Ever since the global financial crisis of 2008–2009, the trajectory of the world economy has been hesitant, unstable and prone to many risks. Output recovery has been limited and fragile; and, more significantly, even in the more dynamic economies, it has not increased good-quality employment or reduced inequality and material insecurity. Global capitalism as an economic regime is increasingly unable to deliver on its own promise of continuous expansion within a largely stable society. Even so, discussions of the 'end' of capitalism still typically seem overstated and futile, not least because those hoping and mobilising for bringing in an alternative system are everywhere so scattered, weak and demoralised. In effect, capitalism remains the only game in town, which is why even in its current debilitated and even decrepit state, there are no rivals.
Indeed, it could be argued that the current difficulties of capitalism are not the result of any external threat or combined socio-political opposition to it, but because it has been too 'successful' for its own good, and so has to confront the contradictions generated by this 'success'. Contemporary globalised capitalism has managed to overrun and conquer its opponents or those that could restrain it (such as trade unions and other associations of workers that could reduce capital's bargaining power; democratic accountability working through regulatory structures that limit or constrain the activities and profits of capitalists and large corporations; expressions of collective concern voicing the requirements of the larger social good; and so on) to the point where it is now almost completely untrammelled. As a result, there are no checks and balances of the kind that in various periods in the past have generated both less economic volatility and more social stability within a broadly capitalist framework.
In purely economic terms, this 'success' of capitalism in vanquishing its opponents means less expansion of demand for products that the system must keep coming up with in terms of its own logic. It also means less ability to create new sources of demand, as financialisation and credit bubbles also appear to have run their course, despite almost endless injections of synthetic liquidity through very loose monetary policy. In ecological terms it means the accelerated exploitation and degradation of nature, to the point where it is not merely irresponsible with respect to the future but actively damaging material conditions in the present. In socio-political terms, it means more widespread despair, alienation and individualised responses that threaten the very basis of functioning societies. In an almost textbook extension of the biological argument of the prey–predator relationship, it could be argued that capitalism as a system is in the process of killing off all its prey, to the point that its own existence could be threatened, even if not in the form of an 'overthrow', but simply by losing steam altogether.
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From a purely macroeconomic perspective, in the 2000s the economic expansion of some large economies' demand was sustained by a combination of financial liberalisation and loose monetary policy that enabled households and companies to consume and invest beyond their means through borrowing. This then enabled some developing countries (especially in Asia, but subsequently across all developing regions) to expand on the basis of increased demand for their exports from the core capitalist countries. Therefore, almost all developing countries adopted an export-led growth model, requiring the containment of wage costs and domestic consumption for the sake of international competitiveness and growing shares of world markets. In a spectacularly irrational twist, this was accompanied by the net transfer of financial resources from the South to the North (BIS 2008; 2010; UNCTAD 2010; 2014; 2016) as more and more countries sought to achieve current surpluses and all developing regions sent their net savings to advanced economies, most of all to the United States. This was famously described by the then head of the US Federal Reserve, Ben Bernanke, as a 'savings glut', especially in Asia, but it could more properly be categorised as an investment famine, since it was typically associated with falling investment rates in the capital-exporting developing countries. The current-account imbalances that were subsequently seen as one of the 'causes' of the global crisis were in fact utterly necessary for the prior much-celebrated boom, which could not have occurred in that form otherwise.
Other than the current-account imbalances, which have since reduced or changed form, none of these problematic features of global capitalism has been fundamentally altered in the post-crisis scenario. This makes any current or future expansion just as vulnerable as it was before the global crisis erupted. Further, there seems to be little likelihood of widespread and coordinated implementation of macroeconomic policies that would generate more demand. The incredibly loose monetary policies in the advanced economies operated to keep them afloat for a while, and contrary to standard monetarist predictions thus far they have not generated significant inflationary pressures. But they have not managed to kickstart real recovery either. In any case, it is clear that they have run their course and are in the process of being revised. However, the more deregulated financial structures and systems that enabled speculative bubbles to develop and persist still remain. Post-crisis attempts to bring in appropriate regulation were extremely limited and even these are now sought to be dismantled in the US as well as in the EU, while any form of labour protection has become even more difficult than before. Meanwhile, ideological opposition to expansionary fiscal policy remains strong across most governments, even as the continued lobbying power of large corporations and moneyed elites prevents any substantial cross-country effort at raising tax revenues by curbing tax evasion and avoidance strategies. The absence (and lack of immediate prospect) of coordinated fiscal expansion across major countries, even to the limited extent that occurred in 2009 just after the global financial crisis, suggests that it would be difficult if not impossible for individual countries to 'go it alone' and indulge in expansion without prompting capital flight. Along with these concerns, there is now a real possibility of the eruption of trade wars, reminiscent of the interwar period of the twentieth century.
Therefore, it is evident that we are in a period of global capitalist stagnation and instability. This is already reflected in lower aggregate growth rates, with the world economy growing at an estimated average of 3.3 per cent per annum since 2008, compared to 4.5 per cent in the period 2000 to 2007.
1 GDP data are notoriously unreliable, as well as problematic, because they do not really capture crucial aspects of material life, but since capitalism is ultimately all about accumulation, aggregate income growth does provide some indication of capitalism's success in its own terms. This is obviously deficient at present.
