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2023 another global recession is coming

Marxist Analysis · 2026-05-13

Core Argument

The central thesis is that the global economy is not experiencing a temporary downturn but an organic crisis of capitalism — a prolonged, structural condition in which the system can no longer find a new equilibrium. The article argues that every measure taken by governments and central banks to escape previous crises (2007-2008, the post-2010 stagnation, the COVID-19 shock) has merely postponed the reckoning while deepening the underlying contradictions. The result is a "permacrisis" in which the usual tools of monetary and fiscal policy have been exhausted, leaving the ruling class caught between inflation, recession, and sovereign debt crises. A new global recession is not merely possible but inevitable; the only question is the trigger.

Theoretical Grounding

The analysis is rooted in the Marxist theory of crisis as developed by Marx and Engels in the Communist Manifesto and Anti-Dühring, but it goes further by drawing on Trotsky's concept of an organic crisis of capitalism — a period in which the normal cyclical pattern of boom and bust gives way to a secular stagnation. The article explicitly distinguishes between ordinary cyclical crises (which can be resolved through the destruction of capital and renewed accumulation) and the present conjuncture, where the productive forces are in "open revolt" against the constraints of the nation-state and private ownership.

Key theoretical concepts deployed:

  • Overproduction: The fundamental contradiction that workers cannot buy back what they produce, leading to crises of realisation.
  • Fictitious capital: Trotsky's analysis of post-WWI money-printing is used to explain how central bank balance sheet expansion creates a "superstructure of banknotes" that does not represent real value, distorting the entire economy.
  • The tendency of the rate of profit to fall is not named explicitly but is present in the description of declining growth rates, zombie firms, and the inability to restore profitability despite decades of attacks on labour.
  • The epoch of capitalist decay: The article situates itself within the Leninist-Trotskyist tradition that sees imperialism and the crisis of the nation-state as expressions of capitalism's historical exhaustion.

The theoretical lineage runs from Marx and Engels through Lenin (imperialism, protectionism), Trotsky (organic crisis, the Comintern debates of the early 1920s), and Rosa Luxemburg (the Junius Pamphlet's choice between socialism and barbarism).

Conjunctural Relevance

The article was written in June 2023 and updated in September 2024, with the claim that events have confirmed its predictions. It connects the argument to specific data and forces:

  • Debt mountains: Global debt reached 247% of world GDP by 2021; China's total debt (households, corporations, government) hit 295% of GDP; Japan's public debt is 263% of GDP, with interest payments consuming 8% of the budget.
  • Central bank balance sheets: The ECB held assets worth 64% of Eurozone GDP; the Federal Reserve held 38% of US GDP. The Fed's balance sheet grew from $900 billion to $8.9 trillion between 2008 and 2022.
  • Inflation: Core US inflation at 5%, Eurozone at 7%, UK at 9% at the time of writing. The article notes that 40% of inflation is supply-side (supply chains, wars, climate change) and therefore immune to interest rate policy.
  • Banking crisis: The collapse of Silicon Valley Bank, Signature Bank, and First Republic in 2023 is analysed as a direct consequence of interest rate hikes exposing fictitious capital. Four academics estimated $2.2 trillion in unrealised losses across US banks.
  • De-globalisation: The article names "friendshoring" and "reshoring" as euphemisms for protectionism, citing the IMF's warning that dividing the world economy into blocs would reduce annual growth by 2 percentage points. Biden's Inflation Reduction Act is described as a protectionist measure targeting allies as well as China.
  • Climate crisis: McKinsey's estimate of $3.5 trillion annual investment needed for net-zero by 2050 is presented as proof that the resources exist but are blocked by private profit.

The conjuncture is defined by the exhaustion of all the tools the bourgeoisie used to manage the post-2008 crisis: zero interest rates, quantitative easing, government deficits, and globalisation. Each has now become a source of new contradictions.

Where the Argument Continues

The article is part of a broader corpus within the In Defence of Marxism tradition. It explicitly references:

  • Rob Sewell's 2015 article on the organic crisis of capitalism, which provides a more extended theoretical treatment of Trotsky's concept.
  • A previous article on inflation (referenced but not named) that explains the mechanisms behind the current price rises.
  • "A New Stage in the World Revolution" (mid-1990s), which analysed the globalisation of the 1990s as a temporary stimulus that has now exhausted itself.

The argument continues in several directions:

  • Against the Stream episodes and IDOM articles on the debt ceiling standoffs in the US, the Chinese property crisis, and the European energy crisis.
  • The question of war and geopolitics: The article notes the fracturing of the world market into blocs but does not develop a full analysis of inter-imperialist rivalry. This is taken up in other IDOM pieces on Ukraine, Taiwan, and US-China tensions.
  • The political crisis: The article mentions the Tea Party, Occupy Wall Street, and Macron's pension reforms but does not develop a systematic analysis of the political consequences of the economic crisis — a gap filled by other texts in the tradition on the rise of the far right and the crisis of bourgeois democracy.
  • The question of revolutionary strategy: The conclusion invokes Rosa Luxemburg's choice between socialism and barbarism but does not elaborate on the concrete tasks of the communist movement in this conjuncture. This is a deliberate limitation — the article is an economic analysis, not a political programme.

Connections

  • Trotsky, "World Economy — Report" (3rd Congress of the Comintern, 1921): The key theoretical source for the concept of fictitious capital and the organic crisis. The article quotes extensively from this text.
  • Trotsky, "Once Again, Whither France?" (1935): Source for the argument that capitalism in its death throes still has cycles, but only the proletarian revolution can end the crisis.
  • Trotsky, "Trotsky Urges Backing for Pioneer Publishers" (1937): Where the term "organic crisis" is explicitly used.
  • Marx and Engels, Communist Manifesto: The classic passage on crises of overproduction.
  • Engels, Anti-Dühring: The description of the cyclical pattern of boom and bust.
  • Rosa Luxemburg, Junius Pamphlet: The framing of the choice between socialism and barbarism.
  • Lenin, Imperialism, the Highest Stage of Capitalism: The theoretical basis for the analysis of protectionism and the nation-state as a barrier to the productive forces.
  • Centre for Economic and Policy Research, "A Short History of Financial Deregulation in the United States": Empirical source for the deregulation that prepared the 2008 crisis.

Key Quotes

  1. "This demonstrates that it is not an accidental recession nor even a conjunctural depression but an organic crisis of the whole capitalist system." (Trotsky, 1937, quoted approvingly)

  2. "Simultaneously a superstructure of banknotes has arisen, which is also termed capital. For these banknotes and government bonds – all this is called capital. However, this capital represents, on the one hand, a memory of what has been destroyed and, on the other, a hope of what can be earned – but it does not represent capital that actually exists." (Trotsky, 3rd Congress of the Comintern, quoted)

  3. "The accumulation of debt does not solve the problem of overproduction, but merely postpones the problem – and in the process makes it much bigger, as has been revealed time and time again."

  4. "If they raise interest rates, they sink government finances, and those of a whole swathe of heavily indebted banks, 'zombie' businesses and households. If they rescue the banks, they are keeping the wheels of credit spinning, which they are trying to slow down by raising interest rates. Thus, they are caught between a rock and a hard place."

  5. "The private ownership of the means of production is revealed as the decisive barrier to tackling climate change."

  6. "Capitalism in its death throes, as we know, also has its cycles, but these cycles are declining and diseased. Only the proletarian revolution can put an end to the crisis of the capitalist system." (Trotsky, 1935, quoted)