Opinion
Can India be a winner in the trade war?
The repercussions of the new global trade war initiated by Donald Trump continue. In early April, he announced “reciprocal tariffs” on countries worldwide, ranging from 10% to as high as 49%. In this scenario, almost all countries would face a 10% tariff when selling goods to America. However, some specific countries, including India, experienced a special tariff shock. While Trump imposed a 34% tariff on China, for example, he announced tariffs exceeding 40%, almost reaching 50%, for some other Asian countries like Vietnam, Cambodia, Sri Lanka, and Laos. For India, this tariff was 26%. This means that even New Delhi, which had lowered tariffs on thousands of goods, recommended tariff reductions on half of its $23 billion imports, initiated trade talks, increased imports by $3 billion, and created nearly 500,000 job opportunities with over $40 billion in investment, could not escape the 26% (discounted) Trump tariff.
Tariffs are taxes imposed by a country on goods imported from another country. Donald Trump believes that American goods are unfairly tariffed by trade partners, which harms American companies. This is why he announced these controversial new tariffs to level the playing field. He escalated the trade war by increasing customs duties on China, which retaliated with a 125% tariff, to 145% (and announced today – April 16 – that he has raised it to 245%), while giving the rest of the world a 90-day pause. Yes, Trump’s trade war is now a duel between America and China. And now, Chinese President Xi Jinping is on a Southeast Asia tour to take measures against Trump’s tariffs. When elephants fight, the grass gets trampled. Yes, I know; the elephant is a favorite metaphor for India, but in this duel, the question is: Will India be the grass? Or, alternatively: Will it be a winner as a major swing country in the duel between these two? Let me state at the outset what I will conclude with: Frankly, this duel between America and China has opened up many possibilities for all swing countries, but New Delhi is one of the biggest and most important of them. Frankly, Delhi seems to be in a more advantageous position against Beijing, its biggest rival in trade. To be a winner, it needs to recommit itself to that Covid-era reform idea.
While evaluating crises often seems like a facile approach, it is generally a rational strategy in world politics. However, Delhi has not fully capitalized on such opportunities recently. Especially after Covid, many of the promises remained unfulfilled, and there were no tangible results from the proposed agricultural laws and labor codes. For example, Prime Minister Narendra Modi said in 2021 that the government would unconditionally transfer all business areas except strategic ones to the private sector, but there has been no mention of any privatization other than the Air India sale, which has been ongoing since 2017. There is still no word on the long-awaited reforms in the country. The Indian government had proposed a new economic agenda around two ideas: Atmanirbhar (self-reliance) and Make in India (domestic production model). Under this economic agenda, large amounts were allocated to production-linked incentives, and ease of doing business was promised. The first was partially implemented because production stagnated. However, some production-linked incentives were received, the most prominent being for iPhones. In the midst of the US-China trade war, this could strengthen New Delhi’s hand. Apple may now start shifting its production from China to India. This is at least a good example of a “plus one” against China. Taiwanese-based Foxconn has already moved some of its factories in China to India and started iPhone production. When it comes to ease of doing business, yes, India’s ranking has risen, but at a snail’s pace.
At least, given the Trump tariffs, there may be opportunities for New Delhi in American markets where China cannot compete. We mentioned Apple phones as the first example. However, when you look at the list of products Beijing exports to America, it is not difficult to estimate that there will be tens of billions of dollars worth of export possibilities available. The questions are: How quickly can India ramp up new production to turn this duel to its advantage? If customs duties are significantly reduced, is Indian production robust enough to survive? And what does the Indian government plan to do to ensure this? While subsidies are the first thing that comes to mind, they are expensive, and Trump may find them unfair and object. I am quoting the view of the US Trade Representative’s office on this matter verbatim: “India provides a wide range of subsidies and support to the agricultural sector, including credit subsidies, debt waivers, crop insurance, and input subsidies (such as fertilizer, fuel, electricity, and seeds) at both the central government and state government levels. These subsidies, which are a significant cost to the government, reduce the cost of production for India’s producers and have the potential to distort the market where imported products compete.”
