READ AND DISCUSS:

A New Era of Capitalism in Crisis (agreed at the World Congress of the CWI, July 2025) ³⁹

“The world economy has seen expected global growth in a downward spiral this year to its lowest level since 2008, according to the World Bank’s latest ‘Global Economic Prospects’. In fact, illustrating the era of capitalist crisis, growth in world trade has been steadily falling for the last twenty-five years. In the 2000s it grew by 5% on average, in the 2010s by 4.5% and in the 2020s by 3%. Global economic growth in the first seven years of the 2020s has thus far been the slowest since the 1960s.

The world economy currently has unsustainable features which are a prelude to a deeper crisis. The lurch to protectionism under Trump, which Biden had also resorted to, reflects the decline of US imperialism. The fact that in the most powerful imperialist power, manufacturing only accounts for 10% of US GDP, down from 16% in 1997, illustrates the decline which has taken place. The rise of finance capital and the service sector in most of the western imperialist powers is a key aspect of the current period in which capitalism finds itself. Within this, the new sectors of high-tech and AI have strengthened their position, reflecting a certain change in the composition of the ruling class.

Manufacturing is now overwhelmingly concentrated in Asia where an enormous industrial working class now exists. This is crucial for future developments in the class struggle. It is estimated that in China over 200 million workers are employed in the manufacturing sector, in Indonesia 18.8 million and in India 60 million. The crisis in these countries is certain to lead to the outbreak of massive class battles. … This does not mean that the working class in the older imperialist powers in Europe or the US will not play a central role in the global revolutionary process.

… The contradictions and systemic crises of capitalism historically have meant that an economic reset is periodically needed. This historically has led capitalism to embark on a destruction of value, as Marx explained. This has been done through recessions, factory closures, war and even world wars. … Recovery from wartime destruction could stimulate some economic growth in some countries. On a larger scale, the rebuilding after the Second World War did this for some countries.

... Today, the destruction of value will not be through the medium of an all-out world war. It will be partially through regional wars like those being fought in Ukraine, Gaza and elsewhere, recession, factory shutdowns and other attacks on the working class. This process is at the beginning. But this will not prevent the ruling classes making brutal attacks against the conditions and living standards of the working class and masses globally. However, it will not be sufficient in the current situation to allow a reboot of the global economy and a new global upswing.

The element of the destruction of value is being done in a protracted drawn-out manner today. An all-out world war today would mean a nuclear cataclysmic event that would obliterate the working class, the productive forces and the capitalist class. The capitalist classes at this stage are not contemplating a nuclear Armageddon. For this to take place an entirely new world situation would be necessary involving the defeat of the working class in key countries and the coming to power of extreme Bonapartist authoritarian regimes. At this stage, the ruling classes – although fearing mass movements and uprisings – are not threatened immediately with the threat of socialist revolution. This is due to the throwing back of political consciousness and absence of mass political organisations of the working class. The destruction of value is thus being carried through by stealth.

It is striking that many of the internal factors that led to the collapse of the western Roman Empire are present in the current protracted death agony of capitalism. Constant wars and overspending on the military; power struggles, corruption, and a succession of weak emperors and rulers; massive inequality and a chasm between the ruling elite and the poor giving rise to social unrest and climatic changes and disease; all contributed to the fall of western Rome.

… Social systems approaching their exit from the stage of history are riddled with such features. Yet for a period they may not immediately be confronted, overthrown and replaced by a new social system on a higher level of progress. The slave-based economy of Rome meant that there was no class capable of overthrowing the old system and taking society forward. Thus, it disintegrated and collapsed. Feudalism allowed the emerging bourgeoisie, with the support of other social forces, to eventually carry through the various bourgeois revolutions and replace feudalism. Capitalism will not simply step aside and depart from the historical stage; it will need to be overthrown.”

Reading the excerpt from ‘A New Era of Capitalism in Crisis’ above,

1. The analysis highlights the comparison between the US and China in terms of the importance of manufacturing to their economies, and the size of their manufacturing workforce,

Why do you think these comparisons are important for socialists seeking to understand the state of global capitalism today, and the prospects for class struggle?

2. The analysis explains how capitalism has historically sought to find a way out of its cyclical crises by a “destruction of value … through recessions, factory closures, war and even world wars.”

What do you think is meant by “destruction of value”? (if you’re not sure yet, hopefully the next lessons will help you!)

3. The analysis makes a comparison between the collapse of the Roman Empire [ also discussed in Lesson Eleven, on ‘Slavery and Feudalism’] and the current crisis of capitalism.

(a) What do you think are the similarities and differences between the two periods?

(b) The analysis points out that “the slave-based economy of Rome meant that there was no class capable of overthrowing the old system and taking society forward.” Which class, with the necessary leadership and organisation, is capable of overthrowing the capitalist system of today?