necessary to survey the ways the state has shaped and participated in economic life within capitalist frameworks. Today, state actors around the world are adopting an aggressive economic strategy, investing heavily across sectors to position themselves optimally within the global capitalist system. State-owned enterprises (SOEs) have proliferated dramatically in recent years, growing in number and increasingly occupying positions as some of the top companies in the world. In the twenty-first century, SOEs have “evolved from national monopolist[s] to global players,” expanding their reach and increasingly “operating in strategic sectors – such as energy, transport, infrastructure and logistics, banking and high-tech.” As just one example, sovereign wealth funds (SWFs) have grown significantly in recent years and are now some of the largest and most important investment funds in the world. “As of February 2023, assets under management of sovereign wealth funds globally stood at $11.3 trillion, up more than tenfold in the last decade.” Governments can generally mobilize much larger sums of capital than private companies—and more quickly and easily. Governments have a range of powers that make them unique among institutional investors; they can do things like tax people, control natural resources (like oil, gas, and minerals), print and disseminate money, adjust interest rates for the entire national financial system, and apply foreign exchange reserves. With their incredible masses of capital, states exert enormous and unmatched power as investors in the global market. Their actions can impact whole industry sectors and national economies. Within the current context, the term state capitalism has been deployed as a kind of smear against China and others, to differentiate their supposedly exotic, statist-authoritarian practice of capitalism from a purer and truer Western version. It is undoubtedly true that for cultural and political reasons, China does not feel the same need to obscure or euphemize its participation in the economy. But it has become necessary to mount a critical challenge to the reproduction of “extremely problematic Eurocentric imaginaries” that present a misleading picture of a supposed contest between the “vile, authoritarian state capitalism” of the East and “a more virtuous liberal-democratic form of free-market allegedly prevailing in the West.”

The idea of state capitalism has long been associated with Marxist discourse. Notably, for Vladimir Lenin, state capitalism was promoted as an intermediate phase in which the state would participate in the capitalist system under the supervision and control of the working class. Lenin believed that the consolidation associated with monopoly capitalism would prepare the way for the socialization of production through the state. Indeed, he goes so far as to argue that under “[t]he objective process of development” it is “impossible to advance from monopolies (and the war has magnified their number, role and importance tenfold) without advancing towards socialism.” To Lenin, socialism must proceed directly from state-capitalist monopoly as the inevitable “next step forward.” “Or, in other words, socialism is merely state-capitalist monopoly which is made to serve the interests of the whole people and has to that extent ceased to be capitalist monopoly.” Ironically, then, were he alive today, Lenin could be expected to see current concentrations of wealth under global state capitalism as an auspicious indicator, the condition precedent to the advent of socialism under state administration. Many of Lenin’s socialist and communist contemporaries shared his conviction that capitalist monopolies were the path to state ownership and thus to an eventual full socialist state. At this point, some will ask: what are we to make of the fact that so many influential socialists saw socialism as monopoly capitalism perfected? At the very least, it shows that there were and are many visions of socialism—and of the paths thereto. During Lenin’s lifetime, several social, technological, and ideological developments contributed to his understanding of state monopoly capitalism as the immediate precursor to socialism. Whether or not they were actually implemented in the early Soviet Union, Lenin was influenced by ideas associated with Frederick Winslow Taylor and his Principles of Scientific Management. Taylorism emphasized the centralization and standardization of production processes, which Lenin believed would rationalize and optimize the allocation of labor resources. Lenin thought that under the control and direction of the state, these new methods and practices could be implemented to overcome the chaos and inefficiency of capitalism, creating a streamlined planned economy that would work for all. In line with the economic thinking of the time, Lenin saw gigantic scale as necessary for both attaining economies and making it possible for qualified experts in the state to manage the economy from the top down. It is important to understand Lenin’s point of view because it helps to explain the trajectory of twentieth century communism and to highlight, by contrast, some of the libertarian socialist and anarchist criticisms of state capitalism. Both the state capitalism of the West and the communism of the Soviet Union and China during the 20th century created morphologically similar structural and organizational patterns—centralized, hierarchical, bureaucratic, and ruled from the top down. Lenin’s phased framework notwithstanding, the mere fact of its ownership by the state does not make a corporate entity less hierarchical or exploitative per se. Nor does state ownership, on its own, mean management and control resides in the hands of the workers. Conditions for the workers seem to depend much less on institutional names and formalities than they do on the embodied material facts of centralized power and rigid hierarchical control.

