The God of the Bourgeoise
The God of the Bourgeoise
The global markets are once again in panic. The Japanese stock market crashes, US unemployment rises despite new job creation, and China intentionally slows its growth to prioritize redistribution. Western economies suffer from inflation, protectionism, and massive debt burdens. Interest rate policies and market mechanisms exacerbate contradictions between production and consumption. Capitalism can only delay its crises, not resolve them – the system inevitably approaches the next major upheaval.
The words marked in red are links that lead to corresponding critique articles.
“The Market”—this is, in itself, a misleading term for this transparent institution that has governed humanity for about 200 years.
The bourgeois media reports personify “the market” as an entity that acts as either good or bad, “bullish” or “bearish,” naturalizing it without questioning its true form.
For rationalized, demystified bourgeois ideology, the market replaces the god that disappeared with the development of these markets.
“The market remains restless” – in reality, the market does nothing; it is simply the collective of profit-seeking entities expressed through corporations, monopolies, and individuals globally.
Nevertheless, I will use the term in the following with a wink—because “the market” as a homogeneous actor simply does not exist.
“The Market” Falters
Last week, global stock markets plunged into panic as funds began selling risky stocks and bonds to buy “safe” assets.
The VIX volatility index, which measures sentiment on Wall Street, reached its highest level since the early weeks of the pandemic.
This marks the highest level since the 2008 global financial crisis—the zero year, whose contradictions have since shaped globalized trade.
The Japanese stock market experienced a sharper decline of 12% compared to others.
The Bank of Japan (BOJ) recently decided to raise interest rates for the second time this year and announced the beginning of the end of quantitative easing.
As a result, the downward pressure on the yen reverses, making Japanese exports more expensive and less competitive globally.
Smaller and medium-sized companies, heavily reliant on exports, will face financial difficulties due to decreased demand—leading to further concentration of Japanese capital in the hands of large corporations, which already dominate the Japanese market.
For Japan’s working population, the market collapse means wage cuts, layoffs, and reduced access to credit—exacerbated by the very limited power of Japanese trade unions, which are increasingly focused solely on company-specific issues rather than industry-wide concerns.
American Unemployment
On the other side of the Pacific, the release of US employment data causes unrest.
Although the number of new jobs created in June exceeded expectations, other data points surprised with weakness—the unemployment rate increased by 0.2 percentage points compared to the previous month.
Furthermore, the revised figures for recent months show significantly fewer new jobs than initially reported.
In July, only 114,000 new jobs were created, a decrease of 60,000 compared to June.
However, the trend of job creation remains upward.
The US unemployment rate rose from a low of 3.4% in spring 2023 to 4.3%.
This is a contradiction; more jobs but higher unemployment—primarily due to skill gaps and structural changes, but also driven by uncertainty about the future development of the US economy, especially influenced by the expected interest rate turnaround and the upcoming presidential elections.
This uncertainty causes companies to hesitate to fill open positions because they are unsure how their capital will develop.
Approximately 12 million unemployed in the world’s largest economy because, at the moment, it simply isn’t profitable to hire—market mercy!
The surprising development in US unemployment figures has caused panic among funds and shareholders worldwide, fearing a general slowdown of the US economy:
While overextensions and herd behavior are inherent in stock trading, there is a fundamental basis for market concern.
Despite the suffering of value-creating workers, the US economy continues to grow at extraordinary rates.
The rise in domestic productivity despite declining Chinese exports exemplifies the new American protectionism.
This new protectionism manifests through extensive tariffs on Chinese exports such as electric vehicles, solar cells, semiconductors, batteries, and medical products—goods that American and allied companies cannot compete with directly.
This is the hypocrisy of the “free market”; as long as competition exists that western corporations can dominate, freedom is maintained—yet as this dominance wanes, states are forced to restrict the market to benefit domestic firms.
Ripped Apart by Contradictions
What are the fundamental issues that plunge globally operating capitalists and shareholders into increasingly frequent crises and uncertainties?
Global capitalists and shareholders face a series of grave problems, which are rooted in the very foundation of their wealth—free trade itself.
A key factor is the “slowdown” in China, the world’s second-largest economy.
China’s economic growth is increasingly decelerating, with significant impacts both domestically and globally.
Many companies and investors heavily dependent on Chinese market dynamics see their profits shrinking and face uncertainty.
The slowdown of the Chinese economy is not an unplanned consequence of Western sanctions or the hoped-for “real estate crisis” by bourgeois media, but part of the new era of Chinese socialism initiated by the Chinese Communist Party in November 2017.
For the second phase of socialist development, Xi redefines the core contradiction in China:
The main contradiction in the latter half of the initial stage of socialism is no longer between increasing material and cultural needs and backward social production, as in the Deng era, but between balanced and insufficient development.
This specifically means less growth and more redistribution.
Of course, this is not good for global markets, since the slowdown of Chinese exports also implies a slowdown of Chinese imports for the Western world.
Meanwhile, Europe is in a deep crisis characterized by political instability, economic stagnation, and social tensions.
The economic crisis in Europe is primarily due to the rupture of trade relations between Europe and Russia—an rupture that especially impacts energy-intensive industries like chemicals, metals, and glass, increasing their costs.
This development continues to fuel inflation, especially in Germany.
Politically, inflation and its consequences fuel the rise of fascist elements, who exploit worsening material conditions for their benefit.
