The long downward wave of the world economy and the future of global conflicts

Globalization as a political project rests on claims that liberalization and economic interdependence are conducive to peace and prosperity. Yet more 'globalization' seems to mean less economic growth and more inequalities. I portray first the downward phase that started in the 1970s and discuss the so-called Kondratieff cycles, arguing that they are best understood as mere trend-spotting observations which in themselves explain very little. Next, I propose an explanatory model. The complex that has produced the long downward phase includes the prevailing economic policies; tendencies towards rising inequalities and, consequently, under-consumption; decline in the marginal productivity of capital; and the uncertainty and risks caused by global finance. I also put these elements into a concrete world historical context, focusing in particular on the positioning of the US in the global political economy. Finally, I explain why a new upward wave looks unlikely. On the initiative of the ever-stronger transnational management class, and under the leadership of the US, a worldwide framework of institutional arrangements has been created that, among other things, prevents a turn to a new genuinely upward phase in the world economy. Through consequent pathological learning processes, it is possible that the world has been set onto a path towards a new major catastrophe that might even resemble the First World War.