Niu Xiafei: A Thorough Analysis of the Comprehensive Crisis of Contemporary Capitalism and Its Harmful Effects
Since the 1970s, the polarization between rich and poor in capitalist countries—particularly developed capitalist countries—has grown increasingly severe. Entering the 21st century, movements such as Occupy Wall Street and the Tea Party, the phenomena of Trumpism and Bernie Sanders, the Yellow Vests and pension protests, and "Black Lives Matter" alongside "Algerian Lives Matter" have swept across Europe and the Americas. Meanwhile, the financial-economic crisis, the COVID-19 pandemic, and the Russia-Ukraine conflict have continued to disrupt the world. These endlessly emerging disorders demonstrate that capitalism is by no means facing merely the temporary or localized crises suggested by mainstream Western public opinion; rather, a comprehensive crisis has erupted across the fields of politics, culture, economy, and the international order, manifesting new characteristics distinct from the past. This comprehensive crisis has led to major shifts in the domestic and foreign policies of capitalist states and will inevitably cause a shift in the balance of power between world capitalism and socialism, serving as an important manifestation of the world's "Great Changes Unseen in a Century." Therefore, integrating the latest realities to analyze the developmental mechanism of contemporary capitalism's comprehensive crisis and the disasters it inflicts upon the world is of great practical significance for deepening our understanding of capitalism’s current state and future, and for strengthening our confidence in socialism and its destiny.
I. Polarized Stratification and New Class Conflicts Rent Between "Left" and "Right"
Under the capital-centric interest distribution pattern formed by globalization and the technological revolution, the gap between rich and poor in capitalist society has expanded sharply, forming complex class conflicts that have led to systemic and cultural crises.
(1) Neoclassical Liberal Globalization and New Technological Revolutions: Inequality and Class Stratification
Specifically, two major reasons have led to the current widespread and intensifying inequality in capitalism.
First, neoliberal globalization. It drives the polarization of wealth and class through a triple mechanism consisting of the reorganization of corporate production, financialization, and government policy responses to economic crises, thereby consolidating the rule of capital over labor.
- The reorganization of corporate production has enhanced the power of transnational capital, oppressing labor, especially domestic labor. After the 1970s, neoclassical liberal globalization actively promoted corporate restructuring centered on deindustrialization and offshoring. While this found cheap labor for capital, more importantly, through "geographical expansion and restructuring," surplus capital crossed the barriers of nation-states to open new spaces of accumulation where surplus value could be continuously extracted, thereby creating a powerful transnational capitalist class. Simultaneously, due to the outsourcing of manufacturing and administrative service jobs, positions for blue-collar and some white-collar workers decreased, weakening the bargaining power of unions against management. Domestic labor must also compete with immigrant labor flowing into the country, thus facing greater exploitation by transnational capitalists.
- Financialization has given rise to the financial capitalist. Financial capitalists have joined with transnational industrial capitalists to strengthen the rule of the bourgeoisie and further usurp the rights and interests of workers. Currently, the structure of capital accumulation is deeply financialized, with both the financial sector and physical enterprises dominated by a "logic of financialization." Fundamentally, financialization is a "class struggle" launched by financial, transnational, and industrial capitalists against workers. It exacerbates inequality through three main methods: (a) the disordered expansion of the financial sector squeezes the profitability of non-financial sectors, causing incomes for the lower and middle classes to decline; (b) financialization emphasizes the maximization of shareholder interests, through which capitalists and many corporate executives obtain massive profits and salaries; (c) financialization, along with deindustrialization, offshoring, and the shrinking of the real economy, has become a major cause of the decline of labor unions. Additionally, as the labor share of income has decreased sharply, neoclassical liberalism created "privatized Keynesianism" [1] to prevent a demand-side crisis, encouraging personal mortgages and other forms of debt to further exploit workers.
