Nationalist Shadow Boxing

Tomasz Konicz

About a year after taking office, the results of Donald Trump’s tariff policy are mixed and contradictory. The number of industrial jobs in the U.S. has actually declined slightly, as rationalization in the production process continues to advance, driven in part by AI programs.

In and out of tariffs – this is the only constant in U.S. President Donald Trump’s tariff policy. Last week, new U.S. tariffs of 10 percent on nearly all imports went into effect. They replace the tariffs that the Supreme Court had ruled invalid on February 20. In his initial angry reactions to the ruling, Trump had even announced a 15 percent tariff. The government is still considering further increases of this magnitude.

The only certainty is that the protectionist policy will continue, even though its legal basis has changed. The Supreme Court ruled that imposing the previous tariffs under the International Emergency Economic Powers Act (IEEPA) of 1977 was unlawful. Treasury Secretary Scott Bessent immediately announced that the government would simply rely on other trade laws instead. Currently, Section 122 of the Trade Act of 1974 applies. It allows the government to impose tariffs for 150 days; after that, Congress must approve them.

Politically, too, Trump’s tariff policy remains controversial, even within the Republican Party. Just under a year ago, Trump began raising the U.S. average tariff rate, which stood at 2.4 percent at the time; at the end of last year, it was around 17 percent. Protectionism is intended to “make America great again” – specifically, to reverse the crisis-driven deindustrialization and loss of manufacturing jobs. But the results have been mixed.

Although Trump keeps touting ever-larger, astronomical figures purported to demonstrate a massive surge in foreign investment – in October 2025 he spoke of $17 trillion, and in his address to the nation on February 24, the figure had already risen to $18 trillion, which he claimed had been pledged to him through bilateral trade agreements, among other channels –these figures have little basis in reality. Instead, the administration adds together forecasts of actual high corporate investment in the context of the AI boom, non-binding letters of intent from governments interested in appeasing Trump, vague agreements on potential economic cooperation, and binding agreements—and thus arrives at an absurdly high investment volume that would amount to four times the annual investment activity of the U.S. private sector, which ranges from about $4 to 5 trillion. Foreign investment in the U.S. amounted to only about $151 billion in 2024.

But has the U.S. government actually succeeded in extorting substantial investment commitments through the threat of tariffs? Japan has committed to $550 billion in industrial investments by 2029; South Korea has pledged $350 billion; Apple plans to pour $600 billion into U.S. manufacturing facilities and actually manufacture a Mac Mini in the U.S. There are also binding commitments worth billions from TSMC, Nvidia, Honda, Hyundai, Johnson & Johnson, IBM, Merck, and Roche. The list could go on, but it remains to be seen whether all these commitments will be fulfilled – and whether corporations are simply passing off investments they had planned anyway as a return to “Made in America” in order to gain political capital with Trump.

Huge U.S. Trade Deficit

The massive U.S. trade deficit has not shrunk – at least not yet. Trump said in late February that these investments would not yield economic results for “a year.” The annual trade deficit remained virtually unchanged at $901 billion in 2025. Looking solely at goods trade, excluding services, the deficit actually rose by 2% to a new record of $1.24 trillion, as the AI boom has been accompanied by rising imports, particularly of microchips from Taiwan.

However, the composition of trade flows has changed. Imports from China plummeted by 25% to just $242 billion, Japan’s exports to the U.S. fell by 12%, and those from Germany dropped by 9.4%. Canada also exported less to the U.S. in 2025: goods worth $291 billion instead of the previous $308 billion. Mexico recorded the largest growth last year, and with an export volume of $399 billion, it is now by far the leading exporter to the U.S. Moreover, the slump in imports from China was offset by nearly 50% increases in imports from Taiwan and Vietnam. At least part of these changes can be attributed to the fact that goods produced in China are simply being rerouted through countries such as Mexico or Vietnam to circumvent the particularly high U.S. tariffs imposed on China.

The picture is similarly ambiguous when it comes to production in the United States. Industrial production has indeed risen by more than 1% since Trump took office a year ago, yet the number of industrial jobs has declined slightly over the same period – by a good 108,000. This reveals the inherent limitation of capital – the market-driven tendency of capitalist commodity production to minimize wage labor in the production process through rationalization. Trump is shadowboxing, for the crisis process is by no means rooted in trade practices supposedly disadvantageous to the U.S., but will only be intensified by the current AI boom and advances in robotics.

No Boom in the Labor Market

Furthermore, while protectionism may benefit certain industries, it often does so at the expense of other sectors that rely on the smooth import of materials and parts as part of the internationally organized division of labor. U.S. steel tariffs, for example, have led to an increase in employment at steel mills, but this came at the expense of those sectors that had sourced inexpensive steel products from abroad and have now cut tens of thousands of jobs, as the New York Times calculates. Consequently, there can be no talk of an overall boom in the labor market. Despite economic growth of 2.2% last year, the number of jobs rose only minimally – even though the expected waves of rationalization associated with AI programs are still to come.

For consumers, tariffs drive up inflation because they are passed on in the form of higher prices. The New York Times cites a study indicating that the inflation rate last year was more than half a percentage point higher due to the tariffs. It stood at 2.7% in 2025, and 3.1% for food. The Trump administration implicitly acknowledged this by promising every U.S. citizen a one-time “tariff dividend” of $2,000 as compensation. Whether this will still happen following the Supreme Court’s ruling is questionable.

Above all, however, the tariff revenues were intended to finance government spending. Following the tariff ruling, Trump also imposed substitute tariffs because the revenues had already been budgeted. Last July, the Trump administration sharply reduced taxes – especially for the super-rich – with the so-called “Big Beautiful Bill,” causing the national debt to rise even more than it already had. In part, the customs revenue was intended to cushion that impact – in other words, a de facto consumption tax was meant to finance the tax breaks for capital and top earners.

The U.S. Dollar’s Status as the World’s Reserve Currency is at Risk

As of November 2025, revenue from the tariffs imposed by Trump totaled $236 billion, of which approximately $175 billion was collected under the IEEPA regulations that have now been declared illegal. These funds will now be the subject of protracted legal disputes; they are not available to the Treasury, as companies such as FedEx have already filed lawsuits to secure the refund of these paid customs duties.

Ultimately, Trump’s protectionism threatens the status of the U.S. dollar – which has been steadily losing value – as the world’s reserve currency. U.S. trade deficits provided an incentive for countries and economic regions with large trade surpluses, such as China, Japan, and Europe (which is economically dominated by Germany), to accept the dollar’s dominance. Now, the special status of the U.S. – which has been able to incur virtually risk-free debt in the world’s reserve currency – is in danger of becoming a thing of the past. This became clear, for example, during the disputes over Greenland, when U.S. bond prices plummeted on January 20 after several Scandinavian funds announced they would liquidate their positions.

The U.S. national debt now stands at more than 120% of gross domestic product, while yields on 10-year U.S. Treasury bonds – which averaged less than 2 percent during Trump’s first term – are now above 4%. At $1.1 trillion annually, debt service is now one of the largest items in the federal budget; it has doubled over the past five years and even exceeds military spending. Should, for example, the impending AI disruption once again necessitate trillions of dollars in government crisis measures, the U.S. would have little capacity to do so, unlike during the financial crisis beginning in 2007.

Originally published in jungle.world 10 in 03/2026

War as a Catalyst for Crisis

If the Iran conflict escalates, the region faces the threat of another wave of statelessness.

Tomasz Konicz

Trump went way back, all the way to the 1979 embassy takeover and the 1983 Beirut bombing against U.S. troops, to justify the U.S. and Israeli attack on Iran in an initial statement.[1] Even though the U.S. president’s public statements have an increasingly short half-life, and Trump could claim the opposite as early as tomorrow, he did ultimately name two military objectives of the current bombing campaign: the extensive disarmament of the Iranian regime, particularly regarding its nuclear program, and – optionally – its overthrow, should opportunities arise. Washington and Tel Aviv appear to be planning a multi-day intensive bombing campaign against key officials, the state apparatus, and its infrastructure, which would significantly weaken the regime, in the hope that this would spark an uprising that – supported by the CIA, Mossad, and special forces – would bring an end to the mullahs’ rule. On the evening of February 28, Trump also kept all options open in a brief phone interview with Axios: from short-term bombing to hinder the Iranian nuclear program to regime change.[2]

The talk of regime change is strikingly reminiscent of the murderous disaster the neocons under George W. Bush wrought during the invasion of Iraq—but this time, appearances are indeed deceptive. This is not only due to the simple fact that no significant ground forces are ready for an invasion. The neocons did indeed have the democratization of Iraq in mind, with the aim of subsequently integrating the country into the U.S. hegemonic system; they made no compromises with the remnants of the swiftly defeated Saddam regime in order to rebuild state structures from the ground up. The bloody consequences are well known: anomie, state collapse, a bloody civil war, and its “freezing” into a sham state fractured along ethnic and religious lines. The U.S. easily won the Iraq War against the crumbling Iraqi regime, but it lost the peace after the anomic centrifugal forces in Iraq were unleashed.

No “Democratization”

Trump’s imperialism, on the other hand, has a completely different thrust; Washington has long since shed the ideological veil of human rights imperialism as practiced by Western centers during the neoliberal decades.[3] The Islamofascist mullah regime, which had thousands of demonstrators massacred just a few weeks ago, is to be replaced by a regime subservient to the U.S. This approach is easier to carry out, as large parts of the state and repressive apparatus can simply be taken over. The precedent here is the case of Venezuela, whose head of state was effectively handed over to the U.S., while the power structures characterized by racketeering otherwise remained untouched . The offer of “total immunity” that Trump made in his speech to the officials of the Iranian regime clearly points in this direction.

The authoritarian alternative to the mullahs, the Shah’s son Reza Pahlavi, seems to have been dug straight out of the CIA’s dustbin of history.[4] His father’s genocidal regime was swept away in the wake of the 1979 revolution. His supporters are currently attempting to gain dominance within the Iranian opposition through nationalism, intimidation, and threats, while specifically targeting leftist and feminist movements. A miniature dictatorship is already taking shape. Meanwhile, tensions are also coming to light between the Pahlavi camp and Kurdish opposition groups, which have been accused by the monarchists of separatist aspirations.[5] Even U.S. officials have told media representatives that the Pahlavi monarchists are causing them “fear.”[6] The would-be Shah has already held official talks with members of the Trump administration, such as Steve Witkoff.

Crisis and War

Venezuela, the Al-Qaeda state of Syria,[7] and now, prospectively, Iran – crisis imperialism is merely returning to its roots in its twilight years by once again relying on authoritarian regimes.[8] The human rights imperialism of the neoliberal era thus represents only a brief historical episode. The novel aspect, however, is the crisis process of capital, which, in its economic and ecological dimensions, shapes geopolitical developments as well as concrete imperialist aggression. Without the crisis, there would be no American attempt at regime change.

This is not an abstraction; the global crisis of capital is manifesting itself in very concrete ways. Iran is already on the brink of ecological collapse. In parts of the country, the water supply has collapsed; even in the capital, Tehran, with its ten million inhabitants, the water is occasionally cut off. According to the British newspaper The Guardian, an evacuation of the Iranian capital is now even being considered should no substantial rainfall occur by the end of the year, as its population can barely be supplied with water.[9] The increasing extreme weather events, the lack of rain, and the ever more frequent heat waves are all leading to slumps in crop yields in Iran, which already has to import food.[10]

Iran has been subject to various forms of sanctions for decades; the regime has experience in circumventing or mitigating this economic pressure. However, the decisive tipping point was the current ecological and economic escalation of the crisis dynamics. The sanctions imposed on Iran have exacerbated the escalation, but did not trigger it. The protests were triggered by a massive devaluation and a surge in inflation caused by the suspension of subsidies for basic foodstuffs. At its core, the uprising against the mullahs – which was brutally suppressed – was economically motivated, as even basic foodstuffs became unaffordable for an increasing number of Iranians. The rising demand for imports (and foreign currency) is met with dwindling revenues: China is the Iranian oil industry’s most important customer, yet Beijing purchased the energy resource at a steep discount due to sanctions, further exacerbating Iran’s economic situation.

Reasons for War

The timing of the attack is likely indeed linked to the mass murderous suppression of the protests. It is a window of opportunity that the U.S. and Israel wish to exploit, during which the regime is weakened and has lost its legitimacy among large segments of the population. The time lag between the Iranian uprising and the Israeli-American attack is due to the logistics of war: The U.S. had to assemble its forces in the region, secure their supply lines, etc., which takes weeks. The mullahs’ rule does indeed appear rotten, porous, and highly corrupt, as evidenced by the extensive penetration of the Iranian state by Israeli and Western intelligence agencies. The Israelis were not only able to eliminate part of the Iranian leadership during the 2025 bombing campaign; they have now managed once again to take out Supreme Leader Khamenei on the first day. Netanyahu is said to have been shown images of the body shortly after it was recovered.[11]

In Israel’s case, the reasons for war are obvious: Tel Aviv wants the end of the mullah regime out of pure self-preservation. Israel wants the government overthrown, since the “Islamic Republic” of Iran has elevated the destruction of Israel to a state doctrine. Since October 7, 2023 – the mass-murderous terrorist attack by Hamas on Israel, which was cheered by Iran and militarily supported by Hezbollah attacks – regime change appears to have become the guiding principle of Israeli policy toward Iran. Israel wants to prevent, at all costs, a repeat of an attack such as the one carried out by the Iran-backed Hamas. The current right-wing government in Jerusalem would likely favor a reactionary, U.S.-aligned regime under Reza Pahlavi, yet regime change appears to be the top priority – regardless of the succession debate. Israel’s minimum objective, intended to secure the survival of the Jewish state in a hostile region, consists of permanently preventing Iran’s nuclear program.

In the case of the U.S., domestic political reasons are usually emphasized: Trump wants to divert attention from the pedophilia scandal involving members of the U.S. ruling elite. Meanwhile, there is growing evidence that the president himself may have molested girls and children. The attack on Venezuela was already interpreted as an attempt by Trump to divert attention, similar to Reagan’s invasion of Grenada in 1983, which was intended to divert attention from the Iran-Contra affair. The military triumph in Caracas also simply led to the fascists in the White House – here, above all, Trump’s close confidant Steven Miller – taking a liking to the use of military force without consequences. They have simply gotten a taste for blood.

Yet at the same time, it is evident that the Trump administration is targeting China’s second “gas station” in Iran. Beijing is (and has been) the most important customer in both Caracas and Tehran. The deployment of the colossal U.S. military machine – following Trump’s dismantling of the remnants of American hegemony – effectively constitutes the last significant lever with which Washington can maintain its global dominance.[12] Precisely because the crisis is also breathing down the Trump administration’s neck, as the dollar increasingly loses its role as the world’s reserve currency and Washington faces mounting budgetary problems. The attacks on oil-producing countries that have broken away from the U.S. orbit also appear intended to consolidate the dollar’s role as the world’s reserve currency, as the “petro-currency.”

Moreover – and this must not be overlooked in the era of oligarchic brutalization in the U.S.—Trump was encouraged to attack Iran by the Gulf despotisms, which showered his clan with “gifts” and deals worth billions. Saudi Arabia, in particular, pressed Washington in secret talks to carry out the bombing, while officially maintaining a neutral stance.[13] Iran’s attacks against the Gulf states are a direct consequence of this tactical acquiescence and support for the U.S. attack, which would also neutralize a key Shiite rival of the Saudis for the time being. Riyadh hopes to rise to become the leading regional power in the wake of the war.

Outlook and Prospects

Without substantial deployment of ground forces, the bombing campaign against Iran is likely to peter out after a few weeks without bringing about regime change. The regime is ailing; it is corrupt; and it can apparently be easily penetrated by intelligence agencies that can simply buy information. But it still has hundreds of thousands of supporters and fighters under arms, particularly in the militias, who will remain loyal without substantial military pressure for one simple reason: the regime provides them with material support. Their children are not malnourished; they can make ends meet for their families in the midst of a socio-ecological crisis in which this is no longer possible for ever-larger segments of the population.

Consequently, the organizational structures are likely to remain intact despite the barrage of bombs, the chains of command continue to function, and unreliable elements within the repressive apparatus were neutralized anyway during the brutal counterinsurgency at the beginning of the year. The machine guns stand ready in case spontaneous protests flare up again, which could easily be drowned in blood once more. The backbone of the regime is too strong to be broken by airstrikes and demonstrations alone.

There are hardly any significant, powerful opposition groups that could challenge the regime militarily. The People’s Mujahideen, a left-wing Islamist splinter group of Iranian state Shi’ism, resembles a sect with some 3,000 followers that sporadically organizes attacks in Iran.[14] The Shah’s son, Pahlavi, has no significant battle-tested forces at his disposal. What remains are the minorities: the Kurds, through the Iranian successor organization to the dissolved PKK, have significant combat units; separatist aspirations – which could potentially be encouraged by Turkey – exist among the Azeris in northwestern Iran, as well as in Iranian Baluchistan in the southeast of the country.

However, these groups would likely strengthen Iran’s centrifugal forces, fueling instability and state collapse – while the U.S. would prefer to install a stable, U.S.-aligned regime in Iran. Turkey’s initial opposition to an attack on Iran stems precisely from Ankara’s fears that Iranian Kurds might fight for independence or autonomy (Washington’s betrayal of Rojava, in which the Kurds were sacrificed, which was overcome by Ankara’s resistance).[15] This scenario of a renewed wave of state decomposition in the region also seems most likely in the event of an escalation. The country, with a population of 90 million, could disintegrate into a gigantic, second Syria. In this case, however, it would not only be Iran where conflicts could erupt along ethnic or religious lines.

Iraq would also be affected; following the freeze in the Sunni-Shia civil war, it is little more than a hollow shell of a state, where militias effectively hold sway depending on the region. And Shias constitute the majority of Iraq’s population. Shia militias, most of which are backed by Iran, have already threatened attacks against U.S. military bases and other facilities. A resurgence of the civil war seems quite likely in the event of an escalation.[16] The Syrian Islamist regime, which emerged from the Sunni terrorist network Al-Qaeda, is already massing troops along the border with Iraq.[17] Turkish interventions are also conceivable, aimed at occupying the Azerbaijani regions of Iran or attacking the Kurds as part of Erdogan’s neo-Ottoman imperialism.

And finally, the conflict could very quickly trigger global economic upheaval if Iran blocks the Strait of Hormuz, which could happen simply through the threat of drone or missile strikes – a navy is not necessary for this. This would shut down one of the most important shipping routes for fossil fuels. As is so often the case with Western wars over the world order (Robert Kurz), the war would thus simply become a catalyst for crisis, accelerating the crisis process of capital in fits and starts—both in the region and globally.

