History’s Greatest Crisis Has Begun

The current capitalist crisis is unprecedented in the history of our species both in its impact and its reach, argues Neil Faulkner.

26 June 2020

When the second edition of my Radical History of the World came out in 2018, the last chapter was entitled ‘Capitalism’s Greatest Crisis?’ The question-mark was because I couldn’t decide quite how serious it was.

I no longer need the question-mark. I am now certain this is bigger than anything we have seen before – the biggest crisis in the history of our species. That’s because all previous crises were limited in both impact and reach.

That is obviously true of crises in prehistory, antiquity, and the medieval period. That is because no social system at the time was global. But it is also true of all previous capitalist crises – and capitalism has been, since the 16th century, a global system.

The most frequent point of comparison is with the 1930s. But at the time a huge proportion of the world’s population were subsistence peasants, and they weren’t really affected at all. And whole sectors of the more developed world experienced a boom.

Stalinist Russia experienced no depression at all. The opposite: following a state-capitalist model of primitive accumulation (the ‘Five Year Plans’), the Russian economy grew at a phenomenal rate throughout the decade.

The Nazi regime in Germany also adopted a form of state-driven (and ‘autarkic’) economic expansion. In consequence, there was full employment in Germany by the end of the 1930s

Even in Britain, where much of the economy remained stagnant throughout the decade, there were new industries, like motors and aerospace, new suburbs, especially in Outer London, and a new middle-class consumerism.

Even in the 1970s – when, in any case, the crisis was never so deep as in the 1930s – the reach of the world capitalist system was still less than total. For sure, the multinationals were dominant, international trade was essential, and imperialist powers used military force to protect corporate interests overseas. But a large proportion of the populations of Asia, Africa, and Latin America were still essentially subsistence farmers.

The last 40 years have been transformative. All of us old enough to remember back as far as the 1980s suspect this on the basis of personal experience and anecdotal evidence: we all have the sense that we now inhabit a very different world. That sense is sound.

William Robinson makes a very useful distinction between international capitalism and transnational capitalism. He starts with a very high level of abstraction: Marx’s formula for the process of capital accumulation. It goes like this:

M – C – P – C+ – M+, where M is the money initially invested, C are the commodities (raw materials, machines, labour-power, etc) consumed in production, P is the actual production process, C+ are the new commodities produced, and M+ is the money received when the new commodities are sold (initial investment plus profit).

Under international capitalism, each corporate player, each multinational, remained anchored in one main national centre, where most production took place, so it was mainly capital (M) and commodities (C and C+) that moved around. Under transnational capitalism, an increasing proportion of the global players are TNCs (transnational corporations), where production (P) is also (and increasingly) globalised.

In short, ever more of the giant corporations that dominate the world economy today are investing, selling, and producing in the framework of a single global market.

A second factor is at work. Capitalism is, of course, ‘the self-expansion of value’. It grows exponentially, powered by the drive for profit, each round of accumulation immediately followed by the next on an enlarged scale. Over time, therefore, it eventually penetrates into, and percolates through, all the most distant recesses of the human and natural worlds – seeking resources to extract, labour to exploit, markets to enter.

This process – evident to Marx, of course, who wrote of it in vivid terms in The Communist Manifesto and elsewhere – accelerates as the system expands, and the acceleration in the neoliberal era has been prodigious, driven in part by the system’s chronic problems of over-accumulation and under-consumption. (More on this below.)

What matters here is this: virtually every part of the natural world, and the vast majority of the world’s people, have now been subsumed into the process of world capital accumulation.

Modern capitalism is not only globalised to an unprecedented degree; it has also colonised more completely than ever before the planetary ecosystem and human society. Specifically, a rapid process of proletarianisation on a global scale over the last half century has largely destroyed the traditional peasantry, drawing vast masses into the global labour force, the majority of them condemned to remain ‘precarious’ or ‘surplus’.