It is ahistorical to present the state as merely a neutral rule-giver and enforcer, refereeing fair play in the free market. The twenty-first century state is not passingly interested in the economy. Indeed, the state regards itself as responsible for fundamental measures of economic health such as the GDP, employment levels, inflation, and the balance of trade. The GDP is its GDP, etc. Sovereign states participate directly in the capitalist market in a wide variety of ways. They are much more active players in the capitalist “free market” than many suppose. States often compete in the market directly, with governments owning and operating firms in sectors ranging from airlines and oil and gas to telecommunications, investing, mining, agribusiness, pharmaceuticals, and infrastructure construction. Perhaps least surprisingly, some of the largest energy companies in the world belong to governments, including the largest in Saudi Aramco, one of the most valuable companies in the world, with a market cap of $1.9 trillion (just 6 companies have a market cap over $1 trillion). Russia owns the world’s largest natural gas company by production volume, Gazprom, “with a 10% worldwide share of the market in 2023, followed, just as in the previous year, by PetroChina.” Any real understanding of the way corporate power operates in the world today requires us to “understand the inextricable interrelation between the state and the corporation.” It is common for the mainstream conversation to treat corporate influence on policy making and the political process as a kind of breakdown of the system, a glitch or deviation. But as a historical and empirical matter, this is not at all accurate. The state is itself a corporation in the sense that it is a discrete legal entity, an artificial person separate from the group of people it represents. The first modern companies were created explicitly as the conduits of anti-competitive monopoly privileges and imperialism. The charters that created them were readily acknowledged as favors from sovereigns, granting special rights to particular spheres defined geographically and commercially. Abstract or philosophical notions about economic freedom and fair competition were of course not driving the creation of the proto-corporate economy.

Scholarly interest in the institutions, phenomena, and ideological systems often associated with state capitalism has increased over the past decade in response to aggressive government strategies to play an active and direct role within the global market. In their book The Spectre of State Capitalism, published earlier this year (the full book is available for free here), Ilias Alami and Adam D. Dixon provide a comprehensive and interdisciplinary picture of the “material, discursive, and ideological dimensions” of present-day state capitalism, with they discuss as “the new state capitalism.” Alami and Dixon hope to correct the record in part by pointing out that vigorous state intervention has been anything but an aberration in the history of capitalism:

First, we submit that state capitalism must not be seen as an anomaly or a deviance from liberal, market-based capitalism, but as a particular modality of expression of the capitalist state, including in its liberal form. State capitalism is an immanent potentiality, an impulse which is contained in the form of the capitalist state and built into its DNA.

Alami and Dixon stress that the modern state and capitalism arise together and evolve in a sophisticated and highly intertwined relationship with each other. And as they note, historically, there is no capitalism without deliberate and sustained state intervention to create it. Relatedly, in their analysis of the private sector, Alami and Dixon want to remove it from a privileged position whereby it is simply assumed a priori that private companies are necessarily more efficient, innovative, and driven. Their work encourages us to look behind a state-market, public-private dichotomy that does not accurately describe the real-world relationship between the state and the economy. The authors also want to understand the relationship between the rise of state capitalism and “secular capitalist trends of economic stagnation and the centralization and concentration of capital.” Today, global capital is extremely concentrated and centralized, with inequality soaring in recent years and a relatively small number of companies controlling each major sector. Among the major economic trends of the past several decades is “the unprecedented centralization and concentration of capital on a planetary scale.” In the United States, there are about 40 percent fewer companies today than there were 30 years ago. “In the mid-1990s, there were nearly 8,000 public companies listed in the U.S. Today, there are half as many, and at the current rate, we’ll see that number halved again by 2044.” This has led and will continue to lead to major crises. Among the fundamental contradictions of capitalism is that it expects growth in revenues and profits even as it concentrates the benefits of that growth—and all wealth—in fewer and fewer hands. Unsurprisingly, in capitalism, this phenomenon of wealth and power concentration also appears within the firm, as the size of the firm increases. Quite contrary to popular belief, the growth of state power and a modern state more willing to participate directly in economic competition have not translated to weaker corporations or a more diverse and competitive economy. Indeed, a more active and powerful state seems to lead almost ineluctably to a more centralized and oligopolistic political and economic system. Perhaps surprisingly, then, in a recent interview with Geoffrey Gordon for the New Books Network, Dixon notes that libertarian and classical liberal types could find themselves agreeing with many of the book’s core claims. The book shows that as a political and economic system, state capitalism depends on the active interventions of governments in market economies, the kinds of interventions libertarians frequently criticize. This is another of many areas of fruitful dialogue between libertarian and leftist modes of criticism.

