GLOBAL CAPITALISM AND AMERICAN EMPIRE

LEO PANITCH SAM GINDIN This is the first draft for the lead essay in The New Imperial Challenge: The Socialist Register 2004, L. Panitch and C.Leys eds, forthcoming October 2003. ‘American imperialism… has been made plausible and attractive in part by the insistence that it is not imperialistic.’ Harold Innis, 19481

1. The American empire is no longer the world and doing so in the American concealed. In March 1999 the cover of the interest.’2 Of course, even before it was Sunday New York Times Magazine taken up by the American newspaper of displayed a giant clenched fist painted in record, the American state’s own the stars and stripes of the US flag above geopolitical strategists had already taken the words: ‘What The World Needs Now: this tack. Among those closest to the For globalization to work, America can’t Democratic Party wing of the state under be afraid to act like the almighty the Clinton Presidency, Zbigniev superpower that it is’. Thus was featured Brzezinski did not mince any words in his Thomas Friedman’s ‘Manifesto for a Fast 1997 book, The Grand Chessboard: World’, which urged the United States to American Primacy and Its Geostrategic embrace its role as enforcer of the Imperatives, in asserting that ‘the three capitalist global order: ‘…the hidden great imperatives of geo-political strategy hand of the market will never work are to prevent collusion and maintain without a hidden fist…. The hidden fist security dependence amongst the vassals, that keeps the world safe for Silicon to keep tributaries pliant, and to keep the Valley’s technologies is called the United barbarians from coming together.’3 In the States Army, Air Force, Navy and Marine same year, the Republican wing’s Core.’ Four years later, in January 2003, intellectuals, who eventually would write when there was no longer any point in the Bush White House’s National pretending the fist was hidden, the words Security Strategy, founded The Project ‘The American Empire: Get Used It ’ for a New American Century with the took up the whole cover of the Magazine goal of making imperial statecraft the to feature an essay by Michael Ignatieff: explicit guiding principle of American ‘…[W]hat word but ‘empire describes the policy.4 awesome thing that America is 2. Most of what passes for serious becoming? …Being an imperial power… analysis in justifying the use of the term means enforcing such order as there is in ‘American empire’ is what might be

GLOBAL CAPITALISM AND AMERICAN EMPIRE.. 1 called theory by analogy, implicitly or imperialism was the extent to which the explicitly harkening back to imperial words that opened Kautsky’s infamous Rome.5 But analogy, of course, does not essay in 1914 — the one that so attracted constitute theory. The neglect of any Lenin’s ire - increasingly rang true: ‘First serious political economy or pattern of of all, we need to be clear what we historical determination that would understand from the term imperialism. explain the emergence and reproduction This word is used in every which way, of today’s American empire, and the but the more we discuss and speak about absence of the dimensions of structural it the more communication and oppression and exploitation pertaining to understanding becomes weakened.’8 it, serve as poignant reminders of why it 3. The confusion was apparent in debates was Marxism that made the running in in the early 1970s — the last time the theorizing imperialism for most of the concept had much currency on the left - 20th century. Saying this, however, over the location of contemporary immediately raises anew the question a capitalism’s contradictions. There were leading Indian Marxist posed to the left a those who focused almost exclusively on decade ago. Prabhat Patnaik’s 1990 essay the ‘third world’, and made its resistance ‘Whatever Happened to Imperialism?’ to imperialism bear all the weight as the lamented that ‘Marxists look bemused source of transformation.9 Others when the term is mentioned’ and that ‘the emphasized increasing contradictions topic has virtually disappeared from the within the developed capitalist world, pages of Marxist journals.’ The costs of fostering the impression that American this were severe for the left. The concept ‘hegemony’ was in decline. This became of imperialism has always been especially the prevalent view, and the notion that important for the left as much for its ‘the erosion of American economic, emotive and mobilizing qualities as for its political, and military power is analytic ones. Indeed, in Patnaik’s view, unmistakable’ grew into a commonplace the silence over imperialism had little to by the mid-1980s.10 Even so, it was do with the analysis itself; rather than ‘a notable that very few went back to the old theoretically self-conscious silence’, it Marxist theory of inter-imperial rivalry in was the ‘very fact that imperialism has this context, since despite increased become so adept at “managing” potential economic competition from Japan and challenges to its hegemony [that] made us Germany, it was recognized that ‘things indifferent to its ubiquitous presence.’6 are a long way from a military trial of Yet the left’s silence on imperialism did strength’, as Glyn and Sutcliffe put it. All also reflect severe analytic problems in it was ‘safe to predict’ was that without a the old Marxist theory of imperialism. As hegemonic power ‘the world economy Giovanni Arrighi had argued in 1978: will continue without a clear leader....’11 ‘[B]y the end of the 60s, what had once Meanwhile, the widespread notion that been the pride of Marxism — the theory the power of the nation state had withered of imperialism — had become a tower of away in the era of globalization added to Babel, in which not even Marxists knew the confusion. Against this, there were any longer how to find their way.’7 What very few who had the temerity by the in good part lay behind the left’s mid-1990s to say, as did Peter Gowan in disenchantment with the concept of concluding his analysis of the West’s

