“There is nothing better than the multilateral approach to shaping globalisation … not to leave it to actors who exclusively have their own interests and not the common good in mind,” Merkel stressed on Monday – without calling Trump by name. So one would have to fight for it. With her travels to Russia and China and her adherence to the nuclear agreement with Iran, the Chancellor has already made it clear that Germany and the EU want to defy the Trump course. — https://de.reuters.com/article/usa-deutschland-idDEKCN1IZ0KD, our translation

What is contained in the quote?

The G7, Russia and China have agreed with Iran that Iran must not develop nuclear weapons. Also, Iran must agree to be regularly monitored to ensure this.

Thus, we live in a world where states take the authority for granted to ban other states from developing weapons that they have themselves, under threat of sanctions.

This is not enough for Trump; he is annoyed that Iran is interfering in conflicts beyond its borders and thus expanding its sphere of influence, for example in Iraq, Syria, Lebanon and Yemen. The United States, which has the most military bases in this region, therefore takes for granted that it should be able to deny exactly this to other states.

With this, we have already arrived at the penultimate end of modern imperialism: States argue about who is allowed to have what kind of weapons at all or to what extent and who is allowed to exert military influence where. There is competition for weapons, the means of violence. And there is the claim of some states to judge the arsenal of other states.

What is this competition of weapons good for? So you can credibly threaten a war that you can win. Of course, this always includes the willingness and possibility of waging war in the end in order to assert your claims and to remain credible as a threatening power in peacetime. It is better that other states recognise their inferior position from the outset than to actually wage war.

Conversely, smaller states try to procure weapons of mass destruction such as the atomic bomb as insurance. The superior states then find their calculations of war to be more difficult. Belgrade was simply bombed by NATO in 1999. NATO could not have done that so easily if Serbia had had nuclear weapons.

In this modern world, it seems that sovereignty over violence, control over weapons, etc. are needed in order to credibly threaten wars and, if necessary, to be able to wage them. For what?

Merkel says for shaping globalisation. This keyword refers to the world trade order.

This world trade order, as it has existed so far, is to be discussed in more detail in a moment. Then we will ask what the connection is between the economic order and the global military arsenal. For now, however, let us stick with the quote.

Merkel is disturbed by Trump, who – with “America first” – openly admits that in all foreign policy manoeuvres he wants to think consistently about his own national advantage.

On the other hand, she claims to stand for a worldwide approach that while also promoting Germany's national interests serves the global common good (i.e. the interests of all other states, peoples, etc.). Merkel stands for a rule-based world trade. Trump, in contrast, says that rules interest him only if they benefit the United States. If not, well, then he does not care about these rules.

Currently, Trump is increasing tariffs for some countries. Sometimes he says it would endanger the national security of the United States if the level of steel imports were to destroy the domestic industry. Sometimes he simply says, referencing trade deficits, that customs duties are punitive measures for unfair behaviour of other states.

Germany complains that this is not compatible with world trade rules. Sometimes Trump says it is, sometimes he says it does not matter as he puts America First.

Under the leadership of the United States, rounds of negotiations were held after the Second World War for the General Agreement on Tariffs and Trade (GATT), which eventually led to the World Trade Organisation (WTO), with an increasing number of states. The WTO has the following principles.

Customs duties are to be reduced on goods. Here, the most-favoured-nation principle is meant to help. Whenever two states agree to reduce tariffs on certain product groups, these low tariffs automatically apply to all other states in the WTO.

The sale of goods, the provision of services and banking activities are to be carried out on a non-discriminatory basis worldwide.

Non-discrimination addresses the following principle: a state may not treat foreign enterprises – apart from customs duties – differently from its own national capital. Ultimately, this also applies to companies that open a new branch somewhere. Even when a state awards a public contract, for example to build a motorway, the contract must not favour national companies.

This goes as far as condemning even state subsidies or excessive public-private partnerships as unfair trade practices. Too lax environmental rules, too, have come under the scrutiny of negotiations. For example, China is accused of giving its companies an unjust advantage this way.

The whole thing boils down to this:

Capital – regardless of whether it is productive capital, merchant capital or financial capital – should export, import, seek a place of business, transfer profits, procure raw materials and use labour worldwide. The states, in turn, ought to commit themselves to legally accommodating this process – with which capital is set free worldwide – and not to obstruct it.

