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Return to Socialist Register: The New Imperial Challenge GLOBAL CAPITALISM AND AMERICAN EMPIRELeo Panitch and Sam Gindin
‘American imperialism… has been made plausible and attractive in part by
the insistence that it is not imperialistic.’ Harold Innis,
1948[1] The American empire is no longer concealed. In March 1999, the cover of the New York
Times Magazine displayed a giant clenched fist painted in the stars and stripes of the
US flag above the words: ‘What The World Needs Now: For globalization to work,
America can’t be afraid to act like the almighty superpower that it is’. Thus
was featured Thomas Friedman’s ‘Manifesto for a Fast World’, which urged
the United States to embrace its role as enforcer of the capitalist global order:
‘…the hidden hand of the market will never work without a hidden fist.... The
hidden fist that keeps the world safe for Silicon Valley’s technologies is called the
United States Army, Air Force, Navy and Marine Corps.’ Four years later, in January
2003, when there was no longer any point in pretending the fist was hidden, the Magazine
featured an essay by Michael Ignatieff entitled ‘The Burden’: ‘…[W]hat
word but “empire” describes the awesome thing that America is becoming?
…Being an imperial power… means enforcing such order as there is in the world
and doing so in the American interest.’[2]
The words, ‘The American Empire: (Get Used To It)’, took up the whole cover of the Magazine.
Of course, the American state’s geopolitical
strategists had already taken this tack. Among those closest to the Democratic Party wing
of the state, Zbigniew Brzezinski did not mince words in his 1997 book, The Grand
Chessboard: American Primacy and Its Geostrategic Imperatives, asserting that
‘the three great imperatives of geo-political strategy are to prevent collusion and
maintain security dependence amongst the vassals, to keep tributaries pliant, and to keep
the barbarians from coming together.’[3] In the same year the
Republican intellectuals who eventually would write the Bush White House’s National
Security Strategy founded the Project for a New American Century, with the goal of making
imperial statecraft the explicit guiding principle of American policy.[4] Most of what passes more generally for serious analysis
in justifying the use of the term ‘empire’ in relation to the US today is really
just an analogy, implicit or explicit, with imperial Rome. On the face of it, this is by
no means absurd since, as an excellent recent book on the Roman Empire says,
‘Romanization’ could indeed be understood as the assimilation of the
conquered nations to Roman culture and political worldview. The conquered became partners
in running the empire. It was a selective process that applied directly only to the upper
level of subject societies but it trickled down to all classes with benefits for some,
negative consequences for others…. Roman supremacy was based on a masterful
combination of violence and psychological persuasion -- the harshest punishment for those
who challenged it, the perception that their power knew no limits and that rewards were
given to those who conformed.[5] But an analogy is not a theory. The neglect of any
serious political economy or pattern of historical determination that would explain the
emergence and reproduction of today’s American empire, and the dimensions of
structural oppression and exploitation pertaining to it, is striking. It serves as a
poignant reminder of why it was Marxism that made the running in theorizing imperialism
for most of the twentieth century. Yet as a leading Indian Marxist, Prabhat Patnaik, noted
in his essay ‘Whatever Happened to Imperialism?’, by 1990 the topic had also
‘virtually disappeared from the pages of Marxist journals’ and even Marxists
looked ‘bemused’ when the term was mentioned. The costs of this for the left
were severe. The concept of imperialism has always been especially important as much for
its emotive and mobilizing qualities as for its analytic ones. Indeed, in Patnaik’s
view, rather than ‘a theoretically self-conscious silence’, the ‘very fact
that imperialism has become so adept at “managing” potential challenges to its
hegemony made us indifferent to its ubiquitous presence.’[6]
Yet the left’s silence on imperialism also reflected severe analytic problems in the
Marxist theory of imperialism. Indeed, this was obvious by the beginning of the 1970s --
the last time the concept of imperialism had much currency -- amidst complaints that the
Marxist treatment of imperialism ‘as an undifferentiated global product of a certain
stage of capitalism’ reflected its lack of ‘any serious historical or
sociological dimensions’.[7] As Giovanni Arrighi noted in
1978, ‘by the end of the 60s, what had once been the pride of Marxism -- the
theory of imperialism -- had become a tower of Babel, in which not even Marxists knew any
longer how to find their way.’[8] The confusion was apparent in debates in the early 1970s
over the location of contemporary capitalism’s contradictions. There were those who
focused almost exclusively on the ‘third world’, and saw its resistance to
imperialism as the sole source of transformation.[9] Others emphasized increasing
contradictions within the developed capitalist world, fostering the impression that
American ‘hegemony’ was in decline. This became the prevalent view, and by the
mid-1980s the notion that ‘the erosion of American economic, political, and military
power is unmistakable’ grew into a commonplace.[10] Although very few went back
to that aspect of the Marxist theory of inter-imperial rivalry that suggested a military
trial of strength, an era of intense regional economic rivalry was expected. As Glyn and
Sutcliffe put it, all it was safe to predict was that without a hegemonic power ‘the
world economy will continue without a clear leader...’[11] There was indeed no little irony in the fact that so many
continued to turn away from what they thought was the old-fashioned notion of imperialism,
just when the ground was being laid for its renewed fashionability in the New York
Times. Even after the 1990-91 Gulf War which, as Bruce Cumings pointed out, ‘had
the important goal of assuring American control of… Middle Eastern oil’, you
still needed ‘an electron microscope to find “imperialism” used to describe
the U.S. role in the world.’ The Gulf War, he noted, ‘went forward under a
virtual obliteration of critical discourse egged on by a complacent media in what can only
be called an atmosphere of liberal totalism.’[12] This continued through the
1990s, even while, as the recent book by the conservative Andrew Bacevich has amply
documented, the Clinton Administration often outdid its Republican predecessors in
unleashing military power to quell resistance to the continuing aggressive American
pursuit of ‘an open and integrated international order based on the principles of
democratic capitalism.’ Quoting Madeleine Albright, Clinton’s Secretary
of State, saying in 1998: ‘If we have to use force, it is because we are
America. We are the indispensable nation.’; and, in 2000, Richard Haas, the State
Department’s Director of Policy Planning in the incoming Bush Administration, calling
on Americans finally to reconceive their state’s ‘global role from one of
a traditional nation state to an imperial power’, Bacevich argues that the continuing
avoidance of the term imperialism could not last. It was at best an
‘astigmatism’, and at worst ‘an abiding preference for averting our eyes
from the unflagging self-interest and large ambitions underlying all U.S. policy’.[13] By the turn of the century, and most obviously once the
authors of the Project for a New American Century were invested with power in Washington
D.C., the term imperialism was finally back on even a good many liberals’ lips. The
popularity of Hardt and Negri’s tome, Empire, had caught the new
conjuncture even before the second war on Iraq. But their insistence (reflecting the
widespread notion that the power of all nation states had withered in the era of
globalization) that ‘the United States does not, and indeed no nation state can
today, form the center of an imperialist project’ was itself bizarrely out of
sync with the times.[14] The left needs a new theorization of imperialism, one
that will transcend the limitations of the old Marxist ‘stagist’ theory of
inter-imperial rivalry, and allow for a full appreciation of the historical factors that
have led to the formation of a unique American informal empire. This will involve
understanding how the American state developed the capacity to eventually incorporate its
capitalist rivals, and oversee and police ‘globalization’ -- i.e. the spread of
capitalist social relations to every corner of the world. The theory must be able to
answer the question of what made plausible the American state’s insistence that it
was not imperialistic, and how this was put into practice and institutionalized; and,
conversely, what today makes implausible the American state’s insistence that
it is not imperialistic, and what effects its lack of concealment might have in terms of
its attractiveness and its capacity to manage global capitalism and sustain its global
empire. RETHINKING IMPERIALISM
What this erratic trajectory from the nineteenth to the twenty-first century
suggests is that the process of globalization is neither inevitable (as was conventionally
assumed in the latter part of the nineteenth century and as is generally assumed again
today), nor impossible to sustain (as Lenin and Polanyi, in their different ways, both
contended). The point is that we need to distinguish between the expansive tendency of
capitalism and its actual history. A global capitalist order is always a contingent social
construct: the actual development and continuity of such an order must be problematized.
