Introduction

Two recent articles in this publication prove its continued worth as a space for frank but respectful Marxist discourse. Nicolas Villareal and Julian Assele each offer a reading of the central maladies of late capitalist or neoliberal society, advancing a political-economic and historical-sociological argument respectively that I found even more valuable when brought together. If we combine their critiques and extrapolate their reasoning, these pieces point the way to what a world beyond the current ‘interregnum’ might look like.^[1]

While I would bet that Assele and Villareal disagree sharply in their prescriptions, both authors grapple with a historical transition that remains unresolved; neoliberalism may be on the way out, or at least mutating into a more erratic form, but the mass-less society it spawned in its wake is alive and well, and remains a continuing source of discomfort for the organized Left. The past four decades of revolt have given rise to only a few peripheral ‘zones of autonomy’, most of which are absorbed into the world system as quickly as they arrive. Though even the ephemeral Paris Commune was sufficient to give the First Internationale some sense of what they were working towards, we lack any such rallying point.

For now, we must conclude that the political economy of whatever succeeds neoliberalism will not be ours to create. To learn what it will be like, Villareal’s article helpfully presents an extrapolation in line with Marxist expectations: cyclical crises punctuate a long-term decline in profitability, resulting in a growing need for the socialization of production that drives all powers towards state capitalism. There is a supreme irony to the idea that the Chinese Communist Party is a greater steward of Capital than America’s own capitalist class, but the line of reasoning which takes Villareal to that conclusion is well made. On the whole, his argument allows us to identify neoliberalism as the ‘penultimate’ stage of capitalism, by both meanings of that adjective: not only did it represent the most rapacious and audacious aspects of capitalist society in its American and Chinese forms respectively, but it also marked the beginning of the end for capitalism as such.

As for Assele, his piece reminds us that neoliberalism of the US kind was neither a ‘choice’ in the way that Villareal would frame it, nor was it a historical inevitability. It was and remains the result of classes clashing, with the working class losing what little institutional power it had gained as part of the mid-century corporatist consensus. Assele also points out that state-organized labor sold out its peripheral elements to get where it did, a bifurcation which expressed itself as racialization in an American context, but which can also be recognized in the contemporaneous European dichotomy between the young and precarious and the old and established. (It hardly needs pointing out that the relation between the Old and New Left has its roots in the same intra-class dynamic.) One could even compare it to the war between pro-party and anti-party militias during the Cultural Revolution; though very different from an economic perspective, the basic conflict between a state enforcing social peace and a peripheral element rioting against it still resonated with the global New Left, however partial its understanding of these events. For our purposes, what matters about all of these examples is that the ruling class could not freely choose the shape of the new political economy; before it could find the best way to keep making money, it had to actively deny those forces which risked upsetting the applecart, demobilizing its opponents through criminalization and debt-based discipline. Had this struggle gone the other way, in whole or in part, another world would have come about.

The Keynesian Mirage

This suggestion of a lost alternative is just another reason why so much contemporary critique converges on the 1970s. As a period of transition, the kind where ruling and ruled classes both lose the comfort of old models and arrangements, it contains a great sense of potential as well as frustration. Looking back on such a liminal time may cause many to suspect that History itself took a wrong turn, even if they don't recognize this ‘wrongness’ as a result of class struggle. What makes the 1970s especially curious in this regard is that even a part of the political class found itself among the disappointed. Late-stage New Dealers like Hubert Humphrey proposed to resolve the era’s polycrisis through full employment and economic planning, both ways of broadening the scope of America’s welfare state and extending it to those who had been previously excluded.^[2] Befitting their Keynesian orthodoxy, such progressives hoped to preserve the class coalition of the capitalist golden age for just a little longer, convinced that a universal utopia was just around the corner if only the organs of civil society could be made to see its pragmatic humanist potential.

Could such a world really have existed? If so, this would cast the historical necessity of neoliberalism into doubt, and with it some portion of the analyses I’m responding to. It is therefore fortunate that, in spite of the dreams of nostalgic social democrats, the post-war class coalition could never have been sustained indefinitely. Not only would its preservation have forced the capitalist class into further concentration, as per the trajectory laid out by Villareal, but policies such as full employment or a basic income would have strengthened the bargaining power of the working class, effectively eliminating the reserve army of labor as a disciplinary force. This alone could have been sufficient to throw class coalition capitalism out of balance, this time to the benefit of Labor, and the ambition of the working class would have only grown with its increased security.

For a sense of where the continuation of mid-century corporatism could have taken the world, we can take the past fifty years of Argentinian history as our example. Here, the protectionist tendencies of the Peronist establishment led it to maintain the pact between Labor and (National-Industrial) Capital for far longer than was the case elsewhere, including a distinctly left-wing form during the Kirchner years.^[3] Though this configuration arguably benefited the Argentinian worker—albeit at the cost of incessant economic volatility and periodic bouts of authoritarianism—it could never have served the interests of a distinctly international capitalist class.

