By Introduction
The intention with this paper is to examine the socialist transitional state´s role in the emerging multipolar world-system – primarily China – as a major power, both balancing the declining US-hegemony, and as the driver in organizing a multipolar world-system, both in the economic and political sense.
In the first section I present the concept of the socialist transitional state. Then, using the analytic tool of the principal contradiction, I describe the transformation from the bipolar world-system, following Second World War and the decolonization process, moving into the unipolar world-system during neoliberal globalization, and finally into the current transformation into multipolarity. This historical development has in significant degree influenced the nations-states, which constitute the current multipolar aspect of the new world order.
With the concept of the transitional state and multipolarity in place, I discuss their interaction in the world-system. First their position as the one aspect, versus declining US hegemony, in the current principal contradiction. Then the contradiction within the multipolar world-system. Both the interaction between the transitional state and the nationalist capitalist states in the Global South, and the relation between the struggle against U.S hegemony on state level, and the class struggle, represented by movement, organization and political parties, both in the transitional state itself, and in capitalist states in the world-system – both South and North.
Finally, I will try to draw some strategical conclusions from this analysis, which can be useful in the future struggle to end capitalism and build socialism.
What is the transitional state?
The capitalist mode of production accumulates on a global scale. However, its political governance is made through the system of competing nation-states organized in a center-periphery structured world-system. As long as the capitalist mode of production is vital, developing the productive forces, it will dominate the world-system. Marx states this fundamental principle in historical materialism in Grundrisse:
“No social order is ever destroyed before all the productive forces for which it is sufficient have been developed, and new superior relations of production never replace older ones before the material conditions for their existence have matured within the framework of the old society.”
Why so? As long as the capitalist mode of production is dynamic, generating profit, expanding accumulation, so long will it strengthen the power of the ruling class and the hegemonic state in the world-system. However, when the mode of production becomes dysfunctional, when the development of the productive forces is blocked, the system is in crisis.
This was, what Marx and Engels thought was on the agenda in 1848, when they wrote the “Communist Manifesto”, and stated that “A specter is haunting Europe—the specter of Communism”. However, capitalism managed to solve the crises, by intensifying imperialist exploitation, first via the British Empire and then by US-led neocolonialism. This deepened the center-periphery structure of the world-system. The value transfer created a dynamic capitalist development in the center and under-development in the periphery. Rich countries – poor countries, the global North and South. This “spatial fix” saved the capitalist mode of production – as a whole – up through the 20th century, however it blocked the development of the productive forces in the colonies, the Third world – the Global South, creating revolution, and attempt to establish a socialist mode of production, beginning with the Russian revolution and onwards up through the century.
All this happened, within a world-system, in which the capitalist mode of production as a whole was dominating, in terms of technology, finance, political and military power.
Hence states, seeking to develop a socialist mode of production, could only establish a transitional mode of production, to develop the preconditions to move towards socialism at a later stage. To facilitate this, and to survive as a state in the world-system, they had to establish a corresponding transitional state. It has two main tasks: to defend the power the pro-people, government, and to develop the productive forces to satisfy the needs of the people and to take the first step towards a socialist mode of production. To accomplish this, they have followed changing strategies, sometimes interacting with the dominant capitalist system, sometimes pursuing a strategy for a world revolution and sometimes they were forced into isolation.
Their attempts to build socialism were necessarily distorted and have even been rolled back by the dominating capitalist states. Hence, we should not see the Paris Commune, the German revolution, the Soviet Union, the Peoples Republic of China, the Democratic People’s Republic of Korea Cuba, Vietnam and so on, as a row of failures, showing the impossibility of establish some kind of ideal socialism, but as a long process of resistance against capitalism, preparing the ground, taking steps to change the power balance in the World- system, learning and gaining experience in building socialism.
In this long transition process, from capitalism to socialism, there have been different stages, defined by the interaction between the transitional states and resistance to capitalism by movements on one side, and the capitalist world-system on the other side. Capitalism has been able to be modified, change and coopt much of the resistance in order to continue its dynamic development, from colonialism to neocolonialism and neoliberal globalization, changing the international division of labor, in a constant effort to maximize profit.
On their side, the different revolutions and attempts to build socialism have created multiple narratives of how revolution should be made, who is the revolutionary subject, and different strategies for building and visions of socialism, linked to the different time and place of the struggle: From the more or less spontaneous city-uprisings of 1848 and the Paris Commune, with its barricades in the streets, and armed citizens defending their neighborhoods; the German and Russian revolution in the wake of the First World War, with the industrial workers using strikes, and soldiers mutiny, forming “red armed units” to take the power of the state; to the guerilla struggle and “Peoples War” against colonialism by the national liberation movements, after the Second World War. Some of these movements managed to take state-power and form transitional states, advancing the anti-imperialist struggle to the level of interstate confrontation, such as the Soviet Union, the Peoples Republic of China, Yugoslavia, the East European Peoples Republics, the Peoples Republic of Korea, Cuba, and Vietnam. The established transitional states made space and often supported the anti-imperialist movements in their continuing struggle for state power up through the Twenty Century.
We have to remember that the different visions of socialism, strategies and forms of struggle are linked to different time and place in the long transition process from capitalism to socialism. Each new stage has its own main actor and forms of struggle linked to the economic and political contradiction in the world-system.
The communist party and its state institutions
The state is the product and manifestation of class contradictions. A ruling class – whether it is the capitalists or the proletariat – needs state power to uphold its mode of production. In the struggle for state power, the communist party represents the interests of the proletariat. However, in its struggle against imperialism, communists have often entered alliances with political forces representing other classes, such as the petit bourgeoisie and the national bourgeoisie.
When achieving state power, communist parties have usually formed so called “party-states”, meaning that the communist party forms the government and control major state institutions. However, the difference between the communist party and state institutions in the transitional state, is not just pro forma. It is two different organizations in terms of who they represent, working-methods, goals, and discourse. The Communist Party represents the proletariat, and its goal is socialism on the national and world level. To this end it has party to party relations with other communist parties, and the discourse is Marxist. The party-state government represent the people – all classes, including the national capitalists and the interests of resident transnational capital. The tasks of the state institutions are national development, stability, and harmony. The administration works after the rule of law. The state institution also takes care of foreign economic and political relations with other states. The task is again to enhance national development and the security of the transitional state in the world-system. The discourse of diplomacy is not class struggle and world revolution, but mutual benefit and respect.
On one side, has the transitional party-state the political, economic and institutional instruments to ensure that the contradictions between the proletariat and the bourgeoisie do not spin out of control, risking state power and economic development. On the other side, the Communist Party must lead the proletarian class struggle, to ensure the development of socialism. The distance between the two organizational layers varies, and sometimes they move towards each other – sometimes even blending, depending on the national and global contradictions.
For the transitional states, survival within a capitalist dominated world-system has historically been a priority. Their strategy has varied back and forth, up through the 20th century between confrontation to more or less peaceful coexistence and adaptation to capitalism.
The strategy, practice, and discourse of the two organizational units: the Communist Party and state institutions, have been transformed, by the interaction between the changing principal contradiction in the world-system, and internal national contradictions. The Soviet Union fluctuated between confrontation, alliance, attempted peaceful coexistence, and cooperation, leading to dissolution. The Democratic People’s Republic of Korea developed a form of defensive forced-on isolation in the wave of the Korean War. The Cuban state has also been pressed into a defensive and partly isolated position versus the West, but at the same time chose an offensive anti-imperialist foreign policy. Many of the post-revolutionary party-states in the Third World have given in to the economic, political and military pressure from the surrounding capitalist world-system, sliding back into a capitalist mode of production and a bourgeois state.
The Chinese transitional state
When the Communist Party declared the Peoples Republic of China in 1949 and established the party-state, Mao did not only spoke as the chairman of a revolutionary party, but also as the leader of a very poor country, torn apart by decades of war, in a world-system dominated by capitalism led by the U.S. as the new hegemonic power. The Communist Party had to make the difficult transition from “breaking” to “making.”
