The new world order and the main contradiction in global capitalism by Conrad Schuhler, 9/1/2025

– The new world order and the main contradiction in global capitalism

By Conrad Schuhler

– [This article posted on September 1, 2025 is translated from the German on the Internet, https://www.isw-muenchen.de/online-publikationen/texte-artikel/5375-die-neue-weltordnung-und-der-hauptwiderspruch-im-globalen-kapitalismus.]

Politicians and the media tell us that we are living in an era of rapid change. Russia is invading Ukraine and overturning the “post-war European order” and with it the post-reunification order that followed the implosion of real socialism. NATO predicts that Russia will be in a position to overrun NATO Europe by the end of the 2020s at the latest and has decided to increase its military spending to 5% of annual economic output. NATO is already the strongest military power in the world today. Thirty-two nations, one billion people, 9,400 battle tanks, 4,500 combat aircraft, 3.2 million troops, 22,000 artillery pieces.

The leaders of the “Western community of values” have just demonstrated in the Middle East that they are determined to use their military power: Israel systematically bombed civilian targets in Iran, and the US rained bunker-busting missiles – over ten meters long, with a depth range of over a hundred meters – down on nuclear facilities. An increasingly deranged US president, pushed into office by openly unscrupulous tech monopolists in Silicon Valley, celebrates the atrocity as a triumph of civilization and himself as the greatest peace president of all time. The German chancellor praises the Israelis for doing “the dirty work for us.” The political elites of the “transatlantic community” are bringing the world closer to a great war. Not only are they giving Israel’s Netanyahu the green light to systematically commit genocide against the Palestinians, they have no other response to Russia’s aggression in Europe than to arm themselves and “prepare for war.” In Western countries, “rackets” are coming to power, capital groups primarily in high tech, armaments, and energy, which, as Max Horkheimer called these class factions, are plundering the state and its population as “predatory communities,” without regard for the current interests and future of the masses.

Over a hundred million people are already fleeing war and misery. In the regions of the world that are still livable, long plagued by years of recession and growing social inequality, millions more fear the possible influx of foreigners. The foreign is becoming anathema in political discussion; one’s own nation and racket rule should become and remain “great again.” Where is this global capitalism heading? This is a question that Marxists in particular need to ask, and one that may require new answers or at least raise new issues.

The Marxist discussion on overcoming capitalism has always revolved around the questions: Where is the main contradiction in the capitalist field of contradictions? And, by extension: What is the main social counterforce to capitalist rule, and who is the main bearer of the revolutionary movement?

#### I. Marxism – always in search of the main contradiction

At the beginning, the international communist workers’ movement was clear and united on where to look for the main contradiction in capitalism. Marx and Engels’ Communist Manifesto of 1847 concludes with the call: Workers of all countries, unite! The working class was the antithesis of capital, which was organized internationally, which is why the working class also had to reach this international level – “workers of all countries, unite” – in order to become a revolutionary force in the real class struggle. Under the decisive influence of Lenin and Trotsky, the Third International adopted the new formula: “Workers of all countries, oppressed peoples, unite.” Liberation movements had formed in the colonially exploited nations, which were welcomed by the International as equal elements of the international front of contradiction. Stalin changed this focus of the International. For Stalinism, “Red October” was the decisive anti-capitalist signal. Here, in the first socialist country, Stalin also saw the decisive anti-capitalist force. Successful socialism in the Soviet Union would inspire the proletarian masses worldwide to embrace socialism and reduce the radius of exploitation of capitalism. Support for the USSR was at the heart of the international labor movement. As late as 1961, the CPSU formulated this in its program.

With the implosion of “real socialism,” the controversy between the Communist parties of Russia and China became irrelevant. In the short term, the capitalists hoped for an “end of history” (according to Francis Fukuyama, the then official philosopher of history of the US government), the eternal triumph of capitalism, but with the financial crises of the 1990s originating in Latin America and then the global financial crisis of 2007, the crisis-prone nature of capitalism broke out again violently with wars, loss of income, and environmental destruction. In the Corona crisis of 2021, the International Manifesto Group (IMG) published its manifesto: “Through Pluripolarity to Socialism.” According to the predominantly North and South American scientists led by Indian-Canadian economist Radhika Desai, the fatal failure of the capitalist health care system has once again demonstrated the urgent need to take the production of life’s essentials out of the hands of capital and transfer it to a democratically organized people. On this issue, the IMG representatives will encounter no opposition among Marxists. But does the concept of pluripolarity, coined by Hugo Chavez for a multipolar international order, really lead to socialism? Or even to the dismantling of imperialist dominance? Let us examine the forces that today represent the main elements of pluripolarity. Are they the bearers of a militant opposition to global capitalism? Or do the elites of many of these countries not rather want to be an independent part of a global system of exploitation and function as such where they are in power?