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[1] https://x.com/WhiteHouse/status/2027654336138924410

[2] https://www.axios.com/2026/02/28/trump-iran-war-israel-off-ramps

[3] https://www.konicz.info/2026/01/28/verrat-aus-prinzip/

[4] https://www.politico.com/news/magazine/2026/02/24/reza-pahlavi-iran-trump-00793877

[5] https://apnews.com/article/iran-iraq-kurds-pahlavi-6beae57e9fdc3546a61ec8f1432eef4b

[6] https://www.politico.com/news/magazine/2026/02/24/reza-pahlavi-iran-trump-00793877

[7] https://www.konicz.info/2026/01/28/verrat-aus-prinzip/

[8] https://exitinenglish.com/2026/03/19/what-is-crisis-imperialism/

[9] https://www.theguardian.com/world/2026/jan/15/how-day-zero-water-shortages-in-iran-are-fuelling-protests

[10] https://www.tehrantimes.com/news/507241/Climate-change-significantly-impacts-food-security-in-Iran-expert

[11] https://www.timesofisrael.com/liveblog_entry/natenyahu-said-shown-picture-of-khameneis-body-retrieved-from-compound/

[12] https://medium.com/@ascentreact/everything-must-burn-862b983914a6

[13] https://www.washingtonpost.com/politics/2026/02/28/trump-iran-decision-saudi-arabia-israel/

[14] https://esut.de/2025/04/fachbeitraege/58620/der-geist-der-volksmudschahedin/

[15] https://www.konicz.info/2026/01/28/verrat-aus-prinzip/

[16] https://www.thenationalnews.com/news/mena/2026/02/28/iran-backed-militias-in-iraq-say-us-israel-attack-kills-at-least-two-fighters/

[17] https://x.com/ScharoMaroof/status/2027754904991781276

Originally published on 03/01/2025

What is Crisis Imperialism?

And how does it differ from the classical imperialism of earlier eras?

Tomasz Konicz

Crisis imperialism is the state’s quest for dominance – carried out through economic, political, or military means – during an era of contraction in the valorization process of capital. The state apparatuses of the core of the world system strive for dominance in a systemic crisis fueled by constant advances in productivity, that, on the one hand, create regions of economic and ecological scorched earth – primarily in the periphery – and, on the other hand, make the emergence of a new regime of accumulation, in which wage labor would be valorized on a massive scale in commodity production, impossible. This crisis process is accompanied by a rise in debt that outpaces global economic output and leads to the emergence of an economically superfluous humanity, as illustrated, for example, by the refugee crises of recent years.

This also highlights the fundamental difference between crisis imperialism and the imperialism of earlier eras, since the latter took place during a historical phase of capital expansion – originating in Europe in the 16th century – that was driven precisely by the genocidal exploitation of labor. The plunder of resources – such as the gold and silver of Latin America – and the development of new markets in the Global South – sugarcane, spices, etc. – could only be realized through the mass valorization of “hands,” which in most cases could only be achieved through forced labor. The trail of blood left by this imperialist expansion of the capitalist world system – which integrated ever-new peripheral regions into the world market, often through military force – stretches from the genocide of the indigenous peoples of Latin and Central America, through the Atlantic triangular trade in African slaves and the British Empire’s exploitation of India, to the atrocities of Belgian imperialism in the Congo of the late 19th century, the effects of which are still felt today, when the failure to meet rubber quotas by forced laborers resulted in severe mutilations – such as the chopping off of hands.

The ultimately military drive for expansion by imperialist states is a consequence of capital’s valorization compulsion, whereby imperialist tendencies can gain momentum precisely in response to the internal contradictions of the valorization process: Overaccumulation of capital seeking investment, increasing social tensions intended to be mitigated through colonization, or capital’s demand for raw materials and energy sources that cannot be produced domestically often lead those states possessing sufficient means of power to pursue corresponding forms of imperialist expansion.

Following the 20th century, during which, due to the “Cold War,” practices of informal imperialism were more commonly employed – involving the installation of dependent, formally sovereign regimes in the periphery through economic pressure or intelligence-led coups – forms of direct imperialist aggression are once again gaining the upper hand in the 21st century, in conjunction with the imperial decline of the United States and the increasing tendencies toward state and social disintegration in the periphery. This also carries with it the danger of major wars waged between imperialist great powers.

During its historical phase of expansion, the capitalist world system was characterized by cycles of hegemony in which an imperialist great power was able to attain a hegemonic position that was, at least temporarily, tolerated by competing powers. The 19th century was marked by a British hegemonic cycle, and the 20th century by a U.S. hegemonic cycle of industrial rise and decline. The increasing number military conflicts today are an expression of the U.S.’s hegemonic decline, and the socio-ecological crisis of capital prevents the emergence of a new hegemonic power.

China, which is engaged in a global struggle for hegemony with Washington, is unable to succeed the U.S. as the “world policeman” due to the crisis-induced increase in internal turmoil (debt and real estate crises). The current phase of escalating military conflicts thus represents a bloody real-life satire of the talk of a “multipolar world order” demanded by all imperial rivals of the declining United States. The systemic crisis prevents the emergence of a hegemon, though many state apparatuses continue to strive – ultimately in vain – to become as powerful as the U.S., and the erosion of U.S. hegemony provides them with the necessary leeway for their own military adventures. Moreover, growing internal contradictions are once again fueling the drive for imperial expansion (e.g., Russia, Turkey).

A central concrete difference between today and the imperial quest for dominance in earlier centuries thus lies in the fact that the hunt for markets and “hands” that could be exploited through violent integration into the world market now plays hardly any role at all in the globalized world system due to the aforementioned systemic crisis of overproduction. In the late-capitalist crisis imperialism of the 21st century, the imperialist drive for expansion manifests itself in efforts to seal off the economically superfluous masses of the periphery – both in “Fortress Europe” and in the U.S. In this respect, expansion thus turns into the sealing off of the core from the periphery, which also plays hardly any role as a market.

The collapsed periphery, with its “failed states,” now plays a role only within the framework of extractionism as a supplier of raw materials, building upon the forms of decay of 20th-century “informal imperialism” by – as in the case of cobalt mining in the Congo – organizing raw material extraction independently through local post-state power structures (militias, gangs, sects, etc.) who do this on their own initiative, only to then channel them to the world market through shadowy channels and middlemen. Militarily, the core countries interact with the “scorched earth” regions only within the framework of “world order wars” (Robert Kurz), in which the periphery is either to be stabilized through state-building processes (“nation building”) or at least militarily neutralized as a disruptive factor. The global drone campaign of the former “world policeman,” the U.S., in the “war on terror,” or the – consistently failed – Western interventions in Afghanistan and Somalia fall into this category of the imperial core’s futile struggle against the social consequences of the systemic crisis – originating from the core – in the periphery.

Thus, the current era of crisis imperialism is characterized by the interplay between the state’s quest for dominance and the crisis process of capital, which exhibits a market-mediated, fetishistic momentum fueled by the internal contradictions of capital (which, in market competition, tends to divest itself of its own substance, value-creating labor). The functional elites of the state apparatuses find themselves confronted with the consequences of the crisis, which unfolds, mediated by the market, “behind the producers’ backs” (Marx), as if exposed to an external, natural force, even though the increasing contradictions and distortions (debt, social erosion, economic and environmental crises, etc.) are the unconscious product of market actors in their pursuit of the highest possible capital valorization. Capital has thus brought forth a social formation that lacks control over this blindly unfolding dynamic and is ultimately driven by it into social and ecological collapse.

The state-level competition arising from this systemic crisis of overproduction consequently leads to the formation of an economically grounded imperialism that strives for the highest possible trade surpluses. Through the trade surplus, the crisis of overproduction – as well as the accompanying compulsion to incur debt – is exported to countries that are running ever-larger deficits. In this regard, the Federal Republic of Germany was particularly successful following the introduction of the euro. The political dominance of the FRG in the eurozone stems precisely from the extreme German trade surpluses between the introduction of the euro and the euro crisis, which led to the southern European debt crisis and to deindustrialization in the indebted states, while the industrial base of the German export industry remained intact. After the outbreak of the euro crisis, German Finance Minister Schäuble was able to unilaterally impose the consequences of the burst European debt bubbles – which were accompanied by German trade surpluses – on the crisis-stricken states in the form of strict austerity policies, amidst fierce political disputes. This widened the economic gap between Berlin and “its” eurozone – and cemented Germany’s claim to leadership, while states driven to the brink of bankruptcy, such as Greece, had to accept extensive losses of sovereignty. The protectionism that has been on the rise in recent years, and which has become openly apparent since the Trump administration, represents precisely a reaction to this crisis-driven urge to achieve the highest possible trade surpluses. Before the open trade wars that Trump ignited due to the extensive deindustrialization of the U.S., many countries attempted to improve their trade balances through currency devaluation races.

The objective crisis process of capital thus unfolds through corresponding crisis-imperialist conflicts between state actors – this, the execution of the crisis dynamic through economic, geopolitical, intelligence, or military power struggles, constitutes the objective core of crisis-imperialist practice. This applies not only to the eroding core countries (such as in Southern Europe), but also to the periphery of the world system, where the crisis process has advanced further and widespread social disintegration is giving way to state collapse. The imperialist interventions in Syria and Libya following the “Arab Spring” – where failed modernization regimes, having degenerated into kleptocracies, found themselves threatened by desperate uprisings – make it clear how crisis-induced upheavals first open up opportunities for imperial interventions. Social tensions in the post-Soviet space, where Russia’s hegemony rapidly eroded until the outbreak of the war in Ukraine, gave rise to a similar dynamic of protest, uprising, and external intervention. Putin’s Russia chose to wage a war of aggression against Ukraine precisely in the wake of the uprisings in Belarus and Kazakhstan.

At times, states with imperial ambitions also exploit the consequences of crises directly –Erdogan’s Islamofascist Turkey, for instance, used the refugee flows into the EU as a lever of power to extort concessions and money from Brussels and Berlin. And Ankara also justifies its imperialist expansion in northern Syria and northern Iraq by claiming it intends to concentrate refugees in these regions in the future. Imperialism must therefore be viewed not only historically as an ideological and practical precursor to fascist excesses – the same process is also unfolding in the current systemic crisis.

Imperialist striving for dominance also interacts with the ecological crisis of capital, which, due to its compulsion to grow, is incapable of establishing a resource- and climate-friendly reproduction of humanity. This includes, for example, the tensions in the far north, in the Arctic, where the rapidly melting ice cap is opening up new shipping routes and making new deposits of fossil fuels accessible – and over whose extraction the neighboring countries of Russia, the U.S., Canada, and the EU are in dispute. The conflict between Russia and the West over Ukraine, which began in 2013 as a struggle between competing economic blocs (the EU and the US versus Putin’s envisioned “Eurasian Union”), now also has a climate policy dimension. Ukraine possesses highly fertile black soil, which is rapidly gaining value as a geopolitical lever of power in light of looming, climate-induced food shortages and impending hunger crises – food could become the oil of the 21st century.

The crisis is thus driving the late-capitalist state behemoths into confrontation in both its economic and ecological dimensions. Crisis imperialism thus resembles – to stay with the image of the climate crisis – a cutthroat competition on a melting iceberg, or a struggle on the sinking Titanic. Since the socio-ecological systemic crisis cannot be resolved within the framework of the capitalist world system, crisis imperialism finds its vanishing point in a major war, which would have catastrophic consequences due to the destructive potential accumulated under late capitalism. Without an emancipatory systemic transformation, the collapse of civilization threatens to descend into climate catastrophe and nuclear war.

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Originally published on konicz.info on 06/23/22

Populism for the Poor

A Polemic on the Post-Leftist Desire for self-deception in the midst of a manifest socio-ecological systemic crisis.

Tomasz Konicz

They are anything but modest when it comes to their ostentatiously displayed modesty. The leaders of the so-called “Left Party” (Partei dei Linke – hereinafter PDL), Ines Schwerdtner and Jan van Aken, gave up part of their salary in the fall of 2024 in order to receive the statistical German average wage from then on. They wanted to “change the world,” and an “average salary” was perfectly sufficient for this, whereas “exorbitant salaries would lead to exorbitant politics,” the party leaders explained with all due modesty to any media representatives who wanted to hear it.[1] The money saved would be donated, and special consultation hours would be set up at the party headquarters to help people in need. No concern was too small, party leader Schwerdtner asserted. Populism for the poor and disenfranchised of this late capitalist world, so to speak.

Of course, this populist idea of becoming the advocate of the “little man” did not grow on the dung heap at Karl Liebknecht House (to stay with the populist jargon). The original left-wing populist can be found in Austria and goes by the name of KPÖ. The website of the Communist Party of Austria in Graz states that – surprise, surprise – “exorbitant politicians’ salaries… lead to exorbitant politics.”[2] The KPÖ in Graz uses the money it collects in this way to help people in need – meticulous records are kept of this, and the relevant data is publicly available. The crucial difference to the PDL, however, is that the Austrian communists oblige all elected representatives to limit their salaries to the average wage of a skilled worker in order to be able to use these funds for social policy.

The KPÖ’s strategy should therefore be taken seriously. It is a form of left-wing populism that genuinely strives to help people in the midst of a manifest systemic crisis, while at the same time taking the wind out of the sails of opportunism within its own ranks. Because, let’s not kid ourselves, the salary cuts are primarily intended to deter careerists and their cliques, who have already taken over many left-wing projects as soon as they became successful – starting with the Fischer gang and the Greens. The PDL, on the other hand, is staging a populist charade that is only concerned with external impact and showmanship in order to achieve electoral success and lead as many of its old boy networks and Rackes as possible to well-paid feeding troughs (always stay populist!).

The difference between populism and melodrama lies precisely in the salary cap that would have to apply to the entire party, its apparatus, and above all to the foundation that misuses the name of Rosa Luxemburg in order to be taken seriously. This would actually add up to a considerable sum of money that could be used to help many people who have fallen on hard times during the crisis. In Graz alone, several million euros have already been raised in this way. If the Left Party were to introduce a similar salary cap for all office holders and employees, similar sums would be raised every month, which could actually be used to provide concrete help to a great many people in need – be it soup kitchens or food banks, which are now barely able to meet the growing demand.

The critique of German post-left populism, which has now become almost hegemonic, is thus a critique of this charade performed by actors hungry for power and position. After only a few months, the PDL’s electoral success is thus turning out to be a disaster for all that remains of the left in Germany.[3]

But even as a consistent, sincerely meant strategy, such as that pursued by the KPÖ, populism must be subjected to radical, fundamental critique, as its basic assumption is false. The voice of the people, the vox populi, which populism seeks to capture and transform into politics in order to assert the interests of the people, is preformed by late capitalist crisis ideology and how subjects are socialized in capitalist society. The internal interests articulated by populism are therefore an expression of adherence to a practice of false immediacy in the midst of the capitalist systemic crisis – that is, the doomed post-leftist effort to realize the political goals that impose themselves as “immediate” surface phenomena (welfare state, work, climate protection, democratization, etc.).[4]

Populism can therefore only operate within the framework of internal capitalist interests, which are subject to a crisis-induced process of erosion – and it merely parrots society’s brutalizing ideological self-image. The guiding principle of populist politics is thus not the harsh, uncomfortable reality of the crisis, but the false ideological illusion that the crisis produces through cultural-industrial mediation by means of the vox populi preformed by late capitalism. This is particularly devastating because of the rapidly unfolding systemic crisis, which has now also engulfed the core of the world system, and which makes a radical, transformative critique of late capitalist society, with its contradictions and prevailing crisis ideology, essential for survival—and not parroting it, as is characteristic of populism.[5]

This subjugation to the imperatives and “practical constraints” of the permanent crisis inherent in populism has now driven the imposition of a party foundation that has hijacked the name of Rosa Luxemburg (RLS) to the point of real satire. In its strategy paper entitled Linke Triggerpunkte (Left Trigger Points), the RLS simply argued that all issues that contradict the right-wing, pre-fascist hegemony in the FRG and would thus “trigger” right-wing reactions should be avoided. Don’t rock the boat, is the motto of the – well – Rosa Luxemburg Foundation. In particular, the issues of refugees and the climate crisis should be avoided so as not to alienate potential voters (and, by the way, this says it all about the crazy, old-left fixation on wage earners and “proletarians” as the “revolutionary subject,” who in fact, in their function as variable capital, act more as its last resort, as the RLS implicitly admits in its right-wing “strategy paper.”[6]

Ultimately, the aim is to avoid addressing the systemic crisis that is currently destroying the social and ecological foundations of civilization in order to remain compatible with late capitalist politics. And the PDL is sticking to this line. It is in fact an ideological declaration of surrender, with which the PDL simply enters into populist competition with the AfD, without even being able to conceive of a counter-principle to fascism in the manifest crisis. Other bogeymen are constructed (bigwigs, the rich), alternative historical periods are romanticized as a “golden age” (the “social market economy” of the second half of the 20th century) – and at the same time, any hint of radical, categorical criticism of the disintegrating foundations of late capitalism evaporates. Phrases and posturing take the place of critique. Women and men strike a Che Guevara pose when they demand higher tax rates for “fat cats.”

Wagenknecht’s Heirs

So what does the new German left-wing populism in the form of the PDL want? It wants to return to the past, back to the social market economy, to the Rhineland prosperity capitalism of the post-war period. The social question is at the center of populist propaganda. The Left Party strikes a pose as the advocate of the little people, demanding an expansion of the welfare state, higher taxes for the rich, and a greater role for the state in the economy—just as was the case in the economic miracle of the Federal Republic of Germany.

Not only strategically, but also in terms of content, the new left-wing populism thus turns out to be a mere copy of the policies of Sahra Wagenknecht and the National Socialist forces that formed the Sahra Wagenknecht Alliance (BSW).[7] Ms. Wagenknecht explicitly formulated the crazy idea of being able to return to the second half of the 20th century by means of populist politics in her book Die Selbstgerechten (The Self-Righteous) shortly before the split.[8] The Left Party is the populist heir to Wagenknecht’s Querfront populism, pursuing left-wing conservative policies, to use Wagenknecht’s apt oxymoron, although the PDL at least refrains from parroting the crisis-induced rise in resentment, xenophobia, and racism that characterizes the BSW.

And the whole thing is obviously – to return to populist jargon once again – a single lie and a deception, a kind of popular deception committed by pseudo-populists, which the PDL performs with all its false immediacy. There is no going back to the social market economy; the clocks cannot be turned back. The crisis process stands in the way of this populist anachronism. The crisis as a fetishistic process, eating its way in fits and starts from the periphery to the centers, driven by the internal contradictions of capital, is now evident. Everything is obvious—and it is almost impressive to see the mental contortions the German post-left still manages to perform in order to ignore this evidence.

It is obvious: the trade wars that Trump started are the political consequence of deindustrialization in large parts of the United States, where the internal barrier of capital manifests itself.[9] The fetishistic self-movement of capital on a societal level, generated by competition between market subjects, becomes evident in the climate crisis.[10] There is no capitalist interest behind the fact that the compulsion to valorize will soon render entire regions of the world uninhabitable. The self-destructive irrationality of the capitalist system, which uses instrumental rationality to turn the whole world into material for its boundless valorization process, is self-explanatory when one takes a cursory look at global CO2 emissions.