Going from revolutionary struggle to building socialism in a hostile world-system, class contradiction had to be handled in a new way. China needed stability, unity, and economic development to improve the condition for the masses living in deep poverty. Hence the policy of “New Democracy” built on four social classes: the peasantry, proletariat, petit bourgeoise and national bourgeoisie. In foreign policy, China kept a revolutionary profile, more or less forced by the imperialist isolation of the country. China faced the threat of U.S aggression and it came to a direct military confrontation with the U.S. in the Korean War.
As the Soviet-Chinese “Treaty of Friendship” signed in 1950 began to work, the Chinese government became less dependent on the national capitalists. However, as the split between the Soviet Union and China evolved up through the sixties, Mao had to relied on the revolutionary spirit inside China and hoped that the revolutionary wave of the long sixties, would generate more socialist transitional states in the Third World, forming a new socialist block.
With slogans like “It’s Right to Rebel! Making Revolution is No Crime! Bombard the Headquarters!” Mao, mobilized against any authority within the party or state institutions, who was deemed to be taking “the capitalist road.” For Mao the Cultural Revolution was a struggle to maintain the proletariat at the helm of state institution, against a sneaking capitalist counterrevolution, but it did also generate a split in the Communist Party, the breakdown of functions in state institutions.
During the Cultural Revolution, contradictions that existed within the people and within the Communist Party were handled as if they were an antagonistic class contradiction, between proletariat and capital. However, in reality it was the clash between two different strategies within the Communist Party, on how to handle the contradiction between the surrounding capitalist mode of production and China´s, effort to build socialism. Liu Shaoqi and Deng Xiaoping were not representing the capitalist class, but in favour of using elements of the capitalist mode of production, to enhance the development of the productive forces, under guidance of the Communist Party.
This is not to say, that the difference between the strategies were not important, but the shift from Mao’s mobilization of the people by reference to the socialist moral, to the use of material enticements and “opening up,” also reflect the change in the surrounding world-system, from the revolutionary spirit of the “long sixties” to capital’s counteroffensive in the form of neoliberal globalization. An indication of the non-antagonistic character between the two lines within the Communist Party, but rather a shift in the principal contradiction, in the world-system, is that Mao himself took the initiative to end the Cultural Revolution and invite Henry Kissinger and Richard Nixon to Beijing in 1971.
After Mao’s death in September 1976, Deng Xiaoping replaced Mao’s emphasis on continued class struggle within the transitional state, with a policy of economic pragmatism focused on the development of the productive forces, using capitalist measures. In 1978, the Communist Party broke with the previous position that class struggle, during the development towards socialism, is the main contradiction and promoted instead “socialist modernization” as the new line. The party line maintained that class struggle continues to exist, however as a secondary contraction.
The opening towards transnational capital’s globalization meant that domestic and foreign private owned relations of production expanded. This generated an ideological trend which was called “bourgeois liberalization.” General Secretary of the Communist Party Zhao Ziyang, who was in charge of implementing Deng’s reform program from 1986, was influenced by neoliberal ideas, claiming that the Marxist concept of class struggle was outdated, and sided with the protesters at the Tiananmen Square. After the uprising ended in a violent confrontation June fourth1989, between the protesters and police and Army coursing many deaths on both sides, Deng Xiaoping realized the danger of the “bourgeois liberalization” stating that:
“It seems that one Cold War has come to an end, but that two others have already begun: one is being waged against all the countries of the South and the Third World, and the other against socialism. The Western countries are staging a third world war without firearms. By this I mean that they want to promote the peaceful evolution of socialist countries to capitalism.”
It became clear that the Communist Party had to focus more on the ideological front, pointing out that class struggle still exists in China. Jiang Zemin, the new General Secretary (1989-2002) after Zhao Ziyang was removed, in his speech commemorating the 78th anniversary of the Party’s founding in 1991, stated:
“Class struggle is no longer the main contradiction in our country, but for a certain period it will continue to exist within a certain limit; moreover, under certain conditions, it may intensify.”
It did so. The factories run by transnational capital in Southern China, Taiwanese Foxconn and Japanese Honda for example, experienced violent labor struggles. There were thousands of incidents of labor struggle over privatization of state companies, and because of the introduction of market forces, declining social welfare and corruption.
Hu Jintao, General Secretary (2002-2012) tried to calm things down by upholding the principle of a “harmonious society.” The contradiction of the political rule over economy versus the power of the market economy, had to be solved in such a way, that the dynamics of the market may serve the development of socialism. On one hand, private property of productive forces had to be recognized and protected; on the other hand, the dark sides of capitalism, the damage to the society caused by, was what called, the “disorderly expansion of capital” had to be tamed.
China’s “opening up” for transnational capital, the outsourcing of industrial production and the accompanying transfer of technology, had a positive effect on the development of the productive forces, but as private property increased, it had also negative effects on social life. The condition of labor in the national and transnational capitalist companies deteriorated, inequality in society expanded, ecological problems, internal labor migration, the housing problems in the major cities, the general level of stress, all worsened.
In the wake of the global financial crises in 2006-7, the Communist Party began to change course, to tackle the negative effects of the intrusion of capitalism. As a result of the new posture, several changes occurred: a shift from an export orientated economy to emphasizing the domestic market, erasing poverty in rural areas, a clampdown on corruption and an insistence that class struggle is still an issue. Xi Jinping’s coming to power in 2012 repeated Jiang Zemin’s position. In 2014 Xi explains:
“The political position of Marxism is primarily a class position, which implements class analysis. Some people say that this idea no longer corresponds to the present era, which is a mistaken point of view. When we say that the class struggle in our country is not the main contradiction, we are not saying that in our country the class struggle within certain limits no longer exists, or that in the international sphere it doesn’t exist either.”
The capitalist class are not a politically well-organized force which can challenge the state power of the proletariat, but the expansion of private property and the accompanying change in consciousness, in the form of norms and values in society –the “bourgeois liberalization” –remains a challenge. When Xi talks about the importance of ideological “struggles”, it is not “class struggle” in the traditional sense. Xi warns against “money worship, hedonism, ultra individualism, and historical nihilism.” He states that: “the formation of firm ideals and beliefs is neither achieved overnight nor once and for all but must be constantly tempered and tested in concrete struggle.”
After forty years of “opening up” towards neoliberal globalization it would be a mistake to diminish the role of class struggle in China. Given the expansion of capitalist relations of production in the past decades, it is obvious that class contradictions would intensify.
The problems facing China today are quite different from the 1970s, when the main contradiction was defined by Deng Xiaoping as: between the low level of development of the productive forces, and the growing demands for goods by the masses. However, according to Xi, the past development was characterized by an unbalanced capitalist growth deepening inequality, rural/urban divisions and creating an unsustainable relationship to the environment. In addition, individualism and greed have made their inroads at the expense of solidarity and community. Xi now redefined the main contradiction as the unbalanced and inadequate development and the growing needs of the people for a better life.
To ease contradictions, Xi emphasis the policy of “Common Prosperity” instead of Deng’s “some get rich first.” New tax laws to redistribute wealth, a huge campaign to eliminate rural poverty, new laws to regulate the working conditions, and rules to reduce speculation in the real estate sector were all introduced. At the same time, Xi Jinping stressed the need to promote unity and harmonious class relations.
Xi, as a schooled Marxist, knows all about class struggle as the driver for social change. He often affirms the party’s adherence to Marxism and the goal of communism, but seldom discusses the specific class struggle in China, and the future of the national capitalist sector, national and transnational. Xi is not only leader of the Communist Party, but he is also president of the Peoples Republic of China, which needs national unity and class harmony to continue economic development and national security. This blend of understanding the transformative role of class struggle, and promoting class harmony inside the transnational state, is not schizophrenic or an expression of revisionism. It reflects the real dilemma –or balancing exercise– between the need for the development of the productive forces and security in a transitional state, within a world still dominated by the capitalist mode of production on the one side, and on the other side, the need of proletarian class struggle to maintain state power and push towards a socialist mode of production.
