World Perspectives 2018: I. The Reactionary Offensive of the Ruling Class Inevitable Provokes Political Crisis, Conflicts, Wars and Popular Uprisings

 

 

 

 

4.             The capitalist world system remains stuck in a chronic stagnation of its economy. While the world economy has not entered a new period of deep recession yet, it is characterized by high debts and low productivity growth. While the IMF predicts that 2018 will be a year of moderate economic growth, others believe that a new recession will already hit this year. In fact, the latest panic at the global stock markets in early February underlines the fragile state of the capitalist world economy and its enormous inner contradictions.

 

5.             What is clear, however, is that the beginning of the recession could only be delayed because governments, corporations and private households around the world – from the US to China – were prepared to increase their debts even more. Today, the capitalist world in East and West is more indebted than it was before the last recession in 2008/09. Furthermore, while during the last recession it was possible to cushion the blow because China and other “emerging markets” had relatively low debts, this is no longer the case. However, at the same time, such means of delaying the outbreak of the next recession will guarantee that once the downturn starts, it will become more destructive with unforeseeable political consequences.

 

 

 

Main Characteristics of the Current World Situation

 

 

 

6.             The main political characteristics of the present world situation are the following:

 

i.              The reactionary offensive of the ruling class has provoked an acceleration of the tensions between the imperialist Great Powers (e.g. US vs. Russia, the looming trade war between US and China) or between imperialist powers and major regional powers (e.g. the military stand-off between China and India in summer 2017). Likewise there has been a cooling of the historic close relationship between the US and the EU.

 

ii.            The reactionary offensive of the ruling class has also provoked an acceleration of the imperialist aggression against the oppressed people of the South (e.g. US vs. the Afghan people, North Korea, and Iran, Russia vs. the Syrian people, the pro-US Saudi coalition vs. Yemen, Israel vs. the Palestinian people, or the pro-imperialist AMISOM vs. the Somali people). Each of these conflicts has either already escalated into an open war or has the potential to do so in 2018.

 

iii.           The reactionary offensive of the ruling class has provoked a massive acceleration of the tensions between regional powers (e.g. Saudi-Arabia/UAE/Israel vs. Iran, Saudi-Arabia/UAE vs. Qatar, Egypt/Eritrea vs. Ethiopia/Sudan, or Tunisia vs. UAE). Most of these conflicts can explode into an open war in 2018.

 

iv.           Furthermore, the reactionary offensive of the ruling class has provoked serious or even deep domestic political crises (e.g. the Trump Administration in the US; the preventive civil war from above of Crown Prince Mohammed bin Salman against a sector of the traditional political and religious establishment of the Saudi-Arabia; the ongoing malaise of Temer’s illegitimate government in Brazil; the crisis of the regimes of Kabila in DRC, of Kenyatta in Kenya or of Gnassingbé in Togo; the enormous difficulties of Germany’s Angela Merkel to establish a coalition government). Such crises can provoke mass struggles, and has already in some cases, or even trigger pre-revolutionary situations.

 

v.             Finally, the reactionary offensive of the ruling class has provoked a new upsurge of class struggles. We can say that in the last few months we have seen, on an international scale, a higher level of class struggles than at any time since the strategic defeat of the Egyptian masses by the military coup of General Sisi on 3 July 2013. Examples for this encouraging development are the popular uprisings in Palestine, Iran, Tunisia, Sudan, Honduras and Catalonia; the mass protests in Togo, Kenya, Zambia, Morocco, and India; the mass strikes in Brazil, Argentina; the remarkable popular protests in the USA against the Trump Administration, etc.

 

vi.           However, given the profound crisis of leadership of the working class and popular movements, these struggles are either very spontaneous and lack a strong, organized leadership – which implies the danger that they lose steam and get smashed by the regime (e.g. in Iran, Zambia); or that they are misdirected by petty-bourgeois reformist or populist leaderships which lead the struggle into a cul-de-sac (e.g. Syria, Kenya, Brazil, Argentina, Catalonia).

