The
direction of the world economy, and with it the politics of the elite ruling classes, is increasingly defined by the intersection of three destructive processes.
First, the pile of debt undergirding global growth has reached astronomical proportions. On present trajectories, the world is heading toward roughly $375 trillion in total debt by the end of 2026. For comparison, capitalism—taken globally and using generous arithmetic—generates perhaps $15–25 trillion in profit or surplus each year.
Debt is a stock of financial claims backed by assets and future income, and much of it is continuously refinanced rather than paid off. But the comparison conveys the extraordinary scale of the claims that have accumulated against future production. Capitalism is mortgaging its future on an unprecedented scale.
And each year, more is added. Nearly $30 trillion in debt was added in 2025 alone. Debt is accumulating on a scale comparable to the annual expansion of the world economy itself. Interest payments on public debt alone have risen to $3.3 trillion. An ever greater stream of social wealth is sucked up and siphoned off to service the claims of banks and other creditors.
Alongside this is a second critical process: the rising cost of basic necessities and of the energy and raw materials on which economic life depends.
Diesel, a fuel essential to trucking, mining, agriculture, construction and manufacturing, has more than doubled in price for many users over the past year. European diesel futures traded between roughly $600 and $700 per tonne before the Iran war began in February. They now trade above $1,400 per tonne. These increases work their way through the economy, raising the cost of producing and transporting almost everything.
Natural gas prices, meanwhile, have tripled in Europe and Asia since the war began, with the United States relatively insulated. Similar pressures have appeared in jet fuel used by planes and the bunker fuel used by ships.
But the pressure extends beyond hydrocarbons.
Copper, a pivotal metal underpinning electronics, electrification, renewable energy and the infrastructure of AI, has also surged in price. Throughout much of the 2010s, it traded between roughly $2 and $4 per pound. It has recently traded above $6.50, reaching record levels.
Global food prices, meanwhile, remain dramatically above their levels of a decade ago. The UN Food and Agriculture Organization’s Food Price Index stood at 136 in September 2026, compared with an annual average of 91.9 in 2016—an increase of nearly 50 percent.
War, higher energy and transportation costs, and broader inflationary pressures are all to blame. For households already spending much of their income on food it is a punishing drain.
But accompanying these two damaging processes—debt and inflation—is a third: war.
The war in Ukraine, the war in Iran, the genocide in Gaza, the fighting in Yemen, and beneath them all the mounting confrontation between China and the US —these conflicts are increasingly intertwining and intensifying.
“Are we sleepwalking into World War III?” asked the Financial Times last month. In August, North described the growing conflicts as a “metastatic process” which “progressively transform[s] the world economy and every national state in preparation for the general conflagration toward which it tends.”
Connected processes
These three forces—debt, inflation and war—are increasingly connected expressions of the instability and crisis of the global capitalist economy. Each aggravates the others.
The wars in Ukraine and Iran and the fighting in Yemen have directly affected global energy, transportation and food prices. They have driven up the cost of fuel and agricultural production, spreading the pressure through industry and into household expenses.
By aggravating inflation, fiscal pressures and uncertainty, these wars have also contributed to rising borrowing costs, making it harder to keep the train of debt moving. The yield on the 10-year US Treasury has now reached a quarter-century high, moving past 5 percent and toward 6 percent. Higher interest payments demand still more money to service the debts already accumulated.
Meanwhile, financing the drive towards war requires enormous new expenditures, funded through a combination of borrowing and intensified extraction from the working population.
Global military spending increased by 41 percent in real terms between 2016 and 2025, while 2026 and 2027 are each expected to set new records. The Trump administration is demanding a $1.5 trillion military budget for 2027—an increase of roughly 50 percent.
Europe, meanwhile, is madly rearming for war with Russia. Germany alone plans roughly €1 trillion in military spending over the next five years, with annual expenditure rising to €168 billion by 2029, while the IMF calls for “deep cuts in the European model and the social contract” to accommodate the mounting fiscal burden.
But the connection runs in the other direction as well. Deteriorating economic conditions intensify the desperation among rival capitalist powers to control the energy, resources, markets and supply chains upon which their wealth and power depend. Each seeks to secure its own position at the expense of its competitors, even as the resulting conflicts damage the conditions of production on which they all depend.
The turn to war expresses the increasingly desperate struggle of these elite ruling classes to preserve their wealth and world position. They look to military power for a way out of the crisis. This is above all the course being pursued by the American and European ruling classes.
In Athens on October 7, Marco Rubio posed the question as “whether the West maintains its place at the head of the world or resigns itself to a future of atrophy and servitude and decline,” calling for control over critical supply chains, economic and technological dominance and military rebuilding.
“We will make the Bundeswehr the strongest conventional army in Europe,” Chancellor Friedrich Merz declared in June 2025, justifying that goal with Germany’s size, economic strength and geographical position. At the Munich Security Conference in February, he explained, “competition policy is security policy and security policy is competition policy.” Germany’s economy is in a dire state, with high energy costs battering its industrial base and fierce competition from Chinese automakers threatening its once-dominant car industry.
And so the attempts to resolve one crisis ricochet to deepen the others.
Debt finances war; war raises the cost of necessities and of borrowing; and mounting economic pressure feeds an increasingly desperate struggle to secure control over the sources of global wealth.
The elite ruling class increasingly looks to artificial intelligence as a potential escape from this impasse. AI has generated enormous speculative valuations and investment, sustaining the appearance of renewed dynamism in an otherwise stagnating economy. But even as it revolutionizes production, it heightens the social contradictions of capitalism. The very advance hailed as a way out intensifies the crisis. Meanwhile, a new financial bubble has been inflated around it. It is only a matter of time before it bursts.
Who will pay for this astronomical debt? Social programs must be dismantled and hundreds of billions found for war, while private fortunes remain sacrosanct. Everything may be sacrificed to preserve and augment the wealth and power of those oligarchs at the top.
In Europe, Latin America, the United States and elsewhere, healthcare, pensions, unemployment benefits, support for families and virtually every other form of social expenditure become targets for cuts. Amid an already profound social crisis, everything afforded to the population is declared unaffordable. The debts accumulated by governments, banks and corporations, meanwhile, must be paid.
The crisis of world capitalism offers its ruling classes one way out. They turn toward war, even as its prosecution further destabilizes the capitalist economy upon which their own power rests.
These convulsions express the historical exhaustion of capitalism. They emerge from contradictions accumulated over decades and intensified after the financial collapse of 2008. The vast expansion of debt and financial speculation that followed deferred the crisis while deepening the conditions that produced it: social inequality, economic instability and the struggle between the major powers over markets, resources and strategic advantage.
Capitalism unbound as a system of organizing global social life has nothing left to offer the world. Nor can it secure its own future. Its attempts at self-preservation increasingly undermine the economic and social foundations of its continued existence.
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