In order to find the right balance between these two positions, it is important to understand and differentiate between the phases in the long transformation process towards socialism. We must distinguish between when we are talking about the development of the productive forces –in a transitionary state– in a world system still dominated by the capitalist mode of production, or when we are talking about the final transformation of the mode of production, from capitalist to a socialist mode of production.
In the current phase it is still possible use capitalist management and the market forces to move towards socialism. In the second phase, when the capitalist mode no longer dominate the world system, we must eliminate residual elements of the capitalist mode of production, as they no longer play a progressive role in the development of the productive forces, but are blocking – and even destroying – human development.
This is the tipping point, when it is time to move from taking advantage of the capitalist mode of production to eliminating it, and to release the socialist mode of production from the constricting residual bind of capitalism. We are approaching the point where the need for another mode of production becomes more and more pressing, as the destruction of global ecology and climate accelerates under current capitalism.
After this description of the transitional state, I turn to the development of the multipolar world-system defined as a world-order, in which there are multiple centres of economic and political power, trying to solve conflicts and to create development towards greater global equality.
The multipolar world-system
To understand the contradictions of the current multipolar world-system, we need to see how these new poles came into being, as it determines their characteristics. The past continues to exist in the present. First the decolonization process, then neoliberal globalization has transformed the Global South.
At the end of the Second Inter-Imperialist World War the U.S finally emerged as the new hegemon following the British Empire. The Soviet Union, however, also came out stronger from the war. The military strength it had built since the Russian Revolution proved powerful enough to overcome the German war machine. Despite the war’s immense human and material costs, the Soviet Union had established itself as an important political player in the world-system, securing the establishment of transitional states in Poland, DDR, Czechoslovakia, Hungary, Bulgaria and Romania. In the course of the war, Yugoslavia and Albania also established themselves as socialist transitional states. In Asia the Democratic People’s Republic of Korea was founded in 1948, and the Peoples Republic of China was proclaimed in 1949. All these socialist transitional states formed a socialist bloc creating a bi-polar world-system, with the West led by the US, as the dominant aspect.
The formation of new states in Asia and Africa
This change in the power-structure within the world-system, together with the transition from colonialism to neocolonialism, created a “window of opportunity” for liberation movements, in what became the Third World. Throughout the 1950s, 60s, and the beginning of the 70s, with its climax in the 1968-uprisings, a revolutionary wave washed over the world. Inspired by the anti-imperialist victory in China and the successful struggle in Vietnam, revolutionary movements appeared in numerous countries: Laos, Cambodia, India, Nepal, Indonesia, Thailand, the Philippines, Palestine, Lebanon, South Yemen, Oman, Angola, Mozambique, Guinea-Bissau, Zimbabwe, South Africa, Namibia, Guatemala, El Salvador, Nicaragua, Brazil, Chile, Uruguay, and Mexico. In some of these countries, socialist movements came to power, establishing fragile transitional states, with a socialist perspective. In the decade from 1965-75, the principal contradiction on the world level was between imperialism, led by the U.S., and the numerous anti-imperialist movements and new transitional Third World states, which tried to build socialism.
However, national liberation proved easier to obtain than ending imperialist exploitation and building socialism. The anti-colonial movements were well aware, that the struggle to develop the forces of production was a necessary continuation of national liberation towards socialism. In Algeria, Frantz Fanon posed the problem of a national liberation movement’s transition from the politico-military to the politico-economic arena. The worker replaced the guerrilla as the revolutionary subject:
Today, national independence and nation-building in the underdeveloped regions take on an entirely new aspect…every country suffers from the same lack of infrastructure…But also, a world without doctors, without engineers, without administrators…When a colonialist country, embarrassed by a colony’s demand for independence, proclaims with the nationalist leaders in mind: «If you want independence, take it and return to the Dark Ages,» the newly independent people nod their approval and take up the challenge. And what we actually see is the colonizer withdrawing his capital and technicians and encircling the young nation with an apparatus of economic pressure. The apotheosis of independence becomes the curse of independence. The sweeping powers of coercion of the colonial authorities condemn the young nation to regression…The nationalist leaders then are left with no other choice but to turn to their people and ask them to make a gigantic effort. An autarkic regime is established and each state, with the pitiful resources at its disposal, endeavours to address the mounting national hunger and the growing national poverty. We are witness to the mobilization of people who now have to work themselves to exhaustion while a contemptuous and bloated Europe looks on. Other Third World countries refuse to accept such an ordeal and agree to give in to the terms of the former colonial power. Taking advantage of their strategic position in the Cold War struggle, these countries sign agreements and commit themselves. The formerly colonized territory is now turned into an economically dependent country.
After the end of the Second World War and the subsequent tide of decolonization, over a hundred new nations were born. But national self-determination and the ambition to create socialism were often not enough to bring them closer to the goal. The conditions were even more difficult for the smaller Third-World countries than it was for huge countries like Russia and China, where more diverse economic, land reforms, and planned economy made it possible to create more viable transitional economies and mount a defence against hostile imperialist encirclement. However, the most important barrier for transition towards socialism was the century old polarizing dynamic, caused by the “unequal exchange” in global capitalism. Raw materials and agricultural products, produced by low-wage labor in the Third World, were exchanged by industrial products produced by relatively high wage labor in the imperialist centre. The newborn transitional states did not have the power to change this dynamic. They could not simply increase wages and thereby prices, for the raw materials and agricultural products they supplied to the world market, dominated by Western monopolies.
Without the necessary development and diversity of the productive forces, delinking themselves from the world market, and trying to produce mainly for the domestic market, and in the interest of the workers and peasants, risked throwing their economies into ruin. They had inherited the economic structures established by their former colonial oppressors, and these were not designed to serve their interests. They were stuck with monocultures and industries limited to processing a few raw materials. No matter their socialist aspirations, the political independence, in most cases, led to capitalist “development economics” in the end. Unlike their Western colonial predecessors, they could not just transfer the costs of industrialization and establishment of welfare systems, to other nations, and therefore most were caught in the “development trap”, leading to huge debt and sliding back to an exploited position in global capitalism. The periphery states managed to achieve national independence, but they did not liberate themselves from imperialist exploitation and they did not manage to develop a socialist mode of production.
It is easy to say, that this was inevitable, and that the anticolonial movements should have known better. They had little choice. Seizing state power was necessary to at least change the balance of power in international relations. Up until the mid-1970s, global capitalism was actually under pressure. The struggle against colonialism and imperialism grew stronger as the U.S. neocolonialism penetrated the Third World, replacing the old colonial powers. This contradiction of imperialism versus anti-imperialism, interacted with the confrontation between the U.S. and the block of transitional states. Although the split between China and the Soviet Union weakened the socialist bloc, and socialist movements in general, the two positions, in some peculiar ways, also supplemented each other. While China’s Cultural Revolution and Vietnam’s armed struggle provided a new revolutionary spirit, the Soviet Union was the necessary nuclear military power, which could counterbalance U.S. imperialism on a global scale, so that the revolutionary spirit had the necessary space to flourish, without being crushed.
In the late sixties some of us hoped that the liberation movements would prevail, establishing strong socialist transitional states, cutting the pipelines of imperialist value-transfer, and thereby leading to a crisis and a revolutionary situation in the imperial core, creating a new global movement for socialism.
As it happened, the new global wave which came into being was not a world socialist revolution, but neoliberal globalization. Capitalism still had options for expansion — a new “spatial fix” in the international division of labor. The G77 developing countries within the United Nations system – demanded a “New International Economic World Order” in the 70s, to give them control over their natural resources and to the development of a more equal world-system. However, the UN-system was blunt in this regard. Formulated in the language of historical materialism was the overarching factor that ended the revolutionary wave of the long sixties, the inability of “actually existing socialism”, both the Soviet and Chinese versions, and in the new states in the Third World, to develop their productive forces to a sufficient degree, to break the dominance of the global capitalist market forces. Because of this, the neoliberal counter-offensive was able to do what the U.S. army could not in Vietnam – put the Third World on its knees.