 

 

 

Domestic Crisis and Aggressive Foreign Policy

 

 

 

7.             The uniqueness of the present situation is that the ruling classes of capitalist states – both of imperialist powers as well as of semi-colonial countries – are forced to take aggressive steps in order to avoid the consequences of a domestic political crisis, a looming economic recession, a loss of sphere of influence abroad, etc. However, by taking such steps they either unintentionally deepen the crisis or, by avoiding a crisis in the short-term, they provoke an even worse crisis in the future. The pathetic US Administration of Donald “Dumb as Shit” Trump is a prime example for this. [1] In order to boost his dwindling domestic support by appeasing the Evangelic, pro-Zionist fundamentalists, Trump recognizes Jerusalem as Israel’s capital … and destroys at the same time the so-called peace process in the Middle East. In order to survive its domestic crisis, this Administration is so desperate that it is ready to undertake every possible hara-kiri operation. This, again, is a reflection of the decay of U.S. imperialism. Indeed, one could characterize this bizarre amalgam of extreme right-wing billionaires, ultra-imperialist adventurists, evangelic tea-party morons and Zionist fanatics as the Armageddon faction of the American bourgeoisie. But Trump is not the only example. Take for example Saudi Arabia’s Crown Prince Mohammed bin Salman who wants to “modernize” the country and expand its regional influence … and in order to achieve this he launches one foreign policy adventure after the other which all turn out to be embarrassing failures (Yemen war, boycott of Qatar, arrest of Lebanon’s Prime Minister Hariri, agreement to Jared Kushner’s bizarre and doomed to fail Middle East “Peace” Plan etc.). Or take Philippines’ strong man Rodrigo Duterte who announces a nation-wide war on drugs in order to create a Bonapartist authoritarian regime and ends up in corruption scandals, public humiliation and an embarrassing five-month battle in Marawi where the army hardly manages to defeat a few hundred encircled Islamist rebels. The reasons for this unique characteristic of the world situation can not be found in the dumbness of this or that individual (albeit some are really blessed with abysmal stupidity!) but rather in the decay of the capitalist world order which pushes its leaders to act increasingly in a desperate and adventurist way. [2]

 

8.             Trotsky always emphasized that “foreign policy is everywhere and always a continuation of domestic policy, for it is conducted by the same ruling class and pursues the same historic goals.[3] Given the decay of the productive forces in the present historic period and the corresponding increasingly fragile domestic rule of the bourgeoisie, it is only logical that the foreign policy of the ruling class increasingly become more aggressive. Chauvinism, militarist rhetoric and wars are important instruments for the ruling capitalist class to deflect from domestic crisis. However, they usually work for the bourgeoisie like a drug. In the short-term, an aggressive foreign policy often gives the bourgeoisie a kick at the beginning, i.e. it serves to strengthen it via an ideological offensive. But the more it strengthens the ruling class at the beginning, the more it threatens to ruin it later. A saber-rattling foreign policy creates huge expectations by the public opinion which can easily result in embarrassment and humiliation if such an adventure does not end in total victory. A war, destined to be short and decisive, can turn out to take much longer and to result in a quagmire – with all the risky domestic consequences (e.g. the U.S. in Afghanistan and Iraq, Saudi Arabia in Yemen). Furthermore, such a war often results in much higher economic losses than gains. In other words, chauvinism and militarism of the ruling class make it look strong and stable but in fact is an expression of domestic crisis and bears high risks to deepen such a crisis sooner or later. [4]

 

 

 

Like the situation before the Balkan Wars 1912-13

 

 

 

