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Core Argument

Against The Stream · 2025-02-20

The central thesis of this episode is that the liberal world order, which has dominated global capitalism since the Second World War, is now in its death throes. The authors argue that this is not merely a geopolitical shift but a systemic crisis rooted in the long-term decline of European capitalism, the relative decline of American imperialism, and the terminal exhaustion of the post-war settlement that sustained reformism. The immediate trigger is the US-Russia talks on Ukraine, which reveal that Washington is abandoning its European deputies to pursue its own national interests, leaving a fragmented, weakened, and politically paralysed Europe to face a strengthened Russia alone. The argument is that this conjuncture — the collapse of the European pillar of Western imperialism — will produce immense class struggles, initially channelled through right-wing populist formations, but ultimately preparing the ground for a revolutionary left.

Theoretical Grounding

The analysis draws on a classical Marxist understanding of imperialism as a system of competing national capitals, where the post-war order was not a permanent peace but a temporary arrangement rooted in American hegemony and the Cold War imperative to contain the Soviet Union. The episode deploys a framework of capitalist decline and decay: social systems have periods of ascent characterised by dynamism, then peak, then enter a declining phase of turmoil and inflexibility. This is applied concretely to Europe, which is described as having been in decline for a century — since the First World War displaced it as the centre of global capitalism.

The analysis is grounded in Trotsky's theory of uneven and combined development, particularly his analysis of how declining powers behave and how radicalisation can swing between right and left. The episode explicitly references Trotsky's observation that when the system can no longer grant concessions, working-class voters who were conservative in stable times become radicalised and seek extreme answers. This is used to explain the rise of figures like Farage, Le Pen, and the AfD not as a simple "turn to the right" but as a rebellion against a bankrupt establishment that includes the traditional left.

The episode also draws on a Marxist understanding of the state and reformism. Reformism is presented as a product of the post-war upswing — a period when American imperialism, facing a Soviet competitor, was willing to prop up European capitalism and grant concessions to the working class. With the crisis of world capitalism, the material basis for reformism disappears, yet the reformist left clings to the system, defending liberal institutions precisely when the working class is beginning to question the system itself.

Conjunctural Relevance

The episode is recorded in February 2025 and analyses events that are unfolding in real time. The key conjunctural elements are:

The US-Russia talks on Ukraine: Trump and Putin have outlined a deal that includes territorial concessions to Russia, no NATO membership for Ukraine, no American boots on the ground, the lifting of sanctions, and the unfreezing of $300 billion in Russian assets. Europe was excluded from these negotiations and informed via the media.

JD Vance's speech at the Munich Security Conference: The US Vice President effectively declared war on the European liberal establishment, attacking European governments for cancelling elections (Romania), supporting the AfD in Germany, and telling Europeans that their democracy is weak if it can be destroyed by a few hundred thousand dollars of digital advertising.

The collapse of European unity: Macron's emergency meeting in Paris on Ukraine peacekeepers revealed total disarray. Britain demanded American backstops, Germany refused troops, Poland offered only logistical support, and Italy arrived late and offered nothing. The Wall Street Journal reported that European officials were already discussing a "reassurance force" stationed away from the border — a therapist force, not a fighting force.

Economic data: European GDP is approximately 16% of world output and falling. Productivity has stagnated or collapsed. German industry faces energy costs far higher than the US or China. European companies are investing more in the US than in Europe. Debt-to-GDP ratios are unsustainable: Italy 135%, France 110%, Spain 105%, UK 98%. The Draghi report calls for €800 billion in annual investment just to catch up technologically.

Military weakness: The British army has 70,000 personnel, most of whom are office workers. The German army has 50% readiness, lower than when the Ukraine war started. NATO cannot win a war with Russia — Russian forces have three years of combat experience and are trained in drone warfare, while NATO forces are trained according to pre-drone manoeuvre doctrine.