Neoliberal Globalization
From the late 70s, a new principal contradiction develops in the world-system: one between transnational capital and the nation-state. This contradiction had been growing steadily since the “social state” in the Global North, pulled capitalism out of its crises in the 1930s. It was amplified by the establishment of the welfare state, in parts of the Global North in the 1950s and 1960s, and the consumer society, providing an ever-expanding market for capital.
Capital hates the state, as it interferes with business and demands taxes, but capital cannot live without a state. The state is the necessary “over-capitalist” that administers the system to soften the inherent contradiction in the system, to prevent it from crashing. The state and its monopoly on the use of violence, maintains “social peace” and protects property right. The state is also the central entity in capitalism’s international political institutions. Transnational capital is therefore not detached from the nation state. The U.S. government will always look after the interests of U.S. corporations first, the German government after the interests of German ones, and so forth. Nation-states provide political and military means for national bourgeoisies to compete with one another in the struggle over global market shares and investment opportunities.
Yet both state and capital built up strength in the post-war period, for conflicts to come. Capital concentration reached the point where the revenue of some corporations exceeded that of smaller nation-states. These corporations operated more and more transnationally. However, the state’s role also became stronger, building both infrastructure and expanding the administration of the welfare state. The public sector grew, in health, education, and elder- and childcare, as much as in transport, communications and housing. To regulate capitalism, the welfare state relied on Keynesian economics and trade policies. The “social state” promoted a redistribution of wealth via income and profit taxes; and it functioned as a mediator between capital and labor in negotiation on wage and working conditions. The national-state administration of economics, finance and trade became more and more a straitjacket for capital.
The pressure on capital culminated in the early 1970s. The contradiction U.S. versus the Soviet Union, the contradiction between the U.S. led imperialism and the socialist movements in Southeast Asia, the Middle East, Southern Africa, and Latin America came to a head. On top of this, social democracy and the trade union movement became more and more demanding in Western Europe. There were even anti-capitalist currents in the U.S as part of the anti-racist struggle and the resistance against the Vietnam War. In terms of the economy, “the oil crisis” erupted in 1973. There was high inflation in the West and stagnation in both production and consumption, a phenomenon referred to as “stagflation.” The West experienced its first serious recession since the Second World War. It revealed that Keynesian methods were no longer effective in keeping global economic forces in check and protecting the nation-state from economic crises.
Capitalism seemed vulnerable. But the socialist forces were fragmented: The transitional states of Soviet Union and China were divided by nationalist, political and ideological quarrels. The newly independent countries of the Third World could not break the forces of the capitalist world market and the “New Left” movement in Europe and North America was never able to mobilize broad popular forces against imperialism. A common front against the system, which would have been necessary to topple it, was never built.
Transnational capital versus the nation-state
Most importantly, however, capitalism was still a vital mode of production, and not out of options to expand. If millions of people in the Third World and the socialist bloc could be firmly integrated into the capitalist labor-force and world market, imperialism could be enforced. This new “spatial fix” however, required a weakening of the nation-state. The “social state” was no longer part of the solution for capital, but the problem. Partly because welfare programs demanded a share of the capitalists’ profits via taxes, but mainly because the controlling nation-state was a barrier for transnational capital global ambitions, which was the key to a revived imperialism. The “social state” regulated financial flows and trade and, in collaboration with the trade union movement, determined wages and labor conditions. If transnational capital wanted, not only to invest and trade globally, but also to relocate production from the Global North to countries where low wages and labor standards promised high accumulation rates, it had to free itself from state restrictions. This was the reason behind neoliberalism’s attack on the “social state” and trade unions in the 80s.
Neoliberal political leaders such as Ronald Reagan in the U.S. and Margaret Thatcher in Britain, launched an all-out attack on government regulations, public welfare programs, and the redistribution of wealth via taxes. They ensured capital’s free mobility, privatized the public sector, and limited trade union power. They demanded a shift from the “social state” to the “competition state”. This meant that the state’s main task was to compete with other states to create the best conditions for capital. From regulating and controlling transnational capital, the state has now moved on to serve it. The transfer of millions of industrial jobs from the Global North to the low wage countries of the Global South increased the profit rate and the accumulation of capital. The Third World’s prior demand for a “New Economic Order” was ignored. Instead, there were demands for “structural adjustments”: no restrictions on capital’s mobility, no protection of national industries, and no trade barriers. Neoliberalism also dealt a final blow to the transitional states in Soviet Union and Eastern Europe, while China opened up for investment from transnational capital. The production process itself became globalized, in chains of production sites, stretching from finance and control in the Global North, to production in the South, and back again to final consumption in the North. The neoliberal globalization process eroded the sovereignty of the national state. In the first phase of neoliberal globalization, transnational capital became the dominant aspect in the contradiction versus the national state. Even social democrats turned into neoliberals, as exemplified by Tony Blair’s “New Labour.”
Globalization of production triggered the rapid development of the productive forces, both qualitatively (computer, communication, and container transport) and quantitatively, in the form of the industrialization in Southeast Asia and Latin America, integrating hundreds of millions of new proletarians into the world economy. The globalization of production, new forms of transport logistics and liberalization of trade, made the location of production near its market less important.
The national state makes a comeback
Neoliberalism gave capitalism thirty golden years. However, the aspects in contradictions are in constant struggle. In short, it was unavoidable that neoliberalism would encounter resistance. The rise of neoliberalism took place within the world-system of states, as an effort of transnational capital to avoid state interference and control of movements of capital and goods. The transnational capital effort to erode the borders of the national state is one aspect of the contradiction of neoliberalism. The other aspect is the national states and their endeavors to manage society, including economics, within its borders. From the mid-1970s until the turn of the millennium transnational capital was the dominant aspect in the contradiction. At first, it weakened the state “at home” by enforcing laws of deregulation of transnational movements of capital and trade, privatization and cuts in welfare. Then transnational capital outsourced hundreds of millions of jobs to low-wage countries in search of higher profit. However, the consequences of these acts on the ground began to change the balance between the aspects.
Neoliberalism generated right and left-wing nationalism in both the Global North and South, demanding a stronger national state as a bulwark against the negative impact of the global market forces. The outsourcing of industrial production brought cheap goods to the Global North but also meant the loss of jobs and stagnation in wages. Privatization and cuts eroded the welfare state. Global inequality and imperialist wars, especially in the Middle East, led to millions of refugees, who, in the Global North, were seen as competitors for both wages and social services, not least by the social groups, which had been most affected by the erosion of the welfare system. For a large section of the population in the Global North the pressure on wages, the erosion of the welfare state, and the “migration problem” provoked nostalgia for the strong nation-state as a bulwark against globalization’s damaging forces. Even though neoliberalism had weakened the trade unions and the workers’ movement in general, and even if the state no longer acted as a mediator between capital and labor, the working classes of the Global North were not powerless yet. They still had the weapon of parliamentary democracy, which they had been granted in the early twentieth century. Many supra- and transnational institutions were established, but nation-state parliaments were still operating and making political decisions, and the nation-state was still the key unit in WTO, EU and so on. Government power was not dead yet—and it was electable. As social democrats were compromised by their attraction toward neoliberalism, right-wing populism and national conservatism became the political trend to gain by the opposition to the consequences of neoliberal globalization. There are also left-populist parties in Europe trying to reinvent old social-democratic positions. However, in a world in which neoliberalism has removed many of the state’s economic tools, it is difficult to reintroduce Keynesian policies. The nationalists seek to strike a new compromise between capital and labor, not based on a social-democratic mediation between the classes, but on national unity between the conservative factions of capital and the right-leaning sectors of the working classes. We saw this trend in in the “Brexit” movement in UK, “Alternative für Deutschland” in Germany, Le Pen´s “National Rally” in France, “The Party for Freedom” in the Nederland, Victor Orban in Hungary, “Danish Folk Party” in Denmark, and so on. Even Trumps “Make America Strong again” it to a certain extend the result of this tendency.