#### II. The new international order – BRICS has overtaken the West

Since the 1980s, the countries of the Global South have been subject to the Washington Consensus, which strictly aligns the economies of these countries with the interests of Western investors. Jim O’Neil, chief economist at Goldman Sachs investment bank, noticed that emerging economies progressed more quickly the less they adhered to the dictates of the capitalist commandos at the World Bank and International Monetary Fund. Leading the way were Brazil, Russia, India, and China. In terms of growth rates, the order was exactly the opposite, but O’Neill wanted to get at this acronym: BRIC. Because brick means building block in English, and the New York banker seemed to sense that a new world order was emerging on these bricks.

In 2006, the four countries founded BRIC, and since 2011, with the addition of South Africa as a new member, they have called themselves BRICS. The BRICS now has 10 members, 11 partner countries, and over 30 other countries have expressed their interest. Turkey has also applied for membership in 2024. The 10 official members alone account for 48% of the world’s population and produce 40% of global GDP. The economic growth data for the BRICS countries is significantly higher than that of the West. In his video message to this year’s BRICS meeting in Rio de Janeiro, Russian President Putin rightly stated that the model of neoliberal globalization is becoming obsolete and that the “focus of global business activity” is shifting to emerging markets.

#### III. China is the dominant force in BRICS

The strongest element of BRICS is the People’s Republic of China. With 1.4 billion inhabitants, it is the most populous country in the world alongside India, but its purchasing power-adjusted GDP is almost three times that of India, and it ranks first in the world GDP rankings by purchasing power parity, ahead of the EU and the US. China is no longer just “the world’s workbench,” but also occupies a leading position in essential raw materials and modern technology. The rest of the world is dependent on China for rare earths and lithium, which are indispensable for the production of state-of-the-art information technology, as well as for cobalt and manganese. China registers the most international patents for modern technology after the US. In the second quarter of 2025, China achieved economic growth of 5.2% and industrial production grew by 6.8%. The Chinese have so far been able to confidently fend off the tariff attack by Trump’s USA.

The academic sector is extremely important and has its own department within the BRICS administration based in Beijing. Every year, tens of thousands of students and scientists are exchanged between the countries. This creates a counterweight to the “international class” of the West. Researchers and specialists are developing without the corrupting influence of international corporations and other imperialist agencies.

Here, too, China is the hub, with its “New Silk Road” offering a wide range of international cooperation in trade, transport, and science. Sixty-five countries are currently participating in the New Silk Road, which connects China to Europe by land and sea in terms of trade and transport. The maritime and land-based Silk Road now affects more than 60% of the world’s population and 15% of the global economy. Trade along the Silk Road accounts for almost 40% of world trade, with the majority of this being by sea. This is not least due to Russia’s war against Ukraine, which has made land routes more unsafe and expensive. At the end of the China-Europe continental bridge of the New Silk Road lie the ports of Duisburg-Ruhrort with the Rhine as Europe’s most important waterway. Germany is a region of great importance for China and the BRICS countries.

It is in the area of armaments that China lags significantly behind its global rival, the US. China’s annual military spending amounts to US$374 billion, a third of the trillion spent by the US each year. This trillion dollars is a third higher than the combined military spending of the BRICS countries China, Russia, India, and Saudi Arabia. Without Russia, which has the world’s strongest nuclear power, the BRICS countries would be largely helpless against the military and nuclear blackmail of the US-West. In response to the tendency of large and medium-sized powers to once again assert their own interests through war, as seen in the war in Ukraine, Israel’s wars, Trump’s threats against Greenland and Panama, and NATO’s armament program (5 percent of GDP for armaments), China intends to counter this with increased armament of its own conventional and nuclear forces.