Political crisis: France has a technocratic government with Macron a lame duck. Germany's coalition has collapsed. Austria cannot form a government. Reform UK is polling as the largest party. The AfD is likely to come second in German elections. Across Europe, the traditional establishment parties are in terminal decline.

The water crisis in Britain: Thames Water, privatised and milked for dividends, is collapsing. It has been allowed to borrow £3 billion to survive while bills rise by £200 a year. The Metro's front page reveals it borrowed money to pay dividends. This is presented as a microcosm of the system's decay.

Where the Argument Continues

The episode deliberately leaves open the question of how the working class will respond to this conjuncture. The authors argue that the current swing to right-wing populism is not permanent — these forces cannot solve the contradictions of capitalism, will be exposed by events, and will prepare the ground for a sharper turn to the left. This is a thread that runs through the broader Against the Stream corpus, particularly episodes analysing the rise of right-wing populism as a symptom of the crisis of reformism.

The argument about the decline of Europe and the collapse of the post-war order connects to earlier episodes on the Ukraine war, the nature of NATO, and the crisis of American hegemony. The episode also points forward to the need for a revolutionary party that can win over the radicalised layers of youth and workers who are currently looking to the right.

For a fuller development of the theoretical framework, listeners should consult the Spectre of Communism podcast, which deals more systematically with the Marxist theory of imperialism, the law of uneven and combined development, and the critique of reformism. Trotsky's text on France, referenced in the episode, is essential reading for understanding how radicalisation can swing between right and left.

Connections

  • Trotsky, The Struggle Against Fascism in Germany: The key text on how the failure of the reformist left opens the door to right-wing populism, and how the working class can be won over by either side of the political spectrum.

  • Trotsky, Where is France Going?: Referenced directly in the episode for its analysis of how the middle class and working class can radicalise in either direction.

  • Lenin, Imperialism, the Highest Stage of Capitalism: The theoretical foundation for understanding the rivalry between imperialist powers and the decay of the system.

  • Other Against the Stream episodes: The episode on the Ukraine war (February 2024) and the episode on the crisis of NATO (December 2024) provide the immediate background. The episode on the rise of Reform UK (January 2025) develops the analysis of right-wing populism in Britain.

  • The Draghi Report (2024): Referenced for its data on European underinvestment and technological decline.

  • The Financial Times articles cited: On the need for a €500 billion European defence fund, on the impossibility of the UK paying for higher defence spending, and on the coming economic crisis without a hegemon to stabilise the system.

Key Quotes

  1. "All social systems start with a period of ascent which is characterised by dynamism, agility, and momentum, but at a certain point these reach a peak before they enter a declining phase which is characterised by turmoil, inflexibility, and intense social strife. Today we are looking at the death throes of the liberal world order which dominated the capitalist world since World War II."

  2. "The threat that I worry the most about facing Europe is not Russia, it's not China, it's not any other external actor. What I worry about is the threat from within — the retreat of Europe from some of its most fundamental values." — JD Vance, quoted in the episode, interpreted as a declaration of war against the European liberal establishment.

  3. "If the answer is nobody — there's no single power — then we're back in the 1930s and should prepare for the challenges of that era. The world awaits with trepidation the experience of an economic or financial crisis without it." — The Financial Times, quoted in the episode, on the absence of a hegemon to stabilise the system.

  4. "The European Union's austerity measures have made the average European citizen £3,000 worse off in real terms. Disposable incomes have gone down in Spain by 25%, in Finland and Holland by 15%. To achieve the target of keeping national debts to no more than 60% of GDP would require permanent austerity until the year 2070."

  5. "The basis of reformism was the post-war period. Europe experienced a massive economic upswing supported by American imperialism, who saw the Soviet Union as a massive competitor. But with the crisis of world capitalism, America cannot play that role anymore. The whole basis of reformism is disappearing, and just at the moment that's happening, the reformers are clinging onto the system more than ever."