- Contemporary capitalist economic crises manifest primarily as financial crises. Western governments adhere to neoclassical liberal crisis-response measures, which usually favor transnational monopoly financial capital. For example, during the 2008 financial crisis, the U.S. government first bailed out financial institutions such as Citibank and JPMorgan Chase. After the crisis, the market share of these institutions expanded further, and the personal assets of capitalists and many corporate executives grew faster, while the general public bore most of the bitter fruits of the crisis, such as unemployment and precarious employment. Furthermore, after the crisis, American and European countries implemented even stricter "austerity capitalism," cutting welfare spending and accelerating the privatization and marketization of public services, making life more difficult for the lower and middle classes who had already been hit by the financial crisis.
Second, emerging technologies exacerbate the class stratification of workers through automation and the digitalization of the labor process, deepening the chasm between the bourgeoisie and the working class.
- Automation increases the risk of unemployment and exacerbates inequality. When machines are introduced into the capitalist production process, workers start by operating them, then move to overseeing them, and may finally be replaced by them during the stage of "automated machine systems." Currently, the production automation caused by the information technology revolution is making jobs in specific industries disappear rapidly—manufacturing and services being the first to be affected. Simultaneously, middle-skill positions or simple white-collar jobs are being replaced. With the development of artificial intelligence, even higher-level labor such as managers and technical experts will be replaced. Automation is also accompanied by workplace monitoring driven by algorithms and biometrics, allowing capitalists to use "digital leashes" to bind the bodies and minds of blue-collar and white-collar workers, achieving the ultimate exploitation of them.
- The tight integration of the labor process with digital technology into "digital labor" has exacerbated the binary polarization of the labor force and strengthened the rule of capital over labor. On one hand, digital labor is a type of knowledge and intellectual labor that causes stratification within the working class: the "multitude" possessing "general intellect" and engaged in cognitive work such as data processing forms the main body of the working class; meanwhile, a small number of workers who possess "tacit knowledge" that is difficult to disseminate and easy to monopolize, and who engage in creative work, occupy the upper stratum of the working class. On the other hand, digital labor is rife with "digital exploitation." This is mainly carried out through three ways: (a) forming digital prosumerism, which erases the boundary between digital workers and consumers, forcing the public to provide unpaid digital labor time; (b) establishing the platform gig economy, implementing an employment model that is elastic, flexible, and possesses the illusion of "freedom and independence" while actually creating a massive group of low-skill, precarious employees, while simultaneously exercising strict and extensive "spatio-temporal control" over workers through algorithmic management systems; (c) constructing a "social factory," [2] eliminating the boundaries between the factory, the office, the whole of society, and the personal lives of workers, so that the production of value relations and the power of capital "pervade all social fields," whereby workers become "cyber-slaves" locked in "24/7 electronic sweatshops."
(2) New Stratification Structures and New Forms of Class Conflict: Polarization and the "Left"-"Right" Tear
The aforementioned inequality and class stratification—particularly the class split between capitalists and workers—are reshaping the hierarchical structure of capitalist society, leading to intense and intricate conflicts.
First, inequality and class stratification have caused capitalist society to form a new type of polarized hierarchical structure. It was generally believed that after World War II, the stratification structure of Western countries was "olive-shaped" (diamond-shaped). The middle class, primarily consisting of the working class, was the mainstay of society, enjoying a strong sense of economic security and possessing significant upward mobility, matching that of the lower class (the bottom of the working class). However, as inequality intensifies, it has become difficult for the middle and lower classes to move upward, and many have even fallen in status. Earl Wysong defined this new structure as "double-diamond": the "small diamond" at the top represents the bourgeoisie, while the "large diamond" at the bottom represents the working class. The population ratio between the two is roughly 2:8, and the "new working class" of the middle stratum continues to shrink. Additionally, some scholars describe the stratum or income structure of contemporary capitalist society as "hourglass-shaped" or "M-shaped."