Anyway, America was generally a duty-free economy, which provides Delhi with a $45 billion trade surplus. It is also true that America produces very little that it can export to India. The top two items in the export basket are mineral oils and precious stones. Manufactured goods, machinery and appliances, electrical, and optical equipment have a value of less than $8 billion. In contrast, India exports electrical and pharmaceutical products, which are the top two products on the export list, and the value of these products is more than three times higher, at $26.5 billion. Most of the rest that Delhi buys from America are agricultural products. This is exactly what Trump wants to boost. This directly benefits his farmer base as well. Everything Delhi grows on farms, from walnuts to edible oil, is tariffed at significant rates. Fish, meat, and dairy products are taxed so high that it is almost impossible for America to export them. And this is the only thing America produces in exportable surpluses.
The trade issue seems to be almost entirely limited to manufacturing and agricultural products, which means that services, which account for about 40% of India’s exports to America, are not included. Since none of them cross the border, they are not subject to customs duties. Somewhere in the article, I said that Delhi, which lowered tariffs on thousands of goods, could not escape the Trump tariff. Agriculture is critical for Trump, and Delhi must have realized that it cannot conduct trade by neglecting agriculture and lowering taxes on machinery, boilers, electronic devices, and precious stones, I think. If you look at the India section in the US Trade Representative’s report on restrictive practices of different countries, you can see that agricultural products are marked as non-tariff barriers. Also, the idea that India is an important partner and that the personal friendship between Modi and Trump will bring a special exemption to Delhi is often thought or repeated; however, looking at Trump’s attitude towards his other allies, I don’t think he thinks that way at all. Trump is playing hardball and is very likely to continue playing hardball. Lowering customs duties on non-agricultural goods was the easy part. However, considering Delhi’s traditional insecurities and protectionism, can India open up to milk and meat imports, for example? Furthermore, is milk and dairy production or meat production self-sufficient? Considering Delhi’s production protectionism and historical hesitations regarding agriculture, its task seems difficult. Perhaps the opportunity for agricultural reforms missed during the Covid crisis deserves a second chance for Delhi, and perhaps this superpower trade war, where its best friend and worst rival are showing their hands, is telling it that now is the perfect time.
Rhetoric such as being the fastest-growing major economy or the fifth largest and soon to be third, surpassing Japan and Germany, and the discourse of a manufacturing revolution that has been said to be coming for the last decade but has not yet materialized – or even gone backward – is certainly noteworthy. However, New Delhi, which seems to have moved away from the hard-won economic freedoms of the early 90s, appears to have returned to the belief that growth can be achieved through top-down methods. Higher tariffs have been seen returning in the last decade. You might be buying the world’s most expensive steel from India, for example. In the late 90s, the finance minister of the time said he had brought tariffs down to almost ASEAN levels. Increasingly powerful oligarchs are dividing market share and sectors. Does it work? Is the idea that state patronage will lead India to a manufacturing and export utopia coming to fruition? Take a look at government data: Despite the Make in India domestic production model, where Delhi invested over $26 billion in strategically important sectors to benefit from the exodus from China, the share of manufacturing in the Indian economy has declined compared to the service and agricultural sectors. Or, after the 10-year period of the Make in India initiative, you see that the share of manufacturing in India’s GDP in 2023-24 is exactly the same as in 2013-14: 17.3%. And it tends to be even lower this year. The contribution of manufacturing to job creation was slightly lower in 2022-23 compared to 2013-14; it was 10.6% in 2022-23 while it was 11.6% in 2013-14. Furthermore, while the real success in smartphone production may deserve celebration, the share of exports in its GDP has fallen from 25% in 2013-14 to 22.7% currently. Consequently, the growth rate of Delhi’s share in global exports has also slowed down.
Praveen Khandelwal, a Delhi-based businessman and ruling party member of parliament known for his lobbying activities, may be saying that the high tariff imposed on imports from China to America presents a significant opportunity for India’s trade and industry, and that they want to use this advantage against Beijing in most sectors, including electronics, auto parts, textiles, and chemicals. However, Delhi is dependent on Beijing for parts and equipment, lacks skilled labor, and incentive programs are also insufficient in many sectors where Delhi is competing with Beijing. The Chinese economy, which is five times larger than the Indian economy, is still a formidable competitor. In India’s case, Trump’s tariffs could be softened, or perhaps even completely removed (?); but in return, Delhi may need to offer more than the “tiny concessions” I mentioned in a previous article. It is clear that America expects more than “tiny gains.” While other countries that experienced a special tariff shock are trying to enter into negotiations for reciprocal tariff reductions during the 90-day grace period, New Delhi has already been at the negotiating table with America for some time, but this time Trump is a tough friend. The scale of Indian strategic vulnerability will be revealed by time.