This latter observation serves as the true death knell of the Keynesian Dream. Even if a particular country’s ruling class would be willing to stomach the cost of class peace and/or high investment rates indefinitely, the international order would compel it to act otherwise. The overdevelopment of the productive forces is no joke, and the increasing ease with which all of the world can be furnished with what it needs (or rather, what it can effectively dispose of) makes it so that any new cycle of accumulation—usually centered on regions and technologies unburdened by sunk cost or path dependency—proves less potent than the last. Crisis can temporarily alleviate this chronic issue of overcapacity, but the more that obsolescent manufacturers try to forestall that crisis, the worse it gets for everyone.^[4]Any way of insulating oneself from this cycle of creative destruction and reinvestment, perhaps by becoming the world’s rentier, may as well be irresistible.

The logic laid out above has two important implications. First, it suggests that contemporary China could be the last of the capital-accumulating hegemons, as not even the most greenfield alternative would be worth investing in if another round of accumulation were to take place. Secondly, it implies that any hegemon who isn't last in line had best get out of the manufacturing game altogether, instead using its accumulated military and financial power to extract a rent from the rest of the world's efforts. Unsurprisingly, this is exactly what the US did as part of the neoliberal transition, dragging Britain along with it due to its importance to global finance. Even when the US did try to protect its own manufacturing, devaluing the dollar in relation to rival currencies like the yen, it did not halt this tendency towards industrialization. All it did was plunge Japan’s economy into a stagnation from which it arguably never recovered, a preview perhaps of the general fate of overdeveloped economies.^[5]

All in all, it's more than fair for Villareal to claim that the American capitalist class saved its own skin by sacrificing its industrial supremacy. At the same time, I would not describe this as a ‘choice’, as the alternative would have been worse for capitalists the world over. Had the US not relented, the countries of Europe would have been unable to walk their path of mild neoliberalism mixed with continuous investment, forced instead to commit to the most intense forms of socialized production to make sure they would win out. While this would have fit the logic of accumulation that has ruled history for the past two centuries, it is not as if history keeps the same pace at all times. If the relative sloth of American capitalists allowed the rest of the world to breathe a little easier, that may as well be taken as a natural part of the process, instead of a local deviation in the way that Villareal frames it.

But what of the future? If our analyses can only take us to the present, they can do little but prove us right after the fact. Instead, there are important questions to be asked and hopefully answered. For if it is true that the neoliberal era saw the US ruling class resort to imperialist rent-seeking instead of self-discipline, what can they do as their hegemony collapses around them? And as for China, although the ‘moderately prosperous society’ remains a realizable prospect, will there not come a moment where its own worker/producer-to-professional/consumer pipeline breaks down in the manner of the late New Deal era? These are the questions the rest of this piece will address.^[6]

America The Baleful

It should be clear by now that the old regimes of accumulation are no longer adequate, neither the false smile of class coalition corporatism nor the rictus grin of public-private neoliberalism. Indeed, the issue increasingly becomes whether accumulation as such, the constant growth in economic activity and productive capacity on which the reproduction of capitalist society depends, has not passed its logical endpoint. Terminal stagnation is an all-too-real prospect as ecological shortcomings and economic surpluses hamper profitability at both ends of the equation. Worse yet, the inability for large parts of the global workforce to be gainfully employed raises the specter of a permanent surplus population in both the core and periphery. These are the conditions which any intellectual or revolutionary worth their salt must address.

In considering the impact of these developments on specific parts of the world system, it is the United States that very well may suffer the broadest and strangest range of potential outcomes. The present drive towards a nakedly imperialist kleptocracy is one we should take seriously, as it could do considerable damage in the short to medium term using the residual military and financial power of the American state. At the same time, it cannot overcome its fundamental overextension, and every new conflict will only exacerbate this. Though no collapse on the level of 1991 is expected, the endgame could still be similar, with the US becoming an immiserated regional power dependent on the performance of a few residual industries like fossil resource extraction. So long as no foreign powers intrude on its immediate sphere of influence—currently being carved out of the Caribbean by the maneuvers against Cuba and Venezuela—the US would become one of several poles of an unsteady world order. Internally, however, losing the financial hegemony which effectively subsidized American deficits in trade and government spending would be a fundamental blow to the nation’s social fabric, and the Russian example gives us many examples of where such miseries might lead.

