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How the Pandemic Accelerated the Geopolitical Breakdown 

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This recent post on the Twitter/X, which if true, might lead one to believe that such pandemic panic contributes to the geoeconomic panic infecting the world today.

Seeing as there has been an acceleration in the geopolitical and geoeconomic breakdown in recent years, largely emanating from the world’s heart of neoliberal capitalism in the US, as well as its (also neoliberal capitalist) vassals and proxies, how much of a role did/does the pandemic play? While that might be impossible to quantify, if we subscribe to the theory that bellicosity derives, at least in part, from crises of capitalism, then if COVID-19 is causing or is contributing to crises of capitalism, then there is likely to be a connection.

Evidence of COVID-19 Contribution to Crises of Capitalism

Prior to the COVID-19 pandemic the US-led “West” was already in the midst of a capitalism crisis.

Source: Michael Roberts’ Blog.

COVID has only served to deepen it. A November brief from npj Primary Care Respiratory Medicine highlights the following:

…microeconomic impacts, which are estimated at an average annual burden of $1 trillion globally and $9000 per patient in the USA, with some individuals covering substantial out-of-pocket expenses. Annual lost earnings in the USA alone are estimated at approximately $170 billion. Long COVID was associated with increased unemployment, financial distress, and work impairment for up to three years post-infection.

Multiple other studies in the past year show how the pandemic has hammered productivity. See here, here, here.

Additionally, the pandemic might have deepened what is described as a birth rate crisis in advanced economies. While declining birth rates can have ecological benefits, they cause alarm among the capitalist class due to negative effects on economic growth.

While many of these economic trends were already present before the pandemic, COVID-19 accelerated them—or at least accelerated the fear of them. Similarly, while many of the billionaires now driving the US policies in response to these crises were already psychopaths, COVID further broke their brains—if not the virus itself then fear of what it meant for their power.

Evidence that Increased Belligerence Is Result of Crises of Capitalism, Which Are Worsened by COVID-19

If one subscribes to the view that capitalist expansion (i.e., the neverending need for growth) will eventually lead to attempts at empire building in order to facilitate such expansion, then the argument is that the US-led “West” needs to do something to kickstart another growth and profitability wave. From economist Michael Roberts:

This ‘golden era’ came to an end in the 1970s, when the profitability of capital fell sharply (according to Marx’s law) and the major economies suffered the first simultaneous slump in 1974-75, followed in 1980-2 with a deep manufacturing slump.  Keynesian economics was exposed as a failure and economics returned to the neoclassical idea of free markets, free flow of trade and capital, deregulation of state interference and ownership of industry and finance, and the crushing of labour organisations.  Profitability was (modestly) restored in the major economies and globalisation became the mantra; in effect the expansion of imperialist exploitation of the periphery under the guise of international trade and capital flows.

But again, Marx’s law of profitability exerted its gravitational pull and from the turn of the millennium, the major economies experienced a fall in the profitability of their productive sectors.  Only a credit-fuelled boom in finance, real estate and other unproductive sectors disguised that underlying crisis of profitability for a while (the blue line below shows the profitability of US productive sectors and the red line, the overall profitability). 

Source: BEA NIPA tables, author calculation

But eventually this culminated in the global financial collapse, the Euro debt crisis and the Long Depression; further enhanced by the impact of the pandemic slump of 2020.  European capital has been left in tatters. And US hegemony now faced a new economic rival, China, after its stupendous rise in manufacturing, trade, and more recently technology, unaffected by economic crises in the West.

This is arguably what we are seeing playing out in conflicts across the globe today as the US uses its empire in an attempt to open up new markets. Why is the US trying regime change in Venezuela?

Trump said back in 2023 that it’s about the oil. And here’s the current Director of National Intelligence back in 2019:

And it’s not just oil. Nobel Peace Prize winner María Corina Machado who argues for the bombing of her home country recently told the Miami Business Forum the following:

“For the U.S., we will turn this criminal hub into a security shield in the heart of the Americas. We will open Venezuela for foreign investment, I am talking about a 1.7 trillion dollar opportunity, not only in oil and gas, … but also in mining, in gold, in infrastructure, power. We will open markets, we will have security for foreign investment, and a massive privatization program that is waiting for you”.