Second, capitalist society is undergoing a class conflict characterized by binary opposition and a tear between the "Left" and the "Right." One aspect is the opposition and conflict between the bourgeoisie and the working class. Marx and Engels pointed out that capitalist society will "increasingly split into two great hostile camps, into two great classes directly facing each other: Bourgeoisie and Proletariat." This is precisely the reality in contemporary European and American capitalist countries: the middle class is undergoing continuous "proletarianization" while the working class undergoes continuous "pauperization." Both white-collar and blue-collar workers believe they are living in an "age of insecurity" and feel dissatisfied with their external environment. The second aspect is the split and conflict between "Left" and "Right" within both the bourgeoisie and the working class. Currently, due to differing benefits gained from globalization and the technological revolution, the capitalist and worker groups have both experienced a clear "Left-Right" split. On one side, financial, high-tech, and large industrial capitalists, corporate executives, those engaged in transnational trade and high-tech R&D, as well as immigrants, women, and the highly educated who benefit from globalization, have largely become the left wing of the class structure and are more supportive of center-left parties. On the other side, some small and medium-sized physical industry capitalists hit by globalization, financialization, and high taxes—as well as blue-collar and white-collar workers with lower education and skills who are unemployed or in precarious employment due to deindustrialization, offshoring, and automation—along with domestic (primarily white), elderly populations, and residents of decaying urban areas, small towns, and rural regions, have largely become the right wing of the class structure and are more supportive of right-wing parties.
In general, the wave of globalization and technological innovation led by Western capitalist countries has resulted in domestic economic inequality, class stratification, and class opposition, while also allowing international monopoly capitalism to run rampant. Wherever monopoly capital goes, wealth polarization and class conflict follow. Consequently, the strength of capital, the weakness of the masses, and social polarization have become global phenomena, brewing unrest and turmoil.
II. The Rise of Populist Democracy and Polarized Politics and the Ossification of the System of Checks and Balances
Contemporary capitalism primarily practices elite politics through the electoral system, pursues consensus politics through the party system, and utilizes the system of checks and balances to achieve equilibrium between the bourgeoisie and between the state and society. Neoclassical liberal policies, however, have diverged too far from the interests of the people, leading to the rise of populism, polarized politics, and the ossification of the system of checks and balances.
(1) Electoral Crisis: Populist Rebellion Against Elite Politics
Western countries have long promoted mass elections in form while practicing elite politics in substance. From the end of World War II to the 1970s, European and American elites constructed a "Keynesian regime." During this period, the public generally believed that elections could compel elites to implement policies consistent with the public interest. After Keynesianism failed, European and American elites created the "neoclassical liberal regime." However, its practice over more than half a century has pushed elite politics into a predicament. First, from 1979 to 1992, right-wing elites represented by Thatcher and Reagan took the lead in implementing privatization, tax cuts, deregulation, and globalization policies, establishing a capital-centric economic system that attacked the working class, eventually forcing center-left elites to accept neoclassical liberalism. Next, from 1992 to 2007, as right-wing elites left office, center-left elites introduced "Third Way" or "progressive" neoclassical liberalism, continuing to promote globalization and economic growth while advancing welfare developments and cultural tolerance. Finally, from 2008 to the present, right-wing elites partially returned to power and basically merged with left-wing elites; however, factors such as the financial crisis, extreme inequality, and the impact of migration have led the public to question and strongly oppose both left-wing and right-wing elites.
Currently, the destructive consequences of neoclassical liberalism have incited a wave of populism, impacting elite rule. Among the lower and middle classes, the Left demands the implementation of direct democracy or "plaza politics," while the Right turns toward "affective politics" and "post-truth politics." Populism also challenges another essential condition for elite politics: that the public acquiesces to elite rule through low voter turnout or political apathy. Marked by the 2016 and 2020 U.S. presidential elections, voter turnout and political participation have increased, shaking elite rule.
Scholars such as David Harvey argue that populism—specifically the rebellion of the right-wing masses against elite politics—has been co-opted by the elites. This is manifested primarily in two ways: first, while the right-wing masses oppose the elites, they cannot detach themselves from them and have even cast their lot with fascist elites; second, the far-right elites are forming an "alliance" with Neoconservatism. Consequently, Harvey dismisses right-wing populism and its role. However, on one hand, the primary objective of populism is to oppose the elites; on the other, the prevalence of populism is itself an expression of the crisis of the capitalist electoral system. At the same time, left-wing masses and elites are essentially relative beneficiaries of the globalization promoted by Neoconservative elites; therefore, the rebellion of the right-wing masses carries greater significance than that of the left. In short, viewing the rebellion of both left-wing and right-wing populism against elite politics from a Marxist standpoint reveals that it is actually a collective rebellion of the working class against the bourgeoisie—a joint rebellion of the "powerless class" against the "moneyed class."