Opinion
Macroeconomic consequences of asymmetric UAV attacks in Russia
Today, the nature of asymmetric threats is undergoing a profound transformation, with their focus shifting increasingly toward economic centers. By mid-2026, the nature of asymmetric warfare within the borders of the Russian Federation entered a qualitatively new and critical phase.
An analysis of the Ukrainian unmanned aerial vehicle (UAV) strikes carried out in July 2026 reveals a deliberate shift in targeting. Moving beyond military installations and fuel-energy infrastructure, these attacks directly targeted civilian logistics networks and critical nodes of the macroeconomic infrastructure.
The primary objective of this strategic shift is to deplete the country’s internal resources, induce insurmountable disruptions in supply chains, and exert intense psychological pressure on the civilian population.
Large-scale, coordinated strikes on the distribution centers of Wildberries—Russia’s largest e-commerce platform and part of the RVB joint venture (formed by the 2024 merger of Wildberries and Russ)—became the symbol of this new phase of home-front vulnerability. The geographic scope of these attacks, spanning an unprecedented area from the Northwestern Federal District to Southern Russia and Crimea, exposed critical gaps in national industrial risk insurance mechanisms. Furthermore, this situation sparked severe legal disputes between platform economy giants and small businesses, compelling immediate intervention from both corporate executives and senior state officials.
Tracing the multi-layered consequences of the kinetic impacts resulting from these July attacks on the state’s digital and physical economy will shape the new architecture of civilian sector security.
The zenith of the logistical terror waged by Ukraine was recorded on the night of July 24, 2026, marking the most technically complex UAV attack inflicted on Russian Federation territory since the beginning of the year. According to data from the Ministry of Defense of the Russian Federation, domestic air defense systems detected and destroyed 571 fixed-wing Ukrainian UAVs that night.
Two points have become exceptionally critical here: saturating radar fields and the military “swarm” effect. In short, this event is the clearest indication that the enemy has transitioned to a tactic of overwhelming radar systems. At the same time, the “swarm” effect generated across a vast geographic expanse aims to rapidly deplete the ammunition of anti-aircraft missile systems and expose air defense positions deep behind the front lines.
The breadth of the targeted geography attests to the unprecedented scale of the operation. UAVs were neutralized over the Belgorod, Bryansk, Kaluga, Kursk, Leningrad, Novgorod, Oryol, Pskov, Ryazan, Smolensk, Tver, Tula, and Vladimir regions, as well as over Moscow, Krasnodar, the Republic of Crimea, and the waters of the Azov and Black Seas.
Such a dense dispersion of targets across a vast territory points to an attempt to paralyze transportation and logistics arteries within Russia’s European landmass.
In parallel with the mass deployment of UAVs, missile strikes were also conducted against civilian industrial enterprises. During the same period, a missile attack on a local enterprise in the Fileyka district of Kirov resulted in outright catastrophe, leaving 6 people dead and 32 employees injured with varying degrees of severity.
Following the incident, Regional Governor Aleksandr Sokolov stated that the situation required not only the evacuation of the wounded, but also large-scale interventions such as restoring water and power supplies and auditing the security of neighboring settlements. This combined approach—employing inexpensive kamikaze drones to degrade air defenses followed immediately by missile strikes on unprotected industrial zones—presents an entirely new threat paradigm for the civilian economy.
Systematic and sequential attacks directed at the facilities of a single commercial entity completely eliminate the possibility of coincidence. The strategic, macroeconomic, and psychological factors turning civilian commercial warehouses into critical vulnerabilities for an entire state rest upon four pillars:
- Role as the central circulatory system of domestic trade: Wildberries plays a critical role in the architecture of the modern Russian economy, connecting millions of consumers with tens of thousands of SMEs. Damage to distribution centers severe supply chains, triggering localized shortages of essential consumer goods and regional inflationary spikes. The primary goal is to destabilize the domestic market and create an artificial supply vacuum.