Another possibility, far more speculative altogether, would see the US accept the new multipolar order wholeheartedly and work to make it a cooperative one. This would effectively make it a junior partner to China’s international efforts, similar to the UK’s “special relationship”, although the balance between them would be closer to an equal partnership than a clear vassalage. The benefits from such an arrangement would come from complementing rather than competing with China’s success in areas like solar and transport infrastructure, importing these techniques in exchange for America’s own remaining advantages, if not the pacification of US empire itself. To fund this developmentalist turn, capitalist consumption would have to be sharply curtailed along the lines set out by Villareal, along with a general redirection of funds out of the most parasitic parts of the rent-seeking US economy. This in turn would require an increase in state capacity over and above the Roosevelt era, along with a near-total turnover in the US ruling class that only a calamity of existential proportions could generate. Its ideological component would be far easier to bring together, finding fertile ground in the widespread animosity against the so-called “Epstein class”. Given its highly speculative nature, however, we can only guess at the specific forms such a statist, populist, yet strangely sinophilic configuration would take.

These two scenarios are not taken from nowhere. While responding to conditions likely to come about in the next few decades, they are also patterned on the volatile fortunes of stagnant middle-income countries, of which the nations of Latin America are a prime example. The immanent dialectic between the two meanings of “America” is well-trod ground, and though not always marked by one-sided domination, it did keep much of the Americas in a state of arrested development.^[7] Were this pressure to fall away with the terminal decline of US empire, perhaps Latin America could have its day in the sun, producing an ironic mirroring of a familiar dynamic. Just as importantly, its reduction to the status of a secondary power would force the US to learn the methods of proper multilateralism, and here the history of its southern neighbors could prove instructive rather than ironic. Either way, the tradition which has long treated the US as a ‘first among equals’ with regard to its Latin American or European counterparts would be well and truly dead.

Finally, there is always the possibility that American society breaks before it bends to the new reality. While prognostications about a Second American Civil War are yet excessive, there’s an entire spectrum of ungovernability which a society in crisis can encounter. Judging by the campaign of distributed terror waged by the formal and informal recruits of the Trump coalition, something like the Italian ‘Years of Lead’ can well be said to afflict the US at present. However, unlike the ‘strategy of tension’ which reinforced establishment power by propping up external threats, this regime has ceded the need for plausible deniability and employed such terror directly. The blatant nature of this campaign is what has set the politically moderate middle class—previously a reliable engine of carceralization, as per Assele—against the intrusions of a federal, anonymized, and generally unaccountable police force. As Assele also points out, the alliance that has resulted between the aggrieved middle classes and the racialized proletarians they both care for and exploit is inherently fragile. Even a return to Biden’s cruel but controlled migration policy would do the trick. On the other hand, should the onslaught of state-sponsored violence linger or even worsen, the growing rift between state and federal authorities, with opportunistic local law enforcers proclaiming their innocence, may well become a permanent crisis of ungovernability. Although regional separatism has no strong roots in the US outside of the abortive Confederacy, history teaches us that minor distinctions can rapidly turn into national antagonisms if the surrounding socio-economic pressures are severe enough. In the worst-case scenario, then, a civil war would not even be worth the effort. So long as federal forces continue to atrophy through fruitless acts of imperialism, the reach of Washington may reach no further than that of Beijing in the 1910s, a regime that only the most loyal regions opt into.

Whither China?

Compared to this cavalcade of potential catastrophes, the fate of China in the 21st century may as well be considered utopian. As the US lurches from one self-destructive conflict to another, it sure looks like China will be able to win this century’s great game by effectively doing nothing. Even then, it is no more immune to the long-term predicament of capitalist accumulation itself than any other link in the global value chain. As noted before, beyond the cyclical crises of economic boom and bust we find a secular tendency towards lower peaks and deeper troughs, with a constant and desperate search for new markets to dump excess products and build better industries. China was in this sense the keystone to neoliberalism, the opportunity for profitable investment and cheaper goods which Western elites required to keep themselves intact. By now, however, China is more than capable of investing in itself and for itself, building the domestic professional-consumer base it would need to rebuild the world to its liking. The days where ‘made in China’ meant subpar quality and sweatshop conditions are long past, in reality if not in popular culture.

The main question, then, is to what extent China can grow before a developmental maturity crisis akin to America’s 1970s causes all of its grandiose capacities to level off. What is especially troublesome in this context is that China would lack its own “China”, a convenient offshore opportunity to offset its own profitability crisis. Moreover, given the technically advanced nature of Chinese industry, some manner of ‘premature deindustrialization’ may already be in evidence, preventing the general foundation of a middle class enabled by mass-based industrialization.^[8] The looming demographic crisis can only exacerbate this tendency, with the actually productive part of the Chinese workforce growing smaller and smaller as a result.