(2) Party Crisis: Polarized Politics Subverts the Politics of Consensus
After World War II, the size of the middle class in Western societies expanded. To win elections, political parties vied for the median voter by promoting a politics of consensus. Specifically, in the United States, the Democratic and Republican parties engaged in widespread cross-party cooperation around the "New Deal Consensus." Europe saw a similar trend: right-wing parties moved toward the center, while Social Democratic parties, though more dependent on the working class, transformed into "catch-all parties." However, this consensus politics, which relatively favored the interests of the masses, soon degenerated into a Neoconservative consensus politics. Mainstream parties of both the left and right became increasingly unscrupulous in serving the interests of the bourgeoisie—particularly monopoly capital—while increasingly ignoring the demands of the lower and middle classes. Consequently, the masses began to subvert the politics of consensus through polarized politics, resulting in a crisis of party politics.
In the United States, the masses subverted consensus politics by refashioning the mainstream parties. Although the populace still identifies with the Democrats and Republicans, the left has forced the Democratic Party's hand by supporting Bernie Sanders and radical progressives, while the right has reshaped the Republican Party through "Trumpism." Division and confrontation caused an unprecedented "difficult birth" [3] for the 2020 general election, and the "Capitol Hill Incident" [4] briefly turned the electoral crisis into a crisis of power transition. Ultimately, this "civil-war style" political conflict was forcibly suppressed by the state apparatus of violence, and Joseph Biden held his inauguration ceremony under military protection. Currently, struggles surrounding the pandemic, inflation, racial hatred, and especially the 2024 election cycle continue to exacerbate political polarization in America. In Europe, the masses have subverted consensus politics by choosing far-right parties outside the mainstream. In Germany, the Alternative for Germany (AfD) has continuously gained ground, winning its first local election in 2023. In France, National Rally leader Marine Le Pen has run for president three consecutive times, reaching the second round in the last two elections. In Italy, the Brothers of Italy became the largest party in 2022, forming the most conservative government since World War II. Sweden was long considered a bastion of Social Democracy, but in the 2022 elections, the right-wing Sweden Democrats surged to become the second-largest party. Furthermore, far-right fringe parties in countries like Finland, Belgium, Austria, and Hungary have seen a rapid rise in recent years.
(3) Constitutional Crisis: Imbalance and Rigidity in the System of Checks and Balances
Through long-term development, the American constitutional arrangement of checks and balances has come to refer not only to the separation of powers in a narrow sense, but also to a broad sense of checks and balances exerted by the mass media—representing society as the "fourth power" [5]—over the national government represented by the three branches. Currently, however, both the narrow and broad forms of checks and balances have become rigid.
First, the separation and balance of the three branches has degenerated into a "vetocracy." The separation of powers is an institutional arrangement whereby capitalism partitions power to achieve balance within the bourgeoisie and to keep the people divided and dependent on the ruling class; it inherently contains the "genes" for different classes and groups to oppose one another. In recent years, this mutual opposition has evolved into hostile vetoes. At every "veto point," the ruling elites can seize upon and exploit public opinion. Furthermore, the U.S. civil service system has reinforced this vetocracy. Civil servants are the implementers of regulatory policies regarding finance, welfare, immigration, and environmental protection, and they ideologically identify with the "political correctness" championed by the elites. These civil servants shuttle between "veto points" like the Presidency, Congress, and the Courts, maintaining inextricable links with interest groups. They use these links to form "iron triangles," "revolving doors," and the "Deep State" with political, economic, and academic circles. Thus, the civil service system has made the American constitution even more imbalanced.
Second, the checks and balances exerted by the "fourth power"—society—on the national government have clearly stagnated and degenerated. Although the mass media is a vital component of the capitalist ideological apparatus, for much of the 19th and 20th centuries, it also served as an aid to the working class in its struggles against capitalists and rulers. However, contemporary mass media is deeply entrenched in the values of "political correctness" and has largely become a mouthpiece for Neoconservative elites and their parties, leading to a continuous decline in public credibility. It can be said that the function of mass media in representing society to check the state "Leviathan" has significantly regressed compared to the past. Moreover, due to the development of digital communication technology and the financialization of digital media, digital corporations have become powerful "accomplices" in sustaining bourgeois cultural hegemony and assisting the "Digital Leviathan" in its rule over the masses.