The ongoing inflation, driven by the hypocritical sanctions of the West against Russia and the huge deficits caused by the war in Ukraine, erodes consumers’ purchasing power while increasing costs (and profits) for companies—leading to poor quarterly results, especially in high-end service sectors.
Additionally, enormous global debt burdens and budget deficits hinder governments’ ability to make necessary investments or respond flexibly to crises.
These debt loads are, of course, a consequence of previous crises that forced states to rescue and defend less competitive domestic firms, as well as to offset the social and societal impacts of “free competition.”
Blame Game
Merchants demand that the US Federal Reserve (Fed) should have cut interest rates earlier to prevent recession.
But the point is: the US markets needed a recession to reduce inflation.
The Fed held interest rates high because, after 16 months, the Fed Funds Rate (effectively the main interest rate) remains above five percent, with inflation still around three percent.
Persistent inflation and high interest rates are not cures but symptoms of the “free market” disease.
The movement of the economy toward inflation or deflation forces the Federal Funds Rate to rise or fall; in anticipation of a recession, markets now expect the Fed to cut rates by 1.25 percentage points this year.
The illusion that the central bank or government can solve crises through “smart” policies is naive—based on the naturalized image of the market as rational and somewhat controllable.
If economic crises and market crashes could be solved by intelligent financial policies, they simply would not exist.
Any call for lowering or raising the main interest rate, or implementing more or fewer sanctions, subsidies, or bailouts, misunderstands the nature of “free trade”.
The growth tendency of every capitalist enterprise inevitably leads to resource, capital, and political concentration in the hands of de facto monopolies, which then use their financial power to influence politics and eliminate competition.
The “freedom” of global trade, dominated by “Global Players” (a bourgeois euphemism for big capital), is always the freedom of corporations that have enough capital to buy political influence.
In the tense global situation—and precisely because this tension results from “free trade”—it is difficult to actually fill job vacancies (see above). The consequence is panic-driven pursuit of maximum profits in stock markets:
leading to further wealth concentration, more “bubbles,” deeper contradictions, and ultimately more severe crises, which bourgeois economists can only marvel at.
No matter how much interest rates are cut, this will not solve the massive debt problem—in fact, it would only inflate the bubble again.
Poor countries are already unable to service their debt burdens.
Wealthier countries have accumulated unprecedented levels of debt even in peacetime, and many still run deficits.
Private households and companies are heavily indebted; lowering interest rates can provide some relief but will not make debts disappear.
Fiscal policy, given the contradictions of global “free trade,” is like taking aspirin for leukemia in its third stage.
Technical Problems
The sell-off in stock markets was led by the technology sector—and that is now coming to an end.
The valuations in this sector are completely inflated, a massive speculative bubble now bursting.
Recently, Samsung and TSMC reported profits of 7 billion USD each, Nvidia 17 billion USD, for just three months.
TSMC and Nvidia are making ridiculous profits of 30–70% of their revenues.
These companies exploit their monopolistic positions in key markets to sell their products at massive markups.
Another case is Intel.
The company’s revenues have recently declined because it failed to develop a series of GPUs (processors used for AI in cars and server farms).
The layoffs of 15,000 employees are a necessary step to bring the company back to profit.
Nevertheless, despite the decline in stock prices, the IT sector is not yet in a deep crisis.
The limits of artificial intelligence will become evident sooner or later, leading to a slowdown in demand for essential components.
The “correction” in IT is merely a minor element in this context—the underlying process is different:
Interest rate increases slow down consumption, especially among the middle class, causing difficulties for luxury brands and automakers heavily invested in electric vehicles.
These brands are struggling to sell their new E-vehicles, which are usually more expensive than traditional combustion-engine cars.
The overaccumulation in “booming” sectors—necessary to maintain profit trends—inevitably leads to crisis in an unpredictable market.
The adjustment of interest rate policies is necessary to “manage” the crisis, at least temporarily—but, as mentioned, this policy worsens the contradiction between production and consumption, which is currently reflected in reduced sales of middle-class brands.
Accounting
The imperialist powers are torn by internal contradictions, leading to escalating conflicts and tensions internationally.
Protectionism, the attempt to export social problems, is increasing along with wars that imperialist states are compelled to wage to defend the profit interests of their domestic corporations.
An escalation of conflict in the Middle East into a regional war could threaten vital oil supplies, especially to Europe, where the economy is already stagnating.
However, it’s not as if these states have a choice— to continue allowing their domestic capital to profit more and more, they are forced to fight for new markets, purchasing power, and resources—that is the logic of profit and growth; there is no end.
In a time when the economy slows down, the inevitable cuts in state spending will likely have a dampening effect on the global economy to reduce massive deficits—that is an unavoidable consequence.
At the same time, protectionism and climate change threaten to push prices higher and force central banks to raise interest rates.
This will lead to further deterioration of workers’ conditions, who in all capitalist countries can expect further cuts in their benefits.
To justify this, bourgeois politics increasingly resort to chauvinism and xenophobia to divert attention from their own failures.
For 16 years, the ruling class has done everything to postpone the “Judgment Day,” which, however, seems increasingly inevitable.
The situation for the working class is already intolerable, especially in the Global South—those countries dependent on Western hegemony and paying for the profits of the Global North.
This crisis is one of many that must be recognized as foreshocks of the upcoming “once-in-a-lifetime” crisis.
The contradiction between capital and labor, expressed here as the contradiction between production and consumption, cannot be resolved—at least not within capitalism, as it is.