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Since the end of World War II, almost every U.S. president has initiated a major military conflict without congressional approval. Donald Trump attempted to portray himself as a “peace president,” promising to end the U.S.’s endless wars and bring troops home from the Middle East and other parts of the globe. But he has proven to be even more trigger-happy than most of his predecessors. In just the first year since his return to office, he has attacked several countries. On February 28 he joined Israel in launching an attack on Iran, killing the country’s supreme leader and targeting both military installations and civilian projects, including bombing a girl’s primary school in Minab, in Iran’s Hormozgan province, that killed more than 170 people, most of them children.

The war in Iran is illegal. In addition to murdering and maiming civilians and spreading fear and suffering, it is also causing collateral damage to the world economy and may very well trigger a global economic crisis if it continues much longer. In an exclusive interview for Truthout, C. P. Chandrasekhar, a world-renowned scholar of finance and development, explains how the war could affect the global economy. He is emeritus professor at the Centre for Economic Studies and Planning at Jawaharlal Nehru University in New Delhi, where he taught for more than 30 years, and currently a senior research scholar at the Political Economy Research Institute at the University of Massachusetts Amherst.

C. J. Polychroniou: Over the past couple of decades or so, the global economy has experienced various shocks and seems to be in the midst of seemingly endless uncertainties. Capitalism, after all, is inherently unstable, subject to periodic crises. And today, due to the U.S. and Israel, the war Donald Trump and Benjamin Netanyahu initiated against Iran has sent tremors through the global economy. There are fears that the war will drive oil to $150 a barrel and that stagflation is knocking on the door. What’s your assessment of the way the U.S.-Israeli war against Iran will impact the world economy?

C. P. Chandrasekhar: I would not refer to the fallout of the joint, unilateral and unwarranted attack by the U.S. and Israel on Iran as a “shock.” The attack emanates from the most aggressive core of contemporary capitalism, and its effects should have been expected by those responsible for it, especially Donald Trump and Benjamin Netanyahu. If their assessment was that the fallout would be short-lived and limited, they were clearly wrong. The rise in the prices of oil and oil products is only the most immediate and visible consequence, given the crucial role of the region as a source of global supply. But even that rise is not driven just by the war-induced shifts in the supply of oil. It is aggravated and rendered hugely volatile by the role of large speculative trading multinationals subordinated by global finance, which may not control production but can influence supply prices. Capitalist and imperialist states today are at the mercy of these agents, who seize every opportunity to extract super profits. The decision of these states (especially the governments of the U.S., Germany, and Japan) as members of the International Energy Agency to release 400 million barrels of oil from their strategic reserves is at most a feeble response. Even if replicated, by depleting reserves, the move will only send a signal to speculators who assume that the war will last to bet that prices will only spike further. That would aggravate oil price inflation. Figures like $150 a barrel are at best guesstimates.

Thus, the real uncertainty is how long the war will last. Pushed to the wall, faced with the assassination of its supreme leader of decades, and confident (despite internal differences) that attack will not result in regime change and installation of a U.S.-chosen political leader, Iran shows no signs of retreating. The objectives of Netanyahu, both personal and political, are such that oil price increases and the implications they have for the global economy and the citizens of the rest of the world are not concerns. Occupation, genocide, and war are the means to pursue those abhorrent goals, at the expense of all else. But Netanyahu cannot pursue them by himself. He needs Trump to fund, support, and legitimize his actions. So, whether the war will last depends on Trump’s staying power.

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