A lot has happened in this respect in the last 70 years.

• Within one year, international investment firms sell back and forth the largest nursing care company in Germany several times over.
• Volkswagen has factories in Germany, Poland, Brazil, South Africa and elsewhere.
• 70% of all sailors are Philipinos.
• Uranium is produced in a number of countries, e.g. Australia, Canada, Russia, Niger, Namibia, Kazakhstan, Uzbekistan, South Africa.

According to the prevailing doctrine on the matter and according to Merkel, the following applies: the more international trade, the more benefit all countries derive from it. That is what she means when she says that anyone who advocates the rule-based world order, like Germany, while also pursuing a national interest, pursues the global common good.

If you look around in the world, it is obvious that this is not true. During the formation of this world trade order, there were also quite a few states that worked against these principles or at least demanded more exceptions and were urged by the free West with different means to give up their resistance.

That is no wonder either. A level playing field for capital favours those capitals which are superior from the outset because of their size and productivity.

An analogy: in a 100m run, the same starting conditions should also make it possible to find out who is physically fitter. There will be winners and losers in the end.

So it is no wonder that, where the same conditions of competition apply, the capital that is superior from the outset spreads out in the world and other capitals perish or cannot develop in the first place.

These worldwide rules of the world market are used by all capitals of all countries, as best as they can in competition and cooperation with their peers.

But the capitals did not create these rules. They are the economic subjects of the world market, but the rules are agreed by the political subjects, i.e. states, through treaties between themselves.

Recall that not too long ago, there was also an Eastern bloc that comprised about 1/3 of the world where the freedom of capital was zilch.

There have time and again been states that tried to establish a new national economy and protected it with high tariffs. This was then called Arab or African socialism. For now, these states had to abandon their political projects and join the so-called Washington Consensus, making them available to international capital.

The decision that a state should from now on rely on foreign investments to rejuvenate the national economy, for which customs duties are lowered and profits permitted to be transferred in and out more easily, is a political one. After all, the entire former Eastern bloc first did not permit this, until it did.

That Germany, as Merkel thinks, is committed to the enforced world trade regime for reasons of general welfare can confidently be labelled an ideology. But she also says herself that the rules are in Germany's interest. What is this – a national interest?

Recall the introduction of the talk. A state always draws its power from the underlying economy. Civil servants, policemen and soldiers must be exempted from productive work in the economy, buildings and weapons must be manufactured. Civil servants contribute nothing to production itself, they are unproductive. They merely ensure that the work of others takes place in a certain way (e.g. as slave labour, serfdom or wage labour) and that the results end up somewhere (e.g. in the state’s budget). The economy over which a state commands must therefore produce a surplus product, a surplus that the state can appropriate and use for its (by itself) unproductive purposes.

It is the same today for Germany, only a little more complicated. The state does not simply take food from the farmers and orders contractors to build barracks and weapons. Rather, the state pays with money. It takes this money away from its citizens – as taxes.

Economically, the state is thus dependent on the money earned and accumulated in society. Historically it has been observed that a capitalist society that is geared to the private accumulation of money in all branches of the economy endows a state with vastly superior means of power compared to previous modes of production. To be more precise: everywhere where capitalism works and manages to live up to the standards of the world market.

The economic subjects in capitalist society are the citizens. They are invited and at the same time compelled to earn money. Money is the power of access to social wealth and the augmentation of it is all every forger of their own luck has to concern themselves with. Wealth is private and so it belongs to someone. It is no secret that this wealth is fought for in competition with or in opposition to each other. There's no such thing as a people's wealth or “our wealth”.

In capitalist societies, labour is directed towards producing a saleable product. This product as a commodity serves to bring in money. Money is then the power of access to wealth in the hands of others and with enough money all the required means can be bought to start a new production process: means of production – such as machines, buildings, raw materials – but above all, the people who do the work, the wage labourers. The latter have no way of competitively producing anything to make money from. Capitalists use their financial assets to increase their wealth through production. The social power of access that they possess in the form of money provides them with everything they need to increase this power through the intermediate step of production. Those who produce the goods are separated from the result of their work and while they receive a wage it is not enough for them to be able to create alternatives for themselves. As a rule, the wage is spent by the end of the month.

