Those trying to understand how the overproduction crisis of imperialism connects up with the current Anglo-American war frenzy would do well to hearken to the doom-laden Jeremiad from Martin Wolf in the Financial Times (‘The markets are too eager to discount the cost of war’, 26-03-03).
Noting how the initial stock market euphoria which greeted the attack on Iraq was tempered “as fantasies of a procession to Baghdad vanished”, Wolf reminds his readers that the economic crisis predated the war and would persist after it.
“[…] this war has come upon a world economy already mired in the aftermath of huge asset price bubbles, unsustainable external imbalances and chronically weak demand in Japan and the eurozone […] This year the world is likely to post its third successive year of below-trend economic growth.”
Blaming this on the “collapse of two asset price bubbles: Japan’s stock market and property bubble of the 1980s and the US (and, to a lesser extent, European) stock market bubbles of the 1990s.” He goes on, “The US bubble helped generate a record private sector financial deficit of 4 per cent of gross domestic product; high real levels of investment; weak profitability, masked by meretricious accounting; extraordinarily low household savings and high levels of household debt and debt service; and a current account deficit that has surpassed 5 per cent of GDP. With the collapse in stock markets, all this has been going slowly and painfully into reverse. But that also means that ADJUSTMENT REMAINS UNFINISHED” [emphasis added].
That discreet sting in the tail should in fact serve as a terrifying memento mori for the capitalist class, a reminder that capitalism is condemned to extinction. The “adjustment remains unfinished” because the market falls seen so far have been no more than the preliminary stumbles of a capitalist system that is heading for a complete smash, so bloated is it with unsustainable credit, and so hopelessly dependent on generating demand for its commodities from amongst the very populations which it is exploiting and impoverishing. “If the US is to inject stimulus into the rest of the world,” wails Wolf, “its demand must grow faster than potential output.” But that could only happen by driving the US even deeper into debt, not “a path to sustained global recovery”. To be precise, such a development could be expected to precipitate the coming markets crash! But where else is the demand stimulus to be found, given that the “high-income countries still accounted for 81 per cent of world output, of which the US generated 31 per cent, the European Union 26 per cent and Japan 15 per cent”? The only answer to this conundrum attempted by Wolf is some half-hearted neo-liberal prescriptions, ending with a despairing shrug: “None of this seems probable”!
As Marx so long ago explained, it is the private character of appropriation under the capitalist mode of production which ends up shackling those public, social forces of production which capitalism brought into historical existence in the first place. Only the expropriation of the capitalist class can finally answer Wolf’s conundrum. Meanwhile, imperialism will do its best to solve the problem in its own barbarous fashion, by plunging the world into a bloody struggle for the redivision of markets which can only lead to world war, unless capitalism is overthrown.
In the same article, Wolf is good enough to show how imperialism’s war frenzy itself helps to create the sort of conditions which must eventually favour the development of revolutionary solutions to the crisis. Contrasting the Iraq aggression with the earlier Gulf War (“fought for a limited goal, by a huge coalition, under United Nations auspices”), Wolf observes that what is attempted is “the conquest of a large country and the extinction of a regime, both undertakings likely to generate strong resistance, particularly to the occupation of the big cities. Even after the war ends, an illegitimate occupying regime could find itself facing insurgency and civil war.”
What’s more, he adds, many countries in the region “with pro-American governments and anti-western populations” are also being destabilised, increasing the risk of “terrorist activity against western or pro-western targets”. And there is no obvious end to all this, since “wider US ambitions remain uncertain”, with maybe Iran or North Korea next in the frame. “And, not least,” to conclude this tale of woe, “what is going to happen to transatlantic relations? Can they be patched up? If so, how?”
Let us try to answer the questions which Wolf raises and leaves dangling. No, transatlantic relations cannot be “patched up” for long, since the battle for markets (steel, agriculture, oil etc) is guaranteed to set the EU and US at each other’s throats ever more ferociously, as protectionism further contracts markets already stifled by surplus capital. And no, there can be no end to the scope of US imperialist aggression now that it is embarked on a desperate crusade to impose upon all-comers a markets supremacy which it cannot hope to retain through competitive economic performance alone, unassisted by force of arms. And no, there can be no limits set on the politicising consequences of this drive to war, as imperialism grows more and more reckless in its aggression, courting eventual defeat and humiliation, as countless millions are drawn into the struggle to bury imperialism before it buries them. As Karl Marx noted, capitalism creates its own gravediggers.