October 6, 2025
By Jorge Cadima
The author, a regular contributor to the media of the Portuguese Communist Party, published the article below in the September/October issue of O Militante, the PCP magazine. We are maintaining Cadima’s notes listing sources. The article was written before the mass protests and strikes in France and Spain and the general strike in Italy against the genocide in Gaza. Translation: John Catalinotto
From the front page of O Militante, magazine of the Portuguese Communist Party.
Although we live in the nuclear age and existing weapons could wipe out human life on the planet, the discourse of militarization and war is becoming widespread and trivialized in the statements of imperialist leaders. Money, which “does not exist” for social spending and wages, suddenly “exists” — and in abundance — for militarization and war. Just as it always “exists” to pay for the excesses of banking and big finance.
The class divide is glaring. It is reflected in the misery that spreads side by side with the obscene opulence of a small minority. Imperialist domination is increasingly marked by chaos, decay, violence and cruelty. What jumps out at us is the interminable horror of genocide against the martyred people of Palestine, carried out for almost two years by Zionism in the service of imperialism.
Contrary to what is claimed by relentless propaganda, which portrays an invented world with words increasingly disconnected from reality, the crisis is not the product of obscure infernal agents. The crisis is the result of the decline of the old imperialist powers (primarily the U.S., Britain, France and Germany) and their refusal to relinquish a hegemony that no longer corresponds to economic reality.
This decline is the result of the very laws of capitalist development and the choices of extreme financialization and rentier parasitism over the last half-century (under the name of “neoliberalism” or “globalization”). The crisis is now manifesting itself on all fronts: economic, social, political, financial, military and cultural. The decline is symbolized by Donald Trump, Joe Biden, Ursula von der Leyen, Emmanuel Macron, Friedrich Merz, Keir Starmer, Mark Rutte (8). But they are only the consequence, not the cause.
Unable to halt the peaceful rise of new powers (first and foremost China), and seeing the traditional mechanisms of global control slipping away, the most reactionary sectors of the imperialist powers are focusing on violence and war to prevent their hegemony from fading away. To this end, they promote the authoritarian and fascist political forces that always accompany the turn to militarism and war. This was already the case in the 20th century.
Big finance capital that rules the imperialist system, and which has its state mechanisms of world domination in the U.S., Britain and the European Union, is incapable of accepting a world based on relations of equality. It only knows the language of domination and subjugation. It prefers to drag humanity into disaster rather than accept the reality of its historical decline.
The decline of the imperialist superpower
The decline of the United States of America is now undeniable. The great capitalist power, once the home of more than half of the world’s industrial production, is now reduced to a pale shadow of its former self.
Many decades ago, it embarked on a course of extreme financialization. Its industrial and productive base has been replaced by increasingly parasitic and rent-based activities. In the absence of investment, its infrastructure has deteriorated. Production has been transferred to other countries (offshoring), where lower wages and manipulated exchange mechanisms guarantee superprofits. In its place, a gigantic octopus of increasingly speculative financial activities has grown, disconnected from what the system’s own economists call the real economy, thus attempting to counteract the effects of the downward trend in the rate of profit (1).
For decades, this octopus has ensured the transfer of enormous wealth created around the world to the U.S., financing its ever-increasing trade and payments deficits resulting from deindustrialization. In 2024, the U.S. trade deficit in goods and services exceeded $918 billion. Official figures for the first five months of this year point to a 50% increase (2).
The wheel turns
This enormous turntable has been based on three interrelated factors: U.S. control of the international financial system, including nominally multilateral institutions such as the International Monetary Fund (IMF) and the World Bank; the role of the dollar as international reserve currency; and the gigantic military (Pentagon) and subversion apparatus (CIA and its counterparts) that has ensured U.S. hegemonic supremacy and on which the first two factors of U.S. hegemony are based.
But this mechanism has entered into crisis, despite having been momentarily camouflaged and mitigated in the 1990s with the disappearance of the USSR and the accompanying counterrevolutionary wave worldwide. While this shift reinforced the global power of the U.S., it also fueled the worst aspects of the imperialist system: aggression, warmongering, parasitism, rentier capitalism, hyperfinancialization, hoarding of wealth, impoverishment of vast masses (even in the imperialist centers) and uncontrolled and unsustainable state debt.
In an apparent paradox, the U.S.-centered imperialist system, at the height of its international power — when it was able to impose its “law” with few obstacles on countries, peoples and workers, who were on the defensive due to the counterrevolutionary wave of the 1980s and 1990s — entered a phase of intense decline, both domestically and internationally. It is this decline that lies at the heart of the current crisis.
The episodes of crisis — which until the beginning of the millennium mainly affected the countries of the so-called periphery (Latin America, the “Asian tigers,” a Russia bled dry by the “shock therapies” of capitalist restoration) — exploded in the imperialist center in 2007-08 and in the Euro crisis, revealing the fragilities and vulnerabilities of the machinery created by big finance capital.