This means the contemporary crisis is more globalised than any previous crisis. There are no crisis-free zones in the modern world.

The most extreme expression of this is the climate crisis. Globalisation, the dominance of transnational corporations, the emergence of a system that is beyond the control of nation-states and liberal-democratic structures, means that we are hurtling towards an ecological breakdown that threatens the survival of industrial civilisation in its present form.

These two things – globalised capital accumulation and imminent climate catastrophe – are what convince me that we have entered the greatest crisis in the history of humanity.

The crisis is unfolding in four dimensions. We need to understand each, and how they intersect and interact.

Ecology: pandemic and climate catastrophe

The COVID-19 pandemic is only the latest in a series of pandemics rooted in the practices of modern agribusiness, the existence of slum cities, and rapid transmission through globalised networks.

The current virus is continuing to spread on a global scale, penetrating deeply into societies where social distancing is almost impossible and public-health provision minimal.

Even in parts of the developed world, the negligence and incompetence of neoliberal regimes has allowed the virus to get a grip, kill large numbers of people, and inflict enormous economic damage.

There may be no vaccine any time soon, perhaps ever. The virus may remain embedded, liable to surge again, perhaps in mutated form. Other viruses are almost certain to follow; perhaps, at some point, one even more lethal than COVID-19.

Pandemic is one aspect of a ‘metabolic rift’ which has now opened between the natural world and human activity within it. There are many others, where human activity is causing irreparable damage to the natural environment. But looming climate catastrophe dwarfs them all.

When the UN Climate Change Conference met for the first time in 1995, annual carbon emissions were 26 billion tonnes. They reached 34 billion tonnes in 2010, and hit an all-time high of 37 billion tonnes in 2018.

Accelerating carbon omissions mean: accelerating atmospheric concentrations; accelerating temperature rises; accelerating polar-ice melt and sea-level rise; accelerating climate-change impacts; and accelerating risks of hitting one or more irreversible tipping-points.

Despite 25 years of increasingly urgent international efforts, the climate crisis is accelerating on all measures. On current projections, we will not only miss the 1.5ºC maximum warming target, but are on track for 3ºC of warming, and, in the view of many scientists, a truly devastating 4ºC of warming.

The explanation is simple. The world capitalist system is hard-wired for exponential growth based on an existing fossil-fuel infrastructure. The global political system is fragmented by nation-state rivalries and poisoned by creeping fascism and climate nihilism. Economic logic and political dysfunction combine to prevent effective action.

The implications, moreover, of a transition to a zero-growth, carbon-neutral, ecologically sustainable economy is redistribution of global wealth on a historically unprecedented scale – so as to satisfy the basic needs of the world’s poor. This is inconceivable in the framework of the capitalist system.

Economy: over-accumulation and under-consumption

Capitalism has been sick since the 1970s. In fact, in the 250 years since the Industrial Revolution, there have been only two periods, 1848-73 and 1948-73, when the system has operated at more or less full capacity in a sustained boom. For half a century now, it has experienced sub-optimal growth, if not actual stagnation-slump, due to chronic problems of over-accumulation and under-consumption.

This is not the place for detailed exposition. Suffice to say, the ability of large corporations in monopoly-capitalist conditions to replace labour with machines (digitisation/robotisation), manage markets and fix prices, suppress wages and increase work rates, and manipulate demand to create artificial ‘wants’ has made over-accumulation of capital (and its inevitable corollary, under-consumption by labour) endemic.

The neoliberal counter-revolution – an attempt to smash labour organisation, welfare states, and (in the Third World) national-developmental regimes, so as to redistribute wealth from labour to capital, restore the rate of profit, and open a new phase of accumulation – afforded a brief respite from the immediate impact of the contradictions. But only by exacerbating them in the long run – by driving down further the share of labour in global wealth, thereby deepening the problem of chronic under-consumption.