- Immense facility footprints and defense complexity: Spanning hundreds of thousands of square meters across the nation, these hangars constitute massive targets with high radar contrast. Unlike military bases, these commercial warehouses cannot possess their own air defense systems; placing every such facility under an air defense umbrella is physically impossible without compromising frontline systems.
- Social and psychological impact: In the eyes of the public, logistics centers symbolize daily economic stability. Black plumes of smoke visible from miles away, massive fires, and civilian casualties represent a hybrid terror tactic designed to transport an atmosphere of fear deep into peaceful cities and shake the internal socio-political climate.
- Magnified radius of economic impact: Inventory consumed by flames in these warehouses generally consists of stock purchased by merchants on credit. The destruction of commodity inventories holds the potential to cause mass vendor bankruptcies, bank loan defaults, and cascading layoffs across small businesses.
The events of July 2026 mark an irreversible shift in the threat landscape facing Russian commerce and macroeconomics. Attacks directed at Wildberries hubs in regions such as St. Petersburg, Moscow, and Tambov exposed the utter vulnerability of civilian logistics infrastructure.
Deploying relatively inexpensive unmanned aerial vehicles, the enemy is capable of inflicting tens of billions of rubles in direct damage, paralyzing the supply of essential goods, and triggering an acute social crisis in which hundreds of thousands of entrepreneurs face the threat of bankruptcy. According to Russian experts, the total cost of a single fire—similar to the Kotovsk incident on July 18—can range between 50 and 100 billion Rubles ($630 million – $1.2 billion USD).
Despite its massive capital reserves, corporate business was caught unprepared for military threats. The medium-term survival of the e-commerce economy depends on the state and the private sector uniting to engineer unprecedented systemic solutions. Establishing compensation funds and introducing mandatory risk-distribution mechanisms are critical steps that must be taken.
Logistics hubs will remain open targets unless a “state program for subsidized reinsurance of military risks” is established for the critical nodes of the civilian economy. In the future, it will not suffice for large enterprises merely to pour capital into the physical protection of infrastructure; they must also deeply decentralize their logistics networks to prevent the concentration of goods and capital at single points of failure.
Opinion
Egypt Under Fire: What Does the Damietta Strike Mean for Global Energy Markets?
Dr. Ahmed Moustafa, Director & Founder, Asia Center for Studies & Translation, Egypt
For the first time since successive waves of escalation between Washington and Tehran began in recent months, an Egyptian liquefied natural gas (LNG) export facility has become a direct target.
In the early hours of Wednesday, 29 July 2026, at least one drone struck the floating storage unit Energos Winter, owned and operated by a U.S. company and sailing under the Marshall Islands flag, while it was moored at the Mediterranean port of Damietta. The impact ignited a fire that spread to a neighboring LNG carrier, GasLog Salem. Egyptian authorities confirmed that the blaze was brought under control without any reported casualties, while no group had claimed responsibility for the attack at the time of writing.

A Broader Context That Cannot Be Ignored
The incident did not occur in a vacuum. It came only hours after the United States Central Command (CENTCOM) announced that it had conducted joint strikes with Saudi forces targeting armed factions in Iraq accused of launching drone attacks against Saudi oil facilities. Tehran responded by warning against a “miscalculation,” at a time when the Middle East is still grappling with the repercussions of an earlier round of escalation that erupted on 8 July, when U.S. forces carried out strikes inside Iranian territory following an attack on a commercial vessel in the Strait of Hormuz. Iran retaliated with attacks targeting U.S. military bases in Bahrain, Jordan, Qatar, Kuwait, the United Arab Emirates, and the Sultanate of Oman.
Against this tense backdrop, Damietta appears to represent yet another link in the chain of regional escalation—but an exceptional one. For decades, Egypt has sought to keep itself removed from direct military polarization in the region, unlike several Gulf states that have increasingly become arenas of open confrontation.
