The Course of Global Capitalism

With these notes, we continue to take stock of the current economic situation. Regarding industrial production indices, for Europe we can rely on Eurostat, which publishes indices for most European countries, with the exception of the United Kingdom. We compared these indices with those from the OECD and found a high degree of compatibility (except in the case of Portugal); consequently, they can reasonably be used. For the United States, we utilized indices provided by the Federal Reserve Bank of St. Louis. 

Interesting insights emerge from this data. Let us begin with inflation. The first chart shows inflation curves for the United States, Europe, and China. While the price index in China was bordering on deflation, due to the saturation of the domestic market, inflation remained above 2% in Europe and approached 3% in the United States. However, following the war against Iran waged by American imperialism, a sharp rise in inflation was observed due to the increase in hydrocarbon prices. Consequently, the rate in the United States rose from 2.4% in February to 3.8% in April. In China, inflation jumped from 0.2% in January to 1.3% in February, before holding at 1% in March and 1.2% in April. Inflation remains low due to the crisis of overproduction affecting China.

Let us examine Europe in greater detail using the charts below. What stands out is the high inflation in the United Kingdom, which has remained well above 3% since October 2024; this is a point that will require further analysis.

Another noteworthy fact is that Germany stands out for having an inflation rate higher than that of Italy and, above all, France. This is attributable to the fact that the German bourgeoisie had staked everything on low-cost energy from Russia, thereby placing itself in the hands of Russian imperialism. All European bourgeoisies, at least those of Western Europe, truly believed in lasting peace for Europe following the collapse of the USSR.

Another significant factor is the low inflation rate recorded in France the previous year, partly attributable to the use of nuclear-generated electricity, though inflation rose sharply starting in February due to the surge in hydrocarbon prices. Consequently, inflation climbed from 0.3% in January to 2.2% in April, even though it typically takes at least 42 days for oil to travel from the well to the gas station pump. This explains the astronomical windfall profits reaped by Total, which capitalized on this time lag. However, this practice of anticipating price hikes is common to producers of any commodity; naturally, the longer the time it takes for products to reach the market, the greater the differential profit.

In the United States, the price of gasoline has risen by 65% ​​since January. In a country where public transport is non-existent outside major cities and workers are forced to drive to work, the situation is dire. We are dealing with a system of swindlers that has expanded with the shift to neoliberalism and the abandonment of all state oversight. Fraud has always been a part of bourgeois society, just as that society is based on the exploitation of the proletariat and oppression in general, but in this historical phase, its unscrupulous use has grown out of all proportion.

Let us turn to an analysis of industrial production indices, first and foremost those of the United States, the world’s leading imperialist power, though one closely followed by Chinese imperialism.

After sluggish industrial growth of 0.2% and 0.3% in 2023 and 2024, respectively, there is a sudden shift to 1.1% growth in 2025. Of course, during the ”Thirty Glorious Years,” such a ”leap” would have seemed meager! Looking at the monthly indices, figures have hovered around 1% since January 2025, with peaks of 1.9% and lows of 0.7%. As is well known, industrial output is driven by hydrocarbon production, with the United States having become the leading producer, as well as by massive investments in AI.

However, if one considers the total growth of industrial production in 2025 relative to the peak reached in 2007, the result is a meager 2.2%, corresponding to an average annual growth rate of 0.12% over 18 years. Hydrocarbon extraction and the AI ​​boom have not, therefore, produced any miracle. Furthermore, looking at manufacturing output, 2023 shows a 7.6% decline compared to 2007; in other words, manufacturing production in 2023 was 7.6% lower than in 2007. The situation in the United States is comparable to that of other established imperialist nations, such as Japan, the UK, Germany, France, and Italy (not to mention Russia), resulting in a relative decline in their share of global industry, which drives the resort to military force to restore hegemony. During the ”Thirty Glorious Years,” American hegemony rested primarily on economic, and thus industrial, might; today, however, following its decline, the US is forced to use military force to reassert its dominance over the Americas and the Middle East, thereby laying bare its own weakness. This has not gone unnoticed by its partner and rival, which is quietly awaiting the opportune moment to establish itself as the new master: Chinese imperialism, the new vampire, is poised to replace the old one.

Let us now consider industrial production in European countries. The accompanying table shows that, with the exception of Belgium, which benefited from the dynamic growth of Flanders, all these nations are trailing behind the peak levels reached in 2007. Industrial output in Portugal plummeted by 22% compared to 2007, and by 21.8% in Spain, while Italy recorded a staggering 24.1% decline. The United Kingdom followed a similar trend with a 22.2% drop (these figures refer to 2024; data for 2025 will be provided later in this study). Japan was no exception, posting a 17.8% decline. Germany and France fared better, with drops of 10.5% and 11.6%, respectively. However, we harbor serious doubts regarding the figures for France, given its deindustrialization and the massive offshoring of operations carried out by the French business class since the early 2000s; one would expect to see a decline much closer to that of Italy. To assess this, we will base our analysis on the physical output of key sectors.

Data regarding indebtedness, both public and private, which is colossal, have not been included here.

In conclusion.

For half a century, global capitalism has managed to sustain itself thanks to the development of capitalism in Southeast Asia, particularly in China, and to massive offshoring to countries with low labor costs (such as China, Vietnam, India, and Mexico, as well as Eastern Europe, Turkey, and, to a lesser extent, Morocco and Tunisia). The price paid for this has been a reckless rush toward massive indebtedness, alongside the growing precariousness and impoverishment of the proletariat.

However, capitalism is reaching the end of this cycle and approaching the moment when the entire house of cards will collapse. For nations, rising indebtedness translates into an increasingly burdensome debt-service cost within their budgets and a need for massive debt refinancing on international markets. For instance, the United States will need to borrow $900 billion from the market over the next five months. A time will come when securing such loans becomes increasingly impossible, or comes at exorbitant costs, forcing some nations into default. At that point, it will be a case of ”every man for himself.”

At the same time, the relative decline of old imperialist states and the rise of new imperialist powers, foremost among them China, lead to growing instability, which is exacerbated by the crisis of capital. The global crisis of capitalism leads to a proliferation of conflicts and pushes imperialist states, slowly but inexorably, toward a global conflagration.

What lies ahead: a global crisis, featuring deflation and a collapse of financial assets, as in the 1930s, alongside skyrocketing unemployment and a resurgence of class struggle and the communist movement, or a Third World War? For the moment, the prospect of a global crisis akin to those of 1848 or 1929, occurring prior to the outbreak of a third conflict, remains a very real possibility. And this is the best-case scenario for us, for woe betide us should the Third World War break out before the communist movement has been reborn on an international scale.