Neoliberalism’s political crisis divided both capitalists and populations in the Global North, between those who want a return to a nation-based capitalism, and those who want to see continued neoliberal globalization. Some of the world’s biggest companies have established global chains of production and distribution nets, that cannot easily be rolled back. But the nationalist forces rallying against neoliberal globalization has become stronger. They have gained momentum in the working and middle classes of the Global North, entering governments in alliance with the national-conservative factions of capital. Nationalists in power use the nation-state to undermine neoliberalism’s transnational institutions. The power of the WTO is not what it used to be. We have entered a situation where economic power lies in the hands of transnational oriented capital, while political power is increasingly slipping into the hands of different types of nationalists. The contradiction between neoliberalism and nationalist governments reached a tipping point with the financial crisis of 2007–2008, due to extensive speculation. It further strengthens the demand for a stronger state and control of capital. Nationalist feelings has also been reinforced by the U.S. moving towards dominance by military means, as it no longer has the economic power to uphold its hegemony.
Trump’s promise to “Make America Great Again” rest on economic protectionism and military might. But Trump cannot just roll back thirty years of neoliberalism. Apple electronics, Nike shoes, and Levi’s jeans will not be produced in the USA as long as U.S. wages are ten times those of Chinese or Mexican wages. Tariffs can slow down the neoliberal machine, but they cannot stop it. Trade wars will just fuel the economic crisis. The crisis of neoliberalism is a problem for the capitalist mode of production, which for decades ran smoothly by the global production-chains, which gave high profit for capital and cheap goods for the consumers. The rejection of neoliberal policies, the erosion of the institutions to manage global capitalism, and the shrinking size of the world market as a consequence of trade wars, embargos, and sanctions due to the rise of national conflicts in the world-system, hampers the continuation of capital accumulation.
Neoliberal shoch therapy, induces by the West, and administered by Yeltsin in Russia in the 90s, broken down the Soviet transitional state. Russia was not to be a partner invited to the “European house.” Neoliberalism did not produce prosperity, but the collapse of production and welfare system in Russia. This provoked a nationalist reaction both from the new capitalist oligarchy and the working class. Putin, coming to power in 2000, still hoped that that Russia could be part of a prosperous West and member of NATO. But NATO was not looking for a partner, but a “taker over”. Under the growing pressure from NATO, absorbing state after state in East Europe, Russian nationalism grew stronger, ending in the proxy war in Ukraine between Russia and NATO, and the all-out economic war between Russia and the West.
However, one specific national project challenged the U.S. hegemony more than others did. From 2000 to 2008 the average annual rate of China’s economic growth was 10.6%. The Chinese economy became the world’s second-largest economy in GNP. The biggest in terms of industrial production and world trade. The global economic crisis of 2008–2009 brought the double-digit growth to an end. But China avoided the severe consequences of what was called the “disorderly expansion of capital” by the Chinese Communist Party. First and foremost because China’s financial and banking system was state-owned, and not an integrated part of the global capitalist financial “house of cards”, that collapsed. Secondly, China quickly expanded investments in the state-owned sector to replace a flailing capitalist sector. However, China’s growth strategy was still based on exports to the U.S. and European markets and declined significantly. The global financial crisis was a wake-up call to the Chinese leadership to realize that neoliberalism was no longer a dynamic force to develop the productive forces, but increasingly a problem in the form of economic stagnation, social inequality, and environmental problems. These conditions led to the strengthening of a reemerging Marxist critique, challenging what had been the growing influence of neoliberal thought. The project of “Socialism with Chinese characteristics” was revitalized. The domestic market was expanded, and a huge campaign against rural poverty implemented. The heyday of neoliberal global capitalism is over. This meant increasing discordance between China’s national project of development and global capitalism. In terms of foreign policy, this was expressed by China’s attempt to reshape international politics from U.S. hegemony to a multi-polar world-system. China itself re-entered the center of the world stage and became the architect of a new economic order much more independent of the capitalist center states.
With a global South, frustrated by the meager economic result of the decolonization process and neoliberal globalization, it is not so strange, that we see economic cooperation and political alliance between China, South Africa, Brazil and national conservative regimes like India, Iran, Russia, Egypt and Saudi Arabia. The nationalists with a socialist perspective such as China, progressives, and the conservative nationalists are united in opposition against a unipolar world-system ruled by the U.S.
The current principal contradiction
The principal contradiction in the era of neoliberalism was between transnational capital´s globalization of production in the framework of a unipolar U.S. led world-system as the one aspect, and the national state, both in the Global North and South, attempt to regain control over economic development, under the leadership of nationalist parties, ranging from conservatives, populist right- and left-wing to communists, in the remaining transitional states, as the other aspect.
These two aspects have been transformed and concentrated into the current principal contradiction between the declining U.S hegemony versus the rise of China and an emerging multipolar world-system.
This change was generated by the shift in the economic balance in the world-system, as the result of forty years of neoliberal globalization. During that period, China became the world’s leading industrial producer and global trader.
As the political leadership of transnational capital – the U.S – experienced that it could no longer dominate the world-system by neoliberal economics means, it turned to geopolitical struggle by military means. The other aspect is the national states in the Global South, headed by China, united in the rejection of U.S. hegemony, whatever the method.
As multipolarity gains strength, so does the resistance from the U.S, hence the increasing aggression of NATO, the creation of AUKUS, the trade wars and sanctions. The loss of dominance in the economic sphere has entailed the U.S to turn to political and military geopolitical struggle, to regain its former position. The current war in Ukraine and Israel’s war on Palestine are not rooted in inter-imperialist conflicts, but in the U.S. drive to maintain control over both Europe and the Middle East.
The U.S is still the dominant aspect in the principal contradiction, but China and multipolarity is the offensive aspect. China have plans and visions for the future, while the U.S hegemony is in economic and political crises.
The intensification of economic, political, military and cultural globalization in the past four decades has increased the significance of the global principal contradiction on regional, national and local contradictions. The struggle between the aspects, together with the a complex pattern of economic and political local contradictions in both aspects of the principal contradiction, constantly change the balance between the aspects. Each regional, national, and local struggle has to be seen in this pattern of contradictions. All struggles in the world-system must take the conflict between a declining U.S. hegemony and the development of multipolarity into account, when developing their strategy.
Let´s take a closer look at the two aspects.
The decline of unipolarity
Since the end of the Second World War and until the turn of the century, the U.S. was the world’s dominant power, economic, political, military and cultural. The socialist bloc never managed to challenge that position. With the dissolution of the Soviet Union and the other transitional states in East Europe and Yugoslavia in the 1990s, this position reaches its height, but only for a couple of decades. The loss of economic superiority, in terms of industrial production, world trade and a weakening position in global finance, has changed U.S. economic policy from promoting neoliberal globalization, to the use of economic sanctions as a weapon in a geopolitical struggle to regain dominance. According to “The Washington Post” July 25th, the U.S has imposed sanctions targeting a third of all nations with some kind of financial penalty. By this the U.S is eroding the world market, which the U.S has relied on for the past century and the trust in dollars as world currency. By sanctioning so many countries the U.S has convinced an increasing number of states to seek alternative economic and financial structures to the ones governed by the US.
Add to all this the political crisis in the U.S that splits the economic and political elite and cuts down through the population. A crisis, the presidential election in November 2024 aggravate. The election of Trump will accelerate the decline of U.S Hegemony. The industrial-military-complex, the agricultural-business, the coal and oil industry support the Republican slogan “Making America Great Again” through geopolitical confrontation. The tech-giant, Google and Amazon, the electronic- and car-industry all wish for a return to neoliberal globalization, under the leadership of the U.S. However, you cannot turn back time, Global South will not accept such an agenda. What unites the two political factions in the U.S. are, that they both want and need a regime change in China and Russia to implement their plans.