Generally speaking, for decades, Western nations have utilized force or soft power to promote the so-called third and even fourth "waves of democratization," instigating "color revolutions" [6] in developing countries across Asia, Africa, and Latin America, as well as in the former Soviet regions, in a desperate effort to export their liberal democratic systems. However, non-Western countries that have actively or passively accepted "liberty" and "democracy" have suffered from a constant stream of chaos, including electoral fraud, political corruption, military coups, armed conflicts, national disintegration, and the proliferation of extremist and terrorist forces. This has triggered political instability, hindered economic development, and widened the gap between the rich and the poor. Today, the West is itself mired in institutional dilemmas and is even exporting its internal populism and political polarization to non-Western countries, further aggravating political instability in those nations and posing a threat to the production, lives, and even the physical safety of their people.
III. Spiritual Collapse and Value Fragmentation Following the Shattering of the Post-Class Narrative
Contemporary capitalism utilizes ideological indoctrination and digital technology to construct a "post-class narrative," yet the real-world class chasm continues to deepen. This has triggered psychological breakdowns and caused a fragmentation of values.
(1) The Exhausted Utopia: Spiritual Collapse after the Screening Out of Class Politics
After World War II, class conflict in capitalist societies appeared to moderate. In response, Anthony Giddens proposed "life politics," and scholars like Louis Althusser advocated for the struggle for "cultural hegemony"—both of which, in practice, served to downplay class conflict. Daniel Bell stated bluntly that the most serious conflict in post-industrial society was not class conflict, but the conflict between industrial culture and modernist culture. In Bell’s view, industrial culture possessed both "asceticism" and "acquisitiveness." Its original impulses, constrained by Puritan ethics, primarily manifested a rational and progressive side. However, economic development broke religious shackles, allowing modernist culture—with radical individualism at its core—to "reign supreme" and merge with the market. This commodified culture and morality, plunging society into a spiritual crisis.
The aforementioned spiritual and cultural conflicts are, in essence, reflections of the intensified fundamental contradictions of capitalism within the human spirit; thus, they remain class conflicts. Evading this fact makes it impossible to recognize the roots of these spiritual and cultural conflicts, fails to help resolve them, and may even accelerate their development. In recent decades, capitalism has further screened out class politics through ideological indoctrination and the application of digital technology, leading to an accelerated collapse of the masses' spiritual world.
First, Neoconservatism promotes a "post-class promise"—the idea that future society will be an ideal world of high mobility, abundant wealth, and cultural order. In reality, however, this has led individuals and society to lose their value orientation. On one hand, the "post-class promise" contains a logic of extreme "personal responsibility," suggesting that in the free competition of a post-class society, success or failure, self-restraint or indulgence, are strictly personal matters irrelevant to the government or society. Consequently, the achievement of success and the evaluation thereof have evolved into a "tyranny of merit," serving as a key mechanism for fueling resentment and populism. Meanwhile, the pursuit of stimulation and instant gratification has become a symbol of personal liberation, while "altruistic ethics such as moral ideals and collectivism are often marginalized or criticized." This leads to the spiritual collapse of both individuals and society and provokes dissatisfaction among traditionalists, fueling the struggle between conservatives and progressives. On the other hand, the shattering of the "post-class promise" has caused the public to lose confidence in the future. Persuaded by right-wing elites, left-wing elites and the masses began to believe in the Neoconservative social blueprint and performed a "depoliticization" of their own discourse. But in recent years, wealth polarization and social stratification have declared the bankruptcy of the "post-class promise." While the masses intend to "re-politicize" through populism, it is difficult for them to shake Neoconservatism, leading them into "left-wing melancholy" or "right-wing moral panic."
