The post-global economy



What is developing in the world economy after the crises of 2008 (housing bubble), 2020 (pandemic) and 2022 (Ukraine war)?

The opening of this article is a direct translation of The post-global economy, general title of a set of articles on the future of capitalism, published on the portal Project syndicate, on August 18, 2022. What is presented here is a critique of part of these writings, all of them by system economists. In addition to showing that they appeal to unjustified optimism, we also want to show another perspective on this issue.

What is developing in the world capitalist economy after the crises of 2008 (real estate bubble in the USA) and 2020 (new coronavirus pandemic) and 2022 (Ukraine war)? – here is the big question mark. It is known that, with the partial reversal of the globalization impulse, an important geopolitical change is under way; it is also known that there is a mutation in the way of producing due to a decisive deepening of the computerization of the economic system; it is also known that neo-fascist political currents are growing in many countries, spontaneously – not coordinated. What does the future hold for humanity in the face of such conservative changes in the capitalist mode of production, which is still largely hegemonic?

As has been argued in other texts, capitalism has already entered its sunset. Several structural contradictions can be listed to substantiate and justify this thesis, which is still unusual.[I] The socialization of capital through what is commonly called financial dominance has been subsidized by a transformation in commodity production itself that has been understood by the name of platform capitalism.[ii] As a result, income and wealth have become increasingly concentrated, while, on the other hand, profit, investment and growth rates have tended to fall.

Economic stagnation with concentration of wealth and income – this is the main indication that points to the definitive character of the structural crisis of capitalism. All this – and this indication in particular – has been ignored by system economists who see – without explicitly stating it – capitalism as the end of history. Here is, for example, how portal management Project syndicate presents the problem that animates the texts there: “A succession of shocks over the last decade and a half significantly reversed the dominant international economic trend of the entire post-Cold War era. But even if reports of the death of globalization have been exaggerated, the continued disruptions to trade and production networks present major headaches for governments and businesses around the world.”

Two articles stand out from a set of six and they are quite optimistic in characterizing the future – the other four address collateral issues. One of them, written by André Velasco, professor at London School of Economics, believes that a mitigated globalization will be born, at the same time more sustainable and more lasting. The other, Dani Rodrik, a professor at Harvard University, thinks a new consensus is forming around what he calls "productivism."

According to this supposed “consensus”, countries will return to taking care of their own real economy to the detriment of the emphasis on finance: “work and localism instead of financialization, consumerism instead of globalism” – he says, without blushing and with a good dose of excitement – ​​possibly. The first predicts the continuation of neoliberalism in the coming decades of the XNUMXst century and the second believes in the emergence of a new Keynesianism.

As is known, there is extreme concentration of power in the world: the US and its NATO partners centralize an impressive set of productive, financial, military, etc. forces. unparalleled in history. Now, this hegemony does not prevent the extroversion of contradictions that subsist in the structure of relations between nations.

Today, the formation of two antagonistic blocs is clearly outlined, which from now on will not only be in economic competition, but also in a cold and even hot war between themselves. Behold, a trend towards economic unification of the world as a whole is being replaced by another geopolitical configuration that is much more dangerous. In addition to the bloc nucleated by the US, another is in the process of being constituted through the union between China and Russia, with possible accession by other countries.

Despite the stench of this conflict, which threatens the very existence of humanity – atomic war has once again become possible – the two orthodox economists mentioned prefer that their writings exhale the perfume of imaginary hope. But after all, what arguments do they add to support their positions that speak of the advent of a better globalization than the one now in the process of reversal? It can be seen that they do not just ignore the geopolitical conflict, but also the environmental crisis that plagues humanity, as well as the great stagnation that has been undermining the traditional dynamism of capitalism since 1987.

Andrés Velasco believes that “a worldwide escalation of tariffs and quotas will not occur, for the simple reason that voters do not want it to happen”. In making this silly claim, he is thinking of the period between 1914 and 1945, lying between the first two waves of globalization, when widespread protectionism produced a decrease in the overall volume of world trade. But, above all, it ignores the structural and dynamic imperatives of the capitalist mode of production that sometimes, despite the agents' intentions, lead to expansion and, sometimes, to contraction and crisis.

For this author, a new golden age is still far ahead in a time that will still be history: "three major changes are about to happen in world trade and none of them implies deglobalization": the first would be a rapid reconfiguration of supply chains global offer; the second would be a shift from trade in goods to trade in services, which would benefit from the inherently expansive global computer networks for communication and information; the third would be political, since the ongoing transformations suitably shape the interest and action of governments that supposedly tend to be guided by rationality.

Dani Rodrik, in turn, now assumes, in the economic scene of the economists of the system, the role of the bourgeois gentleman (an oxymoron), that is, of Mr. Jourdan, central figure in Molière's famous comedy-bale. For, even though he is a Turkish and peripheral economist, he makes an effort to appear as a liberal economist at the center of the system. And, in this desideratum, he seeks to maintain a differential mark in the constellation of the orthodox: here he proposes that capitalism needs to become a humanist system that will propitiate the common good and the private good of all.