It became clear that the much-vaunted “markets” are not only “inefficient” but also depend entirely on the “saving hand” of the state to prevent their collapse. They are mere mechanisms for the appropriation of wealth — all of which is created by the labor of humanity — into the hands of a parasitic and destructive minority that pockets profits and rents, leaving the losses to be borne by workers and the people.
The diagnosis of the decadence of the U.S. is shared by the entire ruling class of the imperialist superpower (3); a country corroded by deindustrialization, increasingly dependent on foreign countries, even in cutting-edge areas and affecting critical military aspects; unsustainably indebted; and with large sections of the population increasingly impoverished and deeply discontented.
But the difficulty in turning the situation around has deeply divided the U.S. ruling class. Its internal contrasts have reached an intensity unprecedented in many decades.
Trumpism
The phenomenon of Trumpism reflects widespread discontent among the U.S. population. Effective at selling promises, Trump was able to bring together deep social unrest and revolt against the ongoing wars that — in addition to destroying entire countries and regions of the planet — contributed to the indebtedness and impoverishment of the people in the U.S.
Trump sold the illusion that he would “make America great again” (MAGA). His style of simultaneously asserting one thing and its opposite helped to camouflage the true essence of his project.
But six months of his presidency already reveal two things. The first is that the deeply reactionary and class-based nature of his politics is clearly asserting itself. Social promises are being betrayed. And instead of the promised end to U.S. wars around the world, they are intensifying (as evidenced by the attacks on Iran and Yemen and the unconditional support for Israel).
The second is that the style of permanent confrontation and attacks, both against adversaries and vassals, makes it highly likely that the Trump presidency, far from resolving the crisis of U.S. global hegemony, will end up aggravating it.
The much-talked-about “tariff policy” of Trumpism is based on an objective that is itself not irrational: Raising customs barriers makes imports more expensive and could boost domestic production and bring revenue to the state. Trump openly proclaims these objectives.
The return of production to U.S. soil is aimed not only at large U.S. companies with factories based in other countries but also at foreign companies that want to sell in the U.S. market.
Customs duties are accompanied by actions, using force. Many of these actions date back to the Biden era, such as restrictions on exports of advanced chips to China or the attack on the NordStream gas pipelines. The latter also aimed to make production costs in Europe unviable, encouraging relocation and subordination to the U.S., a goal that is being achieved with the collaboration of the German government and the European Union (EU). The U.S. also feeds off its “allies,” which are really vassals.
Reality is proving difficult
Announcements of major investments in the U.S. are multiplying, both from American companies (such as Apple) and foreign companies (TSMC, Samsung, Mercedes-Benz). But the reality is proving difficult. On the one hand, Trump’s erratic and confrontational style creates enormous uncertainty that hinders investment plans and breeds resentment. On the other hand, the devastation of the U.S. industrial fabric and the decline in the quality of the U.S. educational system has reached such proportions that many of the new technology companies are finding it difficult both to become commercially viable and to find skilled labor.
The world’s largest chip manufacturer, Taiwanese company TSMC, has been investing in the U.S. since 2020. Its investments, both completed and planned, amount to $165 billion, and TSMC has already received more than $6.6 billion in subsidies from the U.S. government (4). However, about half of its workforce had to be brought in from Taiwan (5). And in 2024, it posted losses of $441 million (6).
South Korea’s Samsung has postponed the start of operations at its new factory in Texas — a $37 billion investment for which it received $4.7 billion in subsidies from the U.S. government — due to a lack of customers (i.e., equipment manufacturers that need its chips) (7).
The boss of Nvidia publicly complains about the failure of the policy of restrictions on exports of advanced chips to China. This restriction has resulted in a loss of market share in the Asian giant, which is becoming self-sufficient in the production of these advanced chips. (bbc.com, May 21, 2025) China’s retaliation (restricting exports of rare earths and other materials) is affecting the U.S. military industry itself.
An industrial fabric cannot be created by decree, without planned state intervention, which, for various reasons, the U.S. government seems incapable of providing. And the underlying causes that led to the financialization of the economy remain. It is difficult to convince big finance capital to invest in the productive economy when its rentier profits are greater in a speculative economy.
What seems to be experiencing unlimited expansion is big finance. In a special issue dedicated to the U.S., The Economist magazine (May 31, 2025) states that “American finance has been transformed over the last decade,” with explosive growth in financial institutions (known as hedge funds, private-equity firms and trading firms), notably Apollo, BlackRock, Blackstone, Citadel, Jane Street, KKR and Millenium. They are growing thanks to the same speculative activities that led to the crash of 2007.
The Economist admits that these are “frighteningly opaque” firms that escape the (scarce) restrictions imposed on banks after 2008. It warns that in the next financial crisis (which “will always happen”), we will “wake up to the fact that we are dealing with a financial system we do not know.”
And The Economist calmly anticipates: “New emergency lending schemes will be needed. Saving the banks last time was politically toxic. Saving billionaire investors will be an incomparably more difficult task. And yet, if the largest of these giant firms are allowed to fail, it could lead to a global credit crisis.”
