Economic Repercussions of September 11 Continue to Spread

Marxist Analysis · 2026-05-13

Core Argument

The article argues that the September 11 attacks did not cause the economic downturn that followed, but acted as a catalyst that accelerated and sharpened a crisis already unfolding within the US economy. The central claim is that the boom of the 1990s had already exhausted itself before the attacks, with manufacturing in sustained decline, mounting job losses, and consumer spending sustained only by debt-financed overconsumption. The attacks shattered the fragile psychological precondition for continued expansion — consumer confidence — and exposed the underlying weakness of a system already heading toward stagnation and slump. Bush's "war on terrorism" is analysed not primarily as a geopolitical response but as a domestic political strategy to displace responsibility for the crisis onto an external enemy, while using the emergency to push through a programme of capitalist restructuring: drilling in Alaska, Fast Track legislation, expansion of NAFTA into the FTAA, and the curtailment of civil liberties.

Theoretical Grounding

The analysis is rooted in the Marxist theory of crisis, specifically the understanding that capitalist economies are subject to recurrent boom-slump cycles generated by the internal contradictions of the system — not by external shocks. The article draws on the classical Marxist distinction between surface phenomena (the attacks, consumer confidence, interest rate cuts) and underlying structural dynamics (the tendency toward stagnation inherent in capitalist accumulation). It situates itself within the tradition of Marxist political economy that insists on the primacy of production over circulation: the decisive indicator cited is the manufacturing index falling below 50 for 15 consecutive months, with 1.1 million workers eliminated from production. The argument also deploys a Leninist analysis of the state and war: the "war on terrorism" is understood as a ruling-class offensive against the working class, using nationalism and patriotism to demobilise resistance while the burden of the crisis is shifted onto labour. The article explicitly rejects the notion that reformist measures — tax cuts, interest rate reductions, military spending — can resolve the crisis, insisting that only the abolition of the profit system and the establishment of democratic planning can provide a way out.

Conjunctural Relevance

The article was written in July 2005, nearly four years after the attacks, and reflects on the medium-term economic consequences. It cites specific data: GDP shrank at 0.4 percent in the third quarter of 2001; manufacturing activity fell to 39.8 on the purchasing managers' index; unemployment rose from 4.9 to 5.4 percent in a single month; consumer confidence dropped by 1.8 percent, the largest decline since 1987. The article draws a political parallel with the first Gulf War: Bush Sr. enjoyed similarly high approval ratings after the 1991 conflict but lost the election within a year due to recession. This comparison is used to argue that the political effects of economic crisis will eventually override the nationalist fervour generated by war. The article identifies the specific legislative agenda being pushed under cover of the "war on terror": Fast Track trade authority, expansion of NAFTA into the FTAA, oil drilling in the Arctic National Wildlife Refuge, and the erosion of civil liberties through the Patriot Act. These measures are presented not as responses to terrorism but as long-standing ruling-class objectives now achievable under emergency conditions.

Where the Argument Continues

The article's central thesis — that the post-9/11 downturn was the acceleration of a pre-existing crisis — connects to a broader IDOM corpus on the nature of the 2001 recession and the long-term decline of US manufacturing. The argument that war serves as a political displacement mechanism for economic crisis is developed further in IDOM analyses of the Iraq War and the Afghanistan occupation. The article's insistence that consumer confidence was the fragile psychological prop of the late-1990s boom points toward later Marxist analyses of household debt and financialisation as temporary offsets to the tendency of the rate of profit to fall. The critique of the "war on terrorism" as a domestic class offensive anticipates later IDOM articles on the use of national security ideology to suppress labour militancy and push through austerity. The article's concluding call for democratic planning as the only alternative to the cycle of boom and slump is a recurring theme across the IDOM corpus, developed in theoretical articles on socialist economics and in conjunctural analyses of crises from 2008 to the present.

Connections

The article should be read alongside IDOM's earlier analyses of the 1990s boom and its contradictions, particularly those arguing that the "new economy" was built on fictitious capital and unsustainable debt. It connects to Marxist analyses of the 2001 recession by authors such as Robert Brenner (The Economics of Global Turbulence) and to the broader tradition of crisis theory from Marx's Capital through to the work of the International Marxist Tendency. The political argument about war as a ruling-class strategy to manage economic crisis echoes Lenin's Imperialism, the Highest Stage of Capitalism and Trotsky's writings on war and revolution. The article's focus on manufacturing decline and job loss as the material basis for political radicalisation connects to later IDOM analyses of the 2008 crash and the Great Recession. For the specific conjuncture of 2001-2005, it should be read alongside IDOM articles on the Iraq War, the Patriot Act, and the FTAA.

Key Quotes

1. "Immediately after the unprecedented events of September 11, we predicted that this spelled the end for the economic boom. Billions of dollars were lost in the destruction and in lost business, and more importantly, people's optimism that the boom would recover quickly from its 'slowdown' was shattered."

2. "As we have explained before, and as the serious bourgeois analysts openly acknowledge, the economy was already on a sure path to stagnation and slump even before September 11. The attacks acted only as a catalyst and sped up and sharpened the inevitable."

3. "Bush's war on terrorism is nothing but a war on the world working class. On the home front he is desperately trying to find someone to blame for the sudden economic drop - who better to blame than 'terrorists'!"

4. "The bosses are using the fading economy as an excuse to drill for oil in Alaska, to enable Fast Track legislation, expand NAFTA into the FTAA, and more. Not to mention the curtailing of civil liberties in the name of 'national security'."

5. "The only way out of the cycle of boom and slump, and to truly eradicate the conditions which breed terrorism, is to take the commanding heights of the economy and place them under democratic public control."

6. "We must remember that Bush Sr. had similar approval ratings after the Gulf War, yet less than a year later he lost the presidential election due largely to the minor recession of 1991."