There is a tendency within certain strains of
Marxism, as in much bourgeois analysis, to write theory in the present tense. We must not
theorize history in such a way that the trajectory of capitalism is seen as a simple
derivative of abstract economic laws. Rather, it is crucial to adhere to the Marxist
methodological insight that insists, as Philip McMichael has argued, that it is necessary
to ‘historicize theory, that is to
problematize globalization as a relation immanent in capitalism, but with quite distinct
material (social, political and environmental) relations across time and time-space…
Globalization is not simply the unfolding of capitalist tendencies but a historically
distinct project shaped, or complicated, by the contradictory relations of previous
episodes of globalization.’[16]
Above all, the [s1] realization
-- or frustration -- of capitalism’s globalizing tendencies cannot be
understood apart from the role played by the states that have historically constituted the
capitalist world. The rise of capitalism is inconceivable without the role that European
states played in establishing the legal and infrastructural frameworks for property,
contract, currency, competition and wage-labour within their own borders, while also
generating a process of uneven development (and the attendant construction of race) in the
modern world. This had gone so far by the mid-to late nineteenth century that when capital
expanded beyond the borders of a given European nation-state, it could do so within new
capitalist social orders that had been -- or were just being -- established by other
states, or it expanded within a framework of formal or informal empire. Yet this was not
enough to sustain capital’s tendency to global expansion. No adequate means of
overall global capitalist regulation existed, leaving the
international economy and its patterns of accumulation fragmented, and thus fuelling the
inter-imperial rivalry that led to World War I.
The classical theories of imperialism developed at the time, from Hobson’s to
Lenin’s, were founded on a theorization of capitalist economic stages and crises.
This was a fundamental mistake that has, ever since, continued to plague proper
understanding.[17] The classical theories were
defective in their historical reading of imperialism, in their treatment of the dynamics
of capital accumulation, and in their elevation of a conjunctural moment of inter-imperial
rivalry to an immutable law of capitalist globalization. A distinctive capitalist version
of imperialism did not suddenly arrive with the so-called monopoly or finance-capital
stage of capitalism in the late nineteenth century, as we argue below. Moreover, the theory of crisis derived from the classical
understanding of this period was mistakenly used to explain capitalism’s expansionist
tendencies. If capitalists looked to the export of capital as well as trade in foreign
markets, it was not so much because centralization and concentration of capital had
ushered in a new stage marked by the falling rate of profit, overaccumulation and/or
underconsumption. Rather, akin to the process that had earlier led individual units of
capital to move out of their original location in a given village or town, it was the
accelerated competitive pressures and opportunities, and the attendant strategies and
emerging capacities of a developing capitalism, that pushed and facilitated the
international expansionism of the late nineteenth and early twentieth
centuries.
The classical theorists of imperialism also failed to apprehend adequately the
spatial dimensions of this internationalization. They made too much of the export of goods
and capital to what we now call the ‘third world’, because the latter’s
very underdevelopment limited its capacity to absorb such flows. And they failed
to discern two key developments in the leading capitalist countries themselves. Rather
than an exhaustion of consumption possibilities within the leading capitalist countries --
a premise based on what Lenin’s pamphlet Imperialism called ‘the
semi-starvation level of existence of the masses’ -- more and more Western working
classes were then achieving increasing levels of private and public consumption.[18]
And rather than the concentration of capital in these countries limiting the introduction
of new products so that ‘capital cannot find a field for profitable investment’,[19]
the very unevenness of on-going competition and technological development was introducing
new prospects for internal accumulation. There was a deepening of capital at home, not
just a spreading of capital abroad.
Far from being the highest stage of capitalism, what these theorists were observing
was (as is now obvious) a relatively early phase of capitalism. This was so not
just in terms of consumption patterns, financial flows and competition, but also in terms
of the limited degree of foreign direct investment at the time, and the very rudimentary
means that had then been developed for managing the contradictions associated with
capitalism’s internationalization.
It was, however, in their reductionist and instrumental treatment of the state that
these theorists were especially defective.[20] Imperialism is not
reducible to an economic explanation, even if economic forces are always a large part of
it. We need, in this respect, to keep imperialism and capitalism as two distinct concepts.
Competition amongst capitalists in the international arena, unequal exchange and uneven
development are all aspects of capitalism itself, and their relationship to imperialism
can only be understood through a theorization of the state. When states pave the way for
their national capitals’ expansion abroad, or even when they follow and manage that
expansion, this can only be understood in terms of these states’ relatively
autonomous role in maintaining social order and securing the conditions of capital
accumulation; and we must therefore factor state administrative capacities as well as
class, cultural and military determinations into the explanation of the imperial aspect of
this role.
Capitalist imperialism, then, needs to be understood through an extension of the
theory of the capitalist state, rather than derived directly from the theory of economic
stages or crises. And such a theory needs to comprise not only inter-imperial rivalry,
and the conjunctural predominance of one imperial state, but also the structural
penetration of former rivals by one imperial state. This means we need to historicize the
theory, beginning by breaking with the conventional notion that the nature of modern
imperialism was once and for all determined by the kinds of economic rivalries attending
the stage of industrial concentration and financialization associated with
turn-of-the-century ‘monopoly capital’.
In fact, the transition to the modern form of imperialism may be located in the
British state’s articulation of its old mercantile formal empire with the informal
empire it spawned in the mid-nineteenth century during the era of ‘free trade’.
Schumpeter’s theory of imperialism as reflecting the
atavistic role within capitalism of pre-capitalist exploiting and warrior classes, and
both Kautsky’s and Lenin’s conception that mid-nineteenth century British
industrial capital and its policy of free trade reflected a ‘pure’ capitalism
antithetical or at least ‘indifferent’ to imperial expansion,[21]
all derived from too crude an understanding of the separation of the economic from the
political under capitalism. This lay at the root of the notion that the replacement of the
era of free competition by the era of finance capital had ended that separation, leading
to imperialist expansion, rivalry and war among the leading capitalist states.