Neoliberal accumulation has taken the following five overlapping forms, each of which can be seen as capital seeking pathways to accumulation in the context of a chronic problem of over-accumulation/under-consumption in the real economy:


What happens here is that the circuit M – M – M+ (where money is invested in monetary assets to yield a monetary increment) replaces the productive circuit (M – C – M+). Needless to say, this is a wholly parasitic activity, in which fictitious capital becomes a mechanism for hoovering wealth from labour, mainly in the form of debt, to the corporate elite. A huge increase in government, corporate, and household debt has generated an electronic mountain of shares, bonds, derivatives, etc. This trade in debt – ‘the permanent debt economy’ – dwarfs in scale the value of the real productive economy.


Explosive growth in ‘fourth industrial revolution’ communications technology – and a corresponding explosive growth in the corporations that provide it – is a central feature of neoliberal capitalism. It both facilitates a host of other developments (like financialisation, displacement of labour, global supply-chains, and so on), and also becomes in itself a prime investment outlet in a system awash with surplus capital. (One by-product is an epidemic of highly alienated forms of social interaction and mass addiction to social-media trivia.)


There has been a vast increase in state expenditures on the army, the police, the prisons, the borders, etc. The ‘permanent arms economy’ of the Cold War era has been replaced by a new ‘permanent arms economy’ of the War on Terror era (with the definition of ‘terrorist’ endlessly evolving to accommodate new classes of imaginary threats); wars, of course, are highly profitable for the transnational corporations that dominate the global economy. At the same time, social decay, rising inequality, and neoliberalism’s growing crisis of legitimacy necessitates increased investment in internal repression, police militarisation, the prison infrastructure, mass surveillance, etc: another source of highly profitable investment for surplus capital.


State-funded accumulation has assuming growing importance in the neoliberal era. This takes many forms: sale of state assets; state contracts for infrastructure and services; state spending on the military-industrial-security complex; state spending on subsidies and bailouts. In each case, what is happening is that the state is becoming a conduit for revenue flows from labour to capital (as tax revenues – or debts incurred in anticipation of future tax revenues – are recycled into corporate profits). A central feature of globalisation/neoliberalism has been the sell-off of state assets and public services to private capital, and the commodification of all aspects of social life. The creeping privatisation of the NHS and the commodification of university education (in the form of student debt) are obvious examples.

Manipulated consumerism

We can identify five major class fractions in the modern world: the transnational and national bourgeoisie (the 1% in popular discourse); the middle class, the subaltern class of capital, with secure jobs, good remuneration, and comfortable lifestyles (around 15% in a developed economy like Britain); the core working class; the precarious working class; and the surplus working class (the ‘reserve army of labour’). The first two groups, the third to a degree, and the fourth to a limited extent constitute the market for manipulated consumerism. By this I mean the deliberate creation of false needs and wants to generate demand – through branding, packaging, advertising, redesigns, upgrades, and so on.

All these processes have a single purpose: to facilitate new forms of capital accumulation in reaction to the system’s chronic over-accumulation. Virtually all of it is either entirely parasitic or highly wasteful. The gap between real human needs and the irrationality of capital accumulation has never been so great. The proportion of the wealth of the world that is used in a socially useful way is lower than at any time in history.

Society: private greed and mass impoverishment

This requires no detailed exposition here: the evidence is all around us. We have the highest levels of inequality in the distribution of wealth ever known. A mere handful of the world’s richest people hold the same amount of wealth as the poorest half of humanity. The share of the middle class has also increased in the neoliberal era. The share of the global working class (c. 85% of people) has fallen, often in absolute terms, invariably in relative terms, with the precarious and the surplus experiencing exceptional and increasing levels of poverty.

Politics: the rise of nationalism, fascism, and militarism

Class rule depends on coercion and consent – force and fraud. The balance changes. In the post-war era, when living standards were rising and public services improving, a social-democratic ‘welfare’ consensus was prevalent. In the Third World (as it was then called), new independent regimes that adopted a ‘national-developmental’ model also enjoyed large measures of popular consent. The clubs and the guns were usually in reserve.