At the same time, this interpretation does not entirely rule out the possibility of an indirect Israeli role, driven by hostility toward Egypt’s growing diplomatic influence in the Palestinian and Gaza files. Cairo has remained committed to advancing the two-state solution and to implementing the second and third phases of the peace roadmap agreed upon following the Sharm El-Sheikh Peace Summit last October. The Israeli government, led by Benjamin Netanyahu, has sought to obstruct these efforts. Netanyahu, who is the subject of arrest warrants issued by the International Criminal Court, is widely accused of bearing responsibility for committing genocide that, according to Palestinian authorities, have resulted in the deaths of approximately 73,000 Palestinian civilians since 7 October 2023.
Why Egypt?
Over the past two years, Egypt has steadily strengthened its position as a regional hub for liquefying and re-exporting natural gas. This growing role has been supported by its two LNG plants at Idku and Damietta, in addition to a network of pipelines linking the country with Israel and Cyprus.
This infrastructure—unmatched elsewhere in the Eastern Mediterranean in terms of combined liquefaction capacity and direct access to European and global markets—has transformed Damietta and Idku into critical gateways for Eastern Mediterranean gas, including increasing volumes of Israeli/Stolen Palestinian natural gas liquefied and re-exported through Egyptian facilities.
According to local reports, the Energos Winter alone was supplying approximately 450 million cubic feet of gas per day to Egypt’s national grid and was preparing to receive four additional cargoes during August.
This expanding role gives any attack on Egypt’s gas infrastructure significance far beyond the immediate incident itself. It threatens not only Egypt’s domestic energy supplies but also a supply chain upon which Europe has increasingly relied as part of its strategy to diversify away from Russian natural gas.
Who Was Behind the Attack? Open Scenarios
At the time of writing, no organization had officially claimed responsibility, leaving several possible interpretations.
The first scenario cautions against prematurely attributing responsibility to Iran or its regional allies. It argues that the ambiguity surrounding the incident—and the absence of any claim of responsibility—may itself be deliberate, allowing whichever actor carried out the attack to undermine Egyptian stability without incurring immediate political costs.
This possibility includes actors competing over Eastern Mediterranean energy routes, as well as local or transnational groups pursuing agendas unrelated to the U.S.-Iran confrontation. Egyptian officials themselves have adopted a notably cautious approach. Egypt’s Minister of Information warned against “rushing to accuse any party,” while a former official suggested that “certain actors are seeking to drag Egypt into the conflict,” implying that the attack may have been designed precisely to draw Cairo into a confrontation it has consistently sought to avoid.
A second scenario, Israeli Involvement or the Involvement of Israel’s Allies
This, in itself, remains a serious hypothesis that is reportedly being discussed in undisclosed investigative circles. The prevailing analyses, supported by pro-Israeli and pro-American narratives, have largely centered on suspicions directed at Iran or Iran-aligned actors within the context of the ongoing conflict, rather than at Tel Aviv. This is partly because Israel maintains an energy partnership with Egypt, making any attack on an Egyptian export terminal potentially detrimental to its own natural gas interests.
Nevertheless, this hypothesis—like all others—must ultimately be assessed in light of the findings of the official investigations, which are still underway. It is worth recalling, however, that repeated warnings have been voiced regarding the visits of Israeli Prime Minister Benjamin Netanyahu to Washington, as such visits have often been followed by heightened regional instability, as was argued after developments last December. According to this line of analysis, Netanyahu seeks to prolong the conflict with Iran in order to strengthen his domestic political position, secure his continuation in office, and advance Israel’s long-term strategic objective of neutralizing Iran and carrying out “Greater Israel.”
Within this framework, some analysts argue that there are broader efforts to weaken both Egypt and Türkey. They cite remarks attributed to a former Mossad operative during appearances on Israeli television, alleging that such a strategy would also serve to divert international attention away from the Gaza file and the question of Palestinian statehood—an issue on which Egypt has intensified its diplomatic efforts in recent days. According to this interpretation, creating indirect pressure on Egypt—the region’s most stable and secure state—could be viewed as a means of drawing Cairo into a wider regional confrontation.
A third scenario links the incident directly to the broader U.S.-Iran escalation. According to the article, The New York Times, citing two Iranian sources, reported that the attack may have been intended as a signal that global shipping and energy supplies could face deeper disruptions should Tehran or its allies choose to escalate further. The sources, however, did not identify the perpetrators or specify the launch point of the drone.
