Where the World Is Heading in 2026?

Global Power in an Age of Systemic Transition

The question presumes what remains genuinely uncertain. The international system that emerged from the Second World War, consolidated through American hegemony after 1989, and universalized through neoliberal restructuring has entered a phase of visible decomposition. Its institutions function increasingly as instruments of particular interests rather than collective governance. Its ideological frameworks—democratic peace, developmental convergence, rules-based order—have lost persuasive power even among those who continue to invoke them. Its material foundations, from dollar supremacy to technological monopoly, face challenges that no longer appear manageable through the familiar instruments of financial and military coercion.

Yet decomposition is not transition. The displacement of one order by another requires more than the weakening of existing structures; it demands the consolidation of alternatives capable of organizing production, exchange, and security on a new basis. Whether such consolidation is underway, whether the emerging configuration will resemble any recognizable historical model, whether the transformation can occur without the catastrophic violence that accompanied previous systemic shifts—these questions remain open. The purpose of this analysis is not to resolve them through prediction but to clarify the forces in contention, the constraints they confront, and the possibilities they variously represent.

The year 2026 arrives at a moment when multiple temporalities intersect: the long cycle of American hegemony, the medium-term restructuring of global production toward East Asia, the short-term consequences of military confrontation in Europe and economic warfare across the Pacific, and the accelerating pressure of ecological limits that recognize no historical periodization. To situate oneself within this conjuncture requires simultaneous attention to structural determination and political contingency, to the weight of inherited constraints and the uncertainty of their resolution. What follows attempts such situated analysis, moving from the immediate crisis of Western supremacy through the reconfiguration of major power relations to the question of whether—and on what terms—sovereign development remains possible for those nations historically excluded from its benefits.

The Acceleration of History

At least since the beginning of this decade, we have lived in a world where global history appears to have accelerated. Months before Russia's military intervention in Ukraine, few analysts would have predicted that the conflict would escalate into the full-scale war—if a distinctive kind of war—that we have witnessed since February 2022. Nevertheless, the complete subordination of Western European elites to American mandates, systematically harmful and exploitative toward European economies and populations, has revealed the extent to which globalist political elites are committed to the imperial project of the United States.

It is hardly novel to observe that declining empires tend to become erratic and increasingly violent during periods when their hegemony is threatened—both by external rivals and internal turmoil. These have historically been eras of great wars, from which new geopolitical orders emerge. Our period is unique in one critical respect: for the first time in history, the declining hegemon and its rivals possess nuclear weapons, rendering our era extraordinarily perilable.

The Soviet Precedent and Russian Illusions

It may be worth recalling that the Soviet Union—the last great power to seriously challenge American empire—never posed a genuine threat in terms of economic scale, nor was it capable of delivering the "world proletarian revolution" that the Bolsheviks themselves recognized as unrealistic by 1919. Having barely survived relentless Western aggression by 1945, it collapsed just thirty-five years later due to internal systemic failures. The same system that had achieved industrialization, victory in World War II, and postwar reconstruction had, by its end, become stagnant and demoralized—yet it managed to resist Western predation for seven decades.

The post-Soviet Russian elite naïvely believed that abandoning socialism would suffice to secure fair and respectful treatment from their Western counterparts. Such illusions, as we now know, proved short-lived. The year 2022 marked a turning point: Russia's military commitment in Ukraine represents the first major challenge to Western expansionism worldwide, and in this sense may constitute the opening chapter of a global conflict that some already regard as a new world war.

The China Challenge

Meanwhile, China has emerged as the first serious contender through economic power alone. Chinese industrialization and broader modernization trace an upward trajectory that contrasts sharply with the declining growth of now-stagnant Western economies. Paralyzed by financial usury and rentier extraction, the Western economy today concludes a ruinous cycle of rampant global plunder—one we can trace at least as far back as the invasion of Iraq in 2003—accompanied by the systematic undermining of global political and financial institutions. The decadent empire serves only a select few: those who govern democracies through the instrument of money. Never in history has wealth inequality been so severe in the United States.

The Eastern challenge extends beyond Russia. China's rise is not merely quantitative but systemic: the Belt and Road Initiative constructs alternative trade architectures across Eurasia, Africa, and Latin America; its state-led industrial policy achieves technological advances in semiconductors, artificial intelligence, and renewable energy that Western financialized capitalism has proven structurally incapable of replicating. The dedollarization of bilateral trade, the expansion of BRICS, the construction of parallel financial institutions—these are not aspirations but material processes already underway. Militarily, the Taiwan question and South China Sea disputes demonstrate that Beijing will not indefinitely accept territorial constraints imposed during its century of humiliation. The AUKUS pact and Pacific base expansion reveal that Washington comprehends this challenge clearly, even if European elites remain fixated on their eastern flank.