Why does the US and its European vassals want to dismantle the Russian Federation? A major driver has always been to relive the heyday 1990s when the US’ best and brightest sucked hundreds of billions of dollars out of the country with devastating results (the number of Russians living in poverty jumped from two million to sixty million in just a few years and life expectancy plummeted among other catastrophes).

There are, of course, other reasons, but those too have to do with crises of capitalism wrapped up in the pandemic. At the time Project Ukraine became a war, the EU had been in a prolonged (largely self-inflicted) economic crisis for years. The bloc’s emergency 750 billion euro COVID recovery program was supposed to stitch the union back up again, but it has underwhelmed, and instead much of the bloc elite have turned to war in a desperate bid for economic growth and to keep the union train on the tracks. That is summarized here by Wolfgang Streeck:

A possible solution for the coming fiscal crisis of an EU warfare state might be member states allowing the Union to issue its own debt—which would, however, also require changes in the Treaties. It is fair to assume that von der Leyen’s out-of-thin-air fiscal commitments in the context of the Ukrainian war were, and are, aimed exactly at getting member states to grant the EU this right to incur debt, constitutive for a modern state. Indeed, that right has long been demanded by advocates of European supranational centralization and integration. An EU borrowing capacity would give member states access, outside of national state budgets and therefore invisible to national voters, to the favorite medicine of underfunded capitalist states, public debt. Keeping national contributions to the European Union low by allowing the Union to debt-finance part of its expenses would amount to another, more advanced, form of political level-shifting.

Fascist Solutions in Silicon Valley

Back in the US, during the early days of COVID the seeds were planted for the new imperial strategy we’re seeing today. Marc Andreessen, the billionaire who co-founded the venture capital firm a16z and, before that, played a role in the invention of the modern web browser, was a driving force behind the elite Signal group chats that began to look for solutions to their problems back in 2020. According to Semafor, those chats included other billionaires and members of companies that now play dominant roles in America’s efforts to remake the country and the world into technomonarchies.

The chats were filled with billionaire grievances—that they were being underappreciated and shackled—and conviction that they knew the best way forward for humanity. As Semafor notes, “The Group Chat Era depended on part of the American elite feeling shut out from public spaces, and on the formation of a new [Silicon Valley] conservative consensus.”1 They were reportedly most concerned with “power.”

That makes sense if you subscribe to the teachings of monarchist pundit Curtis Yarvin who was reportedly lionized in the Andreessen-led Signal chats. Here’s Quinn Slobodian on Yarvin’s vision for the future:

Right-wing accelerationists imagine existing sovereignty shattering into what Yarvin, writing under the pen name Mencius Moldbug, calls a “patchwork” of private entities, ideally governed by what one might call technomonarchies. Existing autocratic polities like Dubai serve as rough prototypes for how nations could be dismantled into “a global spiderweb of tens, even hundreds, of thousands of sovereign and independent mini-countries, each governed by its own joint-stock corporation without regard to the residents’ opinions.” These would be decentralized archipelagoes: fortified nodes in a circuitry still linked by finance, trade, and communication. Think of the year 1000 in Middle Europe but with vertical take-off and landing taxis and Starlink internet. Yarvin expressed the essence of the worldview recently when he enthused over Trump’s proposal to ethnically cleanse the Gaza Strip and rebuild it as a US-backed colony securitized as an asset and sold to investors—as he called it, “the first charter city backed by US legitimacy: Gaza, Inc. Stock symbol: GAZA.”

We are now seeing ongoing attempts to create this vision—whether in Gaza, guarding the billionaire pet project in Honduras, “Freedom Cities” in the US, the embrace of the UAE in yet another genocide, or in the deepening of an American political economic system which guarantees profits for the monopolistic weapons and tech surveillance sectors through endless war at home and abroad.

Again much of these symptoms were already present in the US, but why did the pandemic produce this concerted effort from the Silicon Valley and other billionaires to double down? They were, after all, already billionaires who already control much of what passes as social planning in the US. These chats took place even before their arch nemesis Lina Khan began modest efforts at the Federal Trade Commission to rein in Silicon Valley and other billionaire rapaciousness. What were they so fearful of?