Like contemporary discussions of globalization in the context of neoliberal
‘free market’ policies, the classical Marxist accounts of the nineteenth century
era of free trade and its supersession by the era of inter-imperial rivalry also
confusingly counterposed ‘states’ and ‘markets’. In both cases there
is a failure to appreciate the crucial role of the state in making ‘free
markets’ possible and then to make them work. Just as the emergence of so-called
‘laissez faire’ under mid-nineteenth century industrial capitalism entailed a
highly active state to effect the formal separation of the polity and economy, and to
define and police the domestic social relations of a fully capitalist order, so did the
external policy of free trade entail an extension of the imperial role along all of these
dimensions on the part of the first state that ‘created a form of imperialism driven
by the logic of capitalism’.[22]
As Gallagher and Robinson showed 50 years ago, in a seminal essay entitled
‘The Imperialism of Free Trade’, the conventional notion (shared by Kautsky,
Lenin and Schumpeter) that British free trade and imperialism did not mix was belied by
innumerable occupations and annexations, the addition of new colonies, and especially by
the importance of India to the Empire, between the 1840s and the 1870s. It was belied even
more by the immense extension, for both economic and strategic reasons, of Britain’s
‘informal empire’ via foreign investment, bilateral trade,
‘friendship’ treaties and gunboat diplomacy, so that ‘mercantilist
techniques of formal empire were being employed in the mid-Victorian age at the same time
as informal techniques of free trade were being used in Latin America. It is for this
reason that attempts to make phases of imperialism correspond directly to phases in the
economic growth of the metropolitan economy are likely to prove in vain…’[23]
Gallagher and Robinson defined imperialism in terms of a variable political function
‘of integrating new regions into the expanding economy; its character is largely
decided by the various and changing relationships between the political and economic
elements of expansion in any particular region and time.’ …In
other words, it is the politics as well as the economics of the informal empire which we
have to include in the account... The type of political lien between the expanding economy
and its formal and informal dependencies… has tended to vary with the economic value
of the territory, the strength of its political structure, the readiness of its rulers to
collaborate with British commercial and strategic purposes, the ability of the native
society to undergo economic change without external control, the extent to which domestic
and foreign political situations permitted British intervention, and, finally, how far
European rivals allowed British policy a free hand.[24]
This is not to say there are not important differences between informal and formal
empire. Informal empire requires the economic and cultural penetration of other states to
be sustained by political and military coordination with other independent governments.
The main factor that determined the shift to the extension of formal empires after the
1880s was not the inadequacy of Britain’s relationship with its own informal empire,
nor the emergence of the stage of monopoly or ‘finance capital’, but rather Britain’s
inability to incorporate the newly emerging capitalist powers of Germany, the US and Japan
into ‘free trade imperialism’. Various factors determined this, including
pre-capitalist social forces that did indeed remain important in some of these countries,
nationalist sentiments that accompanied the development of capitalist nation-states,
strategic responses to domestic class struggles as well geo-political and military
rivalries, and especially the limited ability of the British state -- reflecting also the
growing separation between British financial and industrial capital -- to prevent these
other states trying to overturn the consequences of uneven development. What ensued was
the rush for colonies and the increasing organization of trade competition via
protectionism (tariffs served as the main tax base of these states as well as protective
devices for nascent industrial bourgeoisies and working classes). In this context, the international
institutional apparatuses of diplomacy and alliances, British naval supremacy and the Gold
Standard were too fragile even to guarantee equal treatment of foreign capital with
national capital within each state (the key prerequisite of capitalist globalization), let
alone to mediate the conflicts and manage the contradictions associated with the
development of global capitalism by the late nineteenth century.
No less than Lenin, by 1914 Kautsky had
accepted, following Hilferding’s Finance Capital, that ‘a brutal and
violent’ form of imperialist competition was ‘a product of highly developed
industrial capitalism.’[25] Kautsky was right to
perceive, however, that even if inter-imperial rivalry had led to war between the major
capitalist powers, this was not an inevitable characteristic of capitalist globalization.
What so incensed Lenin, with his proclivity for over-politicizing theory, was that Kautsky
thought that all the major capitalist ruling classes, after ‘having learned the
lesson of the world war’, might eventually come to revive capitalist globalization
through a collaborative ‘ultra-imperialism’ in face of the increasing strength
of an industrial proletariat that nevertheless still fell short of the capacity to effect
a socialist transformation. But Kautsky himself made his case reductively, that is, by
conceiving his notion of ultra-imperialism from, as he repeatedly put it, ‘a purely
economic standpoint’, rather than in terms of any serious theory of the state.
Moreover, had Kautsky put greater stress on his earlier perception (in 1911) that
‘the United States is the country that shows us our social future in
capitalism’, and discerned the capacity of the newly emerging informal American
empire for eventually penetrating and coordinating the other leading capitalist states,
rather than anticipating an equal alliance amongst them, he might have been closer to the
mark in terms of what finally actually happened after 1945. But what could hardly yet be
clearly foreseen were the developments, both inside the American social formation and
state as well as internationally, that allowed American policy makers to think that
‘only the US had the power to grab hold of history and make it conform.’[26]
THE AMERICAN REPUBLIC: ‘EXTENSIVE EMPIRE AND
SELF-GOVERNMENT’
The central place the United States now occupies within global capitalism rests on
a particular convergence of structure and history. In the abstract, we can identify
specific institutions as reflecting the structural power of capitalism. But what blocks
such institutions from emerging and what, if anything, opens the door to their
development, is a matter of historical conjunctures. The crucial phase in the
reconstruction of global capitalism -- after the
earlier breakdowns and before the reconstitution of the last quarter of the twentieth
century -- occurred during and after World War II. It was only after (and as a
state-learned response to) the disasters of Depression and the Second World War that
capitalist globalization obtained a new life. This depended, however, on the emergence and uneven
historical evolution of a set of structures developed under the leadership of a unique agent: the American imperial state.
The role the United States came to play in world capitalism was not inevitable but
nor was it merely accidental: it was not a matter of teleology but of capitalist history.
The capacity it developed to ‘conjugate’ its ‘particular power with
the general task of coordination’ in a manner that reflected ‘the
particular matrix of its own social history’, as Perry Anderson has recently put it,
was founded on ‘the attractive power of US models of production and culture…
increasingly unified in the sphere of consumption.’ Coming together here were, on the
one hand, the invention in the US of the modern corporate form, ‘scientific
management’ of the labour process, and assembly-line mass production; and, on the
other, Hollywood-style ‘narrative and visual schemas stripped to their most
abstract’, appealing to and aggregating waves of immigrants through the
‘dramatic simplification and repetition’.[27] The dynamism of American
capitalism and its worldwide appeal combined with the universalistic language of American
liberal democratic ideology to underpin a capacity for informal empire far beyond that of
nineteenth century Britain’s. Moreover, by spawning the modern multinational
corporation, with foreign direct investment in production and services the American
informal empire was to prove much more penetrative of other social formations.