9.             We are marching towards great events and explosions as the world is sitting on a powder keg. The imperialist ideologists are fully aware of the dangers for their system. Klaus Schwab, founder and executive chairman of the World Economic Forum, which is organizing the annual conferences in Davos, pessimistically warns in the group’s annual report that “this is perhaps the first generation to take the world to the brink of a systems breakdown.” [5] And another Western imperialist think tank, the Eurasia Group, warns its readers in alarming words in its latest forecast: Let’s be honest: 2018 doesn’t feel good. Yes, markets are soaring and the economy isn’t bad, but citizens are divided. Governments aren’t doing much governing. And the global order is unraveling. The scale of the world’s political challenges is daunting. Liberal democracies have less legitimacy than at any time since World War II, and most of their structural problems don’t appear fixable. Today’s strongest leaders show little interest in civil society or common values. In the 20 years since we started Eurasia Group, the global environment has had its ups and downs. But if we had to pick one year for a big unexpected crisis—the geopolitical equivalent of the 2008 financial meltdown—it feels like 2018. Sorry.[6] These warnings are in line with a statement which Jean-Marie Guéhenno, the former president of the International Crisis Group, made last year: “The world is entering its most dangerous chapter in decades. The sharp uptick in war over recent years is outstripping our ability to cope with the consequences. From the global refugee crisis to the spread of terrorism, our collective failure to resolve conflict is giving birth to new threats and emergencies. Even in peaceful societies, the politics of fear is leading to dangerous polarization and demagoguery.[7]

 

10.          To a certain degree, we can compare the present world political phase with the situation before the Balkan Wars 1912-13. At that time the contradictions between regional powers like Serbia, Bulgaria, the Ottoman Empire and other states as well as the tensions between the Great Powers resulted in two devastating wars. As is well known, the Balkan Wars were the prelude to the first imperialist world war which started in August 1914. Even the German weekly newspaper “Die Zeit” compares the present situation in a recent editorial article with the period before the beginning of World War One and refers to the descriptions of the historian Christopher Clark in his famous book “The Sleepwalkers”. [8] With this analogy we don’t want to suggest that the Third World War will start in one or two years. As we have stated in past documents, while we consider an imperialist World War III as unavoidable if the international working class does not overthrow the global capitalist order beforehand, we think that the aggravation of the inter-imperialist antagonism to such a degree will take longer.

 

11.          In the current period, the application of the dialectical method and its transformation into a concrete program of revolutionary action is of particular importance as the world situation becomes more and more complex. We see the unfolding of new historic circumstances as the US has outlived its role as the absolute hegemon of the capitalist world – a role it carried since 1945 – and the emergence of new imperialist rivals like China and Russia. We face the acceleration of imperialist wars against oppressed people as well as of democratic and national liberation struggles against dictatorships and foreign occupation. And we face numerous attempts of imperialist powers to exploit and utilize such liberation struggles. And there are more and more conflicts between semi-colonial states. Indeed, the increasing complexity of the world situation is one of its most important features. All these complex and contradictory developments require Marxists to elaborate a scientific and clear analysis as well as a sharp program to intervene in the class struggles.

 

 

 

The Most Explosive Focal Points of the Current World Situation

 

 

 

12.          If we have to identify the most explosive focal points of the current world situation, we would name the Middle East and the Korean peninsula. It is in these two regions where the interests of most imperialist Great Powers directly clash, where long-standing conflicts exists and where major wars with devastating consequences could break out. As the WEF’s Global Risks Report 2018 points out: “the North Korea crisis has arguably brought the world closer than it has been for decades to the possible use of nuclear weapons.[9] Furthermore such devastating wars, with potentially hundreds of thousands of casualties, could provoke major domestic political crises, yet even pre-revolutionary situations, in the countries concerned, including in the U.S. In addition, there could be a new wave of revolutionary uprisings in the Middle East and North Africa – similar to the insurrectional wave in 2011. In short, the Middle East and the Korean peninsula are currently the two most important focuses of the world situation because what is happening there has immediately and direct global consequences and can abruptly change the entire world situation. A U.S. war against North Korea or a major war in the Middle East would have major repercussions for the relations between the Great Powers and it would also most likely provoke an immediate crash of the world economy.