No one wants a revolution; there is no revolutionary subject. That, too, is obvious. And yet – even though almost all sections of the population cling fiercely to its forms of socialization – the system is collapsing. It is the capitalist compulsion to valorize in its agony that calls the system into question by breaking down under its own contradictions – while left-wing populism wants to make everything a question of distribution and clings to a society in dissolution in a reactionary manner. The right wing is, in a sense, acting in a forward-looking manner; it wants barbarism, it wants collapse, in order to approach fascist madness in a cleansing steel storm – the populist left is acting conservatively, clinging to the ideologically distorted ideal images of economic miracle capitalism.

But there can be no welfare state in late capitalism, because the whole of society depends on the pot of the valorization process, quite prosaically in the form of taxes and wages. The PDL’s moronic drivel about the welfare state is a lie. When the valorization process stagnates or simply collapses, when the economy no longer “runs,” then everything else is also up for grabs. Redistribution does not help when the mass of valorized labor in commodity production melts away, when the valorization process destroys its ecological foundations.

There will also be no peace in collapsing late capitalism, as the increasing internal contradictions and ecological upheavals almost inevitably drive the state monsters into external expansion and military adventures. The arms build-up in the West is not only a reaction to Russian imperialism, which launched a war of aggression against Ukraine from a position of internal instability and geopolitical weakness.[11] Increasing resource bottlenecks and raw material shortages will make ordinary wars of plunder necessary again wherever the process of capital valorization, with its boundless hunger for resources, is to be maintained. Food supplies are at risk in the medium term, which is already reflected in corresponding inflation. A catastrophic major war is only a matter of time. In the dark present of the 21st century, there is only war.

Late capitalist democracy is also a thing of the past. In times of crisis, fascist tendencies inevitably gain the upper hand, together with an oligarchic brutalization of the increasingly authoritarian state apparatus. This is not a prediction for the future; it is already happening: in the US, in parts of Eastern Europe, and to some extent also in Germany. What’s more, fascism is the subjective agent of the objectively already unfolding systemic transformation into post-capitalist barbarism. The optimization of the valorization process, realized through democratic discourse, which constitutes the Orwellian essence of capitalist democracy, is turning into an objective tendency toward self-destruction in the manifest crisis of the system, whose subjective political actor is fascism.[12]

The Stepping Stones for the Stepping Stones

Almost everyone knows, really everyone suspects, that the system is coming to an end. And yet the populism of the Left Party, with its obvious fairy tales, is quite successful. The PDL’s deceivers of the people (always stay populist!), who pretend that the systemic crisis does not exist in order to throw social democratic sand in people’s eyes, are simply pursuing their own intra-capitalist interests. The populist question of cui bono, of “who benefits,” which inevitably turns into ideology when considering the irrational, fetishistic crisis process, is entirely appropriate in the autopsy of populism.

Redefining the systemic question as a question of distribution simply opens up career paths in politics. There is a concrete need for this. The ideological taboo of saying what is, of clearly naming the self-destruction of the system, must be maintained even in its agony. However, the basis of capitalist ideology production, the naturalization of capitalism, can hardly be maintained due to increasing upheavals. The false narratives of left-wing populism, according to which the excessive greed and lust for power of a class of sinister puppet masters and bigwigs are responsible for this, create ideological outlets that alleviate the pressure for legitimacy. There is nothing that a few new tax rates and economic shifts toward Keynesianism cannot fix, according to the implicit lie of left-wing populism. The seemingly radical pose and hollow rhetoric conceal the gulf between the reality of the crisis and the anachronistic postulates of the PDL.

The Greens have twisted the urgent insight into the capitalist climate crisis[13] into a commitment to “green capitalism,” while the Left Party is doing something similar with regard to the internal barriers of capital and their social consequences.[14] The PDL thus offers itself to the capitalist functional elites as crisis managers. And this is not done metaphorically, but quite concretely –visible to anyone who wants to see it. Any pseudo-radical rhetoric from prominent figures in the PDL melts away immediately as soon as there is even the slightest chance of participating in politics.

The TikTok product Heidi Reichinnek, for example, jumped on the anti-fascist wave of outrage in early 2025 that was triggered by the taboo-breaking of the then CDU top candidate Friedrich Merz in the heated election campaign phase when the CDU used the votes of the AfD to push through tightening of immigration laws.[15] At the time, the chairwoman of the Left Party group in the Bundestag said that Merz had left the democratic center and had the AfD in tow.[16]  Just a few months later, the same Heidi Reichinnek and her parliamentary group enabled the election of the same Friedrich Merz as chancellor, who committed the greatest fascist “taboo breach” in German postwar history.[17] This was accompanied by the most pitiful phrases: “End the chaos,” “always ready,” “for the good of the country and its people,” always “cooperation possible.” Reichinnek can simply rely on the fact that the memory of her TikTok fan swarm has to be measured in seconds.

Why did the PDL enable the early election of Merz as a stepping stone? Why did the PDL members of the Bundestag effectively act as stepping stones for the stepping stones? To demonstrate their reliability in the political arena, to prove that they can be a reliable partner in “cooperation” in capitalist crisis management. And this decision by the PDL not to stand in the way of German pre-fascism was recognized and appreciated, within narrow limits. The CDU’s decision on its incompatibility with the PDL has been made, and the FAZ, as a kind of late-capitalist Izvestia, basically the central organ of the Federal Republic’s functional elite, ran a headline after the chancellor election that said the “Left Party” was no longer “suitable as an bogeyman.”[18] The path to normalization, to ordinary participation, has been paved since the chancellor election – the PDL’s anti-fascist campaign slogans were the opportunistic sacrifice that the party, which hatched Wagenknecht, was only too willing to make.

The leading PDL cliques are, to stay with populist jargon, an abyss of cheap phrases and ass-kissing towards the functional elites wherever possible. And this post-leftist imposition wants to do nothing other than the political business that is oriented towards ordinary, worn-out crisis strategies. The reactionary state fetish that characterizes a large part of the German old left forms the perfect ideological springboard for career planning in crisis management, since the state moves into a central economic position in manifest crisis phases in order to support the stuttering valorization machine.

Dysfunctional Hyper-Opportunism

However, as mentioned above, there are strict limits to the PDL’s participation. In return for its parliamentary function as a stepping stone for Merz, the PDL faction expected not only the “normalization” of relations with the CDU, but also a seat on the secret service committee. Our Heidi Reichinnek, who made it possible to quickly elect a chancellor who had the “AfD in tow” in order to “avoid chaos” in Germany, wanted to be on this committee for one reason only: to prove her reliability, “for the good of the country,” etc., etc. Well, that was too much of a stepping stone for the CDU and SPD. The already pitiful calculation of getting into the intelligence committee by means of the chancellor election did not work out, as Reichinnek failed to obtain the necessary majority in June.[19]

But that does not deter the opportunistic participation mania of the power-hungry middle-class snobs with proletarian tendencies who make up the majority of the PDL’s old boy networks – on the contrary. Opportunism escalates into hyper-opportunism, it overturns itself, becomes dysfunctional, stands in its own way, negates itself, so to speak. It is opportunism without an opportunistic chance, without opportunity, which virtually takes control of the bullying machines at the top of the PDL: No one demanded it of her, there were no government posts in sight, and yet Ines Schwerdtner, the imposition at the top of the “Left Party,” demanded an increase in the retirement age in August 2025, while expressing the usual “concerns.”[20]

This was a populist cardinal sin committed here without cause, with Ms. Schwerdtner simply telling the truth: not regarding the retirement age, but with regard to the character of the PDL’s “left-wing populism,” which simply lies to people. As I said, they do not believe in the social demagoguery they spew in the systemic crisis. The populists of the PDL lie; it is not ignorance. Ms. Schwerdtner just wanted to be part of the reactionary debate on crisis management strategies in order to signal her “ability to govern.” And that contradicts not only the PDL’s anachronistic social welfare rhetoric, but also the populist credo and tactics of social demagoguery, which is based on sweet-talking people until you are in power – only to then forget your promises and betray your voters. Schwerdtner overshot the mark and had to be called back, although the PDL can probably rely on the short attention span of its Reddit and TikTok brigades.[21]

And that’s nothing new, really. The PDL already stumbled over its dysfunctional hyper-opportunism during the 2021 election campaign. The man who reverently knelt before Wolfgang Schäuble, Dietmar Bartsch, then the party’s top candidate, declared much of the painstakingly negotiated election program obsolete during the heated campaign phase because the competition criticized it.[22] Following criticism from the SPD and the Greens on a number of program points, Bartsch threw a good part of his party’s program overboard in order to demonstrate the party’s ability to govern in the middle of the election campaign – instead of doing so, as is customary with every other party, only in the event of possible coalitions after the election.[23] Despite the change in leadership, much of the old left has remained opportunistic. Hyper-opportunism can thus be defined as a thirst for power and career advancement that stands in its own way.

The proletarian streak of the “Left Party,” its ostentatious display of love for the working class, for wage earners, is a quirk of the middle-class snobs who make up the majority of the PDL leadership.[24]  The internal capitalist interests of wage earners, which this pseudo-populism purports to represent, will be betrayed at the earliest opportunity. No question about it. Ms. Schwerdtner’s love of work goes so far that she would like to see the working life extended – as long as Ms. Schwerdtner herself does not have to work, of course. After all, why shouldn’t we apply the same populist categories to Ms. Schwerdtner as she does to her political rivals?[25] To evaluate Schwerdtner on the basis of her own work ideology: here, a middle-class snob who has never really worked is calling for the extension of working life so that she can provide her political clique with jobs and money as quickly as possible.

And it is no coincidence that the traditional German work ethic, which Ms. Schwerdtner aggressively propagates, is at the heart of this populist taboo-breaking, which only provides a glimpse of this ragtag group’s possible participation in government. The state fetish of the German old left in and around the PDL – which is reinforced by objective state-capitalist crisis tendencies – is complemented by the German work ethic. It is a product of the old left’s belief in the proletariat as a “revolutionary subject,” as well as a central ideologeme of late capitalist crisis ideology, to which the PDL is attached.

Labor, however – leaving the populist rubbish behind – is the substance of capital. The outright hysteria surrounding work, the relentless agitation against everything that does not contribute to the process of capital valorization, are expressions of the crisis of this very process of valorization, which is driving it toward self-destruction. That is why, in times of crisis, the potentially murderous work ethic manifests itself again and again, to the point of forced labor and starvation – even in the 21st century.[26] Everything must become work because work itself is breaking down.[27] The PDL, with its populist hatred of “profiteers” and “parasites,” which stifled any radical critique, is only one post-leftist current of this crisis ideology.

The Regressive Desire for Self-Deception

The PDL can thus already be understood as a post-left formation; they are opportunistic barbarians who dwell in the ruins of past emancipatory attempts. The actual intra-capitalist interest that drives these populist cliques thus materializes in figures such as Schwerdtner or Reichinnek: It is the panicky urge to find a place in late capitalist crisis management in order to become its subject. This also explains the dysfunctional tendency toward hyper-opportunism –time is running out, and the systemic crisis, which these opportunists are dishonestly framing as a redistribution crisis, is progressing inexorably. And they sense that time is running out for them to still “find a place.” As a result, there are hardly any taboos, even without gratification: stepping stones are paved to the chancellorship, promises of a welfare state are turned on their head, etc. The ridiculousness of demanding marginal improvements to a system in open dissolution in the midst of a manifest socio-ecological systemic crisis is blatantly obvious.

But this does not explain the evident popularity of the PDL’s pseudo-populism, which has in fact long since become hegemonic in the German post-left. Its hypocrisy is evident: Germany’s post-left populists polemicize against fascist stooges in order to pave their way into the chancellery a few months later; they engage in social demagoguery, which they refute without any opportunistic motive by demanding an increase in the working life. These populist lies, which can be easily exposed, nevertheless find open ears and receptive minds. Many old leftists and broad sections of the population simply want to be deceived. There is a widespread desire for self-deception that cannot be explained simply by demagoguery or the hope of followers for a warm place in crisis management. This pseudo-populist filth is so successful because it appeals to a widespread, irrational need that is rampant in the manifest crisis of the system.

This irrational, dark need, which takes hold of the masses in the wake of the fully revealed irrationalism of capital, is best illuminated by the concept of regression. The fear-induced relapse into earlier stages of development, often used to ward off traumatic experiences, corresponds to a variety of reflexes of ideological defense against the crisis in the disintegrating political sphere. In this magical thinking, the global crisis of capital is to be banished by making perceiving, reflecting upon, or discussing it taboo. Concretely, this manifests itself in the struggle of the post- and old left against radical crisis theory. It is a kind of taboo that is being established, a compulsive unwillingness to know – which, in view of the manifest crisis and the openly apparent fetishism of capital[28] increasingly often turns into ridicule: for example, when young PDL members demand “justice in the climate collapse,”[29] or when left-leaning German comedians issue ultimatums to billionaires[30] to put an end to the crisis, while the latter have long since had their bunkers built.[31]

The post-left regression that drives the populism of the PDL and the disintegrating BSW is related to the explicitly reactionary aspirations of the right, which has also been expressed concretely in the querfront efforts of recent years.[32] However, this preconscious and unconscious crisis reflex goes beyond a merely political dimension. The crisis of capital also affects the subjects whose own constitution and socialization are shaped by late capitalism. What capital does to wage earners, their constitution as subjects, as citizens and market subjects, is on the verge of dissolution. And regression wants to cling to this, to late capitalist identity, which – by the way – also explains the rampant identity mania that is merely an expression of dissolving identities. When everything is in flux, when things are in motion, subjects cling to what they still have left – to the identity they acquired through their socialization, even if this is also eroding.

Radical crisis theory and the resulting transformative practice, the escape from the capitalist prison of thought, thus amounts to a necessary, painful break with identity. And it is precisely this break with capital that the old left refuses, as crisis theorist Robert Kurz already explained in his examination of anti-German ideology at the beginning of the 21st century:

The impending categorical break would be such a painful break with identity that the death throes of the old paradigm of critique consist primarily in devising avoidance strategies in this regard.”[33]

The post-left pseudo-populism of the PDL is thus not only an opportunistic career project in an era of open crisis management, it also builds on this unconscious crisis tendency toward regression, on the subjects’ fear of impending “loss of self,” so to speak. It is also a populism of the intellectually poor, to put it populistically. In this context, Robert Kurz spoke explicitly of a “reactionary longing for a return to the old familiar patterns of interpretation” in “large parts of the left.” The anachronistic talk of the welfare state, the zombie-like return of anti-imperialism in the form of post-colonialism, the praise of hard work in the face of the impending AI rationalization pushes, the ridiculous polemic about parasites and fat cats in the face of the manifest climate crisis – all these appeal to this regressive need among all the old leftists who have not yet openly defected to the right.[34]

The populist desire to march back into the idealized social market economy is merely a post-left expression of this general tendency toward regression, as exemplified by Wagenknecht.[35] It is literally an “avoidance strategy,” as Kurz put it. Or, to put it another way: the identitarian delusion – whether based on national or religious grounds – is an expression of clinging to late capitalist society, which shaped these identities through socialization.

And yet this regressive flight into identitarian delusion and class struggle stupidity will not stop the fetishistic march toward crisis. Every day, open crisis fetishism strikes a blow to the numb wannabe class warriors who can only smell sinister capitalist interests everywhere. It is obvious that the looming climate catastrophe, for example, also threatens to put an end to capital’s profiteering. The crisis will continue to unfold in its ecological and economic dimensions, even if populism and old-left dullness obscure or marginalize radical crisis theory. The fetishistic reality of the crisis cannot be mobbed away.

The categorical break that Robert Kurz predicted in his book Die antideutsche Ideologie [The Anti-German Ideology] is now very much on the agenda. Not because the fearful market subjects blinded by identity want it, but because it will inevitably take place in the course of the upcoming transformation of the system:

“On the historical agenda is the categorical break with the basic forms of the modern commodity-producing system as such, as announced by the concept of value criticism: the capital relation must be fundamentally criticized as value socialization. If, after the collapse of state socialism, the labor movement, and traditional Marxism, there is to be a renewed theoretical and practical critique of the ruling world system, its economic terror, its social impositions, and its processes of destruction, then this critique must become more radical; that is, unlike previous left-wing paradigms, it must go deeper, to the roots and to the categorical basis of commodity-producing modernity. This includes a critique of the fetishistic form of subject and interest, of ‘abstract labor,’ and of the democratic legal form: all of which are foreign concepts to the dying consciousness of the categorically immanent labor movement Marxism. Since one was oneself an integral part of the history of capitalist modernization, one cannot and does not want to break away from commodity-producing modernity.”[36]

Despite the ever-advancing dynamics of the crisis, nothing has changed in this regard over the past two decades. This old left is in fact the main disruptive factor in the establishment of a radical awareness of the crisis, which could only develop on the political left. Nowhere is this clearer than in the decaying products of “state socialism, the labor movement, and traditional Marxism,” which have taken on a populist form in the PDL – they are flesh from the ideological flesh of capital, its last resort in the disintegrating left, so to speak, which attempts to suppress any emancipatory impulse. Opportunistic calculation, old-left dullness, and general regression go hand in hand here.

Especially against the backdrop of the inevitable systemic crisis, which will necessarily lead to an open-ended systemic transformation, this post-left “identity populism” has a disastrous effect. Emancipation in crisis can only be the result of a consciously waged struggle for transformation.[37] On this point, Robert Kurz writes in The Anti-German Ideology:

“But that is precisely why the crisis leads to nothing but crisis, the failure of capital to function, and not to the self-evident demise of capital as a social relationship, as has become a false assumption in people’s minds. The crisis therefore never replaces emancipation, the emancipatory social movement, precisely because it is purely objective. Of course, there is no automatic, objective emancipation; that would be a contradiction in terms. And it is therefore completely open how people will react to crisis and collapse. In its objectivity, the absolute internal barrier of capital can become an external condition for emancipation as well as for social decay into barbarism, which capitalism has always carried within itself as a potentiality and as a manifestation.”[38]

The opportunistically motivated, regressive dullness propagated by the PDL within the dwindling German remnants of the left thus objectively blocks the necessary “categorical break with the basic forms of the modern commodity-producing system,” as Kurz put it.[39] This categorical break, however, would be a prerequisite for anemancipatory social movement” that would consciously wage social struggles as part of the objectively imminent struggle for transformation.[40]

Telling it like it is – clearly and publicly articulating the crisis and the necessity of overcoming capitalism in order to survive – seems hardly conceivable anymore in the populist morass that has spread throughout the remnants of the left in the wake of the PDL’s catastrophic election victory.[41] Instead of radical critique of the frothing identity and work mania, which are only expressions of the crisis of labor and the market subject, instead of a conscious, forward-looking search for emancipatory paths to transformation, the PDL is staging a backward-looking farce that is blatantly obvious in its regressive hypocrisy. Incidentally, the PDL’s ideological-identitarian blockade extends not only to the left-wing media landscape, which has been largely brought into line, but also to left-wing discussion forums and social networks, most of which are moderated by people who do not have to work because they are paid by the PDL – as parliamentary assistants, party employees, volunteers, interns, etc. The fundamental radical discourse, the understanding of emancipatory ways out of the impending catastrophe, is being cut off at its root.