Yet it was not only the economic and cultural formation of American capitalism, but
also the formation of the American state that facilitated a new informal empire. Against
Anderson’s impression that the American state’s constitutional structures lack
the ‘carrying power’ of its economic and cultural ones (by virtue of being
‘moored to eighteenth century arrangements’)[28]
stands Thomas Jefferson’s observation in 1809 that ‘no constitution was ever
before as well-calculated for extensive empire and self-government.’[29]
Hardt and Negri were right to trace the pre-figuration of what they call
‘Empire’ today back to the American constitution’s incorporation of
Madisonian ‘network power’.[30] This entailed not only
checks and balances within the state apparatus, but the notion that the greater plurality
of interests incorporated within an extensive and expansive state would guarantee that the
masses would have no common motive or capacity to come together to check the ruling class.[31]
Yet far from anticipating the sort of decentred and amorphous power that Hardt and Negri
imagine characterized the US historically (and characterizes ‘Empire’ today),
the constitutional framework of the new American state gave great powers to the central
government to expand trade and make war. As early as 1783, what George Washington already
spoke of ambitiously as ‘a rising empire’[32] was captured in the
Federalist Paper XI image of ‘one great American system superior to the control of
all transatlantic force or influence and able to dictate the terms of connection between
the old and the new world!’[33]
The notion of empire employed here was conceived, of course, in relation to the
other mercantile empires of the eighteenth century. But the state which emerged out of the
ambitions of the ‘expansionist colonial elite’,[34]
with Northern merchants (supported by artisans and commercial farmers) and the Southern
plantation-owners allying against Britain’s formal mercantile empire, evinced from
its beginnings a trajectory leading to capitalist development and informal empire. The
initial form this took was through territorial expansion westward, largely through the
extermination of the native population, and blatant exploitation not only of the black
slave population but also debt-ridden subsistence farmers and, from at least the 1820s on,
an emerging industrial working class. Yet the new American state could still conceive of
itself as embodying republican liberty, and be widely admired for it, largely due to the
link between ‘extensive empire and self-government’ embedded in the federal
constitution. In Bernard DeVoto’s words, ‘The American empire would not be
mercantilist but in still another respect something new under the sun: the West was not to
be colonies but states.’[35]
And the ‘state rights’ of these states were no mirage: they reflected the
two different types of social relations -- slave and free -- that composed each successive
wave of new states and by 1830 limited the activist economic role of the federal state.
After the domestic inter-state struggles that eventually led to civil war, the defeat of
the plantocracy and the dissolution of slavery, the federal constitution provided a
framework for the unfettered domination of an industrial capitalism with the largest
domestic market in the world, obviating any temptation towards formal imperialism via
territorial conquest abroad.[36] The outcome of the Civil War allowed for a reconstruction
of the relationship between financial and industrial capital and the federal state,
inclining state administrative capacities and policies away from mercantilism and towards
extended capitalist reproduction.[37] Herein lies the
significance that Anderson himself attaches to the evolving juridical form of the American
state, whereby ‘unencumbered property rights, untrammeled litigation, the invention
of the corporation’ led to what Polanyi most feared, a
juridical system disembedding the market as far as possible from ties of custom, tradition
or solidarity, whose very abstraction from them later proved -- American firms like American films -- exportable and
reproducible across the world, in a way that no other competitor could quite match. The
steady transformation of international merchant law and arbitration in conformity with US
standards is witness to the process.[38]
The expansionist tendencies of American capitalism in the latter half of the
nineteenth century (reflecting pressures from domestic commercial farmers as much as from
the industrialists and financiers of the post-civil war era) were even more apt to take
informal forms than had those of British capitalism, even though they were not based on a
policy of free trade. The modalities were initially similar, and they began long before
the Spanish-American War of 1898, which is usually seen as the start of US imperial
expansion. This was amply documented in a paper boldly called ‘An Indicator of
Informal Empire’ prepared for the US Center for Naval Analysis: between 1869 and 1897 the
US Navy made no less than 5,980 ports of call to protect American commercial shipping in
Argentina, Brazil Chile, Nicaragua, Panama, Columbia and elsewhere in Latin America.[39]
Yet the establishment of colonies in Puerto Rico and the Philippines and the annexation of
Hawaii ‘was a deviation … from the typical economic, political and ideological
forms of domination already characteristic of American imperialism.’[40]
Rather, it was through American foreign direct investment and the modern corporate form -- epitomized by the Singer Company
establishing itself as the first multinational corporation when it jumped the Canadian
tariff barrier to establish a subsidiary to produce sewing machines for prosperous Ontario
wheat farmers -- that the American informal empire soon took shape in a
manner quite distinct from the British one.[41]
The articulation of the new informal American empire with military intervention was
expressed by Theodore Roosevelt in 1904 in terms of the exercise of ‘international
police power’, in the absence of other means of international control, to the end of
establishing regimes that know ‘how to act with reasonable efficiency and decency in
social and political matters’ and to ensure that each such regime ‘keeps order
and pays its obligations’: ‘[A] nation desirous both of securing respect for
itself and of doing good to others [Teddy Roosevelt
declared, in language that has now been made very familiar again] must have a force
adequate for the work which it feels is allotted to it as its part of the general world
duty… A great free people owes to itself and to all mankind not to sink into
helplessness before the powers of evil.’[42]
The American genius for presenting its informal empire in terms of the framework of
universal rights reached its apogee under Woodrow Wilson. It also reached the apogee of
hypocrisy, especially at the Paris Peace Conference, where Keynes concluded Wilson was
‘the greatest fraud on earth’.[43] Indeed, it was not only the
US Congress’s isolationist tendencies, but the incapacity of the American
presidential, treasury and military apparatuses, that explained the failure of the United
States to take responsibility for leading European reconstruction after World War One. The
administrative and regulatory expansion of the American state under the impact of
corporate liberalism in the Progressive era,[44] and the spread of American
direct investment through the 1920s (highlighted by General Motor’s purchase of Opel
immediately before the Great Depression, completing the ‘virtual division’ of
the German auto industry between GM and Ford)[45] were significant
developments. Yet it was only during the New Deal that the US state really began to develop the modern planning capacities
that would, once they were redeployed in World War II, transform and vastly extend
America’s informal imperialism.[46]
Amidst the remarkable depression-era class struggles these capacities were
limited by ‘political fragmentation, expressed especially in executive-congressional
conflict, combined with deepening tensions between business and government...’[47]
America’s entry into World War II, however, not only
resolved ‘the statebuilding impasse of the late 1930s’ but also provided
‘the essential underpinnings for postwar U.S. governance.’ As Brian Waddell notes in his
outstanding study of the transition from the state-building of the Depression to that of
World War II: The
requirements of total war… revived corporate political leverage, allowing corporate
executives inside and outside the state extensive influence over wartime mobilization
policies… Assertive corporate executives and military officials formed a very
effective wartime alliance that not only blocked any augmentation of the New Dealer
authority but also organized a powerful alternative to the New Deal. International
activism displaced and supplanted New Deal domestic activism. Thus was the stage finally
set for a vastly extended and much more powerful informal US empire outside its own
hemisphere. THE AMERICAN RECONSTRUCTION
OF A CAPITALIST WORLD ORDER
The shift of ‘U.S. state capacities towards realizing
internationally-interventionist goals versus domestically-interventionist ones’[48]
was crucial to the revival of capitalism’s globalizing tendencies after World War II.