GLOBAL CAPITALISM AND AMERICAN EMPIRE.. 2 imposition of neoliberal shock therapy in inter-imperial rivalry by understanding Eastern Europe: ‘…this does not so much how it came to pass that the American suggest a new era on the globe as empire incorporated its capitalist rivals, something rather old—fashioned which, and how this was related to the in the days of Communism, used to be establishment of a truly global capitalism. called imperialism.’12 Central to this project must be the 4. There was indeed no little irony in the questions of wherein the plausibility of fact that so many on the left continued to the American state’s insistence that it was turn away from what they thought was an not imperialistic historically derived, and old-fashioned notion, just while the how this was put into practice and ground was being laid for its current institutionalized. And no less central, in renewed fashionability in the New York the current conjuncture, must be the Times. At the end of the 1980s, Susan questions of under what conditions the Strange, in a little-noticed academic American state’s insistence that it is not essay, stood almost alone in pointing imperialistic become implausible, and ‘Towards a Theory of Transnational indeed jettisoned, and what implications Empire’ with Washington D.C. at its this has for its no longer being attractive. centre. Yet the understanding of 5. There is a structural logic to capitalism ‘American structural power’ she called that tends to its globalization. This was for was not only cast in non-Marxist famously captured in Marx’s description analytic terms but was explicitly oriented in the Communist Manifesto of a future to breaking ‘with the presumption of most that stunningly matches our present: ‘The writers on imperialism that imperialism is need of a constantly expanding market for undesirable’, and to advancing the goal of its products chases the bourgeoisie over making the America state live up to its the whole surface of the globe. It must responsibilities as a global empire.13 To nestle everywhere, settle everywhere, be sure, soon after the turn of the century, establish connections everywhere. . . it with the American state’s own avowal of creates a world after its own image.’ But its imperial role, the term was back on affirming Marx’s prescience in this every leftist’s lips. The popularity of respect runs the risk of treating what we Hardt and Negri’s tome, Empire, reflected now call globalization and its specific the new conjuncture. Their post- forms as inevitable and irreversible. It modernist Marxist case that historical must be remembered that Marx’s words materialism needed to be revived on the also seemed to apply at the end of the 19th basis of an entirely different theory of century, when, as Karl Polanyi noted, imperialism than the old one was by no ‘[o]nly a madman would have doubted means uninsightful, but their bizarre that the international economic system insistence that ‘the United States does was the axis of the material existence of not, and indeed no nation state can today, the human race’.15 Yet, as Polanyi was form the center of an imperialist project’ concerned to explain, far from continuing soon turned out to itself be out sync with uninterrupted, there were already the times.14 For what is above all needed indications that the existing system of now is a new historical materialist global accumulation was in the early theorization of imperialism that precisely stages of its dissolution, and soon allows us to transcend the old theory of thereafter it in fact collapsed by way of