This is all very simplified and a study of economics on the basis of Marx's Capital is recommended at this point. But here's what you might notice: the more workers a company commands, the more profitable it usually is. The mass of profit allows companies either to command more and more workers or to rationalise and increase productivity, which is then a competitive advantage. This monetary command of capital over workers is the modern form of continually appropriating a surplus product which expresses itself in private earnings. Furthermore, this is very interesting for the state if it takes a part of the surplus product from the successful private citizens by taxation.

The state regards monetary wealth, which is fought for by companies in competition with each other and which is then mainly used to expand the means to make such wealth, as its basis of power. Insofar the term “national wealth” makes sense and is not merely an ideology then it applies only to the point of view of the state. The private wealth earned separately from it is, to the state, the real or potential basis of power.

That is why the state tries not only to guarantee and regulate the capitalist economic order but endeavours to promote it. This means that it intends to promote economic growth which then benefits its power. Thus one has a circle: The state subordinates its actions and its power to the purpose of promoting capitalism. The promotion of capital then serves its power.

From this point of view, a perspective beyond a country's borders starts to emerge. It is precisely when capitalism functions well, when companies grow, when their demand for raw materials grows, when the mountains of goods that are to be sold grow, when banks are able to grant an increasing amount of loans, that the state notices that its territory and the population over which it rules are too small for the growth requirements of its capital.

The state becomes critical of itself. The limit of its authority is the limits of the capital that it is home to. It is important to organise growth opportunities beyond the current territory.

That states would therefore simply take a territory away from other states by war makes sense. This logic played out in times when the most powerful states were trying to build colonial empires.

After the Second World War this strategy was phased out. The United States contributed to this by urging the allied colonial powers like the UK and France to release their colonies into independence. There shall be no more national exclusive spheres. These contradicted the US's objective of unleashing its capital worldwide. Furthermore, since capital was lacking in all other countries, the United States offered dollar credit to all countries within the new world economic order. Thus the United States has participated in the successes of the worldwide upswing of capitalism.

The United States then played a decisive role in driving forward the new world economic order, and Germany, Japan etc. joined in.

Neither robbery, nor direct control are the modern methods of using the world for national wealth but merely: relatively free trade in goods and services. States mutually recognise each other as sovereigns in order to negotiate contracts which set out conditions under which capital can engage worldwide.

National success is then recorded in the trade balance, the current account, the balance of payments. The ultimately decisive standard is the quality of a currency.

These balance sheets and the question of the quality of the national currency are a separate issue. Here you just have to make a note that you have to study this. Instead, here the idea is to be presented differently by using examples.

The United States and its allies knew as early as 1944, when the new world economic order was being formed, that entire nations could unravel because their national capital would lose out to competition from foreign capital. Therefore they supplemented the free trade agreements with the International Monetary Fund (IMF).

Countries in which capital is not competitive relative to the worldwide standard find themselves increasingly lacking in foreign currencies due to import-export imbalances. At the same time, their own currency will not be accepted abroad. Private and public loans in foreign currency can no longer be paid back and thus the state and the national economy are threatened with having to withdraw from international trade. The IMF is intended to counter this consequence of national bankruptcy.

Those states that have become rich through trade pay into the IMF. The IMF then grants loans to the loser states so that their business world can continue to participate in international trade. Thus the rich countries retain the loser countries as a sphere of business.

This loan does not exist without conditions. The borrowing states must commit themselves to reducing the state budget through austerity measures. As a rule, these measures target the welfare state. Privatisation of public enterprises is called for. This principle of a compulsory austerity policy is a topic in its own right, which you should take a closer look at.

A whole series of states are dependent on the IMF to participate in international trade at all. Prominent at present are: Greece, Egypt, Jordan, Argentina.

In the 1980s, many Leftists were at least familiar with the main facts about the IMF. But it is still worthwhile these days to study it.

Then, as now, the following criticism was levelled: the IMF is the cause of poverty. It forces governments to impoverish its people, as happened in Egypt where food and fuel subsidies were abolished.