It is interesting to quote him here at greater length: “Today we are in the midst of a transition away from neoliberalism; however, what will replace it is still highly uncertain. The absence of a solidified new paradigm is not necessarily bad. We don't need another orthodoxy that offers simple solutions and ready-made blueprints for countries and regions with different circumstances and needs. Economic policy must be guided by an encouraging vision. History suggests that the vacuum left by neoliberalism will soon be filled by a new paradigm that will eventually need support across the political spectrum. Such an outcome may seem impossible given the current political polarization. In fact, there are already signs of convergence”.

He calls this new paradigm “productivism”. Unlike what happened in the last four hundred years, now capitalism – according to him – will be concerned with the dissemination of economic opportunities to all regions of the planet and to all segments of the workforce. Instead of the sabotage of democracy carried out by neoliberalism, productivism will give a very significant role to the proposals that come from civil society. It will not be oriented by the market or large corporations or finance, but by local communities, that is, by the voice of the people. It will thus privilege the common good and, in particular, democracy.

Well, the future accepts any opinion, even if it is characterized by a lack of realism, that is, in fact, by lubricating fantasies. It is known that myths arise in the minds of those frustrated with the way things are going. As is well known, the optimism of the economists of the system can currently be opposed by a radical pessimism: what the future presents now for the unfolding of human history on the face of the earth would be – simply and definitively – extinction. Here, in order not to fall into quietism, we will stick with the perspective announced by a book in preparation by Alex Callinicos, whose title summarizes his main thesis: humanity is entering “a new era of catastrophe”. It is urgent to change the course of things.

As is quite obvious, he is inspired by Eric Hobsbawm, the great historian of capitalism, who characterized the period between 1914 and 1945 as a calamitous era. In those thirty years, there were two world wars and they were interspersed by the great depression of the 1930s, which began with the great crisis of 1929; In the midst of this disastrous situation, the rise and defeat of fascism and Nazism took place, as well as the Russian and Chinese revolutions that shook the world, without being able to avoid the subsequent return of capitalism in these two great nations.

According to Alex Callinicos, the current situation is characterized by a multidimensional crisis that appears, simultaneously, as an ecological crisis, an economic depression, a political crisis and, finally, a geopolitical disarrangement: “The ecological crisis is shown by the increasing breakdown of the balance dynamic between the evolution of human civilization guided by the capitalist mode of production and the environmental conditions that support it. An indicative list of this rupture relates to climate change caused by the use of fossil energy, the coming of pandemics such as the new coronavirus, the acidification and pollution of the oceans, the destruction of the last forests, etc.”.

The economic calamity itself was characterized by Michael Roberts as a "long depression". After the golden period of capitalism after the Second World War, the seventies of the last century saw ten turbulent years due to a dramatic drop in the rate of profit and the oil shocks; after the neoliberal recovery between 1982 and 1997, the world economy saw profit rates fall again, progressively; it has also seen growth rates plummet decade after decade. In addition, it has seen several crises, among which it is worth mentioning the real estate crisis of 1990 in Japan and that of 2008 in the United States. Now one can clearly see the exhaustion of neoliberal economic policies, which for the time being do not want to disappear – behold, there does not seem to be a viable alternative from the point of view of profitability and capital accumulation.

On the geopolitical level, the growing rivalry between the United States of America and its allies and the recent defensive alliance between China and Russia are evident. Now, the situation tending to chaos is not manifested only in the straining of economic relations, but it can also reach and in fact has already reached the military level. The war in Ukraine, in which the two largest nuclear powers face each other indirectly, the skirmishes over the island of Taiwan, the permanent state of war in the Middle East, all this attests to and illustrates a breakdown in the interaction between nations of a world which had gone through an intense process of globalization in recent decades.

Finally, on the political level, the world is now witnessing a new rise of the ultra-right, extreme neoliberalism and neo-fascism, in many countries simultaneously. As a result, it can be seen that the disorders produced by the contemporary crisis of capitalism have been better exploited by conservative forces than by radical leftist forces. The former want to maintain the disastrous historical legacy at any cost and through violence if necessary, the latter seek a transformation, less now through revolutionary insurrection than a radical transformation guided by democratic socialism.

As has been argued in other posts based on Murray Smith's theses,[iii] one is in the presence of the twilight of capitalism. Behold, there are sharpenings of various contradictions in the economic, geopolitical, ecological dimensions, which mark the final stage of capitalist development. Discussions around what has been called techno-feudalism denote that a radical change in the way of producing is underway, which competes with the decisive process of socialization of capital that has been called financialization or financial dominance.

All of this will certainly be highlighted by Alex Callinicos in his new book. In any case, the future of humanity under the capitalist mode of production does not appear in the present historical moment, being realistic, “laughing and frank”. There is, however, nothing to celebrate in the current course of social processes, which has already been characterized as “the great folly”.[iv]

* Eleutério FS Prado is a full and senior professor at the Department of Economics at USP. Author, among other books, of From the logic of the critique of political economy (Ed. anti-capital fights).



[I] See Prado, Eleutério FS – Financial dominance in the sunset of capitalism. the earth is round, posted on 16/08/2022.

[ii] See Prado, Eleuterio FS – About techno-feudalism. the earth is round, posted on 04/04/2021.

[iii] Smith, Murray EG – Invisible leviathan – Marx's law of value in the twilight of capitalism. Chicago: Haymarket Books, 2018.

[iv] Ghosh, Amitav – The great folly – climate change and the unthinkable. São Paulo: Quina, 2022.

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