What was evident to us all back when the powers that be still cared about the pandemic was presumably also evident to them. They saw the US struggling with shortages, unable to even produce personal protective equipment, and it scared them. It drove home the point that the US global position was weakening. Now, the lords of Silicon Valley and finance might be chiefly responsible for that development, but in their telling it’s because they haven’t been given enough power. One only needs to take a look at Andreessen’s April 2020 screed titled “It’s Time to Build”, which became something of a rallying cry for the technomonarchists, for a glimpse into this mindset. Whether they really believe it or it’s just opportunistic power-grabbing matters little; what does is that so far they have been successful, which is bad news for everyone, including them.

The second obvious factor would likely be the growth crisis mentioned above and how COVID had the potential to make it worse. They were also horrified by what they saw as power shifting to the peasants via more generous, albeit temporary, safety net benefits and work-from-home policies. Tim Gurner might be Australian, but I believe he provided one of the more candid omissions of the billionaires’ views in this clip:

Of course, these billionaire fears played the major role in the “return to normalcy” (for the peasants) push. But Andreessen and friends didn’t stop pushing there. They are part of a larger plan.

Edward Ongweso Jr. looks past all the bubble talk at how AI is integral to the US plan of securing hegemonic primacy in the 21st century—regardless of whether the bubble bursts or not. The whole piece is well worth a read, but here a few key pieces:

…“the final act of a three-act play” of US imperial management, featuring an evolution from “dollar diplomacy” to “oil diplomacy” to “compute diplomacy” centered around deploying our state apparatus and capital to preserve global hegemony…

…the United States could manufacture a “sovereignty crisis” with some hysteria about compromised datacenters and Chinese chips—the only cure, then, is the American option: US-made chips (Nvidia), US-controlled cloud architecture (Microsoft/Amazon), US-controlled financing (BlackRock, Emirati investment firm MGX), and so on.

…What political vehicle will meet the task for building this new order? One candidate is the burgeoning coalition that we can describe as the Compute Axis: 1) Silicon Valley and its capital-intensive dream of building God out of sand; 2) Trump and his brigands—concerned with transactional relationships, deregulation, and imperial plunder; 3) the sovereign capital of Gulf sovereigns.

There’s certainly no guarantee it’ll work, but that doesn’t mean they aren’t going to try. In the meantime, what does it mean for the peasants? The tech bro takeover must continue “because China…”

To “win”, America just must turn over all — as opposed to the large majority— of its capital allocation decisions to a bunch of billionaires chiefly concerned with cementing their grip on power. That’s always the common theme. In order to “build” to “win” there must be no regulations, and AI must be supported to the moon. These policies are already teed up for Democrats 2028 in the form of “abundance,” which when you really boil it down is just the flip side to same coin that is Trump’s current all-in AI approach: the technomonarchists must be given everything they need and want and they will deliver us to their idea of victory.

Despite the current tech-friendly reign, Silicon Valley titans are still having a rough go of it. And the great irony is that they’re accelerating America’s demise:

What the recent events from Venezuela to Gaza to the streets of the US demonstrate, however, is that unless decision-making power is taken away from the techmonarchists, the world is in for a whole lot more hurt—both at home and abroad. We likely would have gotten to this breakdown point regardless, but the COVID-19 pandemic, rather than serving as moment for reflection, cooperation, and as Andreessen put it, an opportunity to “build,” tragically became a moment of acceleration with US and Western elites doubling down on nearly all dystopian fronts. As they face more setbacks, why would the next response be any different?

***

Notes

  1. I would disagree with the “Silicon Valley conservative consensus” label. Conservative or liberal makes little difference to them. Their underlying concern is amassing more money, power, and decision-making capabilities in these here United States of America, the greatest democracy evah. We see they’ve already laid the groundwork for a continuation of their control with Democrats through the “Abundance” agenda. We also see this “consensus” fracture whenever there’s a rare whiff of Trump making good on any of his MAGA promises.
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23 comments

  1. Ignacio

    Let me post a little criticism: when you say that when Covid started the west was in the midst of a productivity crisis, and then illustrate it with a profitability graph. I have lot of issues with measures of productivity in terms of money value but in any case two different concepts are productivity and profitability. This does not mean any criticism on the thesis of the article. For that I would need further thinking but something has been clear to me these years: The Ukraine war might have started sooner if there had not been an interfering pandemic. The pandemic delayed it for a while.

