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Money and Missiles in the Crisis in the World Order

Marx in 1850 and Lenin in 1905. The Marxist school has the tools to investigate the accumulation of tensions in the crisis in the world order, without falling into the trap of waiting for a mythical deadline for the breakdown of the order, or of inconclusive maximalism, according to which every upheaval is the decisive one. In 1850, Marx and Engels linked economic crisis, political upheaval, and great collisions on the continent in their prediction of the workers’ revolution in England. An incorrect prediction, comments Arrigo Cervetto in The Difficult Question of Times, due to the lack of coincidence between the Crimean War and the economic crisis of 1857. However, that consideration of interdependence would become part of the genetic heritage of strategy: In the thinking of Marx and Engels, the concept of crisis includes the economic cycle and the political cycle, in particular the military cycle. In 1905, Lenin addressed the bourgeois revolution in Russia with the two paths, the dual hypothesis of an accelerated and decelerated pace, and with the political variants drawn from European experience — the Prussian path of revolution from above and the accelerated variant of French-style turmoil. Faced with the political, social, and military crisis in Russia, Lenin formulated two hypotheses which were not an arbitrary binary of a prediction and its opposite, but the more or less contradictory expression of the fundamental trends of development, identified by scientific analysis.

With these tools, we address the question of the timing of the crisis in the world order, tracing the two possible movements of the chain of conflicts — marking a cycle of rearmament and colossal, unprecedented tensions — or the catastrophic breakdown — with the outbreak of war between the great powers. The wars in Ukraine and Gaza, the hundred-hour war between India and Pakistan, and the new front opened between Iran and Israel are the first links in that chain, which is joined on the economic front by Donald Trump’s trade war: for the moment, a partial economic war, limited to the commercial sphere and American power, with isolated incursions into the fields of finance and critical raw materials.

It goes without saying that even a slower pace of the crisis, with a chain of partial conflicts delaying a general conflagration, is still an acceleration compared to the previous strategic picture: history has resumed its course with China’s epochal transition to imperialism in the new strategic phase of the 2000s; and the mounting tensions, the convergence of the major imperialist forces in the arms race, and the return of the nuclear question are the most obvious confirmation of this. Finally, developments in the economic cycle and the political-military cycle must be considered in terms of their mutual influences. For some time to come, economic war and military war will be the two horns to grasp in this analysis. The intimate connection between the two forms of contention is confirmed in practice and in the thinking of the bourgeoisie’s top echelons.

A speech by Christine Lagarde at the Hertie School in Berlin places the foundations of the global status of the euro on the pillars of the depth of the capital market, the effectiveness of political centralisation, and the credibility of European military strength. For the ECB president, self-induced uncertainty about the dominant role of the dollar creates the conditions for a global euro moment — an unmissable opportunity for Europe, which, however, will not gain influence by default but will have to earn it. Lagarde outlines a European political programme, as well as a course of action in power relations. For our analysis, we are literally on the terrain of monetary weapons, in the double sense introduced by Cervetto in 1967 on the occasion of the devaluation of the pound sterling.

On the one hand, Cervetto wrote, monetary weapons combine and complement military weapons in the struggle for the partition of the world market and just as the various capitalist groups confront each other with their economic and military potential, so they fight each other on the financial terrain with their monetary weapons. The reference is to the economic and extra-economic forms of contention in Lenin’s analysis of imperialism. Monetary war is the prelude and continuation of military war, to which it is intimately linked because it pursues the same goal.

More generally, however, like military relations, monetary relations are also an expression of the power relations between States. The monetary aspect is one of the fundamental aspects of capitalism, but it is above all the aspect which summarises, in a quantitative expression, all the multiple relations that exist between the various economies and, ultimately, between the various States. Since monetary relations encapsulate multiple social and political relations, they are also based on the military strength of States, and it is this link between monetary strength and military rearmament that is the most significant aspect of the challenge launched by the ECB.

Lagarde cited three assessments which define the field of battle. In two historical precedents, reminiscent of the current course, the leadership of the dollar was challenged by unilateral decisions taken by the American metropolis itself: in the 1930s, its share of world reserves lost about 40 points, falling from over 60% to about 20%; in the 1970s, after the Nixon shock, it lost about 20 points, from 70% to 50%. On neither occasion was there an alternative currency capable of replacing the US dollar: between the two world wars, London was already in decline and, in the 1970s, the mark and the yen were backed by markets that were too small and the gap was therefore filled pro tempore by gold. Today, however, with the euro, there is a second global currency.

The third reference is the link between a power’s monetary strength and its military strength, and the effect that this dual strength can have on global currency reserves. This can be up to 30 points, according to a study by Barry Eichengreen which we discussed in our newspaper at the time [The Dollar Between Mars and Mercury, Internationalist Bulletin, March 2018]. Today, the euro’s share as a billing currency in global exports is already equal to that of the dollar (40%), but its usage as a reserve currency is one third (20% versus 58%). There is a limit beyond which a currency cannot grow simply by virtue of trade but starts requiring geopolitical assurances in terms of military security. The precondition for tackling those 20-point, 30-point, or 40-point global gaps is therefore the reconstruction of European hard power, with rearmament underway at the national and EU level.