Emancipation requires a radical, categorical break with value-based society, both ideologically and identitarily, as a precondition for emancipatory transformative practice – precisely because value-based society is breaking down due to its contradictions. Regression, the comfortable opportunistic path of the PDL, on the other hand, acts as one of the breeding grounds for fascism. Fascism is an extremism of the center, which drives precisely what it finds in the center in terms of ideology and identity to extremes in response to crises.

This regressive openness to the right, which drove Wagenknecht to leave the National Socialist Party, can currently be best demonstrated by the largest populist hollow body in the PDL, party leader Jan van Aken.[42] Van Aken has developed the habit of having posters made for himself[43] in order to sell himself as a tribune of the people in populist fashion.[44] Here, the right-wing degeneration of a simplified critique of capitalism becomes visible as if under a magnifying glass: praise for the hard work that “keeps the country running” goes hand in hand with the personification of the crisis in a “clique of millionaires.” Mr. van Aken, similar to his co-chair, is someone croaking the praises of work even though he has never had to “really work” in the populist sense.

As mentioned, labor is the substance of capital – the rampant work hysteria that is once again giving rise to forced labor in the FRG is an expression of the crisis of capital, which, with the impending AI rationalization push, threatens to finally rid itself of its own substance.[45] Emancipatory practice would consist in fighting for the end of compulsory labor and the realization of automation in a post-capitalist society emancipated from fetishism. The German work mania, which escalated during the last severe systemic crisis in the context of National Socialist extremism from the center to the Auschwitz motto “Arbeit macht Frei” [Work makes you free], is currently flaring up in response to the crisis in almost all political camps. Van Aken reproduces this work fetish in a post-leftist variant by contrasting the proletarian masses with a clique of parasites.

The discourse hegemony of fascism in the FRG becomes particularly visible when van Aken expresses anti-fascist views and unwittingly lapses into fascistoid critique of fascism, imagining fascism as a sinister elite conspiracy (“bigwigs”) directed against national labor, against – surprise – the “hard-working people.”[46] Workaholism, personification of the causes of crisis, conspiracy thinking – all on one poster whose simplified critique of capitalism could also be found on a Nazi poster, if only “bigwigs” were replaced with “Jews.” This has nothing to do with a critique of the actual dynamics of the crisis, which are actually causing the distribution struggles to escalate on the surface. This is not an expression of a counter-principle to fascism, but merely its populist rival.

I finance my journalistic work largely through donations. If you like my writing, you are welcome to contribute – either via Patreon or Substack.


[1] https://www.zdfheute.de/politik/deutschland/linken-vorsitzende-schwerdtner-van-aken-gehalt-spende-100.html

[2] https://www.kpoe-graz.at/tag-der-offenen-konten-2023.phtml

[3] https://www.konicz.info/2025/03/23/alle-werden-wagenknecht/

[4] https://www.untergrund-blättle.ch/politik/theorie/emanzipation-in-der-krise-7306.html

[5] https://jungle.world/artikel/2025/14/autoland-ist-abgebrannt

[6] https://www.rosalux.de/fileadmin/rls_uploads/pdfs/Studien/Studien_3-24_Linke_Triggerpunkte_web.pdf

[7] https://www.konicz.info/2025/03/23/alle-werden-wagenknecht/

[8] https://www.konicz.info/2021/06/29/schreiben-wie-ein-internettroll/

[9] https://exitinenglish.com/2025/06/06/trump-at-the-inner-barrier-of-capital/

[10] https://www.konicz.info/2022/01/14/die-klimakrise-und-die-aeusseren-grenzen-des-kapitals/

[11] https://www.akweb.de/politik/russland-ukraine-konflikt-kampf-auf-der-titanic/

[12] https://www.konicz.info/2024/01/13/e-book-faschismus-im-21-jahrhundert/

[13] https://www.konicz.info/2024/05/29/aktualisierte-neuausgabe-klimakiller-kapital/

[14] https://www.konicz.info/2025/11/01/understanding-jd-vance/

[15] https://www.konicz.info/2025/01/28/schwarz-brauner-durchbruch-in-der-heissen-wahlkampfphase/

[16] https://www.zdfheute.de/video/zdfheute-live/reichinnek-bundestag-redebeitrag-debatte-migrationsgesetz-video-100.html

[17] https://x.com/antonnft6/status/1919821830660976804

[18] https://www.faz.net/aktuell/politik/inland/kommentar-zum-unvereinbarkeitsbeschluss-die-cdu-sollte-ihr-verhaeltnis-zur-linken-aendern-110466519.html

[19] https://www.tagesschau.de/inland/innenpolitik/geheimdienst-gremium-reichinnek-afd-100.html

[20] https://www.n-tv.de/politik/Linken-Chefin-haelt-Erhoehung-des-Renteneintrittsalters-fuer-moeglich-article25948019.html

[21] https://www.zdfheute.de/politik/deutschland/rentenalter-linke-schwerdtner-aussage-korrektur-100.html

[22] https://www.wsws.org/de/articles/2024/01/04/link-j04.html

[23] https://www.konicz.info/2021/09/24/linkspartei-wagenknecht-statt-kampf-um-emanzipation/

[24] Workers are so underrepresented that the party had to introduce a quota in 2025. https://www.freitag.de/autoren/sebastian-baehr/die-linkspartei-will-eine-arbeiterquote-einfuehren-kann-das-klappen

[25] https://x.com/fr_dr_kniffel/status/1992268626490269713

[26] https://www.konicz.info/2013/03/15/happy-birthday-schweinesystem/

[27] https://exitinenglish.com/2025/06/06/trump-at-the-inner-barrier-of-capital/

[28] https://exitinenglish.com/2023/01/23/the-subjectless-rule-of-capital/

[29] https://x.com/tkonicz/status/1992636311359172882

[30] https://x.com/tkonicz/status/1928306598717403243

[31] https://konicz.substack.com/p/the-exodus-of-the-money-people

[32] https://www.konicz.info/2024/06/06/linkspartei-querfrontschrecken-ohne-ende/

[33] Robert Kurz, Die antideutsche Ideologie, Vom Antifaschismus zum Krisenimperialismus: Kritik des neuesten linksdeutschen Sektenwesens in seinen theoretischen Propheten, Münster, 2003, p. 14.

[34] https://exitinenglish.com/2024/08/03/ai-the-final-boost-to-automation/

[35] https://exitinenglish.com/2024/08/10/the-great-regression/

[36] Robert Kurz, Die antideutsche Ideologie, Vom Antifaschismus zum Krisenimperialismus: Kritik des neuesten linksdeutschen Sektenwesens in seinen theoretischen Propheten, Münster, 2003, p. 14f.

[37] https://exitinenglish.com/2023/02/22/emancipation-in-crisis/

[38] Robert Kurz, Die antideutsche Ideologie, Vom Antifaschismus zum Krisenimperialismus: Kritik des neuesten linksdeutschen Sektenwesens in seinen theoretischen Propheten, Münster, 2003, p. 227.

[39] In the US, the Democratic Socialists of America and the regressive rag Jacobin fulfill a similar crisis-ideological function.

[40] https://www.untergrund-blättle.ch/politik/theorie/den-transformationskampf-aufnehmen-fuer-ein-kaempferisches-krisenbewusstsein-009092.html

[41] https://www.konicz.info/2025/03/23/alle-werden-wagenknecht/

[42] https://x.com/tkonicz/status/1995044050798612824

[43] https://x.com/tkonicz/status/1995108620632002741

[44] https://x.com/tkonicz/status/1995110373213536561

[45] https://exitinenglish.com/2024/08/03/ai-the-final-boost-to-automation/

[46] https://x.com/tkonicz/status/1995107787139936504/photo/1

Originally published on konicz.info on 11/30/2025

On the Altar of the Techno Gods

Prospects for new forms of crisis competition in the looming authoritarian era of widespread late-capitalist scarcity.

Tomasz Konicz

 Competition is for losers – Peter Thiel[1]

More RAM! There simply cannot be enough memory produced after OpenAI secured a large share of the world’s production of this essential computer component in a veritable coup. Prices for DRAM[2] (especially DDR5, and to a lesser extent DDR4) are literally exploding,[3] hardware manufacturers are panic buying,[4] while memory producers are discontinuing their consumer products in order to supply only the corporate market caught up in the speculative frenzy.[5] It is an insatiable hunger for RAM, fueled by the current AI bubble, which was heightened to hysterical levels by OpenAI in October 2025 – and which has now spread to other components such as graphics cards (video memory) and SSDs.

What happened? In October 2025, OpenAI was able to simultaneously conclude two supply contracts for computer memory with two of the world’s largest manufacturers – Samsung and SK Hynix – securing around 40% of global production of this component in one fell swoop.[6] Altman managed to keep the content of the negotiations secret – neither Samsung nor Hynix were aware that OpenAI was concluding similarly gigantic deals with their competitor, which is likely to have had a positive effect on the AI company’s respective contract terms.[7]  DRAM manufacturers could have at least pushed through higher prices if they had been aware that OpenAI was going to buy up almost half of the industry’s memory output. The deals might never have come about.

After this coup – the contracts were signed within a few hours of each other – became known, panic set in, bringing back memories of the shortage economy of Soviet-style state capitalism: All relevant IT market players, competitors from the AI industry, scalpers, and ordinary consumers willing to upgrade rushed to snap up production capacities, wholesale stocks, and memory kits. This panic-driven surge in demand was only indirectly related to actual demand: No one knows what other secret deals are being hatched by AI companies swimming in investor money. As a result, everyone is trying to secure their memory supply by hoarding purchases – which is leading to a general memory shortage. This high-tech hoarding is thus a consequence of the gigantic AI bubble, in which the US in particular finds itself.[8]

OpenAI is the first company that comes to mind here, as the AI corporation does more than just buy up 40% of finished DRAM production in order to use this memory in its data centers for capital valorization in the context of AI services. Altmann not only buys finished memory modules, but also the preliminary products, the wafers, which are now stored in warehouses. Around 900,000 DRAM wafers are purchased by OpenAI every month and simply stored without being “cut” and processed into RAM.[9] It is unclear when, and if at all, this memory will be used in the AI industry, which is struggling with infrastructure bottlenecks and energy and water shortages[10],[11] – not to mention the persistent teething problems and practical application hurdles that arise during the actual implementation of AI techniques in the rationalization of real workflows in many economic sectors.[12]

Monopolistic Crisis Competition?

What Altmann is practicing with his memory deal could be described as monopolistic crisis competition. It is a crisis form of market competition that directly and immediately aims to achieve a monopoly or a dominant market position. OpenAI wants to go from startup to monopolist in one fell swoop. Control over a large part of RAM production is motivated not only by the expansion of its own AI capacities, but also by the sabotage and obstruction of competition. The memory, which is gathering dust as a wafer precursor in OpenAI’s warehouses, cannot be used by competing companies to expand their own AI models. It is not the development of the most efficient and reliable automation systems that is decisive here, but control over the necessary resources, precursors, and/or production capacities.

“Competition is for losers” – Sam Altman seems to have taken to heart the lecture given by right-wing billionaire and Trump supporter Peter Thiel, which he introduced at Stanford a few years ago under this title.[13] In his remarks on successful corporate strategies, Thiel argued in a somewhat involuntary Marxist manner, openly advocating monopoly as the ultimate goal of market competition. According to Thiel, capital-rich corporations/startups must quickly copy the innovations of the technological avant-garde and expand rapidly. Pumped full of investor money, they ensure rapid growth by offering favorable entry conditions for their products and services, so that once they have achieved a dominant market position, they can slowly tighten the screws. This is the blueprint for the often lamented “enshitification” of the internet, for the gradual deterioration of the terms of use of many online services.

Google, Netflix, Microsoft, Amazon – there is no way around these tech giants in their respective market segments. This now leaves these companies, who often achieved their market dominance through temporary periods of loss, with all options open for profit maximization. On the one hand, OpenAI operates according to the same pattern, with the startup expanding its AI services as quickly as possible at great loss, even foregoing advertising revenue in order to push for monetization once it has established a dominant market position.

But the new factor here is the “scarcity strategy” that the AI company is apparently pursuing. It is also a kind of crisis hedging, a safeguard for the coming crisis. Sam Altman seems to be aware of the precariousness of his situation. The players in the current boom are well aware that many startups will not survive the inevitable bursting of this AI bubble. OpenAI is the “early bird,” the startup that—unlike Google, Meta, or Microsoft—has no profitable business lines that could feed the loss-making AI business. When the bubble bursts, when the gap between imminent profit expectations and bleak market reality becomes unbridgeable, OpenAI can at least hope to survive thanks to its control of 40% of memory production.

The End of Plenty

Altman’s attempt to hinder competition by buying up memory and thus dominate the AI market also highlights the state of industrial production conditions in the global high-tech industry. The market economy ideology of rising demand being immediately satisfied by rapidly growing market supply is currently colliding with oligopolistic reality in an industrial sector characterized by gigantic investment hurdles. Three corporations (Samsung, Micron, SK Hynix) are responsible for more than 90% of global DRAM production, whereby the construction of new manufacturing facilities would require billions in investments in highly complex machinery, workflows, and scarce skilled personnel as a presupposition. The aforementioned memory manufacturers are now in capitalist heaven: there appears to be a tacit agreement to fully utilize existing production capacities without pumping billions into new fabs, while DDR5 memory kits, which were available for around €80 six months ago, are now trading for just under €400.

As already mentioned, the IT industry is well aware that it has been caught up in a bubble. And that is precisely why there will be hardly any newcomers entering memory production, as no one can predict when the AI bonanza will come to a miserable end. The risk is simply too great to invest billions in factories during the boom only to find yourself in a market flooded with cheap memory once the boom is over. The tendency of late capitalist commodity production to constantly increase investment expenditure is particularly evident in the “inflexible” supply in the current memory crisis. This is precisely why OpenAI considered the strategy of “artificial scarcity” to be promising.

This artificial shortage created in the storage market is merely a reflection of the increasing actual scarcity of resources, raw materials, intermediate products, and energy sources that the late capitalist world system faces in its boundless drive for valorization. Microsoft, for example, is sitting on a mountain of unused, extremely expensive AI graphics cards that the company bought up during the current boom without ever using them.[14] There is simply not enough electricity or the necessary energy infrastructure to use all this computing power to train new AI models. The AI bubble, which consumes dystopian amounts of energy, could thus run out of hot air not only because of the discrepancy between gigantic investments and meager returns, but also because of bottlenecks in energy sources or resources. This fundamentally distinguishes the current AI boom from the US real estate bubble, which also fueled enormous resources in a speculative construction boom – but which collapsed due to its internal contradictions, namely the accumulation of bad mortgages by the exhausted US middle class.

The external, ecological barrier to capital thus also appears to set certain limits on the speculative bubble formation that has so far prolonged the systemic crisis in the 21st century.[15] However, shortages and undersupply are emerging in many other economic sectors, in raw materials such as rare earths or lithium, or in foods such as cocoa or coffee, which are already suffering from the climate crisis. Persistent inflation,[16] especially in food prices, is fueled not least by this “external barrier” to capital – while the capitalist drive for profit has only one answer to all these problems: more growth. Capitalism is thus degenerating in its old age into an economy of scarcity à la the GDR, minus the social characteristics and egalitarian population structure of state socialism.[17]

Efforts to control scarce or artificially scarce resources and/or intermediate products in order to achieve a monopolistic position are therefore likely to become a common competitive strategy in the future. What OpenAI is doing is only the beginning of a new era of monopolistic competition in late capitalism, whose compulsion to valorize is increasingly coming up against the external, ecological barrier of capital – the finiteness of resources and the full onset of climate catastrophe.[18] The differences between market competition and the usual geopolitical and crisis-imperialist strategies of resource plundering will thus become increasingly blurred.[19]

The Longing of IT Capital for an Active State

Until now, whenever a bubble formed in the 21st century, the state’s big moment came only after it burst, when it was time to cushion the devastating economic consequences with loose monetary policy and trillion-dollar crisis and investment programs. But this time, the AI gurus are calling on the state for help in the middle of the bubble. It is precisely the absurd, dystopian energy hunger of the AI industry, its inability to quickly modernize the infrastructure ruined during the neoliberal decades, that already necessitates an economically “active state.” The high-tech oligarchs are mutating into a real-life satire of Keynesian ideologues, as they wreak havoc in the milieu of old-left parties.

The industry – whose leaders normally have a penchant for right-wing libertarian market ideology – is seeking government subsidies, investments, or guarantees on several levels.[20] OpenAI has been pressuring the Trump administration, which is politically closely intertwined with the IT oligarchy, for months to extend tax breaks to the AI industry, specifically to infrastructure investments in data centers. The Bloomberg news service referred to this as Silicon Valley socialism.[21] Furthermore, taxpayers are to bear the risks of these investments in the form of government guarantees for corresponding loans, in order to reduce borrowing costs and expand investment activity.[22] The political interdependence between Silicon Valley and the Trump administration is to be followed by the economic interdependence of big business and big politics, as is characteristic of fascist forms of crisis in capitalist rule.

The insane expansion of the industry, especially the industry leader OpenAI, also seems to be aimed at simply exceeding a critical mass above which, in the event of a crisis, corporate bankruptcy must be prevented for economic reasons. The dizzying borrowing, the $1.4 trillion investment projects that are having very real economic effects, the pursuit of the closest possible ties to government financial flows—all of this suggests that Altman simply wants to make his AI corporation too big to fail. This is similar to what happens with systemic banks in financial market crises. This strategy of growing beyond the possibility of bankruptcy is so obvious that Altman felt compelled to publicly contradict it.[23]

Another argument used by AI capitalists to legitimize government support consists of the usual geopolitical competition considerations. If the US does not pump billions of taxpayer dollars into the AI industry, China will win the race for new military-grade technology, according to the usual line of argument. The whole thing is garnished with the usual bootlicking and ass-kissing necessary to secure the goodwill of the Mad King in the White House. Nvidia CEO Jensen Huang,[24] is not only keen to maintain the best possible relations with the military-industrial complex and the Pentagon, with whom the company cooperates in the development of AI-supported weapon systems.[25] Huang also had no qualms about paying homage to Trump in bizarre statements, by praising the US president for courageously standing in the way of the “demonization of energy.”[26] The CEO of the world’s largest corporation, who sounded like a troll lurking on Twitter or Reddit, was apparently cheering the US’s departure from any form of climate protection.

