Shock doctrine was the term used by Naomi Klein to describe the destruction of public services and the welfare state by governments from the 1980s. Now the major central banks are applying their own ‘shock therapy’ to the world economy, intent on driving up interest rates in order to control inflation, despite the growing evidence that this will lead to a global recession next year.

Italy goes to the polls on September 27. This is a snap election forced on Italy’s president because the ‘technocratic’ government under former ECB chief Mario Draghi fell after he lost majority support in parliament. That support was lost, partly because Draghi vigorously backed NATO support for Ukraine and partly because his government was determined to keep to the fiscal strictures of the EU Commission.

Recession fear is now at levels worldwide last seen in 2020, cautions Marxist economist and commentator Michael Roberts. At the very least, global inflation rates are still likely to be much higher than before the COVID pandemic by this time next year—and at the worst, the global economy could have entered a new slump only three years from the last one.

The announcement that US President’s Biden’s Inflation Reduction Act (IRA) has got the backing of pro-business Democratic Senator Joe Manchin has been greeted with a wave of optimism that the US target of cutting carbon emissions in half before the end of this decade (or 40 percent compared with 2005 levels), can be met.

So, is this the moment of collapse in the Chinese model of development and the end of all that talk about ‘moving towards socialism’ and so on? Many Western experts think so. What will cause this collapse, in their view, is the failure of the Chinese leaders to ‘liberalize’ the economy and open it up even more to capitalist companies and markets.

The world of credit is tightening and bringing with it a downturn in financial asset prices, but also exposing the fault lines in ‘real economy’ production, writes Marxist economist and author Michael Roberts. As the Financial Times put it in an editorial published last week: “the choice is stagflation, or deflationary depression.”

The Chinese economy has slowed down, and with it the demand for Australia’s exports. Anyway, the imperialist bloc wants Australia to disengage from China. The cost of living is rising sharply; rising interest rates risk a serious housing crisis; and global warming is out of control. Neither government nor opposition have any answers. Australia’s luck is turning for the worse.

Chief executives are acutely aware to the ability to hike prices in this inflationary spiral. Hershey CEO Michel Buck told shareholders, “Pricing will be an important lever for us this year and is expected to drive most of our growth.” Similarly, a Kroger executive told investors “a little bit of inflation is always good for our business,” while Hostess’s CEO in March said rising prices across the economy “helps” profits.

The inflation debate among mainstream economists rages on. Is the accelerating and high inflation rate of commodities here to stay for some time and or is it ‘transitory’ and will soon subside? Do central banks need to act fast and firmly to ‘tighten’ monetary policy by cutting back purchases of government bonds and hiking interest rates sharply? Or is such tightening an overkill and will cause a slump?

The shift in international currency strength after the Ukraine war will not form into some West-East bloc, as most argue, but instead towards a fragmentation of currency reserves, argues economist Michael Roberts. To quote the IMF: “if dollar dominance comes to an end (a scenario, not a prediction), then the greenback could be felled not by the dollar’s main rivals but by a broad group of alternative currencies.”