#### IV. BRICS is not a unified force – from the oil dynasties in the Middle East to socialist Cuba to the Stalinist-style Korean People’s Republic

The BRICS countries are anything but an ideologically unified association. They range from the extremely wealthy oil dynasties in the Middle East to socialist Cuba to the mullahs’ rule in Iran. What unites them is their opposition to the global dictates of Western capital. With the exception of the oil-rich Arab countries, they also tend to belong to Fanon’s “wretched of the earth.” According to the Human Development Index developed by the UN, which measures personal income, health, life expectancy, and education, Russia ranks 52nd on the list of countries, Iran 76th, China 79th, Brazil 87th, Egypt 97th, Indonesia 112th, and India 132nd. The UAE, also a BRICS member, ranks 26th, right in the middle of the capitalist countries of the West, where it belongs after the activities of international finance capital and the ruthless exploitation of the highest proportion of foreigners on earth. But the Emirati state wants to create a counterweight to the dictates of Manhattan and London and sees its best chance in the BRICS.

At the same time, the UAE is a “dialogue partner” in the Shanghai Cooperation Organization (SCO), another regional alliance of states that has taken a stand against the dictates of the capitalist West. The SCO includes China, India, Kazakhstan, Kyrgyzstan, Pakistan, Russia, Tajikistan, and Uzbekistan. It deals with trade, energy, and transport, but also—in an era of bellicose imperialism, once again a crucial issue—with ensuring and supporting peace and security in a region that comprises 40% of the world’s population.

In addition to the VAR, the BRICS’ “dialogue partners” include Turkey, Egypt, Saudi Arabia, Qatar, Bahrain, Kuwait, and Myanmar. The growing determination of developing countries to free themselves from the grip of the West is also evident in ASEAN, the Association of Southeast Asian Nations, which wants to create a common economic area in Southeast Asia modeled on the EU. Its members include Brunei, Indonesia, Cambodia, Laos, the Philippines, Malaysia, Myanmar, Singapore, Thailand, and Vietnam. Two trends are evident here. International finance capital is attempting to use its base in Singapore to gain a powerful foothold in the global realignment, particularly in the Pacific region. And secondly: it is not only a question of protection from Western capital, but also, as in the case of Vietnam, of independence from China. The deeper and more diverse Vietnam’s ties to the nations in the region are, the less the country will have to bow to any regulations imposed by China. In the era of de-coupling, emerging economies can also become competitors for capital from the West.

##### Trump’s declaration of a tariff war on 150 trading partners

However, it is not only international trade alliances that are important for the autonomy and global standing of nations, but also bilateral government trade agreements. The EU has such agreements with 79 countries. New negotiations have begun with Mexico, Chile, and the Mercosur countries. China, Singapore, and Vietnam are next, and negotiations are currently underway with Japan and Myanmar. China conducts 35% of its foreign trade through binational free trade agreements, including with Western countries such as Japan, Australia, Switzerland, and New Zealand.

The most important international trading partner remains the US. It imports the most goods, worth €3.1 trillion annually, exports goods worth over $2 trillion, and is the second-largest exporter after China. In April 2025, US President Trump shook up the trading world when he announced that he would be redefining the previously allegedly unfair tariffs on 150 trading partners in order to avoid a trade deficit that he claimed threatened national security in the future.

In fact, the US has had a huge trade deficit in goods for decades. In the service sector, they achieve a surplus, but at $72 billion, this is only one-twentieth of the goods deficit. The real reason for the permanent current account deficit lies in the profit calculations of industrial corporations. They relocate as many parts of their production as possible to cheaper countries abroad, and with the help of the global dollar regime, they can treat their foreign debts as domestic debts. While this is good for corporate profits, it is very bad for those employed in US industrial goods production. The share of US goods production in global goods production declined from 28.4% in 2001 to 17.4% in 2023. Between 1997 and 2024, five million jobs were lost in goods production. This was not a problem for profit-hungry US capital and its governments until the trade and government deficits – at 130% of GDP, the US government is the largest debtor in the world – prompted international capital to stop transferring its financial assets to the US without hesitation. All of the US’s G7 partners are among the countries subject to punitive tariffs. The punitive tariffs may improve the US’s balance of trade with individual countries, but overall they weaken Western capital.