This not only took place through the wartime reconstruction of the American state, but
also through the more radical postwar reconstruction of all the states at the core of the
old inter-imperial rivalry. And it also took place alongside -- indeed it led to -- the multiplication of new states out of their old
colonial empires. Among the various dimensions of this new relationship between capitalism
and imperialism, the most important was that the densest imperial networks and
institutional linkages, which had earlier run north-south between imperial states and
their formal or informal colonies, now came to run between the US and the other major
capitalist states.
What Britain’s informal empire had been unable to manage (indeed hardly to
even contemplate) in the nineteenth century was now accomplished by the American informal
empire, which succeeded in integrating all the other capitalist powers into an effective
system of coordination under its aegis. Even apart from the U.S. military occupations, the
devastation of the European and Japanese economies and the weak political legitimacy of
their ruling classes at the war’s end created an unprecedented opportunity which the
American state was now ready and willing to exploit. In these conditions, moreover, the
expansion of the informal American
empire after World War II was hardly a one-way (let alone solely coercive) imposition --
it was often ‘imperialism by invitation’.[49]
However important was the development of the national security state apparatus and
the geostrategic planning that framed the division of the world with the USSR at Yalta,[50]
no less important was the close attention the Treasury and State Department paid during
the war to plans for relaunching a coordinated liberal trading regime and a rule-based
financial order. This was accomplished by manipulating the debtor status of the US’s
main allies, assisted by the complete domination of the dollar as a world currency and the
fact that 50% of world production was now accounted for by the U.S. economy. The American
state had learned well the lesson of its post-World War I incapacity to combine liberal
internationalist rhetoric with an institutional commitment to manage an international
capitalist order. Through the very intricate joint planning of the British and American
Treasuries during the war[51] -- i.e. through
the process that led to Bretton Woods --
the Americans not only ensured that the British were ‘accepting some obligation to
modify their domestic policy in light of its international effects on stability’, but
also ensured the liquidation of the British Empire by ‘throwing Britain into the arms
of America as a supplicant, and therefore subordinate; a subordination masked by the
illusion of a “special relationship” which continues to this day’.[52]
But it was by no means only the US dollars that were decisive here, nor was Britain
the only object of America’s new informal empire. A pamphlet inserted in Fortune
magazine in May 1942 on ‘The U.S. in a New World: Relations with Britain’ set
out a program for the ‘integration of the American and British economic systems as
the foundation for a wider postwar integration’: … if a world order is to arise
out of this war, it is realistic to believe that it will not spring full-blown from a
conference of fifty states held at given date to draw up a World Constitution. It is more
likely to be the gradual outgrowth of the wartime procedures now being developed… If
the U.S. rejects a lone-wolf imperialism and faces the fact that a League of Nations or
some other universal parliament cannot be set up in the near future…[this] does not
prevent America from approaching Britain with a proposal for economic integration as a
first step towards a general reconstruction procedure. Unless we can reach a meeting of
minds with Britain and the Dominions on these questions it is utopian to expect wider
agreement among all the United Nations.[53]
This pamphlet was accompanied by a lengthy collective statement[54]
by the editors of Fortune and Time and Life magazines which began
with the premise that ‘America will emerge as the strongest single power in the
postwar world, and…it is therefore up to it to decide what kind of postwar world it
wants.’ They called, in this context, for ‘mutual trust between the businessman
and his government’ after the tensions of the New Deal, so that government could
exercise its responsibilities both ‘to use its fiscal policy as a balance wheel, and
to use its legislative and administrative power to promote and foster private enterprise,
by removing barriers to its natural expansion…’ This would produce ‘an
expansionist context in which tariffs, subsidies, monopolies, restrictive labor rules,
plantation feudalism, poll taxes, technological backwardness, obsolete tax laws, and all
other barriers to further expansion can be removed.’ While recognizing that ‘the
uprising of [the] international proletariat... the most significant fact of the last
twenty years… means that complete international free trade, as Cobden used to preach
it and Britain used to practice it, is no longer an immediate political possibility’,
nevertheless free trade between the US and the Britain would be ‘a jolt both
economies need’ and on this basis ‘the area of freedom would spread -- gradually
through the British Dominions, through Latin America, perhaps someday through the world.
For universal free trade, not bristling nationalism, is the ultimate goal of a
rational world.’ And in terms that were uncharacteristically direct, the editors
called this a new imperialism: Thus, a new
American ‘imperialism’, if it is to be called that, will --
or rather can -- be quite different from the British type. It can also be different from
the premature American type that followed our expansion in the Spanish war. American
imperialism can afford to complete the work the British started; instead of salesmen and
planters, its representatives can be brains and bulldozers, technicians and machine tools.
American imperialism does not need extra-territoriality; it can get along better in Asia
if the tuans and sahibs stay home… Nor is the U.S. afraid to help build up industrial
rivals to its own power… because we know industrialization stimulates rather than
limits international trade... This American imperialism sounds very abstemious and
high-minded. It is nevertheless a feasible policy for America, because friendship, not
food, is what we need most from the rest of the world.
The immense managerial capacity the American state had developed to make this
perspective a reality was nowhere more clearly confirmed than at the Bretton Woods
conference in 1944. The Commission responsible for establishing the IMF was chaired and
tightly controlled by the ‘New Dealer’ Harry Dexter White for the American
Treasury, and even though Keynes chaired the Commission responsible for planning what
eventually became the World Bank, and though the various committees under him were also
chaired by non-Americans, ‘they had American rapporteurs and secretaries, appointed
and briefed by White’, who also arranged for ‘a conference journal to be
produced every day to keep everyone informed of the main decisions. At his disposal were
‘the mass of stenographers working day and night [and] the boy scouts acting as pages
and distributors of papers’ -- all written in a ‘legal language which made
everything difficult to understand [amidst] the great variety of unintelligible
tongues’. This was the ‘controlled Bedlam’ the American Treasury wanted in
order to ‘make easier the imposition of a fait accompli.’ It was
in this context that every delegation finally decided ‘it was better to run with the
US Treasury than its disgruntled critics, “who [Keynes put it] do not know their own
mind and have no power whatever to implement their promises.”’ The conference
ended with Keynes’s tribute to a process in which 44 countries ‘had been
learning to work together so that “the brotherhood of man will become more than a
phrase.” The delegates applauded wildly. “The Star Spangled Banner” was
played’.[55]
With the IMF and World Bank headquarters established at American insistence in
Washington, D.C., a pattern was set for international economic management among all the
leading capitalist countries that continues to this day, one in which even when European
or Japanese finance ministries and central banks propose, the US Treasury and Federal
Reserve dispose.[56] The dense institutional
linkages binding these states to the American empire were also institutionalized, of
course, through the institutions of NATO, not to
mention the hub-and-spokes networks binding each of the other leading capitalist states to
the intelligence and security apparatuses of the US as part of the strategy of containment
of Communism during the Cold War. These interacted with economic networks, as well with
new propaganda, intellectual and media networks, to explain, justify and promote the new
imperial reality.