The turn from neoliberal globalization to geopolitical confrontation has strengthened the military-industrial complex. U.S. military spending is mainly paid by printing dollars and the issue of Treasury Bonds, but these are not so attractive any longer. China is selling out of its stock. Add to this, the BRICS policy of general “de-dollarizations”. The two pillars of U.S. hegemony, which mutually support each other, its military force and the dollar as world currency, are unstable. Bank of China has been selling out its U.S. Treasury securities in the past years. The total amount of U.S. debt held by China has fallen to the lowest level as a percentage of GDP since China joined the World Trade Organization in 2001. As the BRICS countries decide to reorient their trade from North-South to South-South they are also moving away from the dollar.
The U.S allies in the EU, are dragged into this confrontation. At the end of the “Cold War” Germany and France began to cooperate with Russa on import of energy and raw materials. The Nord Stream pipeline through the Baltic Sea supplied Europe with Russian gas, and the EU invested in industrial production in Russia. Trade and investment with China also expanded up until the Ukraine war, strengthening an independent EU position in the world-system.
However, the turn in U.S policy from neoliberal globalization towards geopolitical confrontation changed all that. The U.S. proxy war on Russia on Ukrainian soil, disciplined the EU firmly back in the NATO-fold. Being a NATO partner, you are buying the full packets of U.S. policy including the confrontation with Chiana, the support for Israel in the Middle East, and so on.
Furthermore, is the U.S. disruption of the global market, which the EU rely heavily on, by U.S. trade-wars, sanctions and confiscation of assets belonging to nations, considered hostile by the U.S. The EU, Japan, Australia and New Zealand, are clinging to the U.S., as they think it will preserve their position in the world-system, however, they will be dragged down by the descent of U.S hegemony.
The rise of China and the multipolar world-system
The other aspect in the principal contradiction is the rise of China, breaking two hundred years of imperialist value-transfer, which has polarized the world-system into a center-periphery structure. China’s anti-imperialist struggle, resulted in the formation of a socialist transitional state in 1949, which managed to survive both the Cold War and the offensive of neoliberalism. By keeping its state intact, securing that the neoliberal globalization, did not lead into renewed dependency on the capitalist center, but instead a development of its productive forces, China enhanced the development of “socialism with Chinese characteristics”. The size of China in terms of production, development of advanced productive forces and global trade, makes it the main driver in the process of multipolarity.
Multipolarity is not just an adjustment in the relations between the world powers. All the countries. which constitute the new multipolarity, belong to what was called the Third World – now the Global South. It is the revival of old organisations such as the Pan African Union, Community of Latin American and Caribbean States, ALBA, G77 and forming new ones such as BRICS+. This is creating multiple centres depriving the current imperialist bloc of its power to determine the fate of the rest of the world.
The profile of the Global South is influenced by the political and economic history of the past century, first by the decolonization process and then by neoliberal globalization. The anti-imperialist struggle after the Second World War and up through “the long sixties” was waged by popular movements fighting for national liberation, often with communists in the front. They were able to achieve national liberation and had the ambition to continue the struggle by building socialism. However, the newborn states were still victims of exploitation and oppression by the dominating imperialist center, and their attempts to end economic imperialism were often in vain. The capitalist mode of production was still vital, and in the difficult last quarter of the 20th century, with the U.S as hegemonic power, they were sliding back into capitalism, engulfed in economic and political crisis, sometimes dragged down by imperialist military intervention or civil war. This is the story of the Middle Eastern countries. Frustrated by the inability to develop a form of socialism, to solve the social problems, other political trends like political Islam became influential, as for example in Algeria, Iraq, Syria Iran, Afghanistan, South Yeme and Palestine. This frustration over the inability to build socialism was also the case in the former Portuguese colonies in Africa: Angola, Mozambique and Guinea-Bissau The anti-apartheid struggle in South Africa, led by the former socialist ANC, also ended up in neoliberal capitalism.
The neoliberal offensive and its demand for “structural adjustment” of the economies in the periphery and semi-periphery of the world-system, to the demand of global capital, accentuated this process. However, as time passed, is also created a resistance against the consequences neoliberal globalization, in the form of different kinds of nationalism longing for a strong state as a bulwark against the market forces. The turn in Russia, from Yeltsin´s capitulation to neoliberalism, to the conservative nationalist policy of Putin’s oligarchy capitalism, is a prime example. Modi’s Hindu-nationalism in India is another. The trend of conservative national capitalism is widespread in the global South: Turkey, Egypt, Iran, Saudi Arabia and the Gulf states. Some of them like India and Turkey, are trying to gain by balancing between the West led by the U.S. and the new emerging multipolarity.
In Latin America we are seeing shifting left- and right-wing populist national regimes, trying to cope with the challenge from capitalist globalization. With the economic and political history of the latter half of the Twentieth Century in mind, is no wonder that organizations – like BRICS+ – which constitutes the new multi-polarity, also have these conservative and populist trends.
BRISC+, is consisting of Brazil, Russia, India, China and South Africa – admitted four new members in 2024: Egypt, Ethiopia, Iran and the United Arab Emirates. Its role in the global economy is steadily growing. The World Bank figures show that in 1994, the G7 countries (Canada, France, Germany, Italy, Japan, U.K., U.S.) constituted 45.3% of world output, compared with 18.9% of world output in the BRICS+ countries. In 2024 -the tables have turned. The BRICS+ now produce 35.2% of world output, while the G7 countries produce 29.3%.
The pursuit of individual goals creates friction within BRICS+. However, despite how different the BRICS+ countries are politically, they are united in the effort to end the century-long dominance of the West. BRICS+ is certainly not anti-capitalist. All, except China, are explicit capitalist, and even in China capitalism still plays a role. Neither is BRICS+ anti-imperialist in the stringent sense, but by opposing U.S. hegemony, they are diminishing the power of current U.S. imperialism in the world-system.
In that sense, the multipolar world-system is a step in the right direction, towards a more economically and politically equal world-order, in which there is more space for the development of socialism, both by social movements in the capitalist states and in the transitional states. A multipolar world-system has the potential to take the next steps in a socialist direction, not least because it is driven by a huge, economically and politically influential transitional state – China.
Multipolarity is no wonderland, and the next steps will not come by themselves. As the crises of capitalism develop, it will also have an impact on capitalist states in the multi-polar aspect of the principal contradiction. Capitalism will become increasingly irrational and even destructive. As it does not generate development, the capitalist states in the Global South will look for alternatives, and here China can be an example on how to handle the economic crises by expanding the role of the public sector, to the benefit of common people.
China used the dynamics of capitalism to develop its productive forces during the “opening up- period” from 1976 to 2007, by controlling the forces of capital. However, as capitalism lost its vitality, generating inequalities, dissolving social cohesion, and becoming increasingly unsustainable in relation to nature, its role had to be limited. The current “market socialism” is just one more steppingstone crossing the river, on the long transition towards socialism.
The average rate of profit in the capitalist sector of the Chinese economy has fallen from 26% in 2007 to 13% in 2023, and in parallel, net private investment as a share of gross domestic product has fallen from 23% in 2010 to 14% in 2023.
As the rate of profit in the capitalist sector has fallen, causing its investments in production to fall, we see an increase in investments in state-owned enterprises and in the public service sector, in order to maintain overall demand and keep the economy in balance. This will cause the share of state-owned means of production to grow and gradually come to make up the majority of society’s enterprises, and thus favourable conditions will be created for China’s next step towards socialism.
As the general crises of capitalism are deepening in the Global South, they are already looking towards China for solutions. China, with its development of productive forces both in quantitative and qualitative terms is able to assist this transformation, China has invested billions in infrastructure in the Global South: building roads, railroads, dams, ports, power plants. The latest investments have focused on communications technology and renewable energy. Unlike the U.S. E.U-countries, the World Bank, and IMF, China has not made special political and economic conditions for its loans, investments, aid or trade.