 

13.          The U.S. decline as the hegemonic imperialist power vis-à-vis the rise of China and Russia combined with the domestic crisis of the Trump Administration could tempt Washington to launch catastrophic adventures like a “limited” attack against North Korea resulting in a nuclear war on the Korean peninsula. In fact, such an attack is concretely discussed in the White House. It would have horrific consequences for the Korean people North and South and would immediately provoke a crash of the world economy. According to a report of the Congressional Research Service, sent to the U.S. lawmakers in October 2017, a conflict on the Korean peninsula could result in up to “300,000 dead in the first days of fightingeven if no nuclear weapons are involved. Likewise, we could see soon a devastating regional war in the Middle East involving Israel, Saudi Arabia, Iran and possibly even some of the Great Powers. The latest issue of the annual Munich Security Report notes that the deterioration of the security situation in Europe is also increasing the risks of armed conflicts even in Europe: “In this dire state of affairs, miscalculations and misunderstandings could well lead to an inadvertent military clash.[10] Such catastrophic events like wars (or environmental disasters) can provoke mass unrest and pre-revolutionary situations on a regional or even global level. A genocidal attack of Israel against the Palestinian people, aiming at a second Nakba [11] by expelling the Arabs from parts of the West Bank or Gaza could provoke mass rebellions not only among the Palestinians but also among other Arab and Muslim peoples. Furthermore, we increasingly see “bread riots” as a result of the austerity policy enforced by the capitalist decay (e.g. Iran, Tunisia, Morocco, and Sudan). Such spontaneous mass protests could spread and lead to regional waves of uprisings (we saw such an elementary wave during the hunger revolts in 2008/09 and, in a more developed form, in 2011 in the Arab world).

 

14.          Such mass popular uprisings could result in the revolutionary overthrow of reactionary regimes as it happened in Tunisia and Egypt in 2011. Likewise they could result in the splitting-up of oppressor states (e.g. if Catalonia becomes independent of Spain). Such events would be of enormous importance as they could advance the liberation struggle of the working class and the oppressed and enrich its political experience. However, at the same time, our class suffers from the chronic crisis of leadership. A number of forces parading under the banner of socialism or even communism implement in their day-to-day practice the worst austerity policy in the service of the capitalist monopolies or attack the workers’ right to strike (e.g. SYRIZA in Greece – the flagship of the ex-Stalinist Party of the European Left); others support imperialist wars in the South or “anti-terrorist” emergency decrees at home (e.g. the French “Communist” Party or the KPRF in Russia). Other “Communist” Parties like those in Syria are profoundly loyal servants of the Assad dictatorship. Various pseudo-Trotskyist groups hailed the military coup of General Sisi in Egypt in July 2013 as a “Second Revolution” (e.g. Alan Woods IMT, the Cliffite RS/IST or the Morenoite LIT) or they take a neutral stand in the epic struggle between the Assad regime and the Syrian people (e.g. the CWI, IMT, PTS/FT). Many of these pseudo-Marxists refuse to recognize the imperialist character of China and Russia. Hence, they fail to understand the inter-imperialist rivalry as a major factor in the present world situation and are incapable to apply the Leninist program of revolutionary defeatism.

 

15.          However, such a crisis of leadership is no reason for revolutionaries to stand aside from the mass struggles and to passively wait for a Deus ex machine to solve this misery. No, revolutionaries are obliged to intervene in the mass struggles, even when these struggles are led by non-revolutionary forces and they themselves constitute only a small minority. They will be capable to advance their strategies and programs among the vanguard and the masses only with an approach as a fighting force and not as a cynically commenting force. Clearly, the struggle to build a Revolutionary World Party does not and cannot take place in a vacuum. It has to be conducted by applying the united front tactic towards those forces which have mass influence among the fighting workers and oppressed. [12] At the same time such tactics must be combined with fearless exposure of the failure of the official leadership and, in particular, the merciless denunciation of those pseudo-socialist forces which, through their reactionary deeds, smear the banner of communism in the eyes of the masses. The struggle for the construction of the Revolutionary World Party will advance only by removing these reformist and centrist obstacles.