#### V. The main contradiction of our era: rich versus poor

Per capita GDP measures a country’s gross domestic product in relation to its population. It is therefore not a real figure, but a statistical average. In fact, the real incomes of the poor in the Global South are usually far below these statistical figures due to the often miserable social power relations. The list of countries with the highest per capita income is dominated by financial havens where financial capital pays tax on its turnover and profits due to minimal tax rates: 1. Luxembourg, 2. Macao, 3. Ireland, 4. Singapore, 5. Qatar, 6. UAE, 7. Switzerland, 8. San Marino. The real wealth produced there begins at No. 9, with the USA. The top 50 countries include all G7 countries and other Western metropolises such as the Netherlands, Austria, Sweden, Belgium, Australia, Finland, and South Korea. Of the countries of the Global South outside or on the fringes of BRICS, only the oil-producing countries Saudi Arabia, Bahrain, and Kuwait are represented in the top 50 of the GDP per capita list. They can only maintain or expand their privileged position based on their wealth of oil and gas resources if they can rely on a counterweight to Western imperialism. They see this in the BRICS.

This raises the question of how a construct such as BRICS or similar alliances of the Global South, with highly diverse social rules in each country, can be the decisive counterforce to the global dominance of Western capital. We have the Democratic People’s Republic of Korea with its authoritarian one-party rule, which Che Guevara once regarded as a model for the Global South. We have India with President Modi’s ruling racist Bharatiya Janata Party. First and foremost, we have the People’s Republic of China, whose Communist Party operates as the party of the people, in which private entrepreneurs also have their place. We have Russia, which has been taken over by capitalist predatory groups, which started a war against Ukraine to escape the encirclement targeted by NATO, and which practices the opposite of socialist democracy internally. In most countries of the South, we see deep democratic deficits and extreme social inequality. However, this does not change the fact that these countries, like all others, are most likely to achieve progressive social change if international capital is prevented from interfering whenever and wherever possible. As long as Western countries can exercise their “right to protect,” they will always intervene when they see their interests threatened. Under the pretext of having to save democracy locally, they have dismantled Yugoslavia, largely destroyed Bosnia-Herzegovina, ruined Afghanistan, bombed Iraq, bombed Libya back to the Stone Age, and in Iran, Israel is now doing “the dirty work,” as the German chancellor acknowledged.

As long as these interventions continue, democratic change, let alone Marxist change, will not be possible in the Global South. The transformation of the international order into a multipolar one, and with it the opportunity to reduce the special profits of Western capital, is the first prerequisite for independent development in the Global South that is oriented toward the needs of its own people.And not only there, by the way. Lin Piao’s statement from the 1960s that class struggle had “temporarily” come to a standstill in the Western industrialized countries is more valid today than ever. Back then, in the golden age of capitalism, it was mainly concessions on wages and social benefits that kept the working class on the side of capital, but today, discontent over growing poverty and social cuts is driving it further and further to the right. With over 120 million refugees fleeing war and hunger, many millions of whom are fleeing to the supposed land of plenty in the West, right-wing propaganda is gaining traction that the main evil lies with “foreigners,” of whom only the “qualified” who fit the supply, employment, and training needs of Western countries should be allowed in. The foreigners are taking away dwindling social resources, the foreigners are occupying social housing; the foreigners are undercutting even the most modest wage demands with their illegal work, the foreigners are becoming serious competitors on the labor markets – so says right-wing propaganda. In Germany, one in five people is at risk of poverty, and the newly arrived poor are naturally a problem for them. The right solution would be to do away with the enormous income and wealth disparities in Germany; to say no to military build-up; to expand the welfare state, including the rapid expansion of social housing; and to provide concrete help against global poverty and underdevelopment so that there no longer need to be refugees due to hunger and hardship. The problem of poverty in Germany and other Western countries is not foreigners, but the rich in their own country. 0.1% of the population owns over 22% of the total wealth, while over 27% have no wealth at all or more debt than assets. The xenophobia incited by Trump is the lifeblood of multimillionaires like Trump. Friedrich Merz’s thinking is also at home here. For years, he was head of the German division of the Wall Street financial group Blackrock, whose preferred clients are members of the global plutocracy. The political caste of the West, which operates as the “force of the center,” is as much a part of modern imperialism as the right-wing parties, which use the ideology of xenophobia to spread a new justification for the privileges of national capital. Global capital encounters little social resistance in Western countries. The rapidly growing social inequality is being removed from the class struggle politically by right-wing propaganda. Since it has taken up this issue offensively, the Left Party has been able to gain support. This would be the way to bring Western countries back into the main contradiction in the international class struggle.