The “Disintegration” Of Global Capitalism Could Unleash World War 3, Warns Top EU Economist

Thursday, February 28, 2019
By Paul Martin

by Nafeez Ahmed via Medium.com,
ZeroHedge.com
Thu, 02/28/2019

A senior European Commission economist has warned that a Third World War is an extremely “high probability” in coming years due to the disintegration of global capitalism.

In a working paper published last month, Professor Gerhard Hanappi argued that since the 2008 financial crash, the global economy has moved away from “integrated” capitalism into a “disintegrating” shift marked by the same sorts of trends which preceded previous world wars.

Professor Hanappi is Jean Monnet Chair for Political Economy of European Integration — an European Commission appointment — at the Institute for Mathematical Models in Economics at the Vienna University of Technology. He also sits on the management committee of the Systemic Risks expert groupin the EU-funded European Cooperation in Science and Technology research network.

In his new paper, Hanappi concludes that global conditions bear unnerving parallels with trends before the outbreak of the first and second world wars.

Key red flags that the world is on a slippery slope to a global war, he finds, include:

the inexorable growth of military spending;

democracies transitioning into increasingly authoritarian police states;

heightening geopolitical tensions between great powers;

the resurgence of populism across the left and right;

the breakdown and weakening of established global institutions that govern transnational capitalism;

and the relentless widening of global inequalities.

These trends, some of which were visible before the previous world wars, are reappearing in new forms. Hanappi argues that the defining feature of the current period is a transition from an older form of “integrating capitalism” to a new form of “disintegrating capitalism”, whose features most clearly emerged after the 2008 financial crisis.

For most of the twentieth century, he says, global capitalism was on an “integrating” pathway toward higher concentrations of transnational wealth. This was interrupted by the outbreaks of violent nationalism involving the two world wars. After that, a new form of “integrated capitalism” emerged based on an institutional framework that has allowed industrialised countries to avoid a world war for 70 years.

This system is now entering a period of disintegration. Previously, fractures within the system between rich and poor were overcome “by distributing a bit of the gains of the tremendous increase of the fruits of the global division of labour to the richer working classes in these nations.” Similarly, international tensions were diffused through transnational governance frameworks and agreements for the regulation of capitalism.

But since the 2008 financial crisis, wealth distribution has worsened, with purchasing power for the middle and working classes declining as wealth becomes even more greatly concentrated.

Growth in the Western centres of transnational capital has slowed, while formerly sacrosanct international trade agreements are being torn to shreds. This has fuelled a reversion to nationalism in which global and transnational structures have been rejected, and ‘foreigners’ have been demonised. As global capital thus continues to disintegrate, these pressures escalate, particularly as its internal justification depends increasingly on intensifying competition with external rivals.

While integrated capitalism depended on a transnational institutional framework that permitted “stable exploitation on a national level”, Hanappi argues that “disintegrating capitalism” sees this framework become disaggregated between the USA, Europe, Russia and China, each of which pursues new forms of hierarchical subordination of workers.

Disintegrating capitalism, he explains, will resort increasingly to “direct coercive powers supplemented by new information technologies” to suppress internal tensions, as well as a greater propensity for international hostilities: “The new authoritarian empires need confrontation with each other to justify their own internal, inflexible command structure.”

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