Second, in a reality of polarization, the "de-classed" theory of "post-materialist values" has exposed its hypocrisy, leaving people at a loss. This theory posits that the values of the Western public are shifting from a materialism that emphasizes economic welfare to a post-materialism that emphasizes altruism. It suggests that because younger generations who experienced prosperity will continually replace older generations who experienced scarcity, post-materialism will become the mainstream, and political division will depend more on values than on class attributes. However, as inequality intensifies, the economic foundation of post-materialist values has been hollowed out. Western countries that flaunt tolerance and diversity and shout about "political correctness" have recently revealed an intolerant and non-post-materialist side. Furthermore, as the first wave of post-materialists faced unemployment, aging, and declining class status, they initiated a "cultural backlash" of right-wing populism, while the younger generation turned into social democrats or left-wing populists, becoming the primary subjects of populism and polarized politics.
Third, as capitalism enters the digital age, the virtual "classless" appearance of digital space confuses the masses. Regarding the mode of human existence, as digital products increasingly permeate life, individuals are being transformed from physical entities into abstract virtual persons, gradually detaching from the real world to exist virtually as code and data. Regarding human identity, the deep integration of capital and digital technology has further "reified" [7] the individual. People with rights and identities are reduced in the digital world to "impersonal" and "purely biological data," while simultaneously being endowed with various "virtual identities" that allow for the unlimited construction of digital relationships. Thus, it appears that an equal "network republic" or even a "classless" society could exist in the digital world. However, as previously mentioned, digital capitalism has actually created a society with even more severe class stratification and exploitation. Humans fantasize about equality and classlessness in the virtual world, but when they return to reality, they face an inequality where the "ladder" of social mobility has been removed. This undoubtedly triggers aimlessness and resentment among the lower and middle classes.
(2) Divided Political Creeds: Liberalism Degenerates into Tribal Culture
The post-class narrative and its subsequent bankruptcy have caused spiritual breakdowns for some and fragmented values for many others, turning liberalism into a tribal culture and leading to political confrontation.
After World War II, and particularly after the 1970s, three overlapping cultural values prevailed in Western societies: first, the assimilationist concept of multiculturalism. For a long time, the United States used the "American Creed"—formed on the basis of Anglo-Protestant culture—to assimilate European immigrants. After World War II, as large numbers of non-European immigrants arrived, the Frankfurt School argued that Eurocentrism should be abandoned in favor of encouraging immigrants to retain the cultural characteristics and values of their home countries. Second, the norms and policies of "political correctness." Together with multiculturalism, political correctness pushed Western societies to establish a set of linguistic, educational, and academic norms against racial, gender, and sexual orientation discrimination, and promoted the implementation of "affirmative action" policies. Third, secularist values. Secularism questioned the traditional status of Christianity, arguing that it constituted an oppression of minority cultures.
For over half a century, within a social atmosphere of "de-classing" in Europe and the United States, multiculturalism, secularism, and especially "political correctness" once became mainstream values. Although there also existed opposing conservatism, traditional religion, and anti-"political correctness," during the mid-to-late 20th century—a period of relative economic equality—white people, men, and Christians in Europe and the U.S. who enjoyed ample opportunities for upward mobility tended to be more inclusive regarding the demands of immigrants and marginalized groups (such as women and the LGBTQ+ community) for equality and preferential treatment. Good economic conditions led the dominant strata to believe that cultural "political correctness"—namely "diversity" and "progress"—conformed to the "liberty" and "equality" advocated by capitalism. However, as inequality intensified, the previously dominant strata began to experience downward mobility. Consequently, they ceased to be tolerant and began to strongly oppose values such as "political correctness." For example, conservatives argue that multiculturalism allows Hispanic and Muslim immigrants to assert their original cultures, which will internalize the "clash of civilizations," exacerbate racial tensions in the West, and lead to an identity crisis. Those against "political correctness" view it as the value system of "cosmopolitan elites," reflecting a linguistic and cultural "hegemony." Religious apologists argue that the Left’s opposition to religion and traditional morality has led to rising divorce rates and the prevalence of abortion and homosexuality, accelerating national decline.