Most of those who stress the American state’s military and intelligence links
with the coercive apparatuses of Europe and Japan tend to see the roots of this in the
dynamics of the Cold War[57]. Yet as Bacevich, looking
at American policy from the perspective of the collapse of the USSR, has recently said: To conceive of US grand strategy from the late
1940’s through the 1980’s as ‘containment’ -- with no purpose apart
from resisting the spread of Soviet power -- is not wrong, but it is
incomplete…[S]uch a cramped conception of Cold War strategy actively impedes our
understanding of current US policy…No strategy worthy of the name is exclusively
passive or defensive in orientation…US grand strategy during the Cold War required
not only containing communism but also taking active measures to open up the world
politically, culturally, and, above all, economically -- which is precisely what
policymakers said they intended to do.[58]
What an exclusive concentration on the foreign policy, intelligence and coercive
apparatuses also obscures is how far the American ‘Protectorate System’ (as
Peter Gowan calls it), was part of actually ‘alter[ing] the character of the
capitalist core.’ For it entailed the ‘internal transformation of social
relations within the protectorates in the direction of the American “Fordist”
system of accumulation [that] opened up the possibility of a vast extension of their internal
markets, with the working class not only as source of expanded surplus value but also
an increasingly important consumption centre for realizing surplus value.’[59]
While the new informal empire still provided room for the other core states to act as
‘autonomous organizing centres of capital accumulation’, the emulation of US
technological and managerial ‘Fordist’ forms (initially organized and channelled
through the post-war joint ‘productivity councils’) was massively reinforced by
American foreign direct investment. Here too, the core of the American imperial network
shifted towards to the advanced capitalist countries, so that between 1950 and 1970 Latin
America’s share of total American FDI fell from 40 to under 20 percent,
while Western Europe’s more than doubled to match the Canadian share of over 30
percent.[60]
It was hardly surprising that acute outside observers such as Raymond Aron and Nicos
Poulantzas saw in Europe a tendential ‘Canadianization’ as the model form of
integration into the American empire.[61]
None of this meant, of course, that the north-south dimension of imperialism became
unimportant. But it did mean that the other core capitalist countries’ relationships
with the third world, including their ex-colonies, were imbricated with American informal
imperial rule. The core capitalist countries might continue to benefit from the
north-south divide, but any interventions had to be either American-initiated or at least
have American approval (as Suez proved). Only the American state could arrogate to itself
the right to intervene against the sovereignty of other states (which it repeatedly did
around the world) and only the American state reserved for itself the
‘sovereign’ right to reject international rules and norms when necessary. It is
in this sense that only the American state was actively ‘imperialist’.
Though informal imperial rule
seemed to place the ‘third world’ and the core capitalist countries on the same
political and economic footing, both the legacy of the old imperialism and the vast
imbalance in resources between the Marshall Plan and third world development aid
reproduced global inequalities. The space was afforded the European states to develop
internal economic coherence and growing domestic markets in the post-war era, and European
economic integration was also explicitly encouraged by the US precisely as a mechanism for the ‘European rescue of
the nation-state’, in Alan Milward’s apt formulation.[62]
But this contrasted with American dislike of
import-substitution industrialization strategies adopted by states in the south, not to
mention US hostility to planned approaches to developing the kind of auto-centric economic
base that the advanced capitalist states had created for themselves before they embraced a
liberal international economic order. (Unlike the kind of geostrategic concerns that
predominated in the American wars in Korea and Vietnam, it was opposition to economic
nationalism that determined the US state’s involvement in the overthrow of numerous
governments from Iran to Chile.). The predictable result -- given limits on most of the third world’s
internal markets, and the implications of all the third world states competing to break
into international markets -- was that
global inequalities increased, even though a few third world states, such as South Korea,
were able to use the geostrategic space that the new empire afforded them to develop
rapidly and narrow the gap.
Still, in general terms, the new informal form of imperial rule, not only in the
advanced capitalist world but also in those regions of the third world where it held sway,
was characterized by the penetration of borders, not their dissolution. It was not through
formal empire, but rather through the reconstitution of states as integral elements of an
informal American empire, that the international capitalist order was now organized and
regulated. Nation states remained the primary vehicles through which (a) the social
relations and institutions of class, property, currency, contract and markets were
established and reproduced; and (b) the international accumulation of capital was carried
out. The vast expansion of direct foreign investment worldwide, whatever the shifting
regional shares of the total, meant that far from capital escaping the state, it expanded
its dependence on many states. At the same
time, capital as an effective social force within any given state now tended to include
both foreign capital and domestic capital with international linkages and ambitions. Their
interpenetration made the notion of distinct national bourgeoisies --
let alone rivalries between them in any sense analogous to those that led to World War I -- increasingly anachronistic.
A further dimension of the new relationship between capitalism and empire was thus
the internationalization of the state, understood as a state’s acceptance of
responsibility for managing its domestic capitalist order in way that contributes to
managing the international capitalist order.[63] For the American imperial
state, however, the internationalization of the state had a special quality. It entailed
defining the American national interest in terms of acting not only on behalf of its own
capitalist class but also on behalf of the extension and reproduction of global
capitalism. The determination of what this required continued to reflect the particularity
of the American state and social formation, but it was increasingly inflected towards a
conception of the American state’s role as that of ensuring the survival of
‘free enterprise’ in the US itself through its promotion of free enterprise and
free trade internationally. This was classically articulated in President Truman’s
famous speech against isolationism at Baylor University in March 1947: Now, as in the year 1920, we have reached a turning
point in history. National economies have been disrupted by the war. The future is
uncertain everywhere. Economic policies are in a state of flux. In this atmosphere of
doubt and hesitation, the decisive factor will be the type of leadership that the United
States gives the world. We are the giant of the economic world. Whether we like it or not,
the future pattern of economic relations depends upon us… Our foreign relations,
political and economic, are indivisible.[64] The
internationalization of the Americans state was fully encapsulated in National Security
Council document NSC-68 of 1950, which (although it remained ‘Top Secret’ until 1975)
Kolko calls ‘the most important of all postwar policy documents’. It articulated most clearly the goal of constructing a
‘world environment in which the American system can survive and flourish… Even
if there were no Soviet Union we would face the great problem… [that] the absence of
order among nations is becoming less and less tolerable.’[65]
THE RECONSTITUTION FO
AMERICAN EMPIRE IN THE NEOLIBERAL ERA This pattern of imperial rule was established in the
post-war period of reconstruction, a period that, for all of the economic dynamism of
‘the golden age’, was inherently transitional. The very notion of
‘reconstruction’ posed the question of what might follow once the European and
Japanese economies were rebuilt and became competitive with the American, and once the
benign circumstances of the post-war years were exhausted.[66]
Moreover, peasants’ and workers’ struggles and rising economic nationalism
in the third world, and growing working class militancy in the core capitalist countries,
were bound to have an impact both on capital’s profits and on the institutions of the
post-war institutional order. In less than a generation, the contradictions inherent in
the Bretton Woods agreement were exposed. By the time European currencies became fully
convertible in 1958, almost all the premises of the 1944 agreement were already in
question. The fixed exchange rates established by that agreement depended on the capital
controls that most countries other than the US maintained after the war.[67]
Yet the very internationalization of trade and direct foreign investment that Bretton
Woods promoted (along with domestic innovations and competition in mortgages, credit,
investment banking and brokerage that strengthened the capacity of the financial sector
within the United States) contributed to the restoration of a global financial market, the
corresponding erosion of capital controls, and the vulnerability of fixed exchange rates.[68] Serious concerns over a return to the international
economic fragmentation and collapse of the interwar period were voiced by the early
sixties as the American economy went from creditor to debtor status, the dollar moved from
a currency in desperately short supply to one in surplus, and the dollar-gold standard,
which had been embedded in Bretton Woods, began to crumble.[69]
But in spite of new tensions between the US and Europe and Japan, the past was not
replayed. American dominance, never fundamentally challenged, would come to be reorganized
on a new basis, and international integration was not rolled back but intensified. This
reconstitution of the global order, like earlier developments within global capitalism,
was not inevitable. What made it possible -- what provided the American state the time and
political space to renew its global ambitions -- was that by the time of the crisis of the
early seventies, American ideological and material penetration of, and integration with,
Europe and Japan was sufficiently strong to rule out any retreat from the international
economy or any fundamental challenge to the leadership of the American state.