There are two things to say against this theory:

Firstly, it is important to distinguish the actors and their roles both in Western countries and in poor countries. The IMF is an organisation of states. It addresses a state in distress and makes use of its weakness. However, it is not the borrowing state that has to endure the austerity measures, but the population, which is compelled to do so by the borrowing government. This gives the state the opportunity to stick to the project of using the world market for national success. The costs have to be borne by the population. Within the population we again need to make a distinction. Companies in the country usually do not bear the costs. On the contrary: they can continue to pursue their project of making money and often more successfully than before if the wage levels are lowered. Put differently, within societies that take IMF credit there, too, is domination, there are rich economic subjects and a bunch of poor suckers.

The IMF is not a means by which the successful countries simply harass the less successful countries. Rather: the successful exploitation of wage labour in Germany, for example, creates companies that are successful in a global market comparison. This gives the German state the power to make demands on those countries in which this success is not to be found. The relationship is one between states and the damage is then distributed across the wealth hierarchy in the involved countries.

Expressed again using the example of Greece: We Germans do not help the Greeks. Rather: the German state gives credit to the Greek state because a default by the Greek state would mean a default for the entire Greek economy. This in turn would damage the German economy and this is what the German state wants to prevent. So the German state is helping itself with its project of supporting the Greek state. If one condition for these loans is that the Greek state should consistently evict defaulting tenants and small homeowners so that the Greek banks do not have to write off at least a part of their loans then this will also benefit the Greek banks. What do the German wage dependants get out of it? They can continue to try to organise their lives cheaply – exhaustion and persistent fear for their livelihood included – and work for successful German capitals. So the national “we” is not appropriate either in Germany or in Greece.

Secondly, even if the IMF – through its structural adjustment programmes – demands further impoverishment of a large part of the population, the IMF is not the cause of poverty. Fundamentally, those people are poor who, as wage labourers, have to keep going back to capital for work. This relationship – wages, i.e. money to live on, in return for carrying out work – only exists if there is a prospect of economic growth for capital. Where the surplus necessary for this is not created by the wage labourers, they are left without even basic necessities – they are unemployed. In this respect, the positions of wage labourers differ in different countries. Where capital does not live up to world market standards, capital is destroyed or cannot develop in the first place. In such cases, unemployment is then a mass phenomenon and that has its repercussions on the wages of those still employed, who then barely make ends meet. This particular harsh form of wage labour existence is thus due to the fact that the freedom of capital is enforced, and that then one national capital destroys another national capital in competition. In this respect, it must be said that free trade is the cause of absolute poverty in some parts of the world. Only then does the IMF come in and provide further hardship.

The benefits of the free world trade order are basically realised by a small number of states. The United States, Germany and Japan lead the pack.

Their capital has conquered the world. Foreign capital settles there and reinvests its profits in these countries instead of simply transferring them back to its home country. In addition, they have developed currencies that are globally recognised, which in turn promotes all departments of their capital. Their banks can create money which is directly world money and earn from lending and investments all over the world.

Thus, these states no longer have their basis of power solely in their domestic economy and the authority they have over it. Their basis of power reaches all over the world. When foreign powers align their economies with capitalism, they are at the same time means for the United States, Germany and Japan.

These states use their political power for the free world order because it ensures that their power over it increases. As far as the United States is concerned, we must now say that it used to be committed to this project.

It is the initiator of this world order, the United States, which is now announcing that it no longer wants to observe the rules it has set for the world.

This surprised politicians and newspapers around the world, but even in the United States this change is not uncontroversial.

Trump is being told how much the United States benefits from the free world order across the board and there is some truth to that. Measured by the standard: “The world market is the means of subsistence of the United States and the world market keeps it in a strong position” Trump's policy is absurd.

But Trump simply has another standard: The United States was the undisputed number 1 in all fields until the 1980s. The free world order after the Second World War was the means for the United States to maintain this undisputed position over and over again.

The point of view “nations of the world, think of yourself and try to promote your national interest within the rules of the free world market” has made sure that all states (including Germany and Japan) have also made themselves the means for the United States’ enrichment, so that the position of number 1 in all areas has been re-established again and again.

However, the principle “nations, attempt to enrich yourselves and become strong through the rules of the world market” always contained the possibility that other nations will become stronger through it. It also contained the possibility that foreign nations or their capital could actually compete in one niche or another with American capital; to the extent that this could even lead to the destruction of American capital.

Even before Trump, Obama, Bush and Clinton had noticed that this possibility has gradually become reality.

