The Course of Global Capitalism: The Course of Capital is Inevitably Chaotic and Catastrophic

Report delivered to the general meeting of May 24th-25th, 2025.

Everything seems to be accelerating. The crisis of global capitalism is leading not only to general imbalance, but to disorder and chaos, before pushing the various imperialist states towards a deadly confrontation in a third world war.

The dominance of the dollar in financial markets and the international payment system constitutes a really tough predicament for the US economy. On the one hand, the security provided by a dominant monetary system, backed by a really strong military, has allowed the US to impose its debt on the rest of the world. On the other hand however, the constant demand for dollars—which accounts for 90% of foreign exchange transactions, 75% of foreign currency-denominated bonds, and three-fifths of international bank loans—drives its value up, making US industry less competitive on the international market.

Hence the US government’s desire to weaken the dollar to make its industry more competitive.

This upheaval comes on top of many others, not least the heavy tariffs—either threatened or actually imposed by the Trump administration—which prompted the French newspaper Les Echos to write that “Trump is demolishing the historical foundations of world trade.”

The US has been running record trade deficits for years, the latest of which, in 2024, amounts to $900 billion.

An absolute record, compounded by a huge budget deficit of $1.8 trillion.

While in the 1970s the United States was the world’s largest creditor, today it is the world’s largest debtor. Similarly, while in the past the largest currency reserves were held by the United States and its European allies—Great Britain, France, Germany, etc.—today they are held by Japan, China, and other Asian countries.

Today, the ten largest holders are, in descending order: China, Japan, Switzerland, India, Russia, Taiwan, Saudi Arabia, Hong Kong, South Korea, and Mexico.

In this ranking, the old imperialist states are in the background.

Foreign investors hold almost 20% of US shares—an all-time high—and 30% of US debt, compared to a third less in 1971.

To counteract the downward trend in the rate of profit, entire branches of industrial production have been transferred to low-cost countries, where workers are forced to accept any working conditions.

This has made the fortune of European, Japanese, and American multinationals. Furthermore, this is what has allowed global capitalism to enjoy thirty years of respite, at the cost of the growing impoverishment and precariousness of an entire section of the American, European, and Japanese proletariat.

The result has been a shift in the economic center of gravity from the Atlantic Ocean to the Pacific Ocean.

The tumultuous economic development of Southeast Asia, based on the fierce exploitation of cheap labor, has nevertheless had a positive effect because it has led to the improvement of the living conditions of the working masses, laying down the economic foundations for communist society – regardless if this has happened, as always, in a despicable manner.

At the same time, new imperialist states have emerged, while the old ones have experienced relative decline.

A new superpower has also emerged: China, which aims to replace the United States on the world stage.

The globalization touted by the European and American bourgeoisie, which has been a source of extraordinary profits, is turning against them. 

The new US government, aware of this danger, is calling into question the free trade that has so far allowed its multinationals to make extraordinary superprofits.

By trying to force its foreign competitors to rebalance trade, the new US government could provoke a serious trade and financial crisis, worse than that of 1929.

Every year, the US government is forced to issue an ever-increasing amount of debt, and, with the progressive weakening of the international financial system, this will call into question the role of the dollar. That will cause mistrust in its role as an international currency of payment and thus leading to a further serious financial crisis.

Similarly, the closure of the US market will result in a serious crisis of overproduction on a global scale, given the importance of this market.

Moreover, forcing American multinationals, such as Apple, to resume production in the United States can only lead to a decline in their profits.

We do not know how far the US president and the American financial sector that supports him will go, but there is no doubt that the crisis of overproduction of world capitalism and the new inter-imperialist balance of power can only lead to a trade war. This will aggravate the crisis itself, before the world heads towards a third world war. Unless, in the meantime, the proletariat returns to the glorious path of class struggle and communism.

Let us now consider some aspects of the current worldwide situation.

Inflation

After reaching an all-time high of 9.1% in the United States in June 2022 and 10.6% in Europe in October of the same year, inflation fell to 2.4% in the United States and 2.2% in Europe in March 2025.

China, which experienced deflation from April 2023 to April 2024, saw inflation pick up again, peaking at 4.4% in October 2024 before falling to 3% in March 2025.

In Europe, inflation in the Eurozone ranges from 0.8% in France to just over 2% in Germany.

The UK stands out with relatively high inflation at 3.4%.

Low inflation in the Eurozone will allow the ECB to continue lowering interest rates to stimulate the economy, particularly the construction branch, which is still in recession.

Industrial production

Despite the vigorous financial incentives provided by the Biden administration, US industrial production stagnated during 2023 ( + .2%), slightly falling in 2024 (- .3 %).

Now, the trade war unleashed by the Trump administration will put a stop to any resumption of capital accumulation in the industries.

On the contrary, we should expect a decline, especially if these policies are pushed to the limit.