GLOBAL CAPITALISM AND AMERICAN EMPIRE.. 3 events intimately related to its own distinguish between the structural logic of dynamic — two horrific world wars and capitalism and its actual history. A global the implosion of the Great Depression. capitalist order is always a contingent 6. The postwar reconstruction of the social construct: the actual development capitalist world order was a direct and continuity of such an order must be response on the part of the leading problematized. A historical materialist capitalist states to that earlier failure of understanding of modern imperialism globalization. Through the Bretton must escape, first of all, from the Woods infrastructure for a new liberal tendency within Marxism, as in much trading order established under the aegis bourgeois theory, to write theory in the of the American state in 1945, the present tense. We must not theorize structural logic of capitalist globalization history in such a way that the trajectory of was once again unleashed. During the capitalism is merely read out of abstract brief post-war ‘golden age’ — through economic laws, leading to the true but the acceleration of trade, the new degree trite observation that ‘globalization is not of direct foreign investment, and the a new process.’ Rather, as Philip growing internationalization of finance — McMichael has put it so well, we need to capitalist globalization was revived. But it ‘historicize theory and problematize was only fully realized through the globalization as a relation immanent in neoliberal response to the economic crisis capitalism, but with quite distinct material of the 1970s. The outcome of this crisis (social, political and environmental) showed that the particular role of relations across time and time-space. In structural crises in the process of this formulation globalization assumes international accumulation is not specific historical forms…Globalization predictable a priori. Of the three great is not simply the unfolding of capitalist structural crises of capitalism, the first tendencies but a historically distinct (post-1870s) accelerated inter-imperialist project shaped, or complicated, by the rivalry and led to World War One and contradictory relations of previous revolution, while the second crisis (the episodes of globalization.’16 Great Depression) actually reversed 8. The realization - or frustration - of Comment: What is link.? Is it capitalism’s internationalizing trajectory. capitalism’s globalizing tendencies because its historical? Yet the crisis of the early 1970’s, in cannot be understood apart from the contrast with these earlier outcomes, states that have historically constituted resulted in a deepening and acceleration the capitalist world. Whether one sides of capitalist globalization for the rest of with those who stress the role of the century. European absolutist monarchs, merchants 7. What this meandering path from 19th to and conquistadores in the origins of 21st century globalization suggests is that capitalism, or with those who insist on a sustainable international capitalist order locating its roots in the emergent property is neither inevitable (as was relations within one or more corners of conventionally assumed in the latter Europe itself, the rise of capitalism is nineteenth century as well as today) nor inconceivable without the role that states impossible to sustain (as Lenin and came to play in establishing the legal and Polanyi, in their different ways, infrastructural frameworks for property, contended). The point is that we need to contract, currency, competition and wage-

GLOBAL CAPITALISM AND AMERICAN EMPIRE.. 4 labour that constitute a capitalist market capitalism as a mode of production. The and social order. By the mid to late 19th classical early 20th theorists of century, when capital expanded beyond imperialism were not only wrong in the borders of the nation-states that had overstating the scale of the export of been constituted in Europe, it either was goods and capital to the third world — hosted in the capitalist orders that had the latter’s very underdevelopment been (or were then just becoming) limited this — but they were especially established by those other states or unable to appreciate key developments in expanded within a framework of formal the leading capitalist countries. Rather or informal empire that met these than an exhaustion of consumption conditions. But more than this was possibilities within the leading capitalist needed to sustain capital’s tendency to countries, capitalism was then global expansion. The inability at the time characterized by emergent working class to develop adequate means of global formations able to achieve increasing capitalist regulation left the international levels of private and public consumption. economy and its patterns of accumulation Rather than the concentration of capital fragmented, thereby fueling the inter- (‘finance capital’ or ‘monopoly capital’) imperial rivalry that led to World War limiting the introduction of new products One. and investment opportunities, the very 9. The classical theories of imperialism unevenness of on-going competition and developed at the time, from Hobson to technological development was Lenin, were founded on a theorization of introducing new prospects for internal capitalist crises. This was a fundamental accumulation (i.e. the deepening of mistake, which has, ever since, continued capital at home, not only its spreading to plague proper understanding.17 The abroad). Far from being the highest stage classical theories were defective in their of capitalism, what these theorists were treatment of the dynamics of capital observing was (as is now obvious) a accumulation, and in their elevation of a relatively early stage of capitalism. This conjunctural moment of inter-imperial was so not just in terms of consumption rivalry to an immutable law of capitalist patterns, financial flows and competition, globalization. There is, to begin with, no but in terms of the limited degree of need for a theory of crisis to explain direct foreign investment at the time and capitalism’s expansionist tendencies the only rudimentary means developed taking imperial form. In the late 19th and for managing contradictions associated early 20th centuries, the very same with capitalism’s internationalization to competitive pressures and strategies, the this point. Unfortunately, many Marxists same opportunities and emerging continued to use the same kind of theory capacities that led individual units of of crisis to understand every manifestion capital to move beyond the local, pushed of imperialism over the subsequent and facilitated their proclivity for crossing century. borders. If capital looked to foreign 10. It was, however, in their reductionist markets or to the export of capital, it was and instrumental treatment of the state not so much the result of that these theorists were especially overaccumulation and underconsumption, defective. Capitalist imperialism needs to but the result of the