Capitalism’s Seven Contradictions Threaten Humanity

by Gary Porter

Every day the media reports new outrages, more climate catastrophes, escalating wars and attacks, mass killings, new threats, sanctions, tariffs and assassinations. Most people admit feeling anxiety, discouragement and depression.

But some are beginning to organize, develop demands and build huge protest movements. Three recent examples: the people in Iran, Venezuela and revolutionary Cuba who are resisting US military might and the people in Minneapolis who successfully drove out Trump’s racist goons and defended undocumented workers.

We are witnessing the obvious decline of the US led empire, the increasing economic difficulties of Western Europe and the long economic doldrums of Japan.

From a Marxist viewpoint, society is organized into classes, defined by their relationship to the means of production. Under capitalism, a system based on private ownership of the means of production, a tiny minority of capitalists must constantly earn profits and strive to accumulate more capital. Under capitalism, there are three classes: the tiny capitalist ruling class, a massive class of workers with nothing but their labour power to sell, and a middle class of small business operators, farmers, professionals and technocrats.

Capitalism is rife with contradictions which cannot be resolved within the boundaries of its system. To understand the source of the increasing storms and stresses under capitalism and the way out, we must understand these contradictions.

The principal contradictions of capitalism can be understood through the dialectical materialist framework that analyzes the internal and external antagonisms driving its development, crises, and current decline. These contradictions are both inherent to capitalism as a world system and specific to the imperialist stage, of which the U.S. is the current hegemonic power. They include:

1. The Capital-Labour Contradiction

This is the fundamental class antagonism between the bourgeoisie (owners of capital) and the proletariat (working class). Under U.S. imperialism, this is mediated but not resolved by super-exploitation of a global labour pool, financialization, and ideological apparatuses. The results of this irreconcilable contradiction include stagnant real wages versus soaring productivity and profits; extreme wealth inequality; precarious labour; erosion of the social wage (public services); and the use of racial, gender, and national divisions to fragment class consciousness. Financialization represents a parasitic extraction of surplus value from the working class globally and domestically through debt, rent, and user fees.

2. The Contradiction between the Socialized Character of Production and the Private, Monopolistic Appropriation of its Output

This is a core contradiction of capitalism magnified under imperialism. Production is globally integrated and highly socialized (complex global supply chains, coordinated international labour), yet the profits and control are concentrated in fewer, larger private monopolistic firms (transnational corporations, financial institutions) based in the imperial core. This leads to crises of overproduction where the collectively produced wealth cannot be realized as profit because the mass of workers (whose consumption is constrained by low wages) cannot buy back the goods and services they produce. The U.S. “solves” this temporarily through financial bubbles, militarized Keynesianism, and debt-driven consumption, exacerbating long-term instability.

3. The Contradiction between Imperialist Powers (Inter-Imperialist Rivalry)

While temporarily suppressed by U.S. hegemony post-1991 with the collapse of the Soviet Union, this contradiction elaborated by Lenin is re-emerging. Capitalist states and their associated monopolies compete for markets, resources, spheres of influence, and control over global financial and trade architectures. The U.S.’s relative economic decline and the rise of other powers (notably China, but also a resurgent Russia and a unified EU bloc) create friction. Conflicts over trade, technology (semiconductors, 5G and AI), currency dominance (challenges to the petrodollar), and military positioning (NATO expansion, Pacific alliances) signify the reawakening of this rivalry, threatening global instability and potentially major inter-state conflict.

4. The Contradiction between the Imperialist Core and the Oppressed Nations of the Periphery/Semi-Periphery

This is the principal external contradiction. Imperialism extracts super-profits through the unequal exchange, debt bondage, resource extraction, and labour super-exploitation of the Global South.

It generates resistance in the form of national liberation struggles, anti-neoliberal governments, demands for a New International Economic Order, and efforts at regional integration bypassing imperial institutions (like BRICS). U.S. militarism (via direct intervention, proxy wars, sanctions, and a global network of military bases) is the violent enforcement mechanism to maintain this exploitative hierarchy, leading to perpetual war and blowback.

5. The Contradiction between the Drive for Capital Accumulation and the Ecological Limits of the Planet

This is the imperative for infinite expansion on a finite planet. U.S. imperialism, as the historical leader of the capitalist world-system, is the largest cumulative polluter and the primary architect of a global economic model premised on extractivism and unsustainable consumption. The US has given up any commitment to reduce greenhouse gases, climate change, biodiversity loss, and resource wars. This contradiction threatens the very basis of civilization and creates “ecological imperialism”—where the core offshores environmental damage to the periphery and resists global climate justice measures that would impede capital accumulation.

6. The Political Contradiction: Bourgeois Democracy vs. Dictatorship of Capital

There is a rising tension between the ideological claims of liberal democracy and the reality of capitalist class rule. The state is, in the Marxist view, a “committee for managing the common affairs of the whole bourgeoisie,” but it must legitimize itself through popular consent. This is the fusion of economic and political power (the “financial oligarchy”), where corporations and wealthy individuals dominate the funding of political candidates, lobbying, and media. This leads to rampant political corruption, the hollowing out of democratic institutions, the rise of plutocracy, and a crisis of legitimacy. This often manifests as political polarization, as competing factions of capital (e.g., fossil capital vs. tech capital) vie for state control while populist anger grows from below.

7. The Contradiction of Financialization

While not entirely separate from the above, it is a key feature of contemporary U.S. imperialism. It involves the disproportionate growth of the financial sector (FIRE: Finance, Insurance, Real Estate), which feeds on and distorts the productive economy. This process creates a fragile economy of speculative bubbles, systemic risk, and “fictitious capital.” It represents a shift from the (already exploitative) extraction of profit via production to extraction via financial channels (usury, speculation, asset inflation). This deepens inequality, fuels instability, (2008 crisis) and turns the U.S. into a “rentier-imperialist” state, dependent on the dollar’s seigniorage and its ability to impose financial sanctions—a power that itself provokes resistance and de-dollarization efforts and instability.

Conclusion

These contradictions do not exist in isolation but interact dynamically (dialectically). For example, the stagnation of wages (Contradiction 1) is offset by financialized debt (Contradiction 7), which fuels consumption but creates crises. The ecological crisis (5) both results from and fuels inter-imperialist rivalry (3) and core-periphery conflict (4). The internal political decay (6) undermines the U.S.’s ability to coherently manage its global empire in the face of rising rivals (3) and resistance (4).

Ultimately, Marxists understand these contradictions are unresolvable within the framework of imperialism. They can only be managed temporarily through exploitation, coercion, and crisis, until they generate the conditions for their own negation through systemic crisis and the revolutionary agency of the international working class in alliance with oppressed nations.

At the moment of crisis, there must be in existence a disciplined and experienced worker based party capable of explaining the tasks to move forward and organizing the revolutionary overthrow of the capitalist rulers. It is to the building of such a party, that Socialist Action is committed.