The Internal Contradictions of the West

Yet the decisive battles of this transition may occur within the Western core itself. The social contract forged during the postwar decades—mass consumption, welfare provision, ideological incorporation of organized labor—has been systematically dismantled. Permanent austerity, deindustrialized hinterlands, collapsed public health, and the opioid epidemic ravaging American working communities: these are not policy failures but structural necessities of financialized accumulation. The political symptoms are equally transparent—Trump, Le Pen, the AfD, the entire roster of "populist" disturbances—represent not fascist resurgence but ruling-class incapacity to secure popular consent through traditional means. The "democracy versus autocracy" framing deployed against Russia and China serves primarily to discipline domestic populations, to criminalize alternatives, to transform class war into civilizational crusade.

The response of Western elites to this destabilization reveals their structural incapacity for reform. Rather than addressing material grievance through redistribution or reconstructive industrial policy, they have invested enormous resources in ideological operations designed to displace class antagonism onto cultural and territorial terrain. The "democracy versus autocracy" framing, elevated to official doctrine by the Biden administration and adopted across European capitals, serves multiple functions simultaneously. It identifies internal opposition with external enemies, rendering dissent treasonous. It substitutes moral condemnation for political argument, eliminating the need to demonstrate that existing arrangements actually serve popular interests. It reconstructs Atlantic unity around military confrontation, subordinating European economic interests to American strategic imperatives while presenting this subordination as ethical necessity.

This ideological operation is most transparent in its application to the domestic sphere. The same political forces that have systematically dismantled democratic participation through technocratic governance, that have criminalized popular mobilization against austerity, that have constructed surveillance and border regimes of unprecedented scale, now discover democratic virtue as exclusive property of the Western camp. The contradiction is not merely hypocritical but functional: the "defense of democracy" against Russian or Chinese autocracy justifies emergency measures, information control, and political repression that would be impossible to legitimate in their own terms. The class war conducted through four decades of upward redistribution requires permanent ideological mobilization to prevent its recognition as such.

The Global South Realignment

The Ukraine conflict has accelerated a broader realignment that Washington neither anticipated nor desired. Saudi-Iranian rapprochement brokered by Beijing, African rejection of sanctions regimes, the expansion of non-Western trade settlements in national currencies—these developments indicate that decolonization of international institutions has progressed from aspiration to material fact. The unipolar moment, always more ideological projection than sociological reality, has definitively ended. What replaces it remains contested: multipolar coordination, fragmented bloc competition, or the institutionalized antagonism of a new Cold War.

This transition occurs, however, under conditions without historical precedent. Previous systemic handovers—from Dutch to British, from British to American—occurred within a shared capitalist framework and, in the latter case, required two world wars to complete. Nuclear deterrence has thus far prevented general war between great powers, yet it has not eliminated confrontation but merely displaced it into proxy conflicts, economic warfare, cyber operations, and subthreshold competition that continuously threatens escalation. Meanwhile, the ecological dimension imposes absolute limits that earlier transitions did not confront. The Pentagon remains the largest institutional emitter of greenhouse gases; military establishments worldwide are exempt from climate accounting; and competition for remaining accessible resources—lithium, copper, rare earth elements, productive agricultural land—drives territorial contest precisely when coordinated reduction of material throughput has become a civilizational imperative. The nuclear modernization programs currently underway in all major powers suggest less deterrence stability than collective preparation for eventual use.

Historical Comparison and Periodization

Historical comparison thus offers limited guidance. The Dutch-English transition was relatively peaceful because the Dutch financial aristocracy found profitable integration into British structures; the English-American transition required continental destruction to establish clear hierarchy. Our period combines elements of both: financial interpenetration of Western and Chinese capital alongside geopolitical antagonism that periodically threatens military confrontation. The variable that distinguishes our moment is precisely the ecological deadline: there will be no postwar reconstruction, no Bretton Woods settlement, no developmental catch-up if the atmospheric threshold is crossed. Imperial decline and planetary boundaries converge, forcing the erratic violence diagnosed above toward increasingly desperate forms—resource wars, climate apartheid, forced migration crises managed through militarized borders.

Sovereign Possibilities

This instability, however, creates openings unavailable during unipolarity. The dispersal of power reduces the capacity of any single center to veto autonomous development or impose structural adjustment. The technological diffusion that enables industrialization without Western monopoly, financial alternatives to Bretton Woods institutions, and the delegitimation of neoliberal orthodoxy collectively expand the space for sovereign decision-making.