US industrial production is driven by shale gas and oil, of which the United States has become the world’s leading producer.

But in 2023, American manufacturing output was -7.5% compared to 2007, while its overall industrial output, thanks to oil and gas, was 1% higher.

To provide a global outlook, we have reported (see below) industrial production trends (from 2019 to 2024) for the most significant countries.

We do not have such data for China and Russia.

What emerges is that the old imperialist states were in recession or near stagnation in 2019. Some more data in retrospect: figures range from Germany’s -3.3% to Spain’s +0.5%. Belgium’s +4.9% stands out as an exception, thanks to its industries in the Flanders.

Poland experienced a very significant growth, recording an increase of 4.1%.

Türkiye, on the other hand, recorded a negative growth of 0.6%.

The recession obviously worsened in 2020 with the international downturn caused by the COVID-19 pandemic.

Apart from Türkiye (+ 2.2%), all other countries were in the red.

What followed was a strong recovery in 2021, with increases ranging from +25.6% in Belgium to 3.9% in Portugal and Brazil.

On the contrary, after a 7.8% decline in 2020, the UK saw its production continue to fall, in 2021 (-0.7%).

Then, in 2022, recovery slowed down significantly, recording negative increments for some countries.

Other countries fared better: a 10.3% increase for Poland, +5% for Türkiye, +3.4% for the United States, and +2.3% for Spain.

For the rest, increments ranged from the UK’s -6.4% to France’s -0.3%.

Japan stayed at 0%.

By 2023, almost all countries resided in negative territory, with numbers ranging from Belgium’s -7.5% (surprisingly) to the UK’s -0.9%.

Countries in positive territory were Türkiye (+1.6%), France (+0.4%), the United States (+0.2%) and Brazil (+0.1%).

However, those last three are practically at a standstill.

In 2024, almost all countries recorded increments in the red, especially the old imperialist countries. Others will experience near stagnation.

The only exceptions are South Korea (+4.1%) and Brazil (+3.1%).

The last two columns compare 2024 industrial production figures with 2018’s and 2007’s, respectively.

Comparing 2024’s industrial production with that of 2018, we notice that all the old imperialist countries are in negative territory, with declines ranging from -17.3% in the United Kingdom to -0.3% in the United States, thanks to gas and oil.

The exception is Belgium, with an impressive +15%, thanks to Flanders.

Among those in the green, however, Poland stands out with a 29.3% increase in production, followed by Türkiye with +26.7%, then Korea (right behind Belgium) with +11.2%, and finally Brazil, with a slight increase of 0.7%.

If we look at the last column, which compares 2024’s industrial production with the peak reached in 2007, the situation of the old imperialist countries worsens further.

Portugal, Spain, and Italy are almost at -23%, followed by the UK and Japan (-21%) . France sits at -12.3%—although in reality it is probably worse—Brazil (which has been in recession for some time) at -8.3%. Finally Germany and its -9.1%. The latter, which in 2018 had exceeded its 2008 peak by 8.5 percentage points, has taken a massive fall and is also experiencing a deep crisis of overproduction.

The United States is managing to get by thanks to hydrocarbons, with a slight 1.1% increase.

However, manufacturing output is expected to be 10% lower than its 2007 peak.

Among those who have managed to make the most of the processes of production relocation are Türkiye (+111%), Poland (+97.3%) and Belgium (+30.3%).

However South Korea is outperforming Belgium, scoring an incredible 53.5%. 

(continued from the previous issue)

Industrial Production

To complete this overview, we will provide two tables showing the average annual increases in industrial production from period to period.

TABLE 1

The first table concerns the old imperialist countries and is divided into four periods: 1950-1973, 1973-2007, 2007-2018 and finally, 2018-2024. The last two columns have already been shown. Industrial production in 2024 is contrasted with 2018 and in 2007 (2008 in the case of Germany). In the first period, immediately after post-war reconstruction and when industrial production had returned to its pre-war peak, the increases were not simply sustained but accelerated in South Korea, Japan, Germany, and Spain. Spain had just finished a civil war. The increases range from +16.4% in South Korea to +8.5% in Germany. To be clear, this means that over the course of 23 years, production increased by an average of 16.4% per year. The figure for France, 6.1%, is lower, but still very respectable. Finally, the United Kingdom has a modest 2.7%, in line with its age and the lesser destruction it suffered. America, already overflowing, still recorded an annual surge of 4.3%!

It is also very clear that, for all forms of capitalism, there is a sharp slowdown from period to period, ending with negative growth in the last period of 2018-2024. The exceptions are South Korea (+1.8%) and Belgium, which beats South Korea with an average annual growth rate of 2.4%! The second table shows the periods for Eastern European countries. In the next article, a third table will list countries with young capitalism, such as Brazil, India, Mexico, Turkey, etc.