 

 

 

Changes in the Current World Political Phase

 

 

 

16.          We are still in the political phase which opened up in 2013/14 and which is characterized by a counter-revolutionary offensive of the ruling class – a phase which tremendously accelerated since the victory of Trump in the US’ Presidential elections in November 2016. However, a shift has taken place since the later part of 2017 as we see both an acceleration of counterrevolutionary attacks and war threats as well as an upsurge of the class struggle in a number of countries. In fact, these developments of the last few months point towards the pre-revolutionary nature of the next phase. In this phase there will wars, counter-revolutions and revolutions to a qualitative greater extent. In our opinion there are strong indications that we are already nearing the transition from the phase of counter-revolutionary offensive towards a new world political phase which will most likely have a pre-revolutionary character.

 

17.          Such rapid changes lie in the revolutionary nature of the long-term, historic period we are in since 2008/09. [13] Such a historic period has to be understood, in fact it can only be understood, in a dialectical way. This period is characterized both by revolutions as well as by counter-revolutionary offensives. On the surface, these two elements seem to contradict each other. However, using the method of dialectics, the two poles form a unity of opposites. It is a revolutionary period because the capitalist class cannot develop the forces of production (as reflected, among others, by the fact that economic growth is based more on debts than increasing production) and because of it, the ruling classes are attacking the social gains and the democratic rights of the workers and the oppressed. In the current phase, the ruling class is winning in some countries (e.g. the military coup in Egypt in 2013) but in various other countries, the mass struggle is on the rise. Like in every situation the unity of opposites is in motion – one side in the process is growing stronger and the other side weaker. The question is whether the class enemy is getting stronger or our side is in the process of becoming stronger. It seems that we are entering in the last months a situation of growing resistance of the masses (Iran, Palestine, Tunisia, Morocco, Sudan, Honduras, India, Catalonia, etc.). Marxists have to observe indicators like mass rallies, demonstrations, strikes, voting for left parties, liberation wars, etc. In other words, we live in a period of revolutions, counter-revolutions including the danger of fascism and wars. We remark, as a side-note, that intelligent bourgeois analysts with a sense for history are also recognizing in their own way the fundamental explosive character of the present period. [14]

 

18.          One could say that we are in a pre-phase of capitalist breakdown, i.e. we are before a phase of catastrophic events like major wars, economic collapse and revolutionary explosions. In the light of the distortion created by various revisionist theoreticians, starting with Eduard Bernstein, about the Marxist concept of capitalist breakdown we want to clarify that Marx, Lenin and Trotsky never understood this concept in the way that capitalism would collapse and disappear by itself so that it clears the way for socialism. This has always been complete nonsense. The Marxist classics rather understood by the concept of breakdown that this system is in a historic cul-de-sac and inevitable provokes wars, environmental catastrophes and revolutions. It will be sooner or later replaced, as Rosa Luxemburg famously coined the phrase, by socialism – if the working class successfully overthrows the bourgeoisie via an international socialist revolution – or by an epoch of barbarism, if the working class fails in its historic mission. Today, it would be more accurate to concretize the stage of barbarism by an epoch of “stone age” given the vast amount of destructive forces which the ruling class has accumulated over the past decades and which could multiple destroy the planet.

 

19.          In summary, the present world situation is characterized by an increasing polarization and instability. It is pregnant with huge possibilities as well as dangers. The multitude of factors and the intertwining of conflicting forces exclude the possibility of a concrete prognosis. But the general tendency of development is absolutely clear: the old world order is breaking down and we are heading towards both devastating regional wars as well as (pre-)revolutionary waves of popular uprisings. This puts an enormous responsibility on the shoulders of all activists fighting against imperialism and capitalist exploitation!