It is evident that once the false mask of the post-class narrative is pierced by the cruel reality of class polarization, it triggers a conflict of values and disintegrates the political creed of liberalism. Regarding "liberty" and "equality," the Left emphasizes breaking down restrictions like race, gender, and traditional norms, attempting to expand "equality" into "equality of outcome" or even "cultural equality," the essence of which is to seek more policy favoritism from the government. The Right, in the socio-cultural sphere, values the moral and religious foundations of "liberty," calling on the government to intervene to save declining religions; yet in the economic sphere, they place the individual first, oppose government intervention, and emphasize equality of opportunity, essentially opposing the tipping of social policies toward groups such as immigrants and Black people. In short, anxiety over class status and the struggle for social resources have created a chasm in how different groups interpret concepts like "liberty" and "equality," leading to an increasing polarization of values.
Furthermore, to extract higher profits, capital has developed algorithm technologies like "Enhanced Collaborative Filtering Recommendations," which push content to the social-media-using public that aligns with their interests or values, creating an "echo chamber" effect. This makes people less likely and less willing to encounter different perspectives, leading to the "Balkanization" of the online public sphere.
At present, due to globalization and the rapid development of digital media, mental breakdowns and the fragmentation of values have spread widely across capitalist countries. Value nihilism and moral relativism are prevalent; people have lost their ideals, convictions, and spiritual faith, either becoming listless or turning toward religious superstition. Social distrust has intensified, and on almost every socio-political issue, the public holds diametrically opposed views, lacking a spirit of consultation and an attitude of tolerance.
IV. The Resurgence of Extreme Nationalism and the Intensification of Geopolitical Conflicts
(1) The resurgence of extreme nationalism exposes the anti-human nature of Western free trade and universal values
The free trade system and the system of "universal values" represent the economic and cultural dimensions of the contemporary capitalist order.
On the one hand, after the collapse of the Bretton Woods system in the 1970s, the United States spearheaded a globalization movement to expand the free trade system. The results of globalization spread rapidly after the Cold War, allowing the U.S. to dominate international trade rules and global industrial allocation, becoming the center of finance, technology, and high-end manufacturing. Successive waves of globalization maintained the core position of developed capitalist countries in the world system. However, international trade and technological progress also promoted the development of productive forces and the transformation of relations of production in developing countries. While this allowed Euro-American transnational financial and high-tech capitalists to obtain massive profits, it also fostered economic development in underdeveloped nations, creating a "win-win" scenario for a prolonged period that masked the imperialist nature of the major capitalist powers.
On the other hand, capitalist countries like the United States have made every effort to promote "universal values" such as "liberty," "democracy," and "human rights," believing that with the advancement of economic globalization, developing countries like China should not only adopt comprehensive marketization but also implement liberalism at the institutional and value levels. In essence, "universal values" serve the interests of the bourgeoisie and do not possess true universality. During the process of globalization, "universal values" were often linked to economic development and the spread of civilization, making them deceptive and thus pursued by some countries.
However, marked by Trump's rise to power in 2016, the wave of extreme nationalism has fully exposed the imperialist essence of the free trade system and "universal values."
First, starting with the Trump administration, the United States has practiced economic nationalism in the name of free trade, bringing immense risk to the international economic and trade order. The Trump administration blamed the multilateral free trade system—favored by the establishments of both parties—for industrial hollowing-out and the shrinking of the middle class, arguing for "America First." Simultaneously, to divert domestic contradictions, the U.S. accused China of not following free trade rules and harming American interests, thereby instigating a trade war against China. However, while the U.S. government claimed to uphold free trade, its true intention was to prevent the rise of China. When the trade system facilitates the extraction of interests by the U.S., it is "free"; once U.S. profits decrease, it labels the trade "unfair."
The Biden administration primarily implements a "foreign policy for the middle class." Driven by political polarization, the U.S. Democratic and Republican parties compete to invoke the "China threat theory," continuing to suppress China through "friend-shoring," "small yard, high fence" [8] technological encirclement, and promoting the "de-China-ization" of industrial and supply chains. While the Biden administration returned to multilateralism to win over allies, it essentially continues to pursue an economic nationalism of "American interests first," intended to "out-compete" China and maintain hegemony.