This seems to be the political operating cost of the AI bubble. All the major players in the AI bubble are aware that they are in a speculative bubble, the industry knows that a crash is inevitable – and a large part of their activity during this boom consists precisely of preparing for the coming crash, maintaining good contacts with a state apparatus, securing themselves as comprehensively as possible in order to survive the crash and then rise to dominance in the “cleansed” market. The industry is simply dominated by the hope of hitting the big jackpot as a survivor of this cleansing market storm.

Farewell to the Illusion of Consumer Capitalism

Why all this crazy effort, such as burning vast quantities of energy sources in the midst of the rapidly unfolding climate crisis? Critics of the AI industry contrast this massive burning of resources with the digital rubbish spewed out by generative AI to flood the internet. A new word has already been coined for this: AI slop. But this is only a by-product that is only significant for the culture industry.[27]

From an economic perspective, the holy grail of the industry is the production of AI systems that can take over as many fields of work as possible, either completely or at least partially – the AI gurus simply want to sell automation.[28] This is where the dizzying potential for growth and profit lies. This is the real jackpot. Those who survive the coming crash can hope to lead a total transformation of the late capitalist mode of production that promises fantastic growth prospects and profits.[29] But this is also where the insurmountable central contradiction of the capitalist mode of production lies, its internal barrier, which is becoming fully apparent and generally visible in the AI boom.

The crisis process that began with the stagflation period of the 1970s and the IT revolution of the 1980s, which was prolonged in the 21st century by means of the globalized financial bubble economy on credit now finds its crisis-ridden conclusion in the AI revolution.[30] The class struggle fetishized by the old left is only a surface phenomenon; it is an intra-capitalist conflict over the distribution of surplus value, fought between variable capital (“the working class”) and the capitalist functional elites. What is decisive, however, is the internal contradiction of the valorization process itself: the substance of capital is wage labor, but at the same time, due to competition-driven rationalization, capital strives to minimize wage labor in the production process. The decline of the industrial workforce in most industrialized countries, which was the result of the first IT revolution in the 1980s, is now spreading to large areas of the service sector and the IT sector.[31]

Since the implementation of Fordism after World War II, mass demand from a broad middle class was considered a central economic presupposition for the valorization process of capital; mass production had to find mass demand—and this illusion of consumer capitalism was maintained even during the neoliberal era within the framework of the financial bubble economy on credit. Even as the industrial workforce dwindled, the financialization of capitalism continued to generate demand and jobs, albeit at the price of increasing financial instability and periodic crashes. Capital needs solvent mass demand in order to complete the cycle of valorization in commodity production. Otherwise, the valorization process collapses in on itself.

And it is precisely this ideology of consumer capitalism, based on economically necessary mass demand, that is already becoming insubstantial and hollow in the rise of the AI bubble. Speculative fervor is leading to inflation, not to an expansion of consumption, as in previous bubbles. Consumers are already feeling this, especially in the high-tech sector and within the gaming scene. On the one hand, the current artificial shortage is making consumers realize that mass consumption is effectively being capped in a substantial part of the consumer electronics sector in order to fuel the AI boom. The market is simply supplying the most affluent customers – and those are corporate customers. And it is precisely this clientele that the AI industry is primarily targeting with its automation products.

However, this is only the beginning of the coming AI crisis, assuming the teething problems and start-up difficulties in the automation of wage labor actually be overcome, as the industry hopes. But there can hardly be enough consumers if wage workers are replaced by AI systems or paid less. The old Fordist equation, according to which workers constitute the sales market at the same time as their demand, will no longer work—precisely because the globalized deficit economy of the neoliberal era has exhausted itself. Programmers, for example, are already successfully using AI as a tool, resulting in substantial productivity gains that are reducing working days to working hours.[32] Strictly speaking, AI does not replace programmers in individual work processes; it only makes them more productive and reduces the demands of the profession. The labor market then takes care of the rest.

The AI Cult and the Automatic Subject

Capitalist consumers then simply become superfluous human material, while the corporations and companies that massively increase their productivity with the help of the AI industry can no longer find buyers for their goods and services. The subjectless rule of capital inevitably threatens to shatter on this internal contradiction, on its internal barrier, as soon as the AI bubble runs out of hot speculative air. It is clearly evident—even the old left, highly trained in crisis ignorance, can hardly overlook this.[33]

The doubly free wage laborer, as produced by capitalism, is thus acutely threatened with extinction in the current crisis. The system will consequently enter fully into the post-capitalist transformation that is already looming. And it is fascism that seeks to steer this inevitable transformation process in a barbaric direction: On the one hand, through the introduction of forced labor, as indicated in German pre-fascism or in the prison system of the US. On the other hand, through the marginalization, exclusion, deportation or – as a last resort – simply the extermination of the “superfluous humanity” that capital produces in its agony.

The growth mania, the breakneck expansion of the AI industry, also implies all too clearly that the IT princes of Silicon Valley – who effectively want to replace humanity – have already expanded the fascist death cult of the 21st century, as it bubbles up on both sides of the Atlantic, with their own facets. The AI industry’s growth mania, which exceeds anything seen before, is also driven by an ideological factor. The transhumanism rampant in Silicon Valley forms the perfect ideology for the openly misanthropic final phase of the capitalist systemic crisis, in which only blind delusion can obscure the evident destruction of the ecological and social foundations of human civilization under the most absurd ideological contortions.

Transhumanism does not need to do this; it sees humanity as nothing more than a starting aid, a bootloader for artificial intelligence, which is supposed to inherit humanity, so to speak. That is why transhumanists do not care whether the hunger for resources and energy of AI capital further drives the climate crisis, or whether data centers are draining groundwater from entire regions.[34] They see themselves in a race against time—the self-optimizing superintelligence known as singularity, the artificial AI god that transhumanism wants to create, is to become reality before humanity’s capital depletes the foundations of life.

In fact, transhumanism wants to transform the real-abstract automatic subject of capital into reality, to concretize it, to breathe artificial life into the fetishism of capital throughout society. If necessary, the world will be sacrificed to the desired techno god on the altar of the AI industry. And no one knows exactly what the IT titans are checking out in their AI labs, as the Trump administration, which is allied with the industry, gives them a free hand in this regard. As mentioned at the beginning, OpenAI has secured 40 percent of global DRAM production – and we can only hope that this is really just a monopolistic competition strategy.

I finance my journalistic work largely through donations. If you like my writing, you are welcome to contribute – either via Patreon or Substack.


[1] https://www.youtube.com/watch?v=3Fx5Q8xGU8k

[2] https://en.wikipedia.org/wiki/Dynamic_random-access_memory

[3] https://geizhals.de/kingston-fury-beast-schwarz-dimm-kit-32gb-kf560c30bbek2-32-a3164911.html

[4] https://winfuture.de/news,154997.html

[5] https://arstechnica.com/gadgets/2025/12/after-nearly-30-years-crucial-will-stop-selling-ram-to-consumers/

[6] https://www.mooreslawisdead.com/post/sam-altman-s-dirty-dram-deal

[7] https://www.slashcam.com/news/single/OpenAI-s-Secret-DRAM-Deal–Is-Sam-Altman-to-Blame–19700.html

[8] https://www.konicz.info/2025/11/09/die-kuenstliche-intelligenzblase/

[9] https://www.tomshardware.com/pc-components/dram/openais-stargate-project-to-consume-up-to-40-percent-of-global-dram-output-inks-deal-with-samsung-and-sk-hynix-to-the-tune-of-up-to-900-000-wafers-per-month

[10] https://jungle.world/artikel/2024/16/kuenstliche-intelligenz-energieverbrauch-klimawandel-mehr-hunger-mehr-durst

[11] https://www.mooreslawisdead.com/post/sam-altman-s-dirty-dram-deal

[12] https://www.konicz.info/2025/11/09/die-kuenstliche-intelligenzblase/

[13] https://www.youtube.com/watch?v=3Fx5Q8xGU8k

[14] https://redmondmag.com/blogs/generationai/2025/12/microsoft-is-sitting-on-a-pile-of-unused-gpus.aspx

[15] https://www.konicz.info/2022/01/14/die-klimakrise-und-die-aeusseren-grenzen-des-kapitals/

[16] https://www.konicz.info/2021/08/08/dreierlei-inflation/

[17] https://www.konicz.info/2021/10/14/ddr-minus-sozialismus/

[18] https://www.konicz.info/2022/01/14/die-klimakrise-und-die-aeusseren-grenzen-des-kapitals/

[19] https://www.konicz.info/2022/06/23/was-ist-krisenimperialismus/

[20] https://www.banking.senate.gov/newsroom/minority/warren-presses-trump-administration-on-plans-to-prop-up-openai-and-big-tech-with-taxpayer-dollars-at-the-expense-of-working-class-americans

[21] https://news.bloombergtax.com/tax-insights-and-commentary/openais-tax-subsidy-efforts-amount-to-silicon-valley-socialism

[22] https://www.brookings.edu/articles/openai-floats-federal-support-for-ai-infrastructure-what-should-the-public-expect/

[23] https://www.ft.com/content/5835a5a3-36db-41d7-9944-d9823dbdffc5

[24] Nvidia graphics cards form almost the entire technical hardware basis of the AI boom. The graphics card manufacturer has now become the most valuable company in the world.

[25] https://www.youtube.com/watch?v=cUrJVdF2me0

[26] https://gizmodo.com/nvidia-supercomputers-for-trump-2000678264

[27] https://exitinenglish.com/2024/07/07/ai-and-the-culture-industry/

[28] https://exitinenglish.com/2024/08/03/ai-the-final-boost-to-automation/

[29] https://www.konicz.info/2025/11/09/die-kuenstliche-intelligenzblase/

[30] https://www.telepolis.de/article/Die-Krise-kurz-erklaert-3392493.html

[31] https://exitinenglish.com/2024/08/03/ai-the-final-boost-to-automation/

[32] https://arstechnica.com/information-technology/2025/12/how-do-ai-coding-agents-work-we-look-under-the-hood/?comments-page=1#comments

[33] https://www.msn.com/en-us/technology/artificial-intelligence/bernie-sanders-calls-for-robot-tax-to-protect-workers-from-the-impacts-of-ai/ar-AA1O5s7I

[34] https://www.konicz.info/2017/11/15/kuenstliche-intelligenz-und-kapital/

Originally published on konicz.info on 01/05/2026

Understanding JD Vance

Why is the globalization process turning into protectionism and deglobalization?

Tomasz Konicz

Olaf Scholz was moved to tears. The taz published a glowing review. Netflix has made it into a movie. We are talking about Hillbilly Elegy, by the incumbent Vice President of the United States, JD Vance.[1] The autobiographical book describes the social disintegration suffered by many peripheral regions of the United States in the course of the waves of deindustrialization of recent decades from a socially conservative and culturalist perspective: drug addiction in the family, family violence, release for adoption, as well as the luck of getting an expensive law degree as a hillbilly kid, formed the stages of the vice president’s career.

JD Vance was therefore incredibly lucky, as the social hurdles for rising from the lower class in the US are similarly high as in Germany. After this, the usual reflexes of demarcation set in, with which upstarts from the lower class often try to distinguish themselves from their class of origin. Cultural deficits of the hillbillies, a lack of work ethic and abuse of the welfare state were listed by Vance in the Hillbilly Elegy in order to ideologically process the capitalist crisis process that has deindustrialized large regions of the USA since the 1980s – and it was precisely this right-wing perspective that probably made the book a bestseller in late neoliberalism, which was acclaimed from the FAZ to the taz.

But the social disruption in the crisis regions of the US, which Vance described and which shaped him, has solidified and created veritable ghost towns in the southern United States. In the meantime, an entire YouTube genre has emerged in which Youtubers popularize the morbid charm of decaying settlements. Whether in Georgia,[2] South Carolina,[3] Oklahoma[4] or Arkansas[5] – the decay is visible everywhere.

The vice president’s social background from the lower class, which is largely left to its own devices in these crisis regions, comes to the fore time and again. His impulsive public reproach of Ukrainian President Zelensky, when he pointed out that he never thanked Trump, can only be understood against the backdrop of the improbable rise of an authoritarian character who overcame all social barriers, in the course of which the future vice president has certainly had to thank Trump countless times for the mercy of not having to sink into misery. In moments such as the public exchange of blows between Trump and Zelensky in the Oval Office, the authoritarian reflex breaks out openly – Zelensky is supposed to be just as compliant as Vance had to be.

Jackson, Kentucky, the town where JD Vance grew up, is still lucky with a poverty rate of 20%, while in many regions mass poverty and depopulation have long since become the norm.[6] Many settlements and small towns evoke memories of the famous post-Soviet wastelands – with the difference that in the US it is hardly possible to view the ruins undisturbed, as is the case in Russia, because even in state of decay, they are still considered “private property” and jealously watched over.[7]

US Deindustrialization and the Inner Barrier of Capital

The cause of the pervasive decline that has gone unnoticed for decades is currently haunting the right-wing US administration of which JD Vance is a member. For more than 40 years,[8] employment in the industrial sector in the United States has been declining, from nearly 20 million industrial workers in 1978 to about 13 million in 2023.[9] Between 2002 and 2022, the number of industrial establishments in the United States fell by 45,000, a decline of about 14% within two decades.

In the 1980s and 1990s, the US industrial workforce shrank only slowly, interrupted by periods of stagnating employment. However, much of the job losses in the US industrial sector occurred in the 21st century. The bursting of the stock market bubble in the US high-tech sector in 2000 marked the first massive job losses, with the number of industrial workers shrinking from more than 17 million to around 14 million in 2003. The deflation of the great transatlantic real estate bubble together with the subsequent recession triggered the second massive wave of layoffs from 2009, as a result of which the industrial workforce shrank to 11.5 million, only to rise to just under 13 million in the following years in the wake of economic stimulus measures, where it has stagnated ever since.[10]

The crisis process of capital has thus been leaving behind a clear empirical trace for decades, which has so far been ignored by public opinion. This is the manifestation of the inner barrier of capital (Robert Kurz), which, in a fetishistic crisis process, gets rid of its substance, the labor that creates value in commodity production, due to competition-mediated surges of rationalization.[11] This inner, moving contradiction of capital, which outwardly appears as an “overproduction crisis,”[12] forms the decisive, central contradiction of the capitalist mode of production.[13] Capital must therefore move, fleeing from its internal contradiction into ever new markets and branches of production in which masses of wage labor are valorized, which bourgeois economics perceives as industrial structural change.

The social disruption of the United States, the rust belts, ghost towns and social hotspots in which JD Vance grew up are an expression of the failure of this “industrial structural change” due to the tremendous rationalization surge in industrial production triggered by the IT revolution. The rise of the IT industry also created jobs, but at the same time every new branch of industry interacts with the economy as a whole, and the effect of the computer and telecommunications industry was a huge surge in rationalization that led to a massive reduction in wage labor in the production of commodities – and thus undermined the foundations of the capitalist labor society. This is also clear from the employment figures quoted above.

The inner barrier of capital is more than just an “overproduction crisis” that could be overcome by the “creative destruction” (Schumpeter) of overcapacity. Capital has become too productive for its own good, so to speak; due to the high level of global productivity, no new markets or labor-intensive fields of exploitation are emerging, meaning that there can no longer be any “adjustment crises” – and it is this inner contradictory development of capital that is leaving socially and ecologically scorched earth in its wake. It is this crisis process that propelled Trump into the White House and helped him to a second presidency after the US Democrats failed to find an answer[14] to the pauperization and deindustrialization of the US.[15] Supporters of Trump’s protectionism like to refer to economists such as David Autor, whose calculations show that around 2.5 million American industrial jobs were lost to China between 1999 and 2013.[16]

However, the relationship between job losses in the industrial sector and the actual output of industry makes it clear that it was not only the relocation of industrial jobs abroad that led to the deindustrialization of the US. Between 1980 and 2000, during the same period in which the industrial workforce in the United States fell from just under 19 million to 17 million,[17] US industrial production roughly doubled (according Fed data, in inflation-adjusted prices from 2017).[18] Rising industrial production with declining employment in the industrial sector is therefore an expression of the rationalization push in the production of goods in the course of the IT revolution from the 1980s onwards; this is the empirically verifiable consequence of the aforementioned inner barrier of capital. Even in the 21st century, when the US industrial workforce shrank massively (from 17 to just under 13 million), the output of this shrinking industrial workforce stagnated without a corresponding decline (the crisis-related slumps in industrial output in 2009 and 2020 were quickly reversed).[19]

According to the National Association of Manufacturers (NAM), value added in the United States amounted to around $2.93 trillionin 2024 (adjusted for inflation in 2017 prices, it was 2.4 trillion), with the United States paradoxically growing primarily in foreign trade.[20] Manufacturing exports have more than doubled over the last two decades, from $622.3 billion in 2002 to $1.63 trillion in 2024. What is Trump and his entourage upset about? Well, in the same period – the heyday of globalization – the volume of world trade has more than tripled: from $4.9 trillion in 2000, to $9.8 trillion in 2010, to $15.7 trillion in 2023. The American share of world trade has thus fallen – to 7.9% in 2023.

In addition, the economic weight of industry has rapidly diminished in the age of neoliberal globalization, which has been accompanied by the financialization of capitalism and the formation of a credit-driven financial bubble economy in the US. The share of industry in the gross domestic product of the United States fell from 15% in 2000 to just over 10% in 2021.[21]

These opposing trends in the capitalist production of goods – job losses with rising output – were also noticed and addressed by US monetary policy. As early as 2014, the US Federal Reserve noted that industrial production in the United States was continuing to grow (with the exception of short-term slumps caused by the crisis), while employment was not, meaning that “industrial growth is not synonymous with industrial job growth.”[22] The Fed offered “productivity growth” and a shift in sectoral focus towards “computers and electronics” as explanations.

Scientific and technological progress continues to create new industries, such as the renewable energy sector, but these new industries can no longer absorb the redundant workforce from obsolete industries due to the general level of productivity achieved.[23] The precarization of working life, the emergence of miserable jobs in the service sector, the erosion of the middle class, the emergence of a US prison industry for the purpose of repressive crisis management, the socioeconomic decoupling of entire regions of the US mentioned at the beginning – they are the result of the manifest inner barrier of capital, which is reaching the limits of its development both socially and ecologically.

Trump’s Protectionist Response to the Crisis

And it is this crisis, latent for decades and ignored or normalized by the dominant neoliberal mainstream for decades, that the Trump administration needs to somehow alleviate or overcome—precisely because it has crossed the Rubicon toward fascism. In many policy areas, the White House is already operating beyond the rule of law to consolidate authoritarian structures and reinforce new methods of repression – such as the unlawful deportation of people to maximum security prisons in Central America. The same applies to corruption charges and possible internal deals in the chaotic disputes surrounding US customs and trade policy.[24] In a sense, a large part of the Trump administration can no longer afford to be voted out of office, as they would find themselves in court very quickly after losing power due to the massive violations of the law.