 

20.          The most crucial task of today remains to advance the construction of a Revolutionary World Party. In order to achieve this, revolutionaries must develop a correct assessment of the present world situation and the resulting strategies, programmatic demands and tactics. They have to fight for a revolutionary program which combines correct tactics in the major issues of the global class struggle with the goal of the international socialist revolution. It is urgent to overcome any kind of conservative routinism and sectarianism. Revolutionaries must unite now when they have reached agreement on such a program! The RCIT is fighting for such unity since its foundation and will continue to do this with redoubled energy in the coming period! As a concrete step in this direction we propose “6 Points for a Platform of Revolutionary Unity Today” and submit it for discussion for revolutionaries around the world. (See Appendix)

 

21.          The RCIT looks back to a proud record as we understood from the beginning the major lines of the global dynamic of the present historic revolutionary period. We drew attention to the imperialist character of Russia and China when others were incapable to recognize it and hence failed to draw the necessary tactical conclusions of revolutionary defeatism. We recognized the reactionary character of the coups in Egypt, Ukraine and Brazil when other hailed them or took a neutral position. We continued to defend democratic and national liberation wars in Syria or Yemen when others denounced them as reactionary proxy wars and refused to support the struggles of the workers and oppressed. We took the banner of anti-imperialism by siding with national liberation struggles against imperialist occupiers when others refused to do so denouncing these struggles as “reactionary” because of their Islamist leadership (e.g. Hamas in Gaza, Taliban in Afghanistan, Islamists in Mali). The RCIT calls all revolutionaries around the world to unite on the basis of agreement of a program for the victory of the liberation struggles of the working class and the oppressed people via the world socialist revolution!

 



[1] This is how Trump’s economic adviser Gary Cohn characterizes him. Others choose similar attributes. For Steve Mnuchin and Reince Priebus, Trump is an “idiot”. For his national security adviser, H. R. McMaster, Trump is a “dope”. (Quotes are taken from Michael Wolff: Fire and Fury: Inside the Trump White House, Henry Holt and Company, London 2018, p. 301). And Secretary of State Rex Tillerson called Trump, as has been widely reported, a “moron”. (http://edition.cnn.com/2017/10/04/politics/tillerson-trump-moron/index.html) For the RCIT’s analysis of the Trump Administration we refer readers to the pamphlet of Michael Pröbsting: The Meaning, Consequences and Lessons of Trump‘s Victory. On the Lessons of the US Presidential Election Outcome and the Perspectives for the Domestic and International Class Struggle, 24.November 2016, Special Issue of Revolutionary Communism No. 58 (December 2016), https://www.thecommunists.net/theory/meaning-of-trump/

[2] For our analysis of capitalism’s decay in the present historic period we refer readers to RCIT: World Perspectives 2016: Advancing Counterrevolution and Acceleration of Class Contradictions Mark the Opening of a New Political Phase, Chapter II, https://www.thecommunists.net/theory/world-perspectives-2016/part2/; Michael Pröbsting: The Great Robbery of the South. Continuity and Changes in the Super-Exploitation of the Semi-Colonial World by Monopoly Capital. Consequences for the Marxist Theory of Imperialism, Vienna 2013, chapter 14, https://www.thecommunists.net/theory/great-robbery-of-the-south/

[3] Leon Trotsky: The Revolution Betrayed. What is the Soviet Union and Where is it Going? (1936), Pathfinder Press, New York 1972, p. 186

[4] We remark, as a side-note, that anti-migrant chauvinism fulfils not the same, but a similar role. It is destined to strengthen the ideological control of the bourgeoisie over sectors of the domestic working class and middle layers. It often fulfils this purpose for a certain period. However, it is also a risky instrument in cases of domestic crisis of the ruling class where sectors of the working class and the middle layers radically turn away from the ruling elite. In such situations chauvinism can provoke massive political instability: either by leading to clashes between sectors of the working class and the middle layers and / or by creating a fertile soil for the fraternization between domestic and migrant brothers and sisters on an anti-patriotic platform.