The United States had, of course, established itself as the military protectorate
of Europe and Japan, and this was maintained while both were increasingly making their way
into American markets. But the crucial factor in cementing the new imperial bond was
foreign direct investment as the main form now taken by capital export and international
integration in the post-war period. American corporations, in particular, were evolving
into the hubs of increasingly dense host-country and cross-border networks amongst
suppliers, financiers, and final markets (thereby further enhancing the liberalized
trading order as a means of securing even tighter international networks of production).
Even where the initial response to the growth of such American investment was hostile,
this generally gave way to competition to attract that investment, and then emulation to
meet ‘the American challenge’ through counter-investments in the United States.
Unlike trade, American FDI directly affected the class structures and state
formations of the other core countries.[70] Tensions and alliances that
emerged within domestic capitalist classes could no longer be understood in purely
‘national’ terms. German auto companies, for example, followed American auto
companies in wanting European-wide markets; and they shared mutual concerns with the
American companies inside Germany, such as over the cost of European steel. They had
reason to be wary of policies that discriminated in favour of European companies but
might, as a consequence, compromise the treatment of their own growing interest in markets
and investments in the United States. And if instability in Latin America or other
‘trouble spots’ threatened their own international investments, they looked
primarily to the US rather than their own states to defend them. With American capital a
social force within each European country, domestic capital tended to be
‘dis-articulated’ and no longer represented by a coherent and independent
national bourgeoisie.[71] The likelihood that
domestic capital might challenge American dominance -- as opposed to merely seeking to renegotiate
the terms of American leadership -- was
considerably diminished. Although the West European and Japanese economies had been
rebuilt in the post-war period, the nature of their integration into the global economy
tended to tie the successful reproduction of their own social formations to the rules and
structures of the American-led global order. However much the European and Japanese states
may have wanted to renegotiate the arrangements struck in 1945, now that only 25% of world
production was located in the U.S. proper, neither they nor their bourgeoisies were
remotely interested in challenging the hegemony that the American informal empire had
established over them. ‘The question for them’, as Poulantzas put it in the
early seventies, ‘is rather to reorganize a hegemony that they still accept…;
what the battle is actually over is the share of the cake.’[72]
It was in this context that
the internationalization of the state became particularly important. In the course of the
protracted and often confused renegotiations in the 1970s of the terms that had, since the end of World War II, bound
Europe and Japan to the American empire, all the nation states involved came to
accept a responsibility for creating the necessary internal conditions for
sustained international accumulation, such as stable prices, constraints on labour
militancy, national treatment of foreign investment and no restrictions on capital
outflows. The real tendencies that emerged out of the crisis of the 1970s were (to quote
Poulantzas again) ‘the internalized transformations of the national state itself,
aimed at taking charge of the internationalization of public functions on capital’s
behalf.’[73] Nation states were thus not
fading away, but adding to their responsibilities. Not that they saw clearly
what exactly needed to be done. The established structures of the post-1945 order
did not, in themselves, provide a resolution to the generalized pressures on profit rates
in the United States and Europe. They did not suggest how the U.S. might revive its
economic base so as to consolidate its rule. Nor did they provide an answer to how
tensions and instabilities would be managed in a world in which the American state was not
omnipotent but rather depended, for its rule, on working through other states. The
contingent nature of the new order was evidenced by the fact that a ‘solution’
only emerged at the end of the seventies, two full decades after the first signs of
trouble, almost a decade after the dollar crisis of the early seventies, and after a
sustained period of false starts, confusions, and uncertain experimentation.[74]
The first and most crucial
response of the Nixon administration, the dramatic end to the convertibility of the
American dollar in 1971, restored the American state’s economic autonomy in the face
of a threatened rush to gold; and the subsequent devaluation of the American dollar did,
at least temporarily, correct the American balance of trade deficit. Yet that response
hardly qualified as a solution to the larger issues involved. The American state took
advantage of its still dominant position to defend its own economic base, but this
defensive posture could not provide a general solution to the problems facing all the
developed capitalist economies, nor even create the basis for renewed US economic
dynamism.[75] By the end of the
seventies, with the American economy facing a flight of capital (both domestic and
foreign), a Presidential report to Congress (describing itself as ‘the most
comprehensive and detailed analysis of the competitive position of the United
States’) confirmed a steep decline in competitiveness -- one that it advised could
be corrected, but not without a radical reorientation in economic policy to address the
persistence of domestic inflation and the need for greater access to savings so as to
accelerate investment.[76] The concern with retaining
capital and attracting new capital was especially crucial to what followed. The opening up
of domestic and global capital markets was both an opportunity and a constraint for the
American state. Liberalized finance held out the option of shifting an important aspect of
competition to the very terrain on which the American economy potentially had its
greatest advantages, yet those advantages could not become an effective instrument of
American power until other economic and political changes had occurred. The American
state’s ambivalence about how to deal with the growing strength of financial capital
was reflected in its policies: capital controls were introduced in 1963, but were made
open to significant ‘exceptions’; the Euro-dollar market was a source of
concern, but also recognized as making dollar holdings more attractive and subsequently
encouraging the important recycling of petro-dollars to the third world. The liberalization
of finance enormously strengthened Wall Street through the 1970s and, as Duménil and Lévy
have persuasively
shown, proved crucial to the broader changes that followed.[77]
But this should not be seen as being at the expense of industrial capital. What was
involved was not a ‘financial coup’, but rather a (somewhat belated)
recognition on the part of American capital generally that the strengthening of finance
was an essential, if sometimes painful, price to be paid for reconstituting American
economic power.[78] The critical ‘turning
point’ in policy orientation came in 1979 with the ‘Volcker shock’ -- the
American state’s self-imposed structural adjustment program. The Federal
Reserve’s determination to establish internal economic discipline by allowing
interest rates to rise to historically unprecedented levels led to the vital restructuring
of labour and industry and brought the confidence that the money markets and central
bankers were looking for. Along with the more general neoliberal policies that evolved
into a relatively coherent capitalist policy paradigm through the eighties, the new
state-reinforced strength of finance set the stage for what came to be popularly
known as ‘globalization’ -- the