In order to consolidate the post-democratic path already taken and establish a stable authoritarian regime, the US right must somehow confront the crisis that flushed Trump into the White House in the first place. Historically, all fascist regimes have only been able to consolidate their power by finding repressive or expansionist responses to the crises of capital that washed them into power without touching the foundations of the system – this also applies to the Nazis with their Reich Labor Service and the armaments policy that inevitably led to the Second World War.

In all likelihood, presidential elections will still be held in the United States four years from now, and despite all the possibilities of manipulation, the post-democratic, authoritarian right in the US must enjoy a certain level of support in order to win even rigged elections and complete the fascization of the US. In other words, the Trump administration must provide social relief to its voter base to avoid ending up in jail in four years. Trump could be spared such a fate due to a Supreme Court ruling that effectively guaranteed the president immunity from prosecution in office. But members of the government like JD Vance cannot count on this.

For the majority of the profiteers, racketeers, and networks of influence operating in the shadows of the US government apparatus, there is no turning back.[25] They must try to realize the authoritarian – ultimately fascist – option, to finish the authoritarian path they have taken – and this is precisely what makes the situation in the US so dangerous. Since a policy of redistribution, as preached by Bernie Sanders, is out of the question for the post-democratic US right for the time being, the only remaining option is trade war and protectionism.[26]

And, from a narrow-minded national perspective, the connections are clear: the deindustrialization of the United States goes hand in hand with the creation of massive trade deficits with China and German Europe in the age of globalization. Last year, the United States posted a new record trade deficit in goods of $1,211 billion (the aggregate deficit in goods and services was $918.4 billion),[27] which is well above the highs during the US housing bubble in 2006 ($786 billion) and the post-Covid era in 2022 ($971 billion).[28] Last year, the US recorded a deficit of $295 billion with the People’s Republic of China alone,[29] while the figure for the EU was $235 billion, of which Germany accounted for $84 billion.[30] The large US deficit with Mexico is in turn the result of Washington’s nearshoring strategy under Biden, in which the US’s southern neighbor was turned into an extended industrial workbench in order to reduce dependence on China.[31]

Trade surpluses are used to export deindustrialization and debt, which also formed the core of the German beggar-thy-neighbor economic model in the heyday of globalization.[32] This connection is also manifested in the share of industrial production in total GDP,[33] which in 2023 was around 26% in China, 18.5% in Germany and only around 10% in the US (in the 1970s it was still just under 25%).[34]

From the narrow-minded national perspective of the American right, which cannot perceive the crisis process outlined above due to its ideological blindness, it appears to be a simple fraud – China, as well as the alleged “partners” in Western Europe, is expanding its industries at the expense of the US. The sheer hatred towards the EU that JD Vance expressed during his scandalous appearance at the Munich Security Conference,[35] and the open hostility towards Europeans that became evident in the leaked Signal discussions by the Trump administration, with its amateurish communication, can be easily explained – a glance at the trade balance between the EU and the US is enough.[36] The misery, the social neglect that Vance experienced in his youth can be projected onto an imaginary enemy – and it is precisely this socialization in the lower class that makes him forget all diplomatic manners in his attacks against the European “trade cheats.”

The efforts of the economic locations to rehabilitate their own industry in the crisis by means of trade surpluses at the expense of their competitors is only logical – as long as no systemic alternative emerges, this is actually inevitable within the logic of the crisis. It is the logic of last man standing.[37] The simple economic fact that trade surpluses must lead to deindustrialization and deficit formation in the deficit countries has been invoked for years against Germany, the world champion of trade surpluses – for example by the Obama administration or by France, which criticized Germany’s export surpluses during the euro crisis. Back then, in 2017, the then Economics Minister Zypries forbade any criticism: there was no need to “apologize” for the fact that the German economy was “one of the strongest in the world.”[38]

Now that Trump wants to put an end to Germany’s longstanding beggar-thy-neighbor policy with the mallet of sheer protectionism, people in Berlin have suddenly become meek. Europe has the short end of the stick, headlined the Frankfurter Allgemeine Zeitung (FAZ) in reaction to Trump’s “tariff orgy” at the beginning of April. A tariff conflict is not arm wrestling and the Europeans would do well not to instinctively react to Washington’s new trade barriers with counter-tariffs.[39] The difference between this and Berlin’s stance in the euro crisis, for example, toward deficit countries such as Greece, is almost laughable – what a difference a few thousand nuclear warheads can make. However, top German journalism, as cultivated by the FAZ, is characterized by the fact that it does not even mention Germany’s trade surpluses, even if they are the basis of the upcoming trade conflict. This is precisely why Trump actually has the upper hand – because in the course of a trade war, the trade balances will tend to even out, which would reduce Germany’s surpluses and America’s deficits.

But why did it take so long to escalate? The deindustrialization that is now being lamented took place over decades—even during Trump’s first term, his protectionist impulse could be contained—but this time it will not be the case. Protectionism and tariffs are here to stay. And, most importantly, why does Trump keep backtracking, why does he seem to back down only to impose new tariffs a few weeks later?

Nonstop zigzagging! What’s the point? Although there is a tendency to erect ever higher trade barriers, this is happening in the context of seemingly chaotic disputes that are simply the result of the underlying systemic contradictions.

The Era of Neoliberal Crisis Postponement

And it was precisely the financialization of capitalism, together with the corresponding globalization process, that was able to prolong this internal contradiction of capital in the neoliberal age and enabled the late capitalist world system to run on credit, so to speak. Until well into the 21st century, the prevailing view in the core was that an industrial society was an obsolete relic of the 20th century, that capitalism had now evolved into a service or financial services society, or even an information society. These discourses, which have been thoroughly disgraced in the wake of the crises of recent years, were based on the deficit conjunctures of the neoliberal era.

Since the implementation of neoliberalism, global debt has risen faster than global economic output, mainly as a result of increasing financial bubbles. The figures are clear: In the 1970s, global debt amounted to around 110% of global economic output. At the end of the neoliberal era, when the great liquidity bubble burst after the outbreak of the pandemic in 2020, the global debt burden amounted to 258% of global economic output.[40]

In addition to a number of regional speculative manias and financial crashes, the globalized, financial market-driven capitalism of the neoliberal era gave rise to three major bubbles: the dotcom bubble that burst at the turn of the millennium, in which the hope of a new regime of accumulation (“information society”) led to feverish speculation in high-tech stocks; the great transatlantic real estate bubble in Europe and the US,[41] which ran out of speculative steam between 2007 and 2008; and the gigantic liquidity bubble of the central banks,[42] which was only brought to an end by the pandemic along with the inflationary surge of 2020.[43]

As long as the dotcom bubble was on the rise, as long as the United States was caught up in real estate fever, the erosion processes in industry hardly seemed to be noticed – after all, the economy was doing well, the construction sector was booming, cheap money was flooding the financial sphere, and the great financial flood was lifting all boats. Thus, declining industrial regions and marginalized and precarious wage earners could be easily ignored and hidden from public view in core societies. The repressive crisis administration did the rest.

The US was at the center of this globalized financial bubble economy – the inflated financial market of the United States produced the aforementioned bubble-driven deficit economies, while at the same time Washington’s trade deficits reached ever new record levels: from $77 billion in 1990, to $381 billion in 2000, to $740 billion in the crisis year 2008, to a peak of $951 billion in 2022. Last year, in 2024, the US trade deficit amounted to $918 billion dollars (figures for goods and services).[44] So-called deficit cycles emerged: export-fixated industrialized countries such as China, Japan or the FRG exported their surpluses to the US, while a ghostly flow of American securities and debt instruments to Beijing or Tokyo moved in the opposite direction.[45] Japan and China, which run large surpluses vis-à-vis the US, are consequently also the largest creditors of the United States.

Globalization is in fact based on these global deficit cycles.[46] Export-oriented economic areas thus maintain sales markets, while the USA experiences deficit cycles. (Incidentally, a similar deficit cycle developed in Europe after the introduction of the euro, where the Federal Republic was able to sell its export surpluses until this European debt bubble burst).[47] The dollar, in its function as the world’s reserve currency, enabled Washington to borrow de facto without restrictions at very low cost, which is why consumer spending accounts for a large part of the United States’ GDP (in 2023 it was 68% of GDP!).[48]

The figures here are also clear, as illustrated by the long-term development of interest rates on ten-year US bonds: The interest rate on these Treasuries fell from around 8% at the beginning of the 1990s, to over 5% at the turn of the millennium, to sometimes less than 2% in the second decade of the 21st century.[49] In the crisis year 2020, extensive central bank purchases were even able to push the interest rate on these government securities into the per mille range for a short time. To visualize the success of this financial bubble economy, it is sufficient to contrast it with the national debt of the US, which rose from $3.5 trillion (1990) to $5.6 trillion (2002) and $23 trillion (2020) to $36.2 trillion in the fourth quarter of 2024.[50]

The apparent magic of the global financial bubble economy running on credit becomes glaringly apparent here: Washington’s credit conditions became ever more favorable, while the mountains of debt could be driven ever higher. The United States as the world’s financial center thus still resembles a black hole in the global economy, which absorbs a large part of global surplus production through trade deficits – and thus has a stabilizing effect on a global economy suffering from structural overproduction.

This financial bubble economy, which was growing in size and instability, thus gave rise to the aforementioned deficit booms, which also simply created sales opportunities for the commodity-producing industry through credit-generated demand. However, as soon as a speculative bubble burst, the states had to stabilize the system through interventions and economic stimulus packages, which encouraged further deficit formation and the development of new deficit booms and financial bubbles. The economic policy measures that served to alleviate the consequences of the crisis also gave rise to new speculation – the speculative fire was extinguished with gasoline.

The Liquidity Bubble and The Impending Shift to Protectionism

The costs of stabilizing this gigantic financial sphere continued to increase as each bubble burst.[51] And this is precisely the cause of the end of this global financial bubble economy. The bursting of the last bubble during the pandemic-induced crisis forced crisis policymakers to turn off the money tap for the global deficit economy.

In 2000, when the dotcom bubble burst, the brief recession was quickly overcome by a phase of very low key interest rates – which in turn made mortgages attractive and provided the initial spark for the real estate bubble.[52] With the crisis surge in 2008, when the major real estate bubbles in Europe and America burst and the US plunged into the worst recession in post-war history, zero interest rates were no longer enough. Monetary policy switched to buying up all the junk securities that had sent the financial sphere into a state of shock following the collapse of Lehman Brothers. This emergency measure, which was used to buy up the infamous mortgage securitizations, developed into a permanent monetary policy that ultimately amounted to sheer money printing.[53]

The central banks bought up securities in order to inject further liquidity into the financial sphere and stabilize it. This absurd central bank financial capitalism was able to maintain the liquidity bubble over a period of around a decade.[54] This can be clearly seen in the balance sheets of central banks, especially the Fed.[55] In 2007 – on the eve of the housing crisis – the Fed held securities worth less than $880 billion. Just two years later, in 2009, it held $2.2 trillion, which swelled to $4.4 trillion by 2014. This high level was maintained – maturing securities were replaced by new purchases – only to almost double the balance sheet total to almost $9 trillion after the outbreak of the pandemic through extreme money printing.

And this money printing did not trigger a surge in inflation, mainly because the liquidity it generated remained in the financial superstructure – the prices of financial market goods shot up to ever greater heights as part of the liquidity bubble that formed a veritable everything bubble, in the final phase of which even speculative excesses with meme stocks such as Gamestop became common.[56]

Low bond yields, low key interest rates, swelling central bank balance sheets and a global mountain of debt that seemed to be able to grow faster than global economic output forever – the 2020 crisis put an end to this financial market-driven central bank capitalism.[57] The surge in inflation that followed in the wake of the pandemic forced central banks to make a drastic U-turn and the expansionary monetary policy had to be discontinued: Key interest rates skyrocketed (from almost 0 to more than 5%), bond-buying programs were discontinued or drastically reduced, with the result that central banks’ balance sheets are now shrinking again (from just under $9 trillion in 2022 to $6.7 trillion at the beginning of 2025 in the case of the Fed).[58]

The price of this turnaround, which at least curbed double-digit inflation: the stagflation period of the 1970s has effectively returned at an even higher level of crisis – precisely because it is fueled not only by the unfolding of economic contradictions, but also by the ecological crisis of capital, the climate crisis and the increasing destruction of the ecological foundations of the process of civilization.[59] Monetary policy can hardly combat this inflation fueled by the capitalist climate crisis.[60][61]

Skyrocketing interest rates also put the US bond market – practically the foundation of the global financial house of cards – in a difficult position.[62] The decades-long trend of increasingly low interest rates, which enabled debt bubbles in the United States, was reversed starting in 2021, as already mentioned.[63] Bond interest rates have risen to more than four percent – and they have since remained at the relatively high level that makes debt service the largest budget item in the US.[64] The United States has thus already partially lost its strategic financing advantage resulting from dollar hegemony, and its interest rate level corresponds to that at the beginning of the 21st century – with the difference that debt is now much higher. Washington’s extraordinary privilege now only applies to a limited extent.

This major turnaround in monetary policy by the central banks, which they were forced into by inflation, effectively led to an end to the global deficit economy. According to figures from the International Monetary Fund, global debt in relation to economic output has been falling for three years. After peaking at 258% of global GDP in the pandemic year 2020, when gigantic economic stimulus measures had to be initiated, the debt burden had fallen to 237% in 2023.[65] This phasing out of the deficit economy is reflected in the corresponding economic slowdown in many economic areas – especially in the export-dependent FRG.[66][67]

And it is precisely the end of the global deficit economy – which is increasing faster than global economic output – that must lead to protectionist reflexes, as this increases the tensions and contradictions within the global deficit cycles to an intolerable level, simply making them politically untenable due to their social fallout. The economic slowdown in many regions and economic areas is intensifying the efforts of the capitalist functional elites to rely more heavily on exports. This is why the trade deficits of the United States are constantly reaching new highs in a crisis phase in which Washington’s interest burden is increasing and the deficit economy of the US can hardly be maintained due to the skyrocketing costs of servicing the debt.

The global constellation is therefore quite comparable to the euro crisis – until the European debt bubbles burst, Europe saw itself as one big happy family, only to fall over each other after the crisis broke out, with Germany’s Finance Minister Schäuble in particular standing out with his uninhibited austerity sadism towards southern Europe – which made him one of Germany’s most popular politicians.[68]

Trump & Vance as Blind Executors of the Crisis

Viewed from the narrow-minded nationalist perspective of the full and semi-fascists in the White House,[69] the protectionist U-turn – coupled with the brutal austerity program that Musk tried to implement in order to reduce the deficit – therefore seems to make perfect sense.[70]  Washington’s objectives are clear: deindustrialization is being halted and reversed, the tariffs are generating revenue, the social situation of its own electorate is being stabilized and the US military machine is ensuring that the transition from hegemony to empire, which in fact wants to demand tribute by means of tariffs, is not accompanied by a serious loss of power.[71]

In fact, Trump no longer wants to pay the rising costs of US hegemony. The hegemonic position of the United States in the post-war period was based on the Fordist boom, on the post-war prosperity that brought good economic development to all core countries.  From the 1980s onwards, when neoliberalism prevailed in response to the stagflation period of the 1970s, the hegemony of the US was based on global deficit cycles. China, Japan and German Europe accepted US hegemony because they were also able to derive economic benefits from it – specifically in the form of the trade surpluses they achieved vis-à-vis the US.[72] Against the backdrop of the global crisis of capital outlined above, Washington’s hegemonic costs must therefore also include the deindustrialization of the once leading industrial country.  

Only now can JD Vance, who criticized Trump for his protectionist tendencies as recently as 2016, be understood: The Vice President actually seems to believe that he can use protectionism to improve the situation of the economically disadvantaged sections of the population in which he experienced his early socialization. In response to the temporary court ban on a number of troop tariffs at the end of May 2025, the Vice President reiterated the nationalist line of argumentation that the White House was responding to a socio-economic emergency in large parts of the US with its tariff policy.[73] Even on cursory forays through the socio-economic crisis regions of the US – including Minnesota,[74] Iowa,[75] or North Dakota[76] – this description of the situation cannot simply be dismissed out of hand. In contrast to the southern euro states – where there are similar social wastelands – the US has the means to counter the internal crisis with external aggression.

The American vice president sometimes says quite openly that maintaining the US dollar’s position as the world’s reserve currency is no longer a political priority for Washington.[77] Vance wants a weak dollar in particular, as this should promote exports and the reindustrialization of the US. The export-focused economic models of China, Japan and Germany clearly serve as role models in such arguments. Germany’s past successes on non-European sales markets can be explained precisely by the fact that the euro is structurally undervalued in relation to Germany’s economic output.

The advantages of the greenback as the world’s reserve currency are melting away with rising bond interest rates and Washington’s exorbitantly high debt service, which has now outstripped military spending in the US budget. At the same time, trade deficits are reaching new highs after the pandemic – precisely because global borrowing beyond the US is slowing down.[78] Washington’s hegemonic position is slowly turning into a bad deal in the eyes of the dealmakers in the White House. To American nationalism – which is just as blind to the crisis as all other varieties of late bourgeois ideology – this worsening of the crisis must appear to be a betrayal of America by malicious foreign countries. The post-democratic right in the US provides little more than the ideology for the new phase of the crisis, in which the era of globalization gives way to deglobalization and protectionism.[79]

The White House responded to the legal setbacks experienced by Trump’s tariff regime – which was effectively enforced as emergency legislation – at the end of May 2025 by searching for new legal loopholes in sometimes decades-old laws in order to gain further options for erecting trade barriers.[80] In addition, Trump raised the US steel tariffs to 50%.[81] The clashes between free trade and protectionism are thus already forming a new front in the internal capitalist crisis management, similar to the eternal, dull shadow boxing between demand-oriented Keynesians and neoliberal austerity fetishists.

Trump & Vance are therefore actually hoping to use protectionism to attract more industrial production back to the US – in effect, they want a bigger slice of the cake again. This is the actual motive behind the new protectionism made in the USA. And this is precisely the manifestation of their miscalculation resulting from crisis ignorance – the global production value pie is not static, it is not a fixed quantity. It was the deficit economy of the last few neoliberal decades that managed to inflate the global industrial production value “pie” so much, to continue with the image. Protectionism will only accelerate the end of this deficit economy, which could lead to a crisis of unprecedented intensity. The white nationalists in the White House are, in fact, only tearing down what is already falling.

The socio-economic emergency in which he grew up and to which JD Vance refers is a consequence of the world crisis of capital, whose inner barrier is now becoming manifest, as the era of financial market-driven neoliberal crisis postponement is breaking down due to its contradictions. However, this socio-economic emergency resulting from the systemic crisis could only be overcome within the framework of an emancipatory transformation of the system.[82] The nationalist protectionism on which Washington relies, on the other hand, acts as a promoter of the crisis.