In these considerations, we can see a clear line aimed at strengthening Europe as a power across several interconnected financial, political, and military fronts. The liquidity of the European capital market depends on the supply of safe assets that compete with US Treasury securities for global financial flows; but this, in turn, requires that the strengthening [of] European defence be jointly financed, i.e., that the issuance of European debt for rearmament broadens the currency base of the euro. Finally, the stability of institutions, the independence of monetary power, and the political reliability of the EU are also assets in the monetary contention with Trump’s America; but the times demand greater unity and speed of decision-making in foreign and defence policy.

There is no explicit mention in Lagarde’s framework of the nuclear dimension of the current European rearmament, which contributes to the monetary relationship between the great powers. The Frankfurter Allgemeine Zeitung confirms that France and Germany are privately discussing nuclear sharing. Gerald Braunberger, one of the editors, recalls Eichengreen’s estimate that the dollar’s share of the reserves of nuclear-armed powers is 35% lower than that of powers dependent on the American umbrella. Finally, Handelsblatt leaks a government document according to which Paris and Berlin are considering the use of monetary levers and savings instruments in the Atlantic trade war, i.e., reprisals on US debt securities. Nuclear deterrence and monetary deterrence are chasing each other in the German debate, which is generally less inclined than the French to premature obituaries for the dollar, which have been recurring for decades.

Josef Braml and Mathew Burrows, in their new book World to Come: The Return of Trump and the End of the Old Order [2025], also argue that a common debt [for] European defence would erode the role of the dollar, already undermined by the looming US debt crisis. A strong euro, in turn, would ensure the EU’s independent foreign and security policy.

Braml, a former member of the German think tanks SWP and DGAP, had argued in a previous text for the integration of European defence around a Franco-German core, including the force de frappe, with Burrows, an American who had worked for the State Department and the CIA, he advocated the strategic use of the euro in European rearmament. It is striking to find these arguments again today, accompanied by the prescription of a multipolar concert for peace. Today, a war between the great powers would be devastating and would devour immense resources in the first 30 hours; the only alternative would be to recognise China and gradually reintegrate Russia into the gatherings of Western powers, while the central banks of the Big Three — the US, EU, and China — would manage the economy. However, this seems impossible because the United States is not ready for concessions or compromises in building a new order based on the balance of power. Therefore, the path of rearmament is inevitable for every imperialist powerhouse.

Walter Russell Mead captured the Zeitgeist — the spirit of the times — of the crisis in the world order in a commentary at the Asian forum Shangri-La Dialogue: A new era of great-power war is not inevitable, but it is harder to prevent. All democratic societies will eventually have to reckon with this unwelcome global transition from a post-war to a pre-war era in world history.

Three developments mark the contention. We have reported on the clash in Kashmir in other pages of this newspaper. For Zhou Bo, an authoritative voice of the Chinese military, it was a DeepSeek moment, revealing the capabilities provided by China to Islamabad — unprecedented publicity that will shape the global arms market. Furthermore, Zhou observes, the conflict was moderated by the nuclear status of the contenders; in Ukraine, too, Russia’s atomic weapon inhibits NATO’s co-belligerence. In their own way, the wars in Kashmir, Ukraine, and the Middle East call the deterrent into question; China should therefore continue to increase its arsenal, which will not compromise its sufficient defence posture. The Stockholm SIPRI certifies a rate of 100 nuclear warheads per year from 2023.

Beijing’s no first use policy, modelled on French doctrine, requires sufficient nuclear warheads to withstand an enemy’s first strike and guarantee second-strike capability. However, this minimum level, according to Zhou, cannot be quantified because security needs vary depending on the global context. Even if China’s arsenal were to increase from 600 to 1,500 warheads in 2035, the Dragon could still claim to have an insufficient deterrent compared to American and Russian stockpiles, and given the foreseeable level of contention in the Asia-Pacific region.

Interpreting Zhou, in essence nuclear sufficiency in the crisis in the world order cannot be the same as in the previous phase of peaceful rise. Power relations overwhelm postures and doctrines. This is also revealed by the new war crisis in the Persian Gulf. The US is once again moving unilaterally, with a tous azimuts demonstration of political and military force aimed at all powers. On the one hand, the MOAB, the mother of all bombs dropped on Iran, bounces back onto the table of European diplomacy, which is engaged with London, Paris, and Berlin in the E3 negotiations with Tehran. On the other hand, writes Ding Gang in the People’s Daily, the strike restores deterrence but opens a black hole in the non-proliferation regime. The middle powers will be led to believe that they can only protect themselves through nuclear weapons [and] countries on the nuclear threshold will feel they must cross it, triggering a chain proliferation that will accelerate the disintegration of the old order — not necessarily in China’s interest, both in the Gulf and in Asia. This does not exclude tactical convergence with Washington to stabilise Hormuz, nor even implicit convergence against the Iranian atomic bomb.

Finally, the summit in The Hague. NATO abandoned the previous standard of 2% of GDP for military spending, now superseded in Europe by the rearmament plans of the Commission and the Member States. The formula of 3.5% for defence plus 1.5% for strategic infrastructure was, after all, the new German norm. The fact remains that anyway, in an uncertain Atlantic context, Europe is rearming. The race is monetary, conventional, and increasingly nuclear.

Translated from the original work by , published in Lotta Comunista, , p. 23.

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