Last year, Jason Hickel and Dylan Sullivan published an article in Al-Jazeera chalking American belligerence toward China up to two factors: an increase in Chinese wages eroding the profitability of foreign investment and the rise of native Chinese industry threatening western monopolies over advanced digital technology, energy generation, automobile manufacturing, biotechnology and robotics. Since western-dominated global capitalism has shown an uncanny ability to offshore capital and relocate investment in low-wage countries, it is undoubtedly China’s threat to monopoly capitalism that has western governments especially concerned.
The ability to export capital and extract profits from the cheap labour and resources in the Global South has been an extremely lucrative racket for the advanced imperial core countries. $152 trillion was transferred from the developing world to advanced capitalist countries between 1960 and 2021.
This racket has worked for centuries, ever since Columbus landed on Caribbean shores. It has evolved from outright theft of land and gold, into more sophisticated neocolonial arrangements which harness sweatshop labour and mine resources for sophisticated products stamped with western corporate logos and sold the world over.
The result has been a river of profits pouring into Europe and the United States, soaking elephantine financial industries and buoying astronomical stock market valuations. But that river only flows so long as the aggregate of advanced technology, patents, licences, designs and money-capital remains steadfast with western corporate headquarters.
China’s entry onto the stage of high value production does not simply add a new player to the game—it threatens to flip over the board. America is staring down hundreds of billions of dollars worth of potentially stranded assets invested in the AI sector alone.
China’s Marxian approach to economics has led them to force-feed their supply chain with an abundance of rare earths and critical minerals, renewable energy, steel, electric vehicles and batteries, artificial intelligence platforms, drones, pharmaceutical products and high speed trains. In a bid to transform quantity into quality, China is converting the lucrative monopoly industries of the past into at-cost utilities for the present. And they are squeezing western corporations out of the global market in the process.
This context is the key to understanding the posture of NATO countries as they pursue rearmament in unison: Trump is demanding a 50% hike to an already-bloated trillion dollar military budget, Canada has signed $100 billion contract for submarines, the UK will dispense an extra £63 billion, Germany has approved a 33% rise in weapons spending, France has committed $500 billion more to its military by 2030—it goes on and on like this. With Russia pinned down by the quagmire of Ukraine, it beggars belief that these trillions of additional dollars are being earmarked to counter threats from Moscow. Western leaders hold their citizenry in contempt when making this claim.
If human society was governed by anything but the ruling class interests that Karl Marx described, the dawning reality of a new global economy would have spurred a movement toward cooperation, integration with the Belt and Road Initiative and major political and economic reforms adjusting to the new landscape. After all, the people of the West could benefit from low-cost advanced technology, public banks, renewable energy and rational economic planning at the highest levels. But the momentum behind centuries of imperial accumulation does not dissipate like the heat of lightning when the clouds break.
So long as warfare and financial speculation lines the pockets of the powers-that-be, ungodly sums will continue to be extracted from the working class and put into the service of a western oligarchy determined to break China’s back. Only then can swarms of cheap labour return to East Asia and US corporate monopolies be assured.
The problems with all of this are legion. What worked yesterday is not always destined to work tomorrow and we are fast approaching a night when tomorrow does not come. Western morality was buried under rubble alongside the bodies of Gaza’s children and the illusion of military supremacy was sunk to bottom of the Persian Gulf. If Iran is the canary in the coal mine, it is clear that all of these billions dumped into offensive weaponry will not yield the surplus required for imperial capitalism to maintain itself.1 In a dialectical reversal for the ages, the quest for self-preservation puts western capitalism on the express path to terminal crisis.
China has been described as the factory of the world and it would be prudent to now call it the world’s laboratory and power plant as well. Never mind that going to war with such a formidable power would obviously be unwinnable and catastrophic—it well could happen given the incredibly low calibre of people running the Occidental show. When it comes to protecting their property, history demonstrates that the oligarchy is always willing to fight to the last working class man. As David Harvey pointed out in The Limits of Capital:
Capitalism is stabilized through the defence budget, albeit in ways that rob society of more humane and socially worthwhile programmes. But the present theory suggests a rather more sinister and terrifying interpretation of military expenditures: not only must weapons be bought and paid for out of surpluses of capital and labour, but they must also be put to use.2
The collapse of the western economy necessarily entails an enormous loss of property on the most rarefied rungs of capital ownership—and this is the good news. If we’re lucky it will happen before an apocalyptic war can commence. Marx wrote that “the violent destruction of capital as a condition of its self-preservation is the most striking form in which advice is given it to be gone and to give room to a higher state of social production.”3 The collapse will not be where the fight for our future ends. It will be where it begins.
Thanks for reading!
In Seventeen Contradictions and the End of Capitalism (Oxford University Press, 2014): 40, David Harvey recounts other modes of production that have disappeared by failure to generate surplus. ↩︎
David Harvey, The Limits of Capital (Verso, 2018): 445. ↩︎
Karl Marx, Grundrisse (Penguin, 1993): 749-50. ↩︎