Globalisation and neoliberalism have shattered both First World (and Second World) ‘welfare’ and Third World ‘national-developmental’ models. Social-democratic ideologies no longer hold sway. Wages are stagnating or falling. Public services are decaying. The lives of most working people are getting worse, not better.

This has two main political consequences: a) the need for an alternative ideology to engender consent; and b) a higher level of coercion/repression. Creeping fascism is therefore an inherent feature of the neoliberal era, and in particular a feature of the neoliberal crisis which began in 2007 and which has now, in 2020, reached a second downward tipping-point.

We are forced to update the theory of creeping fascism, for it no longer creeps, but has emerged as a clear and present danger. The new fascism now takes four forms:

Regime fascism

I refer here to the fact that a raft of states – Xi Jinping’s China, Modi’s India, Trump’s America, Putin’s Russia, Bolsonaro’s Brazil, Erdogan’s Turkey, Orban’s Hungary, Johnson’s Britain – are ruled by far-right regimes peddling nationalism and racism.

Electoral fascism

All these regimes rest upon a large, chauvinist, reactionary social base, usually an electoral bloc which unites sections of the bourgeoisie, the middle class, and the working class. The mechanisms, ideologies, and fracture-lines vary from place to place, but the general pattern is clear. The British model, of course, has been the use of Brexit to drive a nationalist-racist wedge into the working class and split away enough of it to secure a parliamentary majority for the Tory Right following its takeover of the party with the election of Boris Johnson as leader.

Police fascism

This involves the growing militarisation of the police, the growing brutality of police crackdowns on dissent, and the growing use of the police in implementing nationalist-racist repression of minorities. The Modi regime, for example, is building concentration camps in India. Trump has unleashed the police on migrants in the United States, both on the border and internally.

Street fascism

Elements of this have been visible on occasion in Britain over the last few years, with some large fascist mobilisations around Brexit, but it has been more evident elsewhere, including, for example, armed attacks on Roma camps in parts of continental Europe, armed attacks on Muslims by fascist paramilitaries in India, armed fascist demonstrations against lockdown in the United States, and, most recently, the mobilisation of informal fascist militias alongside the police and National Guard against the Black Lives Matter uprising of the urban poor.

What next?

The Black Lives Matter anti-racist upsurge has been a reminder of the powerful currents of discontent that exist across the world. Millions of black and white youth have marched together, in solidarity against racism and police violence, and in many cases have engaged the cops in pitched street battles and set parts of major cities ablaze.

As the current phase of mass struggle subsides – at least for now – we are in evaluation mode. And again we worry that popular movements from below, arising suddenly and as if from nowhere, seem to go up like rockets and come down like sticks. When the demonstrations disperse, the regimes are still in place, the police and fascists are still there, and we are still hurtling towards climate catastrophe and social breakdown.

The veteran Russian revolutionary Leon Trotsky, surveying the global scene in 1938, had this to say:

The economy, the state, the politics of the ruling class and its international relations are completely blighted by a social crisis, characteristic of a pre-revolutionary state of society… In all countries, the working class is racked by deep disquiet. The multi-millioned masses again and again enter the road of revolution… The present crisis in human civilisation is the crisis in working-class leadership.

In short, the political task of the day was for the revolutionaries in the working class to organise themselves into a political force able to link the different struggles together, drive them forwards by raising new demands, drawing new forces into action, and thereby build a mass movement from below capable of smashing the system.

The consequence of failing to do this was world war and genocide – a descent into barbarism that killed 60 million people and tore apart the lives of hundreds of millions more.

We must create a worldwide working-class revolutionary movement today, if we are to meet the challenge of history’s greatest crisis.

Neil Faulkner is an archaeologist, historian, and author of A Radical History of the World, A People’s History of the Russian Revolution, and, with Samir Dathi, Phil Hearse, and Seema Syeda, Creeping Fascism: what it is and how to fight it.


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