The Messages Behind the Attack
Regardless of who carried out the operation, the choice of target sends several important signals. An attack on what the article describes as the first American-owned energy asset on Egyptian soil would convey a message to Washington that not only its military installations in the Gulf, but also its economic footprint across the region, has become increasingly vulnerable.
For Egypt, which has consistently pursued a policy of strategic restraint and regional neutrality, the incident serves as a reminder that its geographic position—adjacent to some of the world’s most important energy and maritime corridors—no longer guarantees insulation from the conflicts unfolding around it.
For global markets, the attack suggests that the geographic scope of potential disruption is expanding beyond the Strait of Hormuz and the Arabian Gulf into the Eastern Mediterranean, increasing insurance premiums for shipping and critical energy infrastructure in a region long regarded as comparatively secure.
Egypt’s Official Response
The Egyptian government handled the incident with considerable caution and procedural professionalism, treating it primarily as a crisis-management operation rather than a political event.
The Cabinet confirmed that the fire had been caused by a drone attack without attributing responsibility to any specific party, emphasizing that investigations were continuing “to take all necessary measures to safeguard Egypt’s interests and national security.”
Prime Minister Mostafa Madbouly described the response as a test of the state’s crisis-management capabilities, praising emergency teams for successfully moving the burning vessels away from the port, thereby preventing what could have become a far larger disaster.
President Abdel Fattah El-Sisi addressed the incident publicly for the first time during a telephone conversation with Spanish Prime Minister Pedro Sánchez. During the call, he confirmed that the competent authorities were conducting a comprehensive investigation, warned of the dangers posed by the escalating regional situation, and stressed the importance of cooperation between Egypt and the international community to contain the crisis while adhering to peaceful solutions.
This measured diplomatic approach—avoiding direct accusations while emphasizing de-escalation—reflects Cairo’s determination not to be drawn into a broader regional confrontation despite having come under direct attack on its own territory.
Several Gulf states also expressed their full solidarity with Egypt and voiced support for its efforts to safeguard its national security and sovereignty.
The Impact on Global Energy Markets
The Damietta incident occurred at a time when global energy markets were already under considerable strain. Brent crude had been hovering around US$90 per barrel following the escalation of 8 July, while the European Title Transfer Facility (TTF) benchmark for natural gas had climbed above US$700 per 1,000 cubic meters for the first time since March.
Any additional disruption affecting an Egyptian LNG export terminal risks reinforcing this upward trend. Europe has increasingly relied on Egyptian liquefied natural gas as part of its broader strategy to diversify supplies away from Russian pipeline gas. Consequently, even a temporary interruption to Egypt’s export infrastructure could heighten market concerns over supply security.
The incident also adds to the geopolitical risk premium already factored into insurance costs for vessels operating in the Eastern Mediterranean. Higher perceived risks could translate into increased shipping and insurance costs for LNG carriers throughout the region, even if subsequent investigations conclude that the attack was an isolated event unlikely to be repeated.
What Should Be Done to Prevent Similar Incidents?
First, Egypt should further strengthen its short-range air defense capabilities and counter-drone systems around strategic energy installations along its Mediterranean coastline. This includes deploying advanced early-warning radar networks and cost-effective interception systems capable of neutralizing small unmanned aerial vehicles before they reach critical infrastructure.
Second, broader regional intelligence-sharing mechanisms should be expanded among Egypt and neighboring states—including Cyprus, Greece, and Türkiye—in recognition of the increasingly interconnected nature of Eastern Mediterranean gas infrastructure and the shared strategic importance of safeguarding regional energy corridors.
Third, given that the targeted floating storage unit is owned by a U.S. company, Washington should contribute to financing and modernizing the protection of such critical infrastructure rather than limiting its response to statements indicating that it is merely “monitoring the situation,” as the article characterizes the U.S. reaction.
Finally—and perhaps most importantly—reducing the broader cycle of regional escalation between Washington and Tehran remains the only sustainable guarantee against similar incidents in the future. Any purely technical or localized security measures can mitigate immediate risks but cannot eliminate them so long as the underlying geopolitical drivers of confrontation remain unresolved.