Insofar as there is a counter to these fundamental problems of capital accumulation, everything will depend on the considerable state capacity which built and was built by China’s present successes. Much has been made of the durability of the CPC’s “consultative Leninism”, but something more than consultation will be needed as the rising tide stops lifting all boats, and questions of wealth distribution and actual worker power come to the fore. That the capitalist class has so far remained caged is fortunate, but even a strictly political ruling class cannot be expected to cheer on its own replacement or obsolescence, not even for the sake of socialism. If party elites refuse to get back on the socialist road, though, they may well fragment on the basis of more narrow sectoral interests, with competing kinds of capital using the fig leaf of liberalization to negotiate their differences publicly. The wild card in this game will be the Chinese working class itself, which will soon have to wage the same battle for autonomy in the face of decomposition that the Western proletariat lost in the transition to neoliberalism. How the CPC will respond to such pressures from below will make all the difference in how the retrospectives on state socialism will be written by the end of this century, as by then the viability of this developmental model will have been well and truly (dis)proven.

Conclusion

That so much of our future comes down to a question of class is no bold claim. We should all be familiar with the jumbled, precarious, and ever more unemployable nature of the global working class. What remains to be seen is whether and how this class can recompose itself for itself. Though the reasons to do so are plentiful and the means have been thoroughly theorized, it will likely take a few more ‘unfortunate events’ on the order of the pandemic or the war (Which one? Take your pick) before the new structure of revolt will become apparent.

In the meantime, I hope I have provided a sense of where this discombobulated world-system is headed on the basis of its own inertia, at least if we take the US and China to be the primary forces in play. There is always a chance, however slim, that the EU gets its act together and delivers on the potential of a unified European economy. We could also see the wheel of accumulation turn a little further than I have assumed here, allowing India or ASEAN to become genuine world powers. But none of these possibilities can overcome the fundamental stagnation of all parts of the world economy to be expected by the middle of this century. Even the miraculous relief from scarcity promised by technologies like nuclear fusion or space mining could only exacerbate the crisis of (potential) overcapacity which already appears chronic.

This, then, is the water we swim in, or rather the pot which is being brought to a boil. The one ingredient yet unaccounted for is us, the poor frogs who must jump all at once to make it out of our predicament. I would not presume to prescribe the exact form the next wave of counterpower will take; perhaps its beginnings are simply what we see all around us. In any case, I do not share Assele’s implicit skepticism of the growing coalition in the US between a racialized proletariat and an outraged middle class, an alignment which is partly mirrored within leftist organizations like the DSA. While certainly troublesome in its hypocrisy and fragility, it cannot meet the same fate as the old student-worker alliances of the 60s and 70s. The latter fell to the allure of professionalization, the students becoming the workers’ overseers within the new carceral configuration. But “selling out” in this manner is simply not possible anymore, with the best deal on offer being a spin at the roulette wheel of cryptocurrency and prediction markets. The force of recuperation which troubled theorists from Debord to Fisher no longer seems so potent, perhaps to be replaced by a Sinocentric equivalent. Will America as a whole soon be entering its Chinese era? I’d be eager to find out.

1. Although I use the term ‘interregnum’ to describe the liminality of the contemporary world-system, its use in a more specific political context is also common, as per https://theanarchistlibrary.org/library/your-lazy-comrades-the-interregnum

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2. For a poignant example of how far the Overton Window on economic planning has shifted since the end of High Keynesianism, see https://youtu.be/-vV1FD8gCuI?is=rcigglqGi2ABwaMM

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3. Notably, the left-wing Peronism represented by the Kirchners only came about after a more radical campaign of workplace occupations and general democratic assemblies had run its course. See https://workingclasshistory.com/podcast/e115-116-argentina-uprising-2001/

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4. The exact relation between (potential) overcapacity and stagnation is a source of disagreement among political economists. Whereas Robert Brenner and others argue that the US and other older industrial powers have not deindustrialized enough to relieve overcapacity, it can also be argued that the financialization of the US economy allowed for the slowdown in reinvestment elsewhere. I find the latter reading to be more persuasive.

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5. As for how Japan has managed its terminal stagnation over the past thirty years, Jacobin has two instructive articles on the matter: https://jacobin.com/2023/07/japan-economic-stagnation-shinzo-abe-liberal-democratic-party-militarism-politics and https://jacobin.com/2025/04/japanification-trump-trade-war-economy

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6. For a more elaborate description of these conditions, see Jamie Merchant’s Endgame: Economic Nationalism and Global Decline

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7. The history of this ‘immanent dialectic’ between the US and Latin America has recently been rendered wonderfully by Greg Grandin in his America, América

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8. Phil Neel, “Broken Circle: Premature Deindustrialization, Chinese Capital Exports, and the Stumbling Development of New Territorial Industrial Complexes ,” International Labor and Working-Class History 102 (2022): 94–123. https://doi.org/10.1017/S0147547922000321.

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