China is the only developing country that has managed to become a potent economic nation. It is even successful in its attempts to, in some fields, dominate the world market. China is taking the liberty of striving for the same practices as the free West. The country is now buying up areas of land in Africa and is trying to commit entire countries to itself by offering loans. Last but not least, China is converting its economic power into military power.

This development worries not only Trump, but also Germany. It was not meant to be that way. While Obama and Germany pursued the goal of breaking China economically by committing it more to their own rules of the free world market, Trump strikes a different balance:

The free world market and its rules serve either to clearly reproduce the superiority of the United States or the free world market is not a suitable means for the United States and thus unfair.

What is new about Trump is that he not only focuses on China, but is also beginning to define Germany, Europe and Japan as new major opponents. In his eyes, they all cheat the United States. Proof: in some fields they undermine the clear superiority.

Trump is now simply imposing punitive tariffs. Going forward, Trump only wants to negotiate bilaterally. He no longer wants to “waste” money on maintaining loser states around the world.

This is not isolationalism. It is his attempt to get the world order back on track. Now, as before, its purpose is simply to ensure the clear superiority of the United States.

Germany has become a power within the American world trade order. With the Euro project, Germany even measured itself against the Dollar and worked towards putting a crack into the clear superiority of the United States with respect to the world currency – and that within the world order guaranteed by the United States. Yet, Germany cannot really afford a world trade war with the United States. The German economy is too dependent on US trade relations.

The dilemma of German imperialism is most evident on another front: the world order is based on the superior military force of the United States. Germany has profited from this and now is confronted with a US president who blames Germany: You're parasites of our military might. This stops now. Trump declares that he does not want to guarantee world order but instead to guarantee American success. Either NATO serves this purpose or the NATO partnership loses importance to him.

What is the connection between the economic use of the world and direct state might, i.e. the military?

Nationally, a capitalist state organise its rule so that the question of force is settled in favour of the state. The state’s authority is above the competing subjects, it has the sovereignty to dictate to everyone a system of private property, to guarantee contracts (i.e. to enforce them against anyone), to permit or ban business opportunities.

When previously states incorporated foreign territories or subordinated them as colonies, the need for violence was obvious. The local population or even structures of authority had to be subordinated to their own monopoly on the use of force. Other states, that were also interested in these territories, had to be educated by force of arms who ruled over the territory. That is what the First World War was all about.

The modern imperialism of successful nations, on the other hand, relies on the recognition of the sovereignty of other states. The state acknowledges that the other state has full control over its territory and its people and on this basis enters into agreements with it which are then intended to realise its own national advantage.

In this respect, however, the recognition is already a conditional one. Only when the other state is willing to enter into certain contracts does it deserve recognition and the promise that it will not be compelled by direct force.

This is something that needs to be brought about. NATO has for decades clearly stated to a third of the world, i.e. the Eastern bloc: just as you are withdrawing from our use economically, we are working towards sweeping you away with war as well.

But you don't have to be a communist regime to attract military hostility. Sometimes it was enough to implement a more social democratic programme with nationalisation of the economy to get the CIA involved, as many Latin American governments have experienced.

With such military intervention, the United States have spelled out the limits up to which other states are granted a sovereign calculation at all, i.e. one based on national advantage.

Some countries beyond the Eastern Bloc have denied the West's claims to authority. Sometimes verbally, sometimes through supporting small militant groups. Iran, Syria or Gaddafi’s Libya, for example, have made it clear that they do not want to accept the West's claims to authority. This has earned them the hostility of the United States. The deposition of these regimes by force that is being practised or is aimed for is not only a message to these countries in particular, but to the whole world. You are only sovereign if you acknowledge the worldwide regulatory rights of the United States.

The idea that a state expands its basis of power by annexing previously foreign territories does not vanish from the world from one day to the next. Here, too, the United States has essentially enforced on others that this means of national politics has no justification in the modern world. They made this clear once again following the attack by Iraq on Kuwait. The ongoing sanctions against Russia for the integration of the Crimea also stand for this. When Eastern Germany was integrated into the Federal Republic of Germany, it was not the people's will that was decisive, but the “yes” from the disintegrating Soviet Union and above all the “yes” from the United States.