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  2. DJG, Reality Czar

    I am going to take a theme of predation today, after Michaelmas’s response to a comment that I made in comments yesterday. Predation is, in a sense rational, even if immoral. What we are witnessing is another stage of predation by humans.

    The expropriation of wealth isn’t something new, and what is going on now is the expropriation of wealth from the working class, poor, and, incidentally, the middle classes. Gurner isn’t a rarity — he’s vulgar capitalism in all its glory.

    The technological change going from software to web browsers to platforms to AI is causing a redistribution in power. People like to talk about Gutenberg, movable type, the Reformation, and power.

    Hannah Arendt was as skeptic of the Reformation because she considered it as an excuse to confiscate wealth: From The Human Condition, published in 1958:

    “For the enormous and still proceeding accumulation of wealth in modern society, which was started by expropriation— the expropriation of the peasant classes which in turn was the almost accidental consequence of the expropriation of Church and monastic property after the Reformation—has never shown much consideration for private property but has sacrificed it whenever it came into conflict with the accumulation of wealth. Proudhon’s dictum that property is theft has a solid basis of truth in the origins of modern capitalism; … ”

    Meanwhile, the response from much of middle-brow Anglo-America is beggar thy neighbor and cheering on the predation, much as mobs sacked the churches in the Low Countries during the Reformation.

    So the essay by Conor Gallagher is an excellent diagnosis. If we go by the Reformation, we are in for thirty, forty, fifty years of ideological / religious wars. The populations of parts of Europe like Alsace were reduced to mere thousands.

    Because the predators want to wreck the state, the state is the way out. Ironically. Yet war is the health of the state, so people like Trump, Hillary Clinton, Ursula von der Leyen are symptoms of degradation. And besides their love of war, they hate the working class and know nothing of industrial production or the traditional arts and crafts.

    PS: I do have a quibble, so I will quibble. I disagree with a word here: “Similarly, while many of the billionaires now driving the US policies in response to these crises were already psychopaths, COVID further broke their brains—if not the virus itself then fear of what it meant for their power.” Nope. They are not psychopaths. They are predators. They are more or less rational, even if driven by their fears. Think about MacBeth. He isn’t crazy. He and the Lady decide to murder for predation and profit.

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    1. Carolinian

      So if we simply get rid of all these immoral people problem solved? I don’t think so.

      And I believe the point of Macbeth is that predation makes him crazy. Power corrupts but the corruption in turn is self limiting. So here’s suggesting that all the tech futurism is merely vaporware by people in denial about their own humanity and a desire to create a kind of religion out of technology. It’s not new at all but simply the same old thing. Tuchman called it the March of Folly.

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      1. tegnost

        So here’s suggesting that all the tech futurism is merely vaporware by people in denial about their own humanity and a desire to create a kind of religion out of technology.

        Add to this the expectation of immortality or at least living to 150 because of said tech futurism
        Or having your brain implanted in a robot ala dick cheney.

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      2. Chorus

        To dig a little deeper into Macbeth, it’s not his desire for the wealth and power of the King that ‘makes him crazy’, but the conflict between that – largely forced on him by his wife – and his inherent sense of right and morality “Too full of the milk of human kindness,” as she says of him. Don’t forget it’s Lady Macbeth that has to finish the job and then suffers her own crisis of conscience – “Out, damn spot” – before being driven to suicide.

        It’s ‘the milk of human kindness’ that’s missing today.

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        1. Steve H.

          MACBETH
          Be innocent of the knowledge, dearest chuck,
          Till thou applaud the deed. Come, seeling night,
          Scarf up the tender eye of pitiful day,
          And with thy bloody and invisible hand
          Cancel and tear to pieces that great bond
          Which keeps me pale. Light thickens
          And the crow makes wing to the rooky wood;
          Good things of day begin to droop and drowse,
          While night’s black agents to their preys do rouse.
          Thou marvell’st at my words; but hold thee still.
          Things bad begun make strong themselves by ill.
          So, prithee, go with me.

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    2. Laughingsong

      I shall quibble back, and posit the possibility that you have to be a psychopath in order to be okay with predating upon your own species.