In fact, Trump is only executing the crisis dynamics. And the maneuvering of the White House with regard to trade policy, the permanent protectionist advances and retreats – they are due to the open contradictions of the current final phase of globalization outlined above: The extreme trade deficit, the far advanced deindustrialization, they effectively compel the nationalists in Washington to protectionism; at the same time, protectionist measures are out of the question due to the turmoil on the bond markets, where interest rates on government bonds shoot up after every round of Trump’s tariffs – which is, after all, also a consequence of the unwinding of US hegemony, as countries and economic areas such as China, Japan or the EU hardly see any economic advantages in accepting the role of the US dollar as the world’s reserve currency.[83]

Simply dumping the government bonds that have been acquired in exchange for trade surpluses in recent years – that is the economic nuclear option, the threat of mutual economic destruction, as is currently being openly expressed in the protectionist disputes. Japan, the largest creditor of the United States, has already threatened to sell Treasuries en masse.[84] This would plunge Washington into a full-blown financial crisis, the US would turn into a weaponized and nuclear-armed Greece – and at the same time the exporting countries that currently still export their surpluses to the US would also sink into severe economic crises, which would only be the prelude to further geopolitical, military conflicts. The protectionist, fascist 1930s would virtually return under the crisis conditions of the 21st century.

The era of financial market-driven globalization is inevitably coming to an end. Transformation is inevitable. What comes next is an open question and the subject of a transformative struggle.[85]

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[1] https://en.wikipedia.org/wiki/Hillbilly_Elegy

[2] https://www.youtube.com/watch?v=OfhPAHTOkJE

[3] https://www.youtube.com/watch?v=wiCNLVy7aKw&t=1s

[4] https://www.youtube.com/watch?v=5XQUmVjjrZw

[5] https://www.youtube.com/watch?v=J5pU6M8yrpw

[6] https://www.youtube.com/watch?v=5hoq6gNVrAo&t=1s

[7] https://www.youtube.com/watch?v=2i3aS6T6Nng

[8] https://www.bls.gov/opub/btn/volume-9/forty-years-of-falling-manufacturing-employment.htm

[9] https://www.visualcapitalist.com/the-decline-of-u-s-manufacturing-by-sector/

[10] https://www.konicz.info/2006/11/30/keine-weiche-landung/

[11] https://www.konicz.info/2022/10/02/die-subjektlose-herrschaft-des-kapitals-2/

[12] https://www.nd-aktuell.de/artikel/1190139.welthandel-worum-es-in-trumps-zollkrieg-geht.html

[13] The distribution struggles fetishized as class struggle by old Marxism and left opportunism alike, on the other hand, represent only an internal capitalist surface phenomenon in which the variable capital (proletariat) fights for its share of the valorization process.

[14] https://exitinenglish.com/2025/02/26/a-country-for-old-men/

[15] Around 68% of US citizens stated in around 2024 that they would no longer be able to build up reserves and would have to scrape by from paycheck to paycheck. See: https://www.cnbc.com/2024/04/09/most-of-americans-are-living-paycheck-to-paycheck-heres-why.html

[16] https://www.faz.net/aktuell/wirtschaft/wie-donald-trump-den-handel-gefaehrdet-110414669.html

[17] https://fred.stlouisfed.org/series/MANEMP

[18] https://fred.stlouisfed.org/series/IPMAN

[19] https://fred.stlouisfed.org/series/OUTMS

[20] https://nam.org/mfgdata/facts-about-manufacturing-expanded/

[21] https://www.macrotrends.net/global-metrics/countries/USA/united-states/manufacturing-output

[22] https://fredblog.stlouisfed.org/2014/12/manufacturing-is-growing-even-when-manufacturing-jobs-are-not/

[23] https://www.konicz.info/2011/07/05/die-okologischen-grenzen-des-kapitals/

[24] https://www.theguardian.com/us-news/2025/apr/10/donald-trump-ignites-insider-trading-accusations-after-global-tariffs-u-turn

[25]

[26] This does not mean that Sander’s social democratic policy prescriptions could overcome the systemic crisis, but they could possibly have established a new dynamic that would have enabled an emancipatory course of the inevitable systemic transformation.

[27] https://www.bea.gov/news/2025/us-international-trade-goods-and-services-december-and-annual-2024, https://www.fool.com/research/us-trade-balance/

[28] https://www.macrotrends.net/global-metrics/countries/USA/united-states/trade-balance-deficit

[29] https://ustr.gov/countries-regions/china-mongolia-taiwan/peoples-republic-china

[30] https://www.fool.com/research/us-trade-balance/

[31] https://www.konicz.info/2023/11/20/neue-kapitalistische-naehe-2-0/

[32] https://www.konicz.info/2012/12/21/der-exportuberschussweltmeister/

[33] https://ourworldindata.org/grapher/manufacturing-value-added-to-gdp

[34] https://fred.stlouisfed.org/series/USAPEFANA

[35] https://www.youtube.com/watch?v=urXXIQMzUoY

[36] https://www.bbc.com/news/articles/c204vl27n2qo

[37] https://www.konicz.info/2011/11/20/gerangel-auf-der-titanic/

[38] https://www.diepresse.com/5203733/deutsche-handelsueberschuesse-muessen-uns-nicht-entschuldigen

[39] https://www.faz.net/aktuell/wirtschaft/eu-reaktion-auf-trumps-zoelle-am-kuerzeren-hebel-110398208.html

[40] https://www.imf.org/en/Blogs/Articles/2023/09/13/global-debt-is-returning-to-its-rising-trend

[41] https://www.konicz.info/2006/11/30/keine-weiche-landung/

[42] https://lowerclassmag.com/2021/04/13/oekonomie-im-zuckerrausch-weltfinanzsystem-in-einer-gigantischen-liquiditaetsblase/

[43]https://exitinenglish.com/2024/04/29/crisis-beyond-the-bubble/, https://exitinenglish.com/2024/02/29/schizophrenic-monetary-policy/

[44] https://www.macrotrends.net/global-metrics/countries/USA/united-states/trade-balance-deficit, https://www.bea.gov/news/2025/us-international-trade-goods-and-services-december-and-annual-2024

[45] https://www.konicz.info/2010/09/18/zerbricht-chimerica/

[46] https://exitinenglish.com/2022/08/12/a-new-quality-of-crisis/

[47] https://www.konicz.info/2015/10/05/aufstieg-und-zerfall-des-deutschen-europa-2/

[48] https://fred.stlouisfed.org/series/DPCERE1Q156NBEA/

[49] https://www.macrotrends.net/2016/10-year-treasury-bond-rate-yield-chart

[50] https://fred.stlouisfed.org/series/GFDEBTN/

[51] https://www.konicz.info/2020/10/27/vergleich-der-krisen-2020-vs-2008/

[52] https://www.konicz.info/2007/03/05/vor-dem-tsunami/

[53] https://exitinenglish.com/2023/05/25/keynesianism-in-crisis/

[54] https://www.konicz.info/2022/12/09/geldpolitik-vor-dem-bankrott/

[55] https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm

[56] https://lowerclassmag.com/2021/01/30/hedge-fonds-gamestop-und-reddit-kleinanleger-die-grosse-blackrock-bonanza/

[57] https://fred.stlouisfed.org/series/fedfunds

[58] https://fred.stlouisfed.org/series/fedfunds

[59] https://www.konicz.info/2021/11/16/zurueck-zur-stagflation/

[60] https://www.konicz.info/2022/01/14/die-klimakrise-und-die-aeusseren-grenzen-des-kapitals/

[61] https://www.konicz.info/2021/08/08/dreierlei-inflation/

[62] https://exitinenglish.com/2022/08/12/mountains-of-debt-on-the-move/

[63] https://www.macrotrends.net/2016/10-year-treasury-bond-rate-yield-chart

[64] https://budget.house.gov/press-release/interest-costs-surpass-national-defense-and-medicare-spending

[65] https://www.imf.org/en/Blogs/Articles/2024/12/02/persistent-fall-in-private-borrowing-brings-global-debt-down

[66] https://exitinenglish.com/2022/08/12/no-more-trade-surplus/

[67] https://jungle.world/artikel/2025/14/autoland-ist-abgebrannt

[68] https://www.buecher.de/artikel/buch/aufstieg-und-zerfall-des-deutschen-europa/42973311/

[69] https://www.konicz.info/2017/08/07/politische-oekonomie-des-krisennationalismus/

[70] https://exitinenglish.com/2025/02/26/a-country-for-old-men/

[71] https://medium.com/@ascentreact/everything-must-burn-862b983914a6

[72] https://unrast-verlag.de/produkt/aufstieg-und-zerfall-des-deutschen-europa/

[73] https://conservativejournalreview.com/vice-president-jd-vance-says-america-facing-emergency-requiring-trump-tariffs/

[74] https://www.youtube.com/watch?v=qdl1S_Da_hU

[75] https://www.youtube.com/watch?v=L883pwCPOwE

[76] https://www.youtube.com/watch?v=59hzueQkmok

[77] https://nymag.com/intelligencer/article/why-jd-vance-wants-a-weak-dollar-is-that-a-good-idea.html

[78] https://www.bea.gov/news/2025/us-international-trade-goods-and-services-december-and-annual-2024

[79] https://www.konicz.info/2017/08/09/zur-wiederkehr-der-nationalistischen-ideologie/

[80] https://www.msn.com/en-us/politics/government/two-laws-that-trump-could-use-to-re-impose-his-tariffs-and-why-he-might-do-them-both/ar-AA1FIX6r

[81] https://www.youtube.com/watch?v=IpKiZOS6ADU

[82] https://www.untergrund-blättle.ch/politik/theorie/emanzipation-in-der-krise-7306.html

[83] https://www.faz.net/aktuell/wirtschaft/trumps-kurswechsel-bei-zoellen-was-war-der-knackpunkt-110410883.html

[84] https://www.msn.com/en-us/money/markets/japan-threatens-to-offload-its-1-trillion-us-treasury-holdings-if-trump-trade-talks-don-t-go-well/ar-AA1E2Wkn

[85] https://arranca.org/ausgaben/nichts-zu-verlieren/den-transformationskampf-aufnehmen

Originally published on konicz.info on 06/01/2025

Trump at the Inner Barrier of Capital

The reindustrialization of the USA, which Trump wants to force through his protectionism, is being undermined by automation trends in industry.

Tomasz Konicz

What does Donald Trump want? Since the so-called “Liberation Day” at the beginning of April, when the right-wing populist announced the introduction of comprehensive tariffs for almost the entire late capitalist world, Washington’s specific regulations, tariff rates and exemptions have been changing almost on a weekly basis. The economic uncertainty that Trump’s protectionism brings with it is considered by economists to be an important factor that could contribute to an economic slowdown or even recession in the US. Companies and corporations cannot calculate reliably, the flow of trade between the US and China has largely come to a standstill, and supply bottlenecks in the US can hardly be avoided despite the latest postponement in the trans-Pacific trade war.

First and foremost, it is around seven million industrial jobs that Donald Trump wants back. For more than 40 years, employment in the industrial sector in the United States has been declining, from just under 20 million industrial workers in 1978 to just under 13 million in 2023.[1] Between 2002 and 2022, the number of industrial companies in the United States fell by 45,000, which corresponds to a decline of around 14% within two decades.[2] This deindustrialization of the US has led to the very social disruption that has once again propelled Trump into office – and the White House must confront this misery, precisely because the increasingly authoritarian Trump administration can hardly afford to be voted out of office without ending up in prison due to multiple obvious violations of the law. The consolidation of an authoritarian regime in the United States can only be achieved by socially immobilizing broad sections of the population, similar to what Putin was able to do in Russia.

And, from a narrow-minded national perspective, the connections are clear: the deindustrialization of the US goes hand in hand with the creation of massive trade deficits with China and German Europe in the age of globalization. Last year, the United States recorded a new record deficit of $1.21 trillion,[3] which is far above the highs during the US housing bubble in 2006 (786 billion) and the post-Covid era in 2022 (971 billion).[4] Last year, the US recorded a deficit of $295 billion with the People’s Republic of China alone,[5] while the figure for the EU was $235 billion, of which Germany accounted for $84 billion.[6] Trade surpluses are used to export deindustrialization and debt, which also formed the core of the German beggar-thy-neighbor economic model at the height of globalization. This correlation is also manifested in the share of industrial production in total GDP,[7] which in 2023 was around 26% in China, 18.5% in the FRG and only around 10% in the US (in the 1970s it was still just under 25%).[8]

So is this a big scam, as the Trump administration is postulating in order to legitimize its protectionism? The relationship between job losses in the industrial sector and the actual output of US industry makes it clear that it was primarily competition-mediated productivity increases that led to the deindustrialization of the US. Between 1980 and 2000, during the same period in which the industrial workforce in the United States fell from just under 19 million to 17 million,[9] US industrial output roughly doubled (percentage figures from the Fed, in inflation-adjusted 2017 prices).[10]

Rising industrial production with declining employment in the industrial sector is an expression of the rationalization push in commodity production in the course of the IT revolution from the 1980s onwards; it is the empirically verifiable consequence of the inner barrier of capital – the competition-mediated tendency of the capitalist valorization process to get rid of its own substance, the value-forming labor in commodity production. Even in the 21st century, when the US industrial workforce shrank massively (from 17 million to just under 13 million), the output of this shrinking industrial workforce stagnated without a corresponding decline (the crisis-related slumps in industrial output in 2009 and 2020 were quickly reversed).[11]

What’s more, according to the National Association of Manufacturers,[12] value added in the United States amounted to around $2.93 trillion in 2024 (in 2010 it was just under $1.8 trillion, in 1997 only $1.38 trillion),[13] with the United States paradoxically growing primarily in foreign trade. Manufacturing exports have more than doubled in the last two decades, from $622.3 billion in 2002 to $1.63 trillion in 2024. What is Trump and his entourage upset about? Well, in the same period – the heyday of globalization – the volume of world trade has more than tripled: from $4.9 trillion in 2000, to $9.8 trillion in 2010, to $15.7 trillion in 2023. The US’ share of world trade has thus fallen – to 7.9% in 2023.

The opposing trends in capitalist commodity production – which lacks new labor-intensive fields of valorization – were also noticed and addressed by US monetary policy. As early as 2014, the US Federal Reserve noted that industrial production in the United States was continuing to grow (with the exception of short-term slumps caused by the crisis), while employment was not, meaning that “industrial growth is not synonymous with growth in industrial jobs.”[14] The Fed offered “productivity growth” and a shift in sectoral focus towards “computers and electronics” as explanations.  

Trump’s protectionist policy thus appears to be failing due to the increasingly clear inner barrier of capital, the relentless melting away of the mass of spent labor in commodity production as a result of competition-mediated rationalization (the idea that capitalism could be reproduced as a financial market-driven service society was already disgraced in 2008). This is particularly evident in the development in China, where Trump’s protectionism believes it has recovered its lost industrial jobs. Even in the state capitalist workshop of the world, which owes its economic rise to millions of mercilessly exploited cheap workers, automation tendencies are spreading ever faster.

China is now the global leader in the installation of industrial robots. By 2023, the People’s Republic had already overtaken Japan and Germany in the automation of goods production: 470 industrial robots per 10,000 wage earners were in use in China, compared to 419 in Germany and 429 in Japan.[15] The dynamics of this automation push are dizzying: in 2023, more than twice as many robots were put into operation in the People’s Republic than in the next five industrialized countries combined. The world’s automating workshop accounted for more than 50% of global demand for robots in 2023.[16] Meanwhile, forecasts predict that the People’s Republic will become the center of robotics, with more than half of humanoid robot production predicted to be based there this year.[17]

And it is precisely Trump’s protectionism that is tempting capital to further boost automation in reshoring in the United States. According to the US automation service provider Formic, which specializes in the leasing of industrial robots, the general uncertainty caused by the trade disputes led to a 17% increase in the use of robots at the beginning of 2025. The new settlements of industrial companies, which Trump’s capricious customs regime is intended to provoke, would also be built at the globally applicable productivity level, which would entail a high degree of automation. Chinese robotics manufacturers in particular are likely to sense new market opportunities here. Trump’s crazy idea that millions of US wage earners would manufacture smartphones by hand is becoming obsolete, even in China, due to rapidly advancing automation.

Ultimately, however, Trump’s reshoring fantasies are milquetoast calculations that overlook the connection between declining industrial production and the inflated global financial markets. Hyper-productive global industrial production – especially in China – was dependent on a global deficit economy with the US at the center of deficit cycles in which global debt has risen faster than global economic output since the 1980s. And it is precisely this deficit economy, realized by means of increasing financial bubbles, that has been extinguished since the major inflationary surge of 2020, after the central banks had to curb their expansive monetary policy. According to the IMF, global debt fell between 2021 and 2023, contributing to the global economic slowdown, the widening of the US deficit and the increasing destabilization of the globalized world economy through deficit cycles.[18]

The erratic, contradictory behavior of the White House mentioned at the beginning is above all an expression of this contradiction: the US trade deficit is exploding because its trading partners are having to rely more heavily on exports due to the economic slowdown, while Trump’s protectionist measures are jeopardizing the dollar’s position as the world’s reserve currency and causing turmoil on the US bond markets. Trump expected turbulence with his protectionist turnaround, which is why he wanted to initiate it as soon as he took office – but it was the rapid rise in interest rates on US government bonds that forced him to reverse course. In the meantime, US trading partners such as Japan are threatening to sell US government bonds during negotiations.[19] It is effectively the nuclear option in the trade war, which also highlights the absurd state of late capitalist commodity production, whose production surpluses are exported to the US, which can borrow in the world’s reserve currency as the measure of value of all commodities.


[1] https://www.bls.gov/opub/btn/volume-9/forty-years-of-falling-manufacturing-employment.htm

[2] https://www.visualcapitalist.com/the-decline-of-u-s-manufacturing-by-sector/

[3] https://www.bea.gov/news/2025/us-international-trade-goods-and-services-december-and-annual-2024

[4] https://www.macrotrends.net/global-metrics/countries/USA/united-states/trade-balance-deficit

[5] https://ustr.gov/countries-regions/china-mongolia-taiwan/peoples-republic-china

[6] https://www.fool.com/research/us-trade-balance/

[7] https://ourworldindata.org/grapher/manufacturing-value-added-to-gdp

[8] https://fred.stlouisfed.org/series/USAPEFANA

[9] https://fred.stlouisfed.org/series/MANEMP

[10] https://fred.stlouisfed.org/series/IPMAN

[11] https://fred.stlouisfed.org/series/OUTMS

[12] https://nam.org/mfgdata/facts-about-manufacturing-expanded/

[13] https://www.macrotrends.net/global-metrics/countries/USA/united-states/manufacturing-output

[14] https://fredblog.stlouisfed.org/2014/12/manufacturing-is-growing-even-when-manufacturing-jobs-are-not/

[15] https://archive.ph/bL8tt#selection-1101.15-1101.47

[16] https://ifr.org/downloads/press2018/2024-SEP-24_IFR_press_release_World_Robotics_2024_-_China.pdf

[17] https://www.asiamanufacturingreview.com/news/china-to-manufacture-half-of-world-s-humanoid-robots-by-2025-nwid-1613.html

[18] https://www.imf.org/en/Blogs/Articles/2024/12/02/persistent-fall-in-private-borrowing-brings-global-debt-down

[19] https://thediplomat.com/2025/05/how-japans-1-1-trillion-in-us-treasuries-became-a-strategic-lever-in-the-new-tariff-war/

Originally published on konicz.info on 05/26/2025

Russia Is in No Hurry

The chances that the Russian-Ukrainian talks in Istanbul will lead to a quick or even fair peace are slim.