The United States, as the number one military power, has earned a reputation in Europe of being a trigger-happy cowboy by using the force necessary for the free world trade order, while Germany cultivates the self-image of a negotiating peace power.

This image is being partially destroyed by current debates. The case of Ukraine shows just how much Germany has always lived off American violence in the world.

Ukraine was a country that depended on trade with both Russia and Europe. Both sides more or less insisted that Ukraine must decide with whom it wants to deal in the long term. Accordingly, there have always been groups in Ukraine that have stressed one side more than the other, but there was never a decisive conclusion. This was criticised by the EU as a policy of sitting on the fence. The EU wanted Ukraine to fully adopt EU trade law, which necessarily meant Ukraine's withdrawal from the customs union with Russia. After long negotiations with the EU, the Ukrainian President did not agree at the last moment. A civil war or coup d'état broke out in the Ukraine.

By then, both Russia and the EU had flexed their economic power to try to get the Ukrainian government to decide. Ukraine's economic dependence was used to sway the government. In terms of economic offers and economic threats, the EU was simply superior to Russia. This shows that successful states use their power not only for the success of their national capital, but vice versa, the superiority of national capital over which they rule is a weapon used to produce insights for other states.

Russia has ultimately abandoned the rules of the world economic order: With the support of the armed groups in Eastern Ukraine and the annexation of the Crimea, Russia has shown that the peaceful conquest of countries by the EU with economic offers and blackmail goes only as far as one can militarily secure this impudence against Russia.

Suddenly NATO is in demand and that essentially means the United States. The whole eastward enlargement of the EU, as the case of Ukraine shows, was based on the military power of the United States.

By the way: even within the EU one can ask how it comes that Germany of all countries, which has comparatively little to offer militarily, has the leading role. After all, France and the UK have nuclear weapons and they have shown that they can wage war. The fact that military might within the EU has not yet turned into leadership roles, but only economic potency, is also due to the superiority of the United States. It has obliged the European powers to act together without bringing military power into play. This obligation is ultimately based on the United States's military superiority.

If Trump criticises the European powers, and Germany in particular, for spending too little on the military, and thus that the whole burden of military expenditure and sacrificing soldiers lies with the United States, then he has a point.

He announces a double correction: First, he is no longer advocating a rule-based world economic order. Secondly, therefore, unconditional solidarity within NATO no longer applies.

This demolishes the current path to imperialist success for Germany: In order to maintain a rule-based world economic order, the military budget of the EU would have to be significantly increased. This is now being slowly tackled, but it is far from enough. There are also conflicting interests within the EU: Some need the United States against Russia (such as Poland and the Baltic states). Others think that one would have to join forces with Russia to become more independent of the United States.

The world trade order is a means of successful capitalist states. They draw their power from it.

Compared to colonial empires, this spares a lot of violence if the many independent states in the world provide the desired services locally on their own initiative (and using their local authority).

On the other hand, the need for violence is growing enormously. Other states must be compelled to observe the “red lines” demarcating when they may and should pursue their national purposes.

NATO stood and stands (precariously) for this. This is also what the military buildup in China stands for, which wants to free itself from this control.

No state simply wants capitalism. A worldwide capitalism, on the other hand, from which the state derives its benefit, is in the interest of the successful states.

Trump now draws a conclusion and makes a truth lucid: Capital has to be a means for the state and to finance the superiority of the state in the world. For this, he is willing to accept that for his new political programme some business at home and especially in the world is destroyed.

To understand the principles of capitalism, you should make an effort to read Capital Volumes 1-3 by Karl Marx. It is advisable to do this as a longer-term project. A slow, thorough study here is much more useful to a quick run through.

On the subject of free trade we recommend “ISDS — Courts of arbitration within the TTIP treaty”³ Even if the text deals with the TTIP agreement, which Trump no longer wants, it does explain a few things about the state, capital and free trade.

On the subject of currency, IMF, austerity policy, the following pieces are useful: “Financial Crisis 2008ff”⁴ and “Sovereign debt and the crisis in the Eurozone”⁵.

On the subject of free world order, failed states and crappy anti-imperialist projects see “Islamism – Consequence of, Heir to, and Rival of Frustrated Arab Nationalism”⁶, “Insane my Arse, Muammar Gaddafi – a Historical Sketch of his National Project”⁷ and “A new state in Africa: South Sudan”⁸.