Conclusion
The Damietta incident serves as a stark reminder that geographic neutrality alone is no longer sufficient to shield a country that has become a pivotal node in the global energy network.
References:
1- https://www.bbc.com/news/articles/c39ez3klwmro
4- https://www.nytimes.com/2026/07/29/world/middleeast/ships-drone-strike-egypt.html
Opinion
Rising populist parties in Europe and liberalism
Leon Trotsky, one of the foremost leaders of the October Revolution, defined fascism as the totalitarian organization of society by monopoly capital. Magnates of large-scale monopoly capital are acutely aware that their profits cannot be safeguarded in the absence of authoritarian political power. Thus, fascism finds its bedrock of support among capitalist forces, the grand bourgeoisie, monopoly capital circles, and major landowners. We are all too familiar with the calamities fascism wrought upon the world in the era preceding the Second World War.
The post–World War II era is often commemorated as the golden age of capitalism—a period characterized by robust growth rates and low unemployment. Real wages climbed, social rights expanded, demands for a welfare state remained vibrant, and the pursuit of a social state yielded tangible results. This era ultimately met its demise in the 1970s, undone by shifts in the regime of accumulation and structural economic crises.
Today, across Europe, political parties that could virtually be characterized as the direct successors to pre-WWII fascist movements are consolidating their electoral gains. Germany, France, and Italy serve as quintessential examples. These parties weaponize poverty, unemployment, and anti-foreigner, anti-immigrant, anti-Muslim, and anti-Middle Eastern sentiments, while capitalizing on the incompetence of traditional center-right and center-left parties and taking a deeply Eurosceptic, critical stance toward the European Union. They employ caustic rhetoric against the political elites who have dominated governance for decades. Receiving endorsement from both US President Trump and Russian leader Putin, they draw substantial support simultaneously from working-class constituencies—traditionally the bedrock of the left—and from grand capital circles. While monopoly capital quietly pats these populist movements on the back, it simultaneously winks at liberal-democratic and increasingly indistinguishable social-democratic parties that champion unbridled capitalism and aggressive liberalism. Beyond France and Germany, examples abound from Italy to the United Kingdom…
The interests of grand capital, which back populist regimes and advocate authoritarian governance, also champion localization. For the erosion of the national, the public, and the collective—alongside the attenuation of the central state and the elevation of the local—works decisively to the advantage of big capital.
Why?
Because of this:
Under liberalism, the state does not regulate the market; rather, the market regulates, directs, and subdues both the state and society. In a liberal order, the state is expected to act on behalf of capital and in favor of the market—intervening in politics, society, and the law, and enacting statutory frameworks strictly to this end. The state is tasked with engineering legal and institutional arrangements for the market’s account and benefit. Society is reduced to a market-society, wherein the citizen is reimagined as a consumer, a client, and an entrepreneur. Since competition is elevated as the supreme imperative, citizens themselves must become entrepreneurial and competitive—a posture the state actively promotes and incentivizes.
According to liberals, the state bears no obligation to shield its citizens from the pitiless mechanics of the market or the ferocity of unchecked capitalism. On the contrary, the state demands and encourages that citizens establish themselves as entrepreneurial actors within the market arena. Consequently, the state aligns itself with capital, operating at its beck and call. Hence, liberalism harbors an innate preference for unorganized, non-unionized, cheap labor. Wages are suppressed; agricultural subsidies are gutted to a minimum; and strikes are banned on the flimsiest of pretexts.
Because liberalism insists that the state be sculpted, organized, and driven according to market demands—allowing the market to command and direct the state—the liberal vision of the nexus between politics and economics, as well as politics and law, is deeply fractured. In their worldview, law must operate exclusively to the advantage of capital, acting as the vigilant sentinel for the inviolability of property rights. It must dismantle every obstacle standing in the way of free trade, unbridled competition, and the free market, while swiftly and severely penalizing any force that dares to impede them. To conform to the expectations and demands of capital: this is the primary imperative required of the law.
In sum, through its championing of identity politics, its reduction of the citizen to a mere client, and its liquidation of the state’s social character in order to place public power at the disposal of capital, liberalism stands fundamentally opposed to the social, the public, and the national. This is a truth that must be firmly impressed upon left-liberals, nationalist-liberals, and conservative-liberals alike.
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