Alami and Dixon note that quantifying state capitalism presents many practical difficulties, but using the example of the United States, we find enormous levels of government intervention and participation in the economy. Whether they admit it or not, the political establishment across both major parties in the U.S. has long been comfortable with strong and sustained federal government intervention in the economy. A certain level of positive intervention is taken for granted at the political level, and that level is extremely high under any plausible empirical approach. The United States is home to the top two state-owned enterprises by total assets, Fannie Mae and Freddie Mac, which are both currently under government conservatorship; though they are not technically owned by the U.S. government, they highlight one of the fundamental characteristics of the state capitalist paradigm: they were included in the list presumably because, formal ownership notwithstanding, the state holds the incidents of ownership, as is often the case in partnerships between the state and normally private corporations. The state is shrewd and sophisticated as a commercial actor and does not invest without holding the strings. Whatever its rhetorical pretensions, the United States has not adopted a light-touch approach to the economy. Over the past several years, the United States government’s interventions in the economy have totaled in the multiple trillions of dollars, far beyond the level of state involvement we would expect in a hypothetical free and competitive economic system (importantly, this is even without including spending associated with responses to the pandemic). Most such interventions were undertaken to benefit and prop up giant multinational companies, with, for example, several trillions going directly to defense contractors (read: war profiteers) over the past 5 years alone. As an insurance provider, the United States government manages millions of policies to the tune of trillions of dollars. The U.S. government provides grants and subsidies for domestic companies and industries, bails out banks and other financially troubled domestic industries, offers credit lines, and purchases billions of dollars worth of securities. Today, it is considered impolite to point out that the United States is an empire; it wants its vassals—particularly its first-tier ones—to feel that they are masters of their own destiny. But the United States has the power to dictate the parameters of their economic policy, and it is not at all shy about exercising this power. The United States also increasingly tries its best to police and control who can participate in the global market, through an ever-increasing list of sanctions. The idea that the United States should assume this role is asinine and would be hilarious were it not so costly in human terms: to show how serious it is about punishing its enemies and controlling the world economy, Washington will sentence millions of innocent people to entirely unnecessary death.

As observers have long acknowledged, the U.S. incarnation of state capitalism is a version of fascist political economy. In a fascist system, the economy is not centrally planned, but it is monitored, controlled, and directed toward the aims of the state, with any liberal notion of economic rights subordinated to the demands of national greatness and unity. Private ownership is permitted, but corporate power collaborates with the state as junior partner; corporations may operate and compete freely within limited commercial spheres, but they must operate as extensions of the state when called upon and must align their efforts with the goals of the state. Americans of many political stripes have begun to see such features in the visage of our government (if you’ll forgive our here). Though we are led to believe bigger is always better, large scale is integral to the systems of domination and human suffering we see around us. Capitalism has been able to absorb and overcome its critics— “it has become much more immune to social movements, much more immune to critique and judgment. A hundred years ago, it would’ve been probably a lot easier to overturn and topple the system than it is today; it’s so much more rooted in our everyday life, and the values are so taken for granted and a priori …” And speaking of absorbing its critics, just as there is no real free market in the United States, there isn’t much communism going on in China these days. From Mao’s 1938 call for the “Sinification of Marxism” to Deng’s Socialism with Chinese Characteristics to today, China has become comfortable with state capitalism. The Chinese Communist Party has long emphasized the distinctiveness of their socialist vision. And it is no doubt a distinctive form of socialism that unites the full state embrace of capitalism with promises of a return to national greatness, and that preserves the unquestioned political dominance of a single party.

As a social system, state capitalism is a dramatic failure, engendering a crisis of hopelessness, isolation, and dissociation, “because the society seems inalterable, unchangeable, unresponsive to our needs, and it’s crushingly—let’s be honest—meaningless.” If we were to caricature an oligarchical empire ruled by global finance capital, that system might look similar to the one we actually have in 2024. The existing system is a social illness. We have left behind our skepticism of the gargantuan and forgotten that what is giant must be dangerous—and hard to move from an ill course. We may not like the task and we may not be up to the task, but the task is clear: we must dramatically relocalize our political and economic institutions, cultivating active and direct resistance to the dominance of capital and the state over human life. We can only meaningfully counter their dominance by understanding their interrelatedness and history. The dominant system—choose your preferred name: state capitalism, monopoly capitalism, state monopoly capitalism, fascism—seems to us inevitable, but it is far from being so. Other ways of life exist, even now alongside our supposedly inevitable system, all around the world, at the still unreached boundaries of the state capitalist order. Even as the state and capital grow in power together, they have not dominated everything yet.

David S. D’Amato is an attorney, businessman, and independent researcher. He is a Policy Advisor to the Future of Freedom Foundation and a regular opinion contributor to The Hill. His writing has appeared in Forbes, Newsweek, Investor’s Business Daily, RealClearPolitics, The Washington Examiner, and many other publications, both popular and scholarly. His work has been cited by the ACLU and Human Rights Watch, among others.

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