Tomasz Konicz

The fact that peace talks between Kyiv and Moscow were able to take place in Istanbul highlights just how bad the military situation in Ukraine is. On May 10, four European leaders, who had traveled to the Ukrainian capital in a gesture of solidarity, joined their counterpart Zelensky in calling for a 30-day ceasefire as a precondition for any talks. This unconditional, comprehensive ceasefire would give “diplomacy a chance,” Zelensky demanded in the presence of British Prime Minister Starmer, French President Macron, Polish Prime Minister Tusk, and German Vice Chancellor Merz.

The Kremlin remained unmoved by the EU’s threat of sanctions linked the ceasefire that are aimed at taking stronger action against Russia’s shadow fleet – there will be no ceasefire because it is not in the Kremlin’s interest. The Russian-Ukrainian talks, on the other hand, began under fire, as this strengthens Russia’s negotiating position. In addition, as usual, the Europeans were excluded from these negotiations, which were conducted with the participation of the U.S. administration. By excluding the Europeans, Putin obviously wants to further divide the West. Finally, the Kremlin did not agree to Zelensky’s demands to hold direct talks with Putin.

Realities of the War of Attrition

Russia was thus able to dictate almost all of the preconditions for the negotiations in Istanbul. Ukraine, on the other hand, has little choice but to negotiate, as the war of attrition in the east will inevitably be won by Russian imperialism, which has greater resources (material, technology, manpower). Ukraine’s last major offensive, the advance into the Russian region of Kursk, ended in strategic failure. Kiev’s calculation was to dig in and hold the Russian border region in order to have a bargaining chip in any negotiations – now Russia occupies parts of the Ukrainian border region in the Sumy Oblast. Both sides suffered heavy losses in the fighting in Kursk, which also involved North Korean units. However, the Kremlin is better placed than Kiev to compensate for this through successful recruitment campaigns.

Western think tanks sympathetic to Ukraine, after years of whitewashing, are now being forced to acknowledge the realities of the war of attrition on the front lines. In a recent assessment, the Institute for the Study of War (ISW) assumes that Russia will not only be able to mobilize enough new forces to compensate for losses on the front, but also to “increase the size of army groups in Ukraine.” The Russian army leadership thus has more manpower at its disposal, even though, according to the ISW, Russia has recently suffered “significant losses with limited gains.” The growing imbalance could serve to “put pressure” on Ukraine in negotiations. In addition, Moscow appears to be in a position to build up a considerable “strategic reserve” through successful recruitment, according to the ISW.

The Atlantic Council is already warning of a major Russian summer offensive that threatens to become “the deadliest of the war so far.” Here, too, the admission of impending defeat can be read between the lines. Although the Russian army continues to suffer losses in “costly frontal attacks,” this tactic is constantly evolving, with these attacks being supported by “drone strikes, glide bombs, and artillery,” which is making Ukraine’s defensive measures more difficult. Russia currently holds the initiative on the front and is “advancing on several points” (Sumy, Kharkiv), with the Russian army leadership planning a major offensive in the Donbas – around Pokrovsk – in the coming months, according to the Atlantic Council. Ukrainian offensive plans have therefore long been a waste of time. The only question now is whether the front can be held in the face of Russian attacks and possible offensives. The summer threatens to become a “test of endurance” full of “brutal fighting” for “war-weary Ukraine” – especially in view of dwindling American military aid.

Direct military intervention by the Europeans against the nuclear power Russia – which was at times publicly debated in the EU – is now considered virtually impossible, despite all public expressions of solidarity. In mid-May, Macron stated that despite all its support, France did not intend to start “World War III” over Ukraine. Shortly before that, Polish government officials denied statements by U.S. envoy to Ukraine, Keith Kellogg, that Warsaw was prepared to deploy army units to Ukraine. Within Germany’s governing coalition, there is controversy over whether Kiev should be supplied with the advanced Taurus cruise missiles at all. While Deputy Chancellor Merz wants to maintain “strategic ambiguity” on this issue, SPD parliamentary group leader Matthias Miersch has explicitly spoken out against the delivery.

A Caricatured Imperialist Deal

Given this military and geopolitical constellation, which is favorable to Russia, the Kremlin can enter negotiations from a position of strength to push through its core demands, which ultimately aim to legalize its imperialist aggression and claim even more Ukrainian territory than is currently held by Russian troops. The logic behind such a deal is clear: to achieve inevitable military conquest through negotiation. Putin’s minimum territorial demands are likely to include the legalization of the annexation of the entire regions of Crimea, Luhansk, Donetsk, Zaporizhzhia, and Kherson. Russia’s marginal gains in the Kharkiv and Sumy regions are likely to be used as bargaining chips.

Added to this are the restrictions on Ukrainian sovereignty, which the Kremlin is selling under the label of “denazification.” On the one hand, this amounts to preventing Ukraine from becoming part of the Western sphere of influence, which could be achieved through neutrality commitments and arms restrictions for the Ukrainian army, as well as a “regime change” in which new elections would be scheduled in Ukraine. Russia does not want to occupy the entire country, but rather to bring it back into its imperial orbit. In the medium term, the Kremlin hopes to maneuver the “remaining Ukraine” into a state of sham sovereignty, similar to that currently enjoyed by Belarus. Formally independent, the former Soviet republic is in fact already part of the Russian Federation, both economically and militarily.

Russia therefore has no need to rush the negotiations, and one must wonder whether or not they are being held purely for propaganda reasons. Kiev, on the other hand, has few cards left to play in this imperialist poker game, which is why Zelensky had to agree to send his delegation to Istanbul on Putin’s terms—the longer he waits, the worse his position will become. In addition, tensions are rising on Ukraine’s western border, where the Ukrainian secret service has arrested two Hungarian citizens who are alleged to have been spying for the Orbán government in Budapest – they are said to have been gathering information on military installations, the mood among the population, and the defense capabilities of the Transcarpathian region, which is inhabited by a Hungarian minority. Since then, relations between Hungary and Ukraine have been frozen, with both countries expelling diplomats from the other side. The authoritarian head of government Orbán, from whose circle there are repeated calls for the annexation of Transcarpathia, is considered close to Russia.

Kiev’s only chance to retain some leverage seems to be to effectively capitulate to Trump’s extractivism: Kiev has had to sign a humiliating resource agreement with the U.S. in order not to lose its support completely. Kiev’s calculation: this caricature of an imperialist deal, signed at the beginning of May, would only make sense if Ukraine’s resource-rich eastern territories remained under Ukrainian – well – sovereignty. Kiev is hoping that Washington will back up its interest in extracting raw materials with military force. This would effectively tear Ukraine apart between East and West.

At least the Financial Times claims to have noticed a “quiet shift” in favor of Ukraine within the bluntly imperialist U.S. administration as early as mid-May. Speaking at a public meeting in Washington, Vice President JD Vance said that his administration was aware of a number of Russian demands that would make it possible to end the war: “We think they are asking for too much,” Vance said. At the same time, however, the vice president pointed out that despite “widespread criticism” of Putin, it was necessary to understand the Kremlin’s point of view in order to understand the “motivation of the other side.” Vance believed that Russia remained “interested in a solution.”

What might this solution look like? The Kremlin also has the upper hand in Ukraine’s resource poker game: Back in late February, when Kiev was still blocking the sale of its natural resources, Putin offered his American counterpart to jointly exploit the resources of eastern Ukraine and sell them to the U.S. A large part of the natural resources are already under Russian control anyway.

Tomasz Konicz is an author and journalist. His latest book is Climate Killer Capital: How an Economic System is Destroying our Livelihoods. More articles and donation options (Patreon) can be found at konicz.info.

Originally published in analyse & kritik on 05/16/2025.

Protectionist Revenants

The lessons that the bourgeoisie learned from the great systemic crisis of the 1930s have long been forgotten in Trump’s Washington.

Tomasz Konicz

Want some more? When it comes to tariffs and trade barriers, the U.S. president is known to be extravagant. In response to the EU’s announcement of retaliatory measures for the U.S. tariffs on aluminum and steel, which include alcoholic beverages, Donald Trump responded by threatening astronomical punitive tariffs of 200% on European wine and sparkling wine. So far, this escalation strategy has worked: when Canada’s Ontario province announced a 25% tax on electricity exports to the United States as part of the North American trade war, Trump immediately threatened to double U.S. tariffs on all Canadian metal imports to 50% – Ontario then withdrew its export tax.

The U.S. actually has a strategic advantage in these trade wars because of its huge trade deficit ($918.4 billion in 2024). This is likely to tend to decrease in the course of the trade wars, while most of America’s trading partners are likely to see shrinking exports. Trump is speculating that he can ride out the short-term turbulence that the major protectionist turnaround will bring in order to achieve the hoped-for long-term return of a re-industrialization of the U.S. before the next election. In fact, the U.S. wants to reindustrialize itself at the expense of those countries and economic areas for whose export industries the U.S. trade deficits have thus far served as a credit-financed economic stimulus program.

In fact, the world economy, which is increasingly running on credit, also functioned like this in the neoliberal era: the U.S. resembled a black hole of the global economy, absorbing surplus industrial production and being able to borrow in the world’s reserve currency, the U.S. dollar, on the rapidly expanding financial markets. In the context of ever-growing deficit cycles, gigantic export surpluses flowed into the U.S. as the center of capitalism’s neoliberal financialization, while a flow of debt instruments and bonds began in the opposite direction, making China, for example, the largest foreign creditor of the U.S. for many years (currently it is Japan). The global total debt, which in the neoliberal era has increased faster than global economic output (from around 110% at the beginning of the 1970s to more than 250% in 2020), was the lubricant of globalization precisely through these deficit cycles.

This neoliberal construction of towers of debt, which gave rise to the illusion of financial-market-driven growth in the United States, spawned a veritable global financial bubble economy that became unstable with the bursting of the real estate bubble in 2008 and unsustainable with the inflationary surge that began in 2020. Trump is thus a product of the crisis, whose protectionism is supposed to provide an answer to the processes of social disintegration that accompanied deindustrialization and the collapse of the financial bubble economy. And it is no coincidence that the whole thing resembles the protectionism of the 1930s, when the world system was hit by the greatest crisis to date.

The internal barrier of capital, which gets rid of its own substance, wage labor, through market-mediated rationalization, is now openly apparent: since new economic sectors that would valorize mass wage labor are nowhere to be found, each economic area must try to protect its remaining industrial capacities, as everyone is trying to support their industries through exports. Trump wants a qualitative break with the credit-fueled crisis delay methods of the neoliberal era – and the contradiction is almost tangible, for example in Trump’s eternal zigzag. The system can only run on credit – and at the same time the consequences of this global deficit boom are no longer socially, economically and, above all, politically sustainable.

But what does Trump want? Ultimately, the White House is currently destroying the system of American hegemony established in the post-war period, since the U.S. can no longer or no longer wants to bear the costs of this hegemony. Instead, Trump is setting about building a U.S. empire that no longer relies on a global network of institutions and rules in the exercise of power, but will presumably assert itself through direct and ultimately military force. And that is not a sign of strength, but of weakness. Trump’s narrow-minded crisis-imperialist calculation, which perceives the deindustrialization of the U.S. as a result of fraud by foreign competitors, will be exposed as such when these competitors no longer see any reason to accept the U.S. dollar as the world’s reserve currency. The systemic cause of the geopolitical upheavals that are now shaking what is left of the “West” is the openly apparent internal limit of capital.

Originally published on konicz.info on 03/28/25

Into the Crisis One Tariff at a Time

With its protectionist tariff policy, the new U.S. government is ushering in the end of the age of neoliberal globalization.

Tomasz Konicz

Protectionism is likely to become the new normal. The first foreign policy reflex of the new U.S. administration was to instigate trade wars. At the beginning of February, just a few days after taking office, President Donald Trump imposed punitive tariffs on goods from China, Canada and Mexico.

At 25%, the import duties on goods from Mexico and Canada were much higher than for China, whose goods were subject to additional import duties of just 10%. The U.S. is by far the most important trading partner for all three countries, with each of them recording trade surpluses.

However, while the tariffs against China actually came into force, Trump suspended the implementation of protectionist measures against neighboring countries to the north and south of the U.S. for 30 days on February 3rd. At this point, the U.S. government entered into negotiations with Mexico and Canada, during which the threat of punitive tariffs remains in place. In fact, Trump has already been able to secure significant concessions: both Canada and Mexico agreed to tighten controls on their borders with the U.S. Mexico wants to mobilize around 10,000 troops to secure the border so as not to jeopardize the economic position of its northern border region as an extension of the U.S. workbench.

In fact, Trump’s alleged economic protectionism is a geopolitical instrument of power that can be used to extort concessions. In the case of Mexico, which is particularly susceptible to economic pressure from the U.S. because of its increased economic dependency on them as a result of the U.S. nearshoring strategy, the aim is for better defense against migration movements. Canada, on the other hand, is apparently actually being forced to integrate more closely into the U.S. economy – the foreseeable struggle for the resources in and trade routes through the rapidly thawing Arctic make Trump’s bizarre annexation demands regarding Canada and Greenland at least understandable.

China immediately announced retaliatory measures: Tariff increases now introduced there include 15% on energy sources and 10% on agricultural machinery, spare parts for trucks and similar products from the U.S. However, the Chinese government has the short end of the stick in such trade wars. In 2024, the U.S. trade deficit amounted to the gigantic sum of $918.4 billion, of which China alone accounted for $295.4 billion. Even if both sides initially suffer economic disadvantages in a trade war, especially in the current stagflative crisis phase, for example in the form of higher inflation, an escalation would always hit the economy with the export surpluses harder than the deficit country, which can at least hope to substitute imports burdened by tariffs through increased domestic production.

The European Union is in a similar situation, having aligned itself with the export-focused German economic model since the euro crisis and achieving a trade surplus of 235.5 billion euros with the U.S. in 2024. Around 20 percent of all EU exports go to the U.S., its most important sales market. The special tariffs of 25 percent on steel and aluminum, which Trump issued in mid-February, were immediately described by the EU as illegal. It saw “no justification for imposing tariffs on its exports,” according to the EU Commission, which threatened countermeasures to “protect the interests of European companies, workers and consumers from unjustified measures.”

Only Trump’s First Salvo in the Transatlantic Trade War

This was effectively only Trump’s first salvo in the coming transatlantic trade war, as only a few manufacturers in the EU are substantially affected by this. The EU’s trade surplus is primarily generated with cars made in Germany, machinery and pharmaceutical products – on February 18th, Trump consequently threatened punitive tariffs of 25% on cars, semiconductors and pharmaceutical products. Added to this is the EU’s agricultural sector, which is incurring the wrath of the U.S. government due to some EU trade restrictions – for example against the infamous chlorinated chicken. The EU agricultural sector knows exactly what to expect. At the turn of the year, agricultural exports from the EU to the U.S. climbed to their highest level in 15 years. “Mountains of butter, pyramids of cheese and lakes of milk” are currently being laid out for export in anticipation of the coming trade barriers, reported the Austrian newspaper Der Standard.

Trump has already indicated to media representatives that his government is working on a comprehensive protectionist offensive that is likely to hit the EU particularly hard. In principle, the upcoming U.S. tariffs are to be imposed on individual EU countries and not on the entire economic area in order to promote divisive tendencies in the EU, make a joint EU counter-strategy more difficult and reward countries governed by Trump’s ideological allies, such as Hungary, with exemptions. The U.S. Department of Commerce is currently drawing up a list of countries that use “unfair trade practices” in order to impose “reciprocal tariffs” on them.

It is almost certain that Germany’s beleaguered car manufacturers will face new burdens, as the EU car import tariffs of 10% are far higher than those in the U.S. (2.5%). The spreading panic was already evident in the public announcement by VW CEO Oliver Blume that he intends to hold direct talks with the U.S. government. The German mechanical engineering industry is also likely to face tariff increases. If the trade conflict with the U.S. escalates, forecasts predict an additional economic slump of up to 1.5% of gross domestic product for Germany in particular.

What Retaliatory Measures Remain for the EU?

Bourbon, jeans, Harley-Davidsons, peanuts – what retaliatory measures are left for the EU? Brussels and Berlin are certainly aware that the EU is at a disadvantage in trade disputes due to its export surplus. So far, leaders have signaled a compromise proposal and a counter-threat to the U.S. government. The EU appears to be prepared to buy larger quantities of liquid gas from the U.S. and to reduce tariffs on U.S. vehicles in order to reduce the U.S. deficit.

Building on the protectionist experience gained during Trump’s first presidency, the EU had already issued a regulation at the end of 2023 that allows for swift retaliatory measures should “economic coercion” be used against the currency area. This time, it is not just about the import of goods, but also services. This could cause difficulties for U.S. IT giants such as Alphabet, Meta and Amazon in particular, who have very quickly come to terms with Trump’s authoritarian efforts.

However, in terms of economic policy, one can hardly speak of an about-face turn in U.S. policy. It is more a further intensification of the previous restrictive trade tendencies, as Joe Biden’s administration also continued the protectionist measures from Trump’s first term in office in a modified form – especially in the form of the economic stimulus programs that benefited domestic producers. And it is precisely in the increasing protectionism that the crisis process becomes evident. The fight for trade surpluses is a concrete expression of the inner barrier of capital choking on its productivity, which has so far been overcome within the framework of neoliberal deficit economies, especially in the U.S.

Trump now appears to be ushering in the final break with the era of neoliberal globalization, which gave rise to gigantic deficit cycles fueled by speculative bubbles. The U.S., with the dollar as the world’s reserve currency, forms the center of this financial bubble economy, in which U.S. trade deficits act as a global economic stimulus program – until the accompanying deindustrialization led to widespread social disruption and political instability in the U.S., which in turn elevated right-wing populist forces to the White House. In their second attempt, they now seem more determined than ever not only to drive forward fascization in domestic policy, but also to stage a revival of the devastating protectionism of the 1930s, which exacerbated the crisis at the time.

Originally published in jungle world on 02/27/2025