The crisis deepens in Europe Japan and the United States
Core Argument¶
The article argues that the capitalist world economy, far from recovering from the 2008 crash, is entering a prolonged and deepening phase of crisis that will generate successive shocks across the advanced economies. The central claim is that the apparent stabilisation of 2009–2010 was illusory: the underlying contradictions of overaccumulation, sovereign debt, and monetary instability remain unresolved and are now resurfacing in new forms — sovereign defaults, currency instability, and political upheaval. The bailouts of Greece, Ireland, and Portugal are not solutions but mechanisms that transfer the crisis onto working people through austerity, while failing to restore profitability or stability. The article concludes that capitalism has exhausted its capacity to manage its own contradictions and that the only way out is the revolutionary overthrow of the system.
Theoretical Grounding¶
The analysis is rooted in the Marxist theory of capitalist crisis, particularly the understanding that crises are not external shocks or policy failures but immanent to the system itself. The article draws implicitly on Marx's law of the tendency of the rate of profit to fall, though it does not deploy the term explicitly. The argument that a single currency across unevenly developed economies must generate instability reflects the Marxist critique of the euro as a political project of German capital, not a neutral monetary arrangement. The piece also engages with the theory of fictitious capital: the bailouts, quantitative easing, and speculative attacks on sovereign debt are presented as symptoms of a system that can no longer generate real accumulation and instead circulates ever-larger volumes of unproductive financial claims. The article sits within the Trotskyist tradition's insistence that capitalism in its imperialist stage is incapable of resolving its crises through reform, and that the working class must break with all variants of bourgeois politics.
Conjunctural Relevance¶
The article was written in May 2011, at a specific inflection point in the post-2008 conjuncture. The European sovereign debt crisis was escalating: Greece's debt-to-GDP ratio was heading above 150 per cent, Ireland had just been forced to recapitalise its banks by €24 billion, and Portugal was entering bailout negotiations. The article correctly identifies the Finnish election result — the rise of the True Finns party — as a political symptom of the crisis, not a cause. It notes that the probability of a Greek default had risen to 67 per cent, up from 55 per cent a month earlier. In the United States, the article flags the first-ever downgrade warning from Standard & Poor's on US sovereign debt, and the dollar's decline as quantitative easing undermined confidence. It also notes China's growing anxiety about its $3 trillion in foreign reserves, two-thirds held in US dollar assets. The piece anticipates that Spain and possibly Italy would be next, and warns that the eurozone project itself could unravel. This proved prescient: within a year, Spain required a banking bailout, and by 2012, Mario Draghi's "whatever it takes" speech was needed to prevent a eurozone breakup.
Where the Argument Continues¶
The article is a snapshot of a developing crisis, not a final analysis. The argument continues in several directions within the Marxist.com corpus. The question of whether the eurozone would survive is taken up in later articles on the Greek debt referendum of 2015 and the rise of Syriza. The relationship between sovereign debt crises and working-class resistance is developed in pieces on the Indignados movement in Spain and the anti-austerity strikes in Greece and Portugal. The article's claim that a new world slump is coming within "the next few years" is revisited in later analyses of the 2015–2016 global slowdown and the COVID-19 crash. On Against the Stream, episodes on the European Central Bank's monetary policy and the geopolitics of the dollar further develop the themes of fictitious capital and imperialist rivalry. The theoretical grounding in the law of the tendency of the rate of profit to fall is elaborated in longer theoretical articles on Marxist.com, particularly those by Alan Woods and Rob Sewell.
Connections¶
The article should be read alongside Marx's Capital, Volume 3, Part 3 on the tendency of the rate of profit to fall, and Lenin's Imperialism, the Highest Stage of Capitalism for the analysis of finance capital and uneven development. For the specific conjuncture of 2011, Costas Lapavitsas's Crisis in the Eurozone provides a complementary Marxist analysis of the monetary and banking dimensions. Within the Marxist.com corpus, the article connects to Rob Sewell's earlier piece "The Global Economic Crisis: A Marxist Perspective" (2009) and to later analyses of the Greek crisis and the Brexit referendum. The article's treatment of the dollar as a reserve currency under strain anticipates later debates about de-dollarisation, which are taken up in Against the Stream episodes from 2022–2023.
Key Quotes¶
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"Everywhere you look there is upheaval and crisis, from Europe to Japan and to the United States. This reflects the worldwide malaise of capitalism that is struggling to emerge from the recent slump. This is a confirmation of Marxist ideas, which explains that capitalism is a crisis-ridden system."
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"A common currency embracing different economies moving at different rates was always going to be unstable. The only thing that has kept it afloat was the world boom. Once that came to an end, all the tensions within the eurozone would inevitably come to the surface."
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"The crisis of the eurozone's peripheral economies has been exacerbated by financial speculators who are eager to make money from these difficulties. They act like hyenas in stalking their prey."
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"The potential downgrade of credit rating of the US has also introduced a new element of uncertainty into the foundations of global finance. Standard and Poor's action was the first of such downgrades since the agency was set up 70 years ago."
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"The financial surplus was frittered away in tax cuts, wars and bailouts that left the public finances in a monumental mess and the danger of a default."
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"It is now down to the labour and trade union movement to channel this opposition, not in patching up capitalism, but in its overthrow. Only then can the variety of crises we face be ended once and for all."