      These techno-bros behave like the love children of characters from Atlas Shrugged and The Great Gatsby, surrogated inside sundry succubi. I fervently wish that they would just take their Ill-gotten gains and just GO. To Mars, Elysium, their island bunkers, wherever ….

      Ugh. I guess I’m just cranky this morning…

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    3. Yves Smith

      Erm, in France was the French Revolution that confiscated church property to support the new government. Then bishop Talleyrand read out the decree and was pretty shortly excommunicated. It was returned to the church in the Restoration. So this can hardly be seen at least there as expropriation from the peasants, since the Revolution also resulted in destruction of land records and land reform.

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      1. SufferinSuccotash

        Some of the Church’s lands were returned during the Restoration. But any lands sold or auctioned off between 1789 and 1815 were lost. The buyers–mainly well-to-do peasants and bourgeois–got to keep them. Napoleon insisted that the Church agree to this as part of his Concordat (1801). Up until then the market value of those properties had been depressed because of chronic uncertainty (thanks to the political situation) over whether the Church might or might not get them back. Needless to say, this provision of the Concordat boosted the property values and made Napoleon extremely popular with the proprietaires.

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    4. Henry Moon Pie

      “mobs sacked the churches in the Low Countries during the Reformation”

      I don’t know about the Low Countries, but I have run across the history of iconoclasm in Wittenberg, the “birthplace” of the Reformation. Luther was on the lam, hiding out at Elector Frederick’s place, because the pope had put him under the ban. Back in Wittenberg, the leadership of the Reformation was taken up by Andreas Bodenstein von Karlstadt, Luther’s colleague at the University of Wittenberg. Karstadt, as he’s commonly called in Lutheran writings, was an enthusiastic iconoclast who took very seriously the prohibition against images in the Ten Commandments as they appear in Exodus 20. Karlstadt and his followers went about breaking windows and destroying statues with such abandon that Luther came out of hiding to put a stop to the madness. Luther’s views won out among Lutherans, and Karlstadt was forced into what became the Radical Reformation where he had plenty of company as an iconoclast. Church decoration, Luther taught, was a matter of adiophora, Greek for “indifferent things.” Accordingly, one can find Lutheran churches with empty crosses and no statues or Lutheran churches like the one my spouse grew up in with a cross with corpus behind the altar and even a statue of Mary behind the baptismal font.

      The reason for Karlstadt’s destruction was not the same as the fervor of Spanish anarchists’ for looting the Spanish Roman Catholic churches that had hoarded wealth for centuries even when surrounded by hungry people. The anti-clericalism of the Anarchist Revolution (or one might say anticipatory counter-revolution) in Barcelona in 1936 is brought out by the movie Libertarias. where a monseigneur is is taken out and shot summarily. As the tough female anarchist explains to a shocked new recruit, “It’s a revolution, not a fiesta.”

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  3. Michaelmas

    This is all fine as a general statement of COVID-19’s exposure of what neoliberal financialization and deindustrialization have done to the ‘West’ and a piece of agitprop about Silicon Valley oligarchs’ aims. But I think Naked Capitalism had a more useful analysis by political scientist Tom Ferguson and a colleague last month —

    Tom Ferguson and Nick French: Red Tech’s Political Power, Its War on Labor and the Environment
    https://www.nakedcapitalism.com/2025/11/tom-ferguson-and-nick-french-red-techs-political-power-its-war-on-labor-and-the-environment.html

    More useful because more specific. Ferguson and his colleague detail — based on their research and interviews — exactly why ‘Big Tech’ on one side and its political enemies on the other side currently have the positions they do, what specific parties hope to gain, what they’re doing, and then isn’t afraid to draw some conclusions.

    Starting with, as Yves said, that ‘Silicon Valley’s .. opposition to unions…(is) not out of the traditional desire to crush wage rates but to roll (over) all opposition to their campaign to remake society.’ And Ferguson gets specific from there.

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  4. The Rev Kev

    ‘A possible solution for the coming fiscal crisis of an EU warfare state might be member states allowing the Union to issue its own debt—which would, however, also require changes in the Treaties.’