The historical record offers measured grounds for optimism. Bandung demonstrated that collective negotiation could extract concessions from competing blocs; its contemporary recurrence—African Union trade integration, rejection of ICC jurisdiction, South-South development finance—indicates concrete accumulation of autonomous capacities. The Iranian, Cuban, and Venezuelan experiences demonstrate that survival outside Western financial circuits, however costly, is possible; the Russian case suggests such survival can eventually generate countervailing power.

The decisive variable remains internal: the capacity to construct developmental states directing surplus toward productive transformation rather than elite consumption and capital flight. Here the East Asian and Chinese precedents—whatever their social costs—demonstrate that late development remains achievable. The contemporary challenge is to replicate such transformation without the labor repression, ecological destruction, and geopolitical subordination that characterized these models.

The obstacles are formidable: inherited debt structures, comprador fractions, penetrated military apparatuses, institutional frameworks designed to prevent autonomous decision-making. Yet the relative weakening of American enforcement capacity, the multiplication of potential partners, and the urgency of ecological adaptation—which may legitimate state intervention and long-term planning that financialized markets prevent—create conditions for breakthrough that did not obtain during the Washington Consensus period.

Conclusion: Rigorous Optimism

What emerges will not be determined by structure alone. Specific outcomes depend upon political choices and organizational capacities that analysis cannot predict. What can be asserted with confidence is that the automatic reproduction of imperial hierarchy has been interrupted, that the space for sovereign choice has expanded, and that the coming decades will be characterized by contestation over global order to a degree unimaginable during the unipolar moment.

For oppressed nations, this expansion of possibility—however contingent and constrained—constitutes the material foundation for rigorous optimism.

References

Organized by Analytical Themes

The Decomposition of the Liberal International Order

Claim: The post-1945, U.S.-led order is in a phase of "visible decomposition," with its institutions serving particular interests and its ideological frameworks losing persuasive power.

John J. Mearsheimer — Argues the "liberal international order" was always a U.S.-dominated project that is now unraveling due to the return of great-power competition. See The Great Delusion: Liberal Dreams and International Realities (2018).

G. John Ikenberry — While more optimistic about the order's resilience, he acknowledges its deep crises in A World Safe for Democracy: Liberal Internationalism and the Crises of Global Order (2020).

Adam Tooze — Analyzes the fragility of the dollar-based financial order and the crises of the 2008-2022 period in Crashed: How a Decade of Financial Crises Changed the World (2018) and Shutdown: How Covid Shook the World's Economy (2021).

Michael Hudson — Documents how the U.S. financialized its economy and turned the dollar system into an extractive mechanism for global tribute. See Super Imperialism: The Economic Strategy of American Empire (1972, updated 2003) and The Destiny of Civilization: Finance Capitalism, Industrial Capitalism or Socialism (2022). His analysis of debt peonage and the "dollar standard" directly informs the text's treatment of American monetary hegemony.

The Rise of Systemic Challengers: China and Russia

Claim: China represents the first economic peer competitor, building parallel institutions (BRI, BRICS), while Russia's 2022 intervention marks a military-diplomatic challenge to Western expansion.

Giovanni Arrighi — In Adam Smith in Beijing: Lineages of the Twenty-First Century (2007), he predicted the shift of economic gravity to East Asia and a potential non-capitalist market civilization led by China.

Odd Arne Westad — Provides historical context for Sino-Russian relations and challenges to U.S. hegemony in The Cold War: A World History (2017).

Stefan Halper — Discusses the "Beijing Consensus" as a state-capitalist, authoritarian development model alternative to the "Washington Consensus" in The Beijing Consensus: How China's Authoritarian Model Will Dominate the Twenty-First Century (2010).

Foreign Policy Analysis — Journals like Foreign Affairs and International Security contain debates on "dedollarization," AUKUS, and the Taiwan question that mirror the text's descriptions.

Michael Hudson — Analyzes the historical role of debt cancellation in ancient economies and its contemporary relevance for understanding Chinese development finance versus Western IMF conditionalities. See ...and Forgive Them Their Debts: Lending, Foreclosure and Redemption from Bronze Age Finance to the Jubilee Year (2018) and Trade, Development and Foreign Debt: A History of Theories of Polarization v. Convergence in the World Economy (1992, updated 2009).

Internal Decomposition of the West: Neoliberalism and Social Crisis

Claim: The neoliberal counterrevolution dismantled the postwar social contract, leading to deindustrialization, inequality, the opioid crisis, and political instability.

David Harvey — The definitive theorist of neoliberalism. See A Brief History of Neoliberalism (2005) for the argument that it was a political project to restore class power.