TABLE 2

This second table details the periods of 1998-2007, 2007-2018, 2018-2024. The starting year, 1998, is the year in which all these countries, which experienced a recession with the crisis of overproduction that led to the collapse of the Russian empire, returned to pre-crisis production levels. For each period, we have two columns. The first indicates the total increase between the two years and the second indicates the average annual increase for the period calculated from the total increase given in the first column.

In the 1998-2007 period, Poland saw a total increase of 78.9%, which corresponds to an average annual increase of 6.7%. For Hungary, we have 102.9% and 8.2%. For Estonia, we have an increase of 107.5% and 8.4%. For Latvia, we have 57.5% and 6.7%. For Lithuania, we have 55% and 5% For Romania 44.2% and 4.2%

Moving from one period to the next, there is a steady decline in growth rates, which even turned negative in the last period for Lithuania (-0.1%) and Romania (-1.5%). In fact, Romania has been in recession since 2019. It is interesting to see the total increase since 1998. Poland leads the way with a total increase of 253% and an average annual increase of 5%. Followed by Estonia with a total increase of 183.9% and an average annual increase of 4.1%. Hungary and Lithuania follow with total increases of 155.7% and 157.8% respectively, corresponding to an average annual increase of 3.7% for both countries. Then comes Romania with 101.8%, corresponding to an annual increase of 2.7%. Finally, Latvia saw a total increase of 94.1%, equal to an average increase of 2.8%.

For the purposes of constructing the table, the dates of the periods indicated are those of most countries. However, some countries may have different start and end dates for their periods and therefore different durations, which explains why a smaller total increase may result in a slightly higher annual increase, as in the case of Latvia compared to Romania.

To get a more accurate picture of the real industrial growth of these countries, we need to compare it with the peak reached before the great crisis of overproduction in the 1990s. Romania, for example, only managed to surpass its 1988 peak in 2017, because it saw entire sectors of industrial production, such as steel, collapse. Russia for example, has never recovered from the peak it reached in 1989. For other countries, however, there is no doubt that joining the European Community has benefited them and enabled them to experience a real industrial boom.

International Trade

Exports

We have tabulated exports in current dollars. After a decline in exports in 2019 and 2020, there has been a recovery in exports in subsequent years. In 2024, exports in current dollars increased compared to 2018 for almost all countries, with the exception of two: Japan (-4.2%) and the United Kingdom (-1.8%). The winner is China, with a total increase of 43.1%. For the others, the increase ranges from 24% in the United States to 7.8% in Germany. But in reality, these increases are mainly due to inflation.

TABLE 3

We have therefore included a second table expressed in 2019 dollars.

China remains the winner, but with a more modest increase of 13.6%. All others are in negative territory, with increases ranging from -24% in Japan to -1.6% in the United States. This result is more in line with what we saw for industrial production, which suffered a sharp decline in all these countries.

TABLE 4

It is interesting to note that the United States has become the second largest exporter of goods, replacing Germany since 2010, thanks mainly to hydrocarbons. It is surprising that Italy has overtaken France and ranked fifth, starting in 2020. Apparently, France has not recovered from Covid. Otherwise, Italy, France, Korea, and Belgium are very close in terms of the volume of their merchandise exports.

The third table shows the annual increases for the years 2018 to 2024. Without going into detail, we find the same trends in industrial production. This trend is even clearer if we express exports in constant dollars, eliminating the effect of inflation.

TABLE 5

Imports

The United States leads with $3.267 trillion, followed by China with $2.585 trillion. Further behind, in third place, is Germany with $1.421 trillion worth of imported goods. Then, with less than half that amount, come France, Japan, the United Kingdom, South Korea, Italy, and finally Belgium with $514 billion.

If we look at the annual increases, we see that they are all negative in 2023 and 2024, with the exception of the United States and China in 2024. The figures are +6.6% for the United States and +1.6% for China. All others are therefore in recession.

Trade Balances

China ranks first, with an overwhelming trade surplus of $992 billion. Germany follows, more modestly, but still with a more than respectable surplus of $260 billion. Italy, Belgium, and Korea also have trade surpluses, but at a much more modest level of around $50 billion. Next comes France with a deficit of $111 billion, the United Kingdom with $292 billion, and finally the United States with a monstrous deficit of $1.202 trillion. It is thanks to this gigantic deficit that global capitalism continues to thrive. If America turns off the import tap, everything collapses.

Conclusion

We can clearly see that things are accelerating under the pressure of the crisis of overproduction. We do not know how far the new US administration will go to force reindustrialization and rebalance the trade and payments balance, but we hope it will go as far as possible, triggering a massive trade, financial, and overproduction crisis. The situation is such that it won’t take much for the entire building to collapse.

As we know, the international proletariat will only return to the path of class struggle and communism when the situation becomes untenable. The earth must open up beneath their feet.