    That is half the story. If you are going to raise what will be hundreds of billions of dollars of debt, then you are going to need collateral. And the guys at The Duran say that this will be in the form of the EU being able to levy taxes. Maybe 1% at first – like a VAT or a GST – but then could eventually will go to five, ten or twenty percent. It could even be said that the real reason for raising all those debts is to enable EU taxation. No doubt Ursula will bring it in under an emergency decree or something dispensing with a vote of the EU member States.

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      1. The Rev Kev

        I would imagine they would set up an EU taxation office and taxes would be collected at point of sale along with any taxes that individual EU States would collect. These would be electronically be sent on to Brussels. So maybe she would also create an equivalent of the IRS as well. No-one wants to take on the IRS after all-

        https://www.youtube.com/watch?v=G56VgsLfKY4 (22 secs)

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      2. Anthony Noel

        Why do you think she’s so intent on building a EU “army”. She’s alot of things but dumb enough to think any military force that Europe could manage to kludge together in the next few years would stand any chance against Russia is unlikely. So why does she want it? Simple to unleash on member states if they get out of hand, if the population gets a little to riled up, starts general striking, or maybe voting the wrong way, maybe they want to leave the EU.

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    2. JW

      Yes the support of an unwinnable war, militarization,raising EU debt etc, its all about the last attempt to bring about the Federal Europe dream. Given the supine ‘leaders’ of the major nations it might work, although the odds are probably on an acrimonious split of many leaving the old ‘coal and steel’ members standing.

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    3. Bugs

      If the Euro is to persist as an international currency, this is inevitable. It should have been part of the original project, if they had been honest (beyond their capacity). If there is no democratic ascent to the taxation, it will be the last thing the Commission ever does before it is replaced by either sovereign seizure by the Council, or the EU falling apart.

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  5. JE McKellar

    I’ve been wondering lately about general mal-investment gumming up the economy. In classical terms, businesses need X technology to raise productivity and pay their debts, but the big investors invest everything into Y technology instead, which turns out to be a dead end. Productivity stagnates, businesses turn into debt-ridden zombies, and the big investors start looking for another dumb idea hail-mary to recoup their losses.

    Work-from-home and Zoom didn’t make offices more productive, Door Dash didn’t make restaurants more profitable, streaming didn’t save Hollywood, and nothing happens on Meta. If all that money had been thrown into infrastructure, logistics, energy, agriculture, or whatever, or even just giving the old guard at the job more time to train the new hires, things would surely be better.

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  6. gf

    “”As America, we now have two choices: win in AI, including win in open source AI. Or let China win in AI, all over the world. I believe it is critically important that we win. Kneecapping American AI, and American open source AI, to protect Big Proprietary AI is asking to lose.””

    Frankly I would rather China won than these guys.

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  7. XXYY

    Thanks for resurrecting the excellent passage from FDR, Connor. If anything, I think FDR was being excessively gracious by allowing good motives on the part of the wealthy elites who are trying to control society. Of course, people will always self-describe their actions as being well intentioned, but one should not take their word on this.

    Wealthy elites always feel a great sense of entitlement, coming from a belief that (a) great wealth is a marker for great intelligence and ability, and (b) intelligence and ability entitle one to make decisions for an entire society. Particularly in the current era (I can’t speak for earlier eras) it’s been striking how ordinary and lacking in ability members of the wealthy elite class have been. Even in the rare case where an elite excels in a narrow technical skill, they invariably lack the generalized ability to see farther than others in a broad sense and to draw the proper conclusions from what they see, which is the hallmark of intelligence.

    Our descent into rule-by-the-wealthy in the last few decades explains a lot of what’s been going on, I think. It’s the opposite of a meritocracy.

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  8. vao

    One nit-pick with the sources cited by Conor: the expression “Long Depression” is a well-established historical term designating the profound economic crisis that raked (mainly) Europe and North America from 1873 to 1896.

    The “Great Depression” is of course what happened in the period 1929-1939.

    I have seen the term “Long Recession” used to describe the economic crisis following the great financial crash of 2008.

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  9. Dick Burkhart

    The economic crisis of the 1970s had nothing to do with the failure of Keynesian economics – it was really all about the oil shocks. But the Keynesian thing certainly paved the toward 40+ years of accelerating neoliberalism and inequality.

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