Currently the contradiction between declining U.S. hegemony and the rise of China and the development of a multipolar world-system has made the transitional state an important anti-imperialist actor – not only in its own account, but also because it provides space for socialist movements globally.
The contradictions of the multipolar world-system
In the anti-imperialist wave from the end of the Second World War, and up through the decolonization process in “the long sixties”, the main “agents of transformation” were the national liberations movements, often led by communist parties, and supported by the bloc of socialist transitional states. The liberation movements managed to gain national liberation, but only a few had the strength to establish durable socialist transitional states. In the current struggle against the U.S. hegemony, the primary agent is the transitional national state, primarily China.
The struggle against imperialism and for socialism in the world-system can be seen as a multi-step sequence: first the movement, taking state power. Then the establishment of a transitional state that tries to develop the productive forces necessary for the transition to socialism, while struggling for survival in a world-system dominated by capitalism. In that sense the transitional state is a higher organized form of anti-imperialism.
Gabriel Rockhill, in a discussion of my book “The long Transition to Socialism and the End of Capitalism,” summarized part of the argument, as presenting an analogy between China´s policy of “New Democracy” in 1949, uniting “the working class, the peasantry, the urban petty bourgeoisie and the national bourgeoisie”, in order to “enforce their dictator ship over the running dogs of imperialism” — with the current alliance between transitional socialist orientated states and nationalist capitalist state in the global South, in order to stand against imperialism on the global level.
In the previous section I have been looking at the contradictions in the world-system at the state level, however the motive force behind what goes on at state level is class struggle. Class struggle continues in the transitional state as well as in the other states constituting the new multipolarity. Ignoring the contradictions between the oppressed and the oppressors, the exploited and the exploiters, is to deny the need of the working class to advance its struggle for socialism.
The classes are represented by social movements and political parties struggling for state power. As most of the nations in the current multipolar world-system are capitalist, some even reactionary and conservative, they will be haunted by the structural crises of capitalism.
We need to understand the dialectical relation between emerging multipolarity and class struggle, both in the transitional states itself, and the class struggle in the conservative capitalist nationalist regimes in the Global South, such as in Russia, Iran, India, Egypt or Turkey.
To deny that the conservative national capitalist states in the Global South have a progressive part to play, in the struggle against U.S unipolarity, and to make the direct struggle for socialism by the working class, in these countries, the only alternative, is to fail to take into account the objective situation in the world-system. To develop a strategy in the complex pattern of contradictions, we must stick to the importance of the concept of the principal contradiction, as point of departure of the analysis, but not neglect the feedback of the regional, national and local contradictions.
The ongoing structural crises of the capitalist world-system, makes it unstable, with sudden economic and political swings, and seemingly odd alliances, also between transitional states and capitalist states. There are historical examples, of such strange alliances, in the last major political crises of the world-system between 1939 and1945. At that time, the principal contradiction was between the “Allied Forces” – primarily U.S and UK – and. the “Axis Powers” of Germany and Japan. It had a decisive impact on all other contradictions in the world at the time. The transitional state of the Soviet Union entered a non-aggression pact with its archenemy – Nazi-Germany – in 1939, causing confusion among communists worldwide. The Soviet Union did it to postpone a German invasion gaining time for rearmament. The Western powers were not interested in an alliance with Soviet against Germany at the time, because they hoped for a German-Soviet war, weakening both states. When the German invasion came anyway, the Soviet entered an alliance with the U.S. and U.K. against Nazi-Germany. In China the communists entered an alliance with the Kuomintang against the Japanese invasion, in spite of the fact that they had fought a life and death struggle against the Kuomintang for decades. Soviet entered the pact with Nazi-Germany to secure the existence of the transitional state, and China to secure the national liberation, the continued revolution and establishment of the Peoples Republic of China.
The use of the principal contradiction in analysis and the development of strategy can seem cynical. It can be difficult for revolutionaries in local struggles to be reconciled with these kinds of odd alliances. This is also the case today. Nevertheless, I think that the principal contradiction is a necessary and useful tool.
The same goes for the use of the principles of historical materialism in general. We must acknowledge the need of the development of the productive forces, in order to enhance the transformation to socialism. The development of a multipolar world-system will unleash the productive forces in the Global South from the constraints of U.S. led monopoly and finance capital and provide the foundations for a socialist transition in the longer run.
So, in that sense, is the establishment of a multipolar world-system, including the formations of BRICS+ a progressive step, and a more reliable strategy, than the wishful thinking and relaying on some non-existing – or at least weak – “pure” and ideal proletarian international movement, to be the driver of the much-needed transformation of the world-system. This is not to diminish the need for radical change in countries like Iran, Russia, India or Egypt and Turkey, and not acknowledge the importance of socialist revolutionary forces in these countries. A transformation of these states is a precondition for moving the multipolar world-system in a socialist direction. However, the current decline of U.S hegemony and strengthening of the multipolarity in the world system, even including those national conservative capitalist states, will also open up a window of opportunities for these socialist movements – which is a precondition – for the future transformation process towards socialism.
The structural crisis of the capitalist mode of production, will not only appear in the Global North. It will also hit capitalism in the Global South, creating a political crisis in the ruling classes, and thereby opening up the possibility for revolutionary class struggle. A revolutionary situation is not only defined by the fact that the people do not want to live in the old way. It is also a condition, that the ruling class is unable to continue in the old way, due to a severe economic and political crisis. The structural crises in capitalism will put pressure on the national conservative regimes in the Global South for change, and the transitional states will stand forward, as concrete and realistic examples of what can be done to regenerate development. Chinas “transitional mode of production” mixing market forces and a private capitalist sector with strategic industries, infra structure, and service state owned and run, have in the past decades, shown to be much more effective that neoliberal economics in terms of generating development. On top of this, comes the failure of global North to do anything serious to solve the problems of climate change. Instead, they have pursued a belligerent path trying to create regime change in Russia and China, in order to regain global hegemony. Finally, they have lost credibility concerning their often-voiced concern for human rights, and democracy, by their support to the Israeli settler state´s genocide in Palestine. The objective conditions for advancing multipolarisation are favourable.
The realization of the transformation from capitalism towards socialism, depends to a large degree on how China is able to handle multipolarity. Currently, the Chinese state has the strict policy of no interference in other countries’ internal affairs, reflected in its foreign policy at state level. At the same time the Chinese Communist party has relations with communists, socialists and progressive nationalist movements both in the Global South and North participating in class struggle. The balance between those positions is delicate and can change both as the struggle between the U.S. led West and Global South deepens, and class struggles in the capitalist states in the Global South evolves.
In the next decade, we will see the gap between North and South being narrowed, strengthening multipolarity. Before the mid-century we might see a balance has tipped in favour of world-order based on a socialist mode of production. The coming years will be a dangerous and critical, as the U.S. sees its hegemony slipping away, it might turn to war, using NATO against its adversaries. The development of the proxy in Ukraine and Palestine liberations struggle will have far-reaching influence on the overall world balance of power.
I we can avoid major wars, the transformation from the capitalist mode of production to a socialist, can be made rather smoothly. As the even the Chinese transitional mode of production has shown to be capitalism superior.
Much will depend on the BRICS+ holding together and continued strength. As a communist I can see the danger of relaying leaders and states like Modi in India, Iran, Egypt, and Putin in Russia. Certainly, the conservative and autocratic regimes are a weak link. Their policy, instability and regional disputes may create openings for US interference. However, for the time being – they are cooperating to find alternative solutions to the rule of U.S.
The transformation towards socialism at the national and global level
The dialectic of the transitional state is represented by, respectively, the nationalist development perspective and a global socialist perspective. An advanced socialist mode of production must be global, as it is based on a capitalist mode of production, which is globalized both in terms of geography and in function. It is not globalisation as such, which is to blame for the inequality and destruction of planet Earth’s ecology and climate, it is globalisation of capitalism under U.S hegemony.
However, the global transformation process has to go through the national state, as the world-system is politically organized in national states. The national framework constitutes a historical constraint that must be taken into account as a necessity, not something we should make into a virtue.