[5] World Economic Forum: The Global Risks Report 2018 13th Edition, p. 5

[6] Eurasia Group: Top Risks 2018, p. 3

[7] Jean-Marie Guéhenno: 10 Conflicts to Watch in 2017, Foreign Policy, January 5, 2017, http://foreignpolicy.com/2017/01/05/10-conflicts-to-watch-in-2017/

[8] Jochen Bittner und Jörg Lau: Nichts ist mehr sicher. Von Trumps Amerika über Nordkorea bis zum Mittleren Osten: All diese Krisen stehen für eine Welt in Unordnung. Und manchmal genügt ein Funke, um einen großen Krieg auszulösen, DIE ZEIT, 7. December 2017, p. 2

[9] World Economic Forum: The Global Risks Report 2018 13th Edition, p. 10

[10] Munich Security Report 2018. To the Brink – and Back?, p. 32

[11] The Palestinian people and the Arabs in general, call the expulsion of the Palestinian people by the Zionists in 1948 “Nakba”.

[12] The RCIT has published a more detailed elaboration of the Marxist United Front Tactic in a book of Michael Pröbsting: Marxism and the United Front Tactic Today. The Struggle for Proletarian Hegemony in the Liberation Movement and the United Front Tactic Today. On the Application of the Marxist United Front Tactic in Semi-Colonial and Imperialist Countries in the Present Period, RCIT 2016, http://www.thecommunists.net/theory/book-united-front/

[13] For a more detailed elaboration of our understanding of the historic revolutionary period which opened in 2008/09 we refer readers to Michael Pröbsting: The Great Robbery of the South. Continuity and Changes in the Super-Exploitation of the Semi-Colonial World by Monopoly Capital. Consequences for the Marxist Theory of Imperialism, Vienna 2013, chapter 14i), https://www.thecommunists.net/theory/great-robbery-of-the-south/; RCIT: Advancing Counterrevolution and Acceleration of Class Contradictions Mark the Opening of a New Political Phase. Theses on the World Situation, the Perspectives for Class Struggle and the Tasks of Revolutionaries (January 2016), Chapter II, in: Revolutionary Communism No. 46, http://www.thecommunists.net/theory/world-perspectives-2016/;

[14] To give an example we refer to a recently published study of two analysts from the U.S. Federal Reserve Board. This study attempts to create an index of “geopolitical risk” and their effects for the world economy. They conclude that geopolitical events (we Marxists would prefer to speak about the struggle between the classes and states) indeed have important consequences for the economy. “We find that an increase in geopolitical risk induces persistent declines in industrial production, employment, and international trade, and that both economic policy uncertainty and consumer confidence enhance the transmission of geopolitical risk shocks. We also document that stock returns experience a short-lived but significant drop in response to higher geopolitical risk. The stock market response varies substantially across industries, with the defense sector experiencing positive excess returns, and with sectors exposed to the broader economy – for instance steelworks and mining – experiencing negative returns.

Moreover, the authors arrive to the conclusion that such “geopolitical risks” have substantially increased in the past years. They construct a historical index covering the years 1900 to 2017. They arrive at the conclusion that, leaving aside the periods around the two world wars, the period since 9/11 in 2001 has seen the most significant instability and crisis and that this process is accelerating. “High geopolitical risk leads to a decline in real activity, lower stock returns, and movements in capital flows away from emerging economies and towards advanced economies. (...) Extending our index back to 1900, geopolitical risk rose dramatically during the World War I and World War II, was elevated in the early 1980s, and has drifted upward since the beginning of the 21st century.” (Both quotes are taken from: Dario Caldaray Matteo Iacovielloz: Measuring Geopolitical Risk, Board of Governors of the Federal Reserve System, January 10, 2018)