Anne Case & Angus Deaton — Their work on "Deaths of Despair" provides the empirical backbone for claims about collapsing life expectancy, opioid epidemics, and social devastation in deindustrialized zones. See Deaths of Despair and the Future of Capitalism (2020).

Thomas Piketty — Capital in the Twenty-First Century (2013) provides the foundational data on wealth inequality returning to pre-WWI levels in the West.

Mike Davis — In Late Victorian Holocausts (2001) and Planet of Slums (2006), he analyzes "sacrifice zones" and the creation of "surplus populations."

Michael Hudson — Documents the transformation of industrial capitalism into finance capitalism and its consequences for labor, housing, and public infrastructure. See Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy (2015) and J is for Junk Economics: A Guide to Reality in an Age of Deception (2017). His concept of "debt deflation" and analysis of the "FIRE sector" (Finance, Insurance, Real Estate) directly inform the text's treatment of Western economic paralysis.

Political Instability and the Crisis of Governance

Claim: The rise of Trump, Le Pen, and AfD represents a crisis of the centrist party system, driven by material grievances that elites try to manage through cultural warfare ("democracy vs. autocracy" framing).

Peter Mair — In Ruling the Void: The Hollowing of Western Democracy (2013), he argues party systems are collapsing as the space for substantive political choice vanishes.

Nancy Fraser — Theorizes how "progressive neoliberalism" uses recognition politics (identity) to cloak distributive injustice (class). See "The End of Progressive Neoliberalism" (2017) in Dissent.

Ivan Krastev & Stephen Holmes — In The Light that Failed: A Reckoning (2019), they analyze "imitation liberalism" in Eastern Europe and the politics of resentment in the West, partly driven by the "democracy promotion" narrative.

Financialization versus State-Led Development

Claim: Western states, captured by financial interests, are paralyzed and cannot pursue long-term industrial policy, unlike China's state-capitalist model.

János Kornai — His theory of the "soft budget constraint" in state-led economies is inverted here to describe the Western "hard budget constraint" imposed by financial markets on public investment.

Mariana Mazzucato — In The Entrepreneurial State (2013), she argues Western states have underplayed their role in innovation, while China actively emulates this model.

Brett Christophers — In The Price is Everything: How Capitalism Came to Colonize the Future (2024), he analyzes how financial assetization (of housing, etc.) has become the dominant economic logic.

Michael Hudson — The foremost analyst of how financialization has transformed the U.S. economy from industrial production to rent extraction. See The Bubble and Beyond: Fictitious Capital, Debt Deflation and the Global Crisis (2012) and Finance Capitalism and Its Discontents: Interviews and Speeches, 2003-2012 (2012). His distinction between industrial and finance capitalism, and his analysis of how debt overhead stifles productive investment, form a core theoretical framework for the text's comparison of Western and Chinese development models.

Ecological Limits and the Unique Peril of This Transition

Claim: This geopolitical transition is uniquely dangerous because it intersects with absolute ecological limits and occurs under a nuclear shadow.

IPCC Reports — Provide the scientific basis for "ecological limits" and "absolute constraints."

Andreas Malm — In Fossil Capital (2016) and How to Blow Up a Pipeline (2021), he links capitalism, fossil fuels, and the logic of expansion that drives resource competition.

Mark Carney — Coined the "Tragedy of the Horizon": the concept that financial and political systems cannot plan for long-term climate risks.

Bulletin of the Atomic Scientists' Doomsday Clock — Symbolizes the confluence of nuclear and climate risks.

Intellectual Tradition and Overall Framing

The text's overarching framework is most directly informed by:

Immanuel Wallerstein (World-Systems Analysis) — The core concepts of "hegemony," "core-periphery," and "systemic cycles" (Dutch, British, American). See The Modern World-System (4 vols., 1974-2011).

Robert Brenner & Wolfgang Streeck (The "Long Downturn" / End of Capitalism Thesis) — Brenner's analysis of the global profit slump since the 1970s in The Economics of Global Turbulence (2006) and Streeck's argument that we are in a protracted period of capitalist decomposition in How Will Capitalism End? (2016).

Vladimir Lenin, Rosa Luxemburg, David Harvey (Marxist Geopolitics) — The analysis of inter-capitalist rivalry, the role of militarism in absorbing surplus, and "accumulation by dispossession."

Michael Hudson — Synthesizes classical political economy, archaeology, and contemporary finance to analyze the dynamics of debt, empire, and economic polarization. His work on the "tribute economy" of American financial hegemony and the historical alternatives to debt-peonage capitalism provides essential grounding for the text's treatment of sovereign development possibilities. See Global Fracture: The New International Economic Order (1977, updated 2005) for early analysis of multipolar economic emergence.