The Communist Party of China consider that China is in the “first phase of socialism” A stage which still will take decades to complete. Hence, China, or any other transitionary state should not attempt to avoid contact with other capitalist states, as the interaction with global capitalism is part of the transition process. It modifies capitalism and presents itself as an alternative to capitalism.
China must move ahead towards to socialism on the national road, as “Socialism with Chinese Characteristics”, but keep in mind, that a developed socialist mode of production has to be realized on the global level, as it has to solve the historically inherited problem of inequality between center and periphery in the world- system, as well as the global ecological and climate problems.
As we move ahead towards a more advanced stage of socialism, we will see the development of different socialisms with national characteristics, based on different histories and cultures. For the transitional state it is important to keep a balance between the national interest and a socialist transformation of the world-system. Historically this has been a problem in the socialist bloc. There are examples of excessive nationalism in the relation between the Soviet Union and the East European countries and Yugoslavia, and most importantly the Soviet-China relations in the 60s. Chinas harsh critique of Soviet revisionism and “peaceful coexistence” with the West in the sixties, seems more a product of national contradictions with the Soviet Union – than a part of the struggle against imperialism, seen in the light of Chinas own approach to the U.S. in 1971, and the following “opening up” to global capitalism. .
China went a step further in its critique of the Soviet Union in the 70s, launching “The Three World Theory”, naming the Soviet Union: “the most dangerous imperialist power in the world”. This led China to a foreign policy in which it supported PAC in South Africa, as Soviet supported ANC, and ZANU in Zimbabwe, as Soviet supported ZAPU. China also supported UNITA and FNLA together with Apartheid South Africa, Mobutu in Congo-Zaire and the CIA, in the Angolan civil war, against the MPLA supported by Cuba and the Soviet Union. Another example of a split between transitional states due to national disputes, is the war between China and Vietnam in 1979, when China launched an offensive against Vietnam, in response to Vietnam’s invasion of Cambodia to end the rule of the Chinese-backed Khmer Rouge.
Nationalist disputes between transitional states in the future will not only benefit imperialism but will also increase the risk of nuclear warfare and slow down solutions to the urgent environmental and climate problems. It will block the transition towards advanced global socialism.
The fact that humanity has transitioned from scattered local places, then from states and empires, towards a more and more globalized world-system, equipped with advanced productive forces, means that we have developed a way of living that has damaged the planet, and acquired weapons with the ability to destroy human life. But it has also contributed to the knowledge and ability to organize and manage the world-system as a whole, needed for an advanced social mode of production. The transformation of the relations of production towards socialism does not mean going back to productive forces organized only within a national framework. World unification has ceased to be an option. It has become a condition of its existence in the future.
As we approach this revolutionary “end game” the class struggle between the proletariat and the bourgeoisie at a national and global level will be accentuated. It will be a dangerous game. Mao called imperialism a “paper tiger”:
“Imperialism and all reactionaries, looked at in essence, from a long-term point of view, from a strategic point of view, must be seen for what they are – paper tigers. On this, we should build our strategic thinking. On the other hand, they are also living tigers, iron tigers, real tigers that can devour people. On this, we should build our tactical thinking.”
In the struggle we must be careful, and should not be adventurous in our actions, as global nuclear war will be catastrophic. But neither can we allow ourselves to give in to imperialism’s threats. Chinese foreign policy is directed towards deescalating conflicts and avoiding major wars, in order to secure the transfer to advanced socialism, believing that the economic and political crises in the West and superiority of the socialist mode of production will do the job. However, we do not have all the time in the world, as the destruction of the ecosystem and climate of planet Earth are accentuated by capitalism turning to geopolitical confrontation.
The idea to create an alliance between the socialist transitional states and the Global South against Western imperialism, goes back to the Bandung Conference in 1955 in Indonesia and the formation of the Third World. The Soviet Union launched the strategy of “the non-capitalist road”, a set of economic and political prescriptions to Third World countries where the “revolutionary democrats” hold state power. Specific examples are Gemal Nasser´s Egypt, which Soviet assisted in building the Aswan Dam, and the Ba’ath Party in Syria and Iraq. The strategy argues that if this leadership is supported by local communists and by the socialist countries, it can bring about a non-capitalist transformation of the economy preparing for socialism. By the revolutionary spirit of the Cultural Revolution in the sixties and material support, China tried to forge an “anti-revisionist” alliance with liberation movements and new Third World states. China built a strategic important railway from the copper mine in Zambia to the ports in Tanzania. As a third part of the transitional states, Yugoslavia promoted the non-aligned movement. In United Nation-context we see the formation of the 77-Group of Third world countries.
The nationalist and ideological contradictions and split between the Soviet Union and China in the sixties and seventies made it impossible to form a united front, between the socialist block and the Third World against the U.S. imperialist system. The responsibility for this must be shared. China felt patronized by the Soviet Union, going back to the Soviet led COMINTERN´s effort to decide the strategic and tactic of the Chinse Communist Party all through the revolution. The unbalanced critique of the Stalin era by Nikita Khrushchev, the attempt to copy paste the Soviet economic model to China all contributed. However, to announce, that the Soviet Union, was a greater imperialist danger than the U.S, which the Third World including China and Western Europe had to unite against, did not help to solve the contradictions between the transitional states. The split in the camp of transitional states, opened up for the counter-offensive of neoliberalism, The transitional states of the Soviet Union and Eastern Europe was dissolved, NATO split up Yugoslavia, all creating a widespread crisis of the idea of socialism.
A lesson learned is that the transitional states have to solve their national contradictions in a way, which do not harm the unity against imperialism, in order to create the critical mass and momentum in the transformation from capitalism to socialism. The possibility to create a multipolar world-system in the sixties was lost. The difference between today and then is, that U.S hegemony is declining, and the transitional state of China has the capacity to build political and economic institutions that are viable and attractive alternatives to Western imperialism. What still is missing, is a clear socialist agenda for this multipolar world system.
Strategy for anti-imperialists in the Global North
For us, in the Global North the dialectic of the transitional state is important. The understanding of the dilemmas and the balance between the need for national development versus advancing socialism nationally and globally (in class terms, the contradiction between national class unity versus the class struggle nationally and globally) is important and a guide for us, on how to relate to the transitional states. Both in order to defend the transitional state against imperialism, but also to advance the transition to socialism. We must support the transitional states’ respective nationalist aspects, against the hostile capitalist states. Not only to defend their attempt to develop socialism, but also because they are an essential anti-imperialist component, balancing imperialism, providing breathing space for socialist movements in the remaining capitalist world system. However, we must also push for a socialist transformation by class struggle, wherever we can, to ensure that the socialist aspect dominates the national aspect in the contradictions of the transitional state.
In other words, keep the principal contradiction in mind, between declining U.S. hegemony and the emerging multipolarity, when developing strategy for local struggles.
We need a specific and concrete analysis and strategy to act where we live, but it has to be made in the global and long perspective. Failing to do that, we will lose strength or end up on the wrong side in the global struggle for socialism. In that struggle, we should avoid idealism, picking and choosing what is right and wrong based on utopian socialist criteria. The construction of socialism is a long struggle, based on the existing world-system – it is not a sudden transformation into an ideal society. The failure to grasp the dangers and opportunities of the current momentum of the world-system would be to fail spectacularly, as we need to end the domination of capitalism before the middle of this century to avoid the abyss. It is the global South, which is the driver, of this transformation, they are moving ahead, and we must support them in any way we can. In their struggle against oppression and exploitation the Global South will moves to the left. Here in the global North, NATO still has the support of the vast majority of the population. It is not unusual that a class which is losing its privilege position moves to the right, in order to try to defend its position in the global hierarchy. However, as the economic, political and ecological crises draw out and deepen, things may change. In the meantime, anti-imperialists in my part of the world will be a minority, but an important minority. We must do our best to prevent imperialist aggression against the global South.
