By RICHARD D.WOLFF*
Contemporary social changes within and outside the empire can reinforce, slow or reverse decline. However, when leaders deny its existence, this can accelerate the process.
The evidence suggests that empires often respond to periods of decline by overextending their coping mechanisms. Military actions, infrastructure problems, and welfare demands may then combine or conflict. Costs and backlash effects accumulate that the declining empire cannot manage. Policies intended to strengthen the empire—and this has happened in history—now undermine it.
Contemporary social changes within and outside the empire can reinforce, slow, or reverse decline. However, when leaders deny its existence, this can accelerate the process. In the early years of empires, leaders and followers may repress those among them who emphasize or even dare to mention decline. Social problems may also be denied and/or minimized; if acknowledged, they may be blamed on convenient scapegoats—immigrants, foreign powers, or ethnic minorities—rather than being associated with imperial decline.
The U.S. empire, boldly proclaimed by the Monroe Doctrine following two successful wars of independence against Britain, grew throughout the 1945th and 2010th centuries, peaking during the decades between XNUMX and XNUMX. The rise of the U.S. empire coincided with the decline of the British empire. The Soviet Union posed limited political and military challenges, never becoming a serious economic competitor or threat.
The Cold War was a lopsided contest whose outcome was preordained from the beginning. All potential competitors or economic threats to the U.S. empire were devastated by World War II. In the years that followed, Europe lost its colonies. The unique global position of the United States at that time, with its disproportionate share of world trade and investment, was anomalous and probably unsustainable. A denial at a time when decline was almost certain has now turned into denial at a time when decline is well underway.
The United States failed to prevail militarily over Korea in its 1950-53 war. The United States lost subsequent wars in Vietnam, Afghanistan, and Iraq. The NATO alliance was insufficient to change any of these outcomes. US military and financial support for Ukraine and the massive US-NATO sanctions war against Russia have proven to be failures to date and will likely remain so. US sanctions programs against Cuba, Iran, and China have also failed. Meanwhile, the BRICS alliance is increasingly counteracting US policies to protect its empire, including its sanctions war.
In the areas of trade, investment and finance, the decline of the US empire can be measured in different ways. One measure is the decline of the US dollar as a reserve for other countries' central banks. Another measure is the decline in trade, lending and investment volumes.
Consider, then, the decline of the US dollar alongside dollar-denominated assets as an internationally desirable means of holding wealth. Across the Global South, countries, industries or companies seeking trade, loans or investments used to go to London, Washington or Paris for decades; they now have other options. Instead, they can go to Beijing, New Delhi or Moscow, where they often secure more attractive terms.
Empire confers special advantages that translate into extraordinary profits for companies located in the dominated countries. The nineteenth century was notable for its endless clashes and struggles between empires competing for territory to dominate and thus for the highest profits from their industries. The decline of any empire can increase the opportunities for competing empires. If the latter seizes these opportunities, the decline of the former can worsen. One set of competing empires provoked two world wars in the last century. Another set seems increasingly motivated to deliver worse world wars, possibly nuclear ones, this century.
Before World War I, theories circulated about the evolution of multinational corporations; that megacorporations would cease to be merely national—and that this would reduce the risk of further war. Owners and directors of increasingly global corporations would work against war between countries as a logical extension of their profit-maximizing strategies. The two world wars of the century undermined the plausibility of these theories.
So too did the fact that multinational megacorporations increasingly bought up governments and subordinated state policies to those corporations’ competing growth strategies. Capitalist competition governed state policies at least as much as the other way around. From their interaction emerged the twenty-first-century wars in Afghanistan, Iraq, Syria, Ukraine, and Gaza. Likewise, from their interaction emerged rising tensions between the US and China over Taiwan and the South China Sea.
China presents a unique analytical problem. The private capitalist half of its hybrid economic system exhibits growth imperatives parallel to those of purely capitalist economies. However, the state-owned enterprises that make up the other half of China’s economy exhibit different drives and motivations.
Profit is less important here than it is for private capitalist companies. Similarly, the Communist Party’s dominance over the state—including state regulation of the entire Chinese economy—introduces other goals than profit. And these also come to govern business decisions. As China and its main economic allies now form the BRICS, this association now competes with the declining US empire and its main economic allies (G7). China’s uniqueness may produce a different outcome compared to previous imperialist confrontations.
In the past, one empire has often supplanted another; hence the American, British, and so on. This may be our future if this century becomes “Chinese.” However, China has historically stood as an imperial power, but that came and went; it is a unique brand. Can China’s past and its current hybrid economy influence China to move away from becoming just another empire and instead become a genuinely multipolar global organization? Can the dreams and hopes behind the League of Nations and the United Nations become reality if and when China makes this happen? Will China become the next global hegemon against intensified resistance from the United States? Would this increase the risk of nuclear war?
A rough historical parallel may shed some additional light from a different angle on the rise and decline of empires, showing where it might lead us. The move towards independence of its North American colony angered Britain enough to wage two wars (1775–83 and 1812–15) to prevent it. Both wars failed. Britain learned the valuable lesson that peaceful coexistence with some planning and accommodation would allow both economies to function and grow, including trade and investment in both directions across their borders. This peaceful coexistence extended to allow the imperial reach of one to give way to that of the other.
Why can’t you suggest a similar trajectory for US-China relations in the next generation? Barring ideologues out of touch with reality, the world would prefer that to the nuclear alternative. Addressing the two massive and unintended consequences of capitalism—climate change and unequal distributions of wealth and income—offers blueprints for a US-China partnership that the world at large would applaud. Capitalism changed dramatically in Britain and the United States after 1815. It will probably do so again after 2025. There are indeed attractive opportunities open to it. Will they be seized?
*Richard D. Wolff is an economist. He founded the Democracy at Work portal. Author of, among other books, Capitalism's crisis deepens (Haymarket).
Translation: Eleutério FS Prado.
Originally published on the portal counter punch.
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