Translated into plain English: The multimillionaires are once again pocketing huge sums, but when their new para-banks burst, the people will, as usual, be called upon to foot the bill. It is parasitic capitalism in all its glory.
‘Big Beautiful Bill’
The same class criteria presided over the Big Beautiful Bill (BBB) passed by the U.S. Congress and signed by Trump on July 4. Far from curbing debt, as promised by Trump, his BBB will “add $3.4 trillion to budget deficits over the next 10 years and leave millions without health insurance.” (cbsnews.com, July 4, 2025)
The richest will see their tax cuts extended. And Congress has allocated an additional $150 billion to military spending, which, together with what has already been budgeted for this year, brings the U.S. military budget to nearly $1 trillion. (thehill.com, July 3, 2025)
But funding for special health care assistance programs (Medicaid) will be cut by $793 billion. And the SNAP program, which provides food assistance to the most needy and benefits 41.7 million people, or 12.3% of the U.S. population, will be cut by $286 billion. (wvmetronews.com, July 3, 2025)
The U.S. public debt, which already exceeds $37 trillion (123% of gross domestic product), will continue to grow uncontrollably. Even with increased military spending, interest on the debt continues to exceed the gigantic military budget of the capitalist superpower. Although they are aware of the unsustainability of the system, big finance capital and the wealthiest are proving incapable of curbing their insatiable greed. But the debt is unpayable. How to cancel it without compromising the global power of the U.S. is surely a major concern for the leading centers of big finance.
War as a ‘solution’
It is in this context that the sectors of big finance capital that are betting on using force to overcome the crisis and preserve their domination are gaining ground. Trump threatened to withdraw the U.S. from the Ukrainian quagmire. But statements by Defense Minister Pete Hegseth on his first trip to Europe (February 2025) made it clear that the goal was to carry out a “division of tasks:” to have Europe deal with the conflict with Russia, so that the U.S. could concentrate on preparing for war with China.
Hence the demands that NATO members increase their military spending to 5% of GDP. The spectacle of subservience and flattery that surrounded the NATO summit in June 2025 was degrading. Trump’s demands were welcomed with boot-licking.
This subservience was repeated in July, with the EU bowing to Trump’s economic demands. The EU leaders promise endless billions, as long as the U.S. does not lose interest in the Ukrainian quagmire. Leaders in Germany, France and Britain are openly calling for war against Russia.
In this field, too, divisions are emerging within the imperialist camp. While some sectors target Russia as a priority, others target China and still others Iran. The result is increased conflict on all three fronts. The genocide in Gaza — now also through starvation as a weapon of war — continues with impunity.
What is not in sight are sectors of the imperialist ruling classes that advocate peaceful solutions. They are aware of their decline and fear that peace will deepen that decline. They view any mechanism of multilateral cooperation that is not under their control as a mortal danger. This is the case with the BRICS intergovernmental organization (9), whose main characteristic is heterogeneity — economically, socially, politically and culturally.
It is no coincidence that the countries the military doctrines of the imperialist powers define as enemies — China, Russia, Iran — are the driving forces behind the BRICS. It is no coincidence that Trump’s fury is directed against Brazil, India and South Africa. It is no coincidence that terrorism (probably with the help of the British and Israeli secret services) was at the origin of the recent war between India and Pakistan. Trump publicly declared war on the BRICS.
The arms race and war are inevitably linked to the massive indebtedness of states. But debt is the source of profits for big finance capital. Germany is now being led down the path of deindustrialization (except in the military industry), which replicates the path taken half a century ago by the U.S. and Britain. The consequences will be similar. But the social disaster will be a godsend for the large transnational financial capital that German Chancellor Merz represents.
Blocking the path to war
The system is proving incapable of reforming itself. Like the Titanic, it cannot change course even though the iceberg is in sight. Warmongering is always accompanied by authoritarianism and extremist and fascist forces, which are promoted by economic and political power. Their aim is to crush the resistance of workers and peoples. We cannot rule out major provocations that serve as a pretext for escalating war.
The barrier that can prevent a catastrophe lies in the struggle of workers and peoples. It lies in the creation of a broad anti-imperialist front which, bringing together all those who refuse to bow down to big finance capital, can defeat the party of war and halt the march toward disaster.
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Notes
(1) The law of the tendency of the rate of profit to fall is one of the fundamental laws of capitalism, discovered by Marx.
(2) U.S. Bureau of Economic Analysis
(3) See the speech by Jake Sullivan, Biden’s National Security Advisor, at the Brookings Institution on April 27, 2023.
(4) 9to5mac.com, April 8, 2024
(5) New York Times, Aug. 8, 2024
(6) finance.yahoo.com, April 24, 2025
(7) techspot.com, July 5, 2025
(8) U.S. Presidents Donald Trump and Joe Biden, President of the European Commission Ursula von der Leyen, French President Emmanuel Macron, German Chancellor Friedrich Merz, British Prime Minister Keir Starmer, NATO Secretary Mark Rutte.
(9) infobrics.org