accelerated drive to a seamless world of capital accumulation. The mechanisms of
neoliberalism (the expansion and deepening of markets and competitive pressures) may be
economic, but neoliberalism was essentially a political response to the democratic
gains that had been previously achieved by subordinate classes and which had become, in a
new context and from capital’s perspective, barriers to accumulation. Neoliberalism
involved not just reversing those gains, but weakening their institutional foundations -- including a shift in the hierarchy of state
apparatuses in the US towards the Treasury and Federal Reserve at the expense of the old
New Deal agencies. The US was of course not the only country to introduce neoliberal
policies, but once the American state itself moved in this direction, it had a new status:
capitalism now operated under ‘a new form of social rule’[79]
that promised, and largely delivered, (a) the revival of the productive base for American
dominance; (b) a universal model for restoring the conditions for profits in other
developed countries; and (c) the economic conditions for integrating global capitalism. In the course of the
economic restructuring that followed, American labour was further weakened,
providing American capital with an even greater competitive flexibility vis-ŕ-vis
Europe. Inefficient firms were purged -- a
process that had been limited in the seventies. Existing firms restructured internally,
outsourced processes to cheaper and more specialized suppliers, relocated to the
increasingly urban south, and merged with others -- all part of an accelerated
reallocation of capital within the American economy. The new confidence of global
investors (including Wall Street itself) in the American economy and state provided the US
with relatively cheap access to global savings and eventually made capital cheaper in the
US. The available pools of venture capital enhanced investment in the development of new
technologies (which also benefited from public subsidies via military procurement
programs), and the new technologies were in turn integrated into management restructuring
strategies and disseminated into sectors far beyond ‘high tech’. The US
proportion of world production did not further decline: it continued to account for around
one-fourth of the total right into the twenty-first century. The American economy not
only reversed its slide in the 1980s, but also set the standards for European and Japanese
capital to do the same.[80] The renewed confidence on
the part of American capital consolidated capitalism as a global project through
the development of new formal and informal mechanisms of international coordination.
Neoliberalism reinforced the material and ideological conditions for guaranteeing
‘national’ treatment for foreign capital in each social formation, and for
‘constitutionalizing’, by way of NAFTA, European Economic and Monetary Union and
the WTO, the free flow of goods and capital (the WTO was a broader version of GATT, but
with more teeth).[81] The American economy’s
unique access to global savings through the central place of Wall Street within global
money markets allowed it to import freely without compromising other objectives. This
eventually brought to the American state the role, not necessarily intended, of
‘importer of last resort’ that limited the impact of slowdowns elsewhere, while
also reinforcing foreign investors’ and foreign exporters’ dependence on
American markets and state policies. The Federal Reserve, though allegedly concerned only
with domestic policies, kept a steady eye on the international context. And the Treasury,
whose relative standing within the state had varied throughout the post-war era,
increasingly took on the role of global macro-economic manager through the 1980s and
1990s, thereby enhancing its status at the top of the hierarchy of US state apparatuses.[82]
The G-7 emerged as a forum
for Ministers of Finance and Treasury officials to discuss global developments, forge
consensus on issues and direction, and address in a concrete and controlled way any
necessary exchange rate adjustments. The US allowed the Bank for International Settlements
to re-emerge as major international coordinating agency, in the context of the greater
role being played by increasingly ‘independent’ central bankers, to improve
capital adequacy standards within banking systems. The IMF and the World Bank were also
restructured. The IMF shifted from the ‘adjustment’ of balance of payments
problems to addressing structural economic crises in third world countries (along the
lines first imposed on Britain in 1976), and increasingly became the vehicle for imposing
a type of conditionality, in exchange for loans, that incorporated global capital’s
concerns. The World Bank supported this, although by the 1990’s, it also focused its
attention on capitalist state-building --
what it called ‘effective states’.[83] The reconstitution of the
American empire in this remarkably successful fashion through the last decades of the
twentieth century did not mean that global capitalism had reached a new plateau of
stability. Indeed it may be said that dynamic instability and contingency are
systematically incorporated into the reconstituted form of empire, in good part because
the intensified competition characteristic of neoliberalism and the hyper-mobility
of financial liberalization aggravate the uneven development and extreme volatility
inherent in the global order. Moreover, this instability is dramatically amplified by the
fact that the American state can only rule this order through other states, and turning
them all into ‘effective’ states for global capitalism is no easy matter. It is
the attempt by the American state to address these problems, especially vis-ŕ-vis what it
calls ‘rogue states in the ‘third world’, that leads American imperialism
today to present itself in an increasingly unconcealed manner. BEYOND INTER-IMPERIAL RIVALRY We cannot understand
imperialism today in terms of the unresolved crisis of the 1970s, with overaccumulation
and excess competition giving rise again to inter-imperial rivalry. The differences begin
with the fact that while the earlier period was characterized by the relative economic
strength of Europe and Japan, the current moment underlines their relative weakness.
Concern with the American trade deficit seems to overlap both periods, but the context and
content of that concern has radically changed. Earlier, the American deficit was just
emerging, was generally seen as unsustainable even in the short run, and was characterized
by foreign central bankers as exporting American inflation abroad. Today, the global
economy has not only come to live with American trade deficits for a period approaching a
quarter of a century, but global stability has come to depend on these deficits and it is
the passage to their ‘correction’ that is the threat -- this time a deflationary
threat. In the earlier period, global financial markets were just emerging; the issue this
raised at the time was their impact in undermining existing forms of national and
international macro-management, including the international role of the American dollar.
The consequent explosive development of financial markets has resulted in financial
structures and flows that have now, however, made ‘finance’ itself a focal point
of global macro-management -- whether it
be enforcing the discipline of accumulation, reallocating capital across sectors and
regions, providing the investor/consumer credit to sustain even the modest levels of
growth that have occurred, or supporting the capacity of the US economy to attract the
global savings essential to reproducing the American empire. In this context, the extent of the theoretically unselfconscious use of the term ‘rivalry’ to label the economic competition between the EU, Japan (or East Asia more broadly) and the United States is remarkable. The distinctive meaning the concept had in the pre-World War I context, when economic competition among European states was indeed imbricated with comparable military capacities and Lenin could assert that ‘imperialist wars are absolutely inevitable’, |