Second, deglobalization, entwined with cultural nationalism, has empowered the West to unscrupulously carry out acts that contravene humanity, exposing the hypocrisy of "universal values" as never before. When Western countries like the U.S. are troubled by domestic problems, they do not seek causes within themselves or reflect on their exploitation of developing countries; instead, they move against globalization, accusing developing countries’ efforts to pursue development paths suited to their own conditions as threats to "universal values." This cultural nationalism precisely reflects that "universal values" are not universal and demonstrates the lack of self-confidence in Western countries when faced with non-Western paths to modernization.
More critically, while capitalist countries like the U.S. shout slogans of "liberty," "democracy," and "human rights," they themselves are the creators of problems and the biggest obstacles to meeting common human challenges. For instance, the expansion of contemporary capitalism has led to the over-exploitation of natural resources and ruthless destruction of the environment, placing the global ecosystem under great threat. In this situation, all countries should uphold the concept of a community with a shared future for humanity and work together to solve the crisis of human survival; however, the U.S. at one point withdrew from the Paris Agreement, continued to intensify confrontation, and obstructed international cooperation.
(2) Geopolitical conflicts threaten world peace and security
Since the end of the Cold War, the international landscape has trended toward multipolarity, and global governance has exhibited pluralistic characteristics. The world entered a new era of peaceful development, with peace and development becoming the themes of the times. However, the United States is unwilling to abandon hegemonism and the Cold War mentality, striving to control institutions like the United Nations to make them part of a U.S.-led transnational security system. The U.S. believes that after the Cold War, it should actively play the roles of arbiter, international police, and world leader, enlisting a few allies to construct a unipolar international order. However, the Russia-Ukraine conflict has brought destructive geopolitics back to the European continent, weakening U.S. control over the international order.
First, for a long time after the end of World War II, European countries pursued pacifism, using it as an important pillar to maintain their international status. However, the Russia-Ukraine conflict has reignited war in Europe, causing the pacifism that Europe took pride in to be questioned and mocked, and dealing a blow to its international reputation and status. Second, the heart and economic engine of the European Union is Germany, which has always wanted to break free from U.S. control and make the EU a pole in a multipolar world. For years, Germany worked to deepen ties with Russia, attempting to use Russian energy to drive its economic development and green transition, while also hoping to integrate Russia into Europe to achieve European unity, security, and prosperity. However, after the outbreak of the Russia-Ukraine conflict, the U.S. forcibly tethered Germany and the EU to the "support Ukraine, sanction Russia" war chariot, causing the Russo-German relationship, cultivated over many years, to become strained and hostile. Finally, the Russia-Ukraine conflict has had a destructive impact on the economies of Europe, America, and the world. Since the conflict began, the cost of production and living in European countries has surged, and their economies have fallen into "stagflation." The U.S. military-industrial complex has made a fortune, yet the U.S. also faces high inflation. The U.S. used this opportunity to introduce the Inflation Reduction Act, which is essentially an exploitation of its allies and other countries via the hegemony of the U.S. dollar, triggering widespread resentment and intensifying international tensions. Since the outbreak of the conflict, more and more countries hope for its early conclusion. The peace plan proposed by China has been highly praised by the international community, but Western countries have ignored it. It is foreseeable that the continuous intensification or long-term persistence of the Russia-Ukraine conflict will bring more negative impacts to global economy and security, cause more serious humanitarian disasters, and deal greater damage to the common interests of all humanity.
Does capitalism have a future? From a long-term historical perspective, the inherent contradictions of capitalism foreshadow its inevitable doom. However, from a mid-term perspective, digital and AI technologies are still enhancing the productive forces of capitalist countries; the class consciousness of workers in developed capitalist countries has not yet fully awakened; and the bourgeoisie still firmly controls the capitalist world through transnational alliances and complexes such as "military-industrial-oil-media-tech." In Western capitalist countries, although class struggle has returned somewhat, triggering widespread questioning of capitalism, it has not yet pushed capitalism to total collapse. We should have a clear understanding of this. Of course, more importantly, the comprehensive crisis of contemporary capitalism and its widespread harm have increased the expectations of all countries, especially developing ones, for socialism. Therefore, we should all the more persist in socialism with Chinese characteristics, resolutely follow the path of Chinese-path modernization, and make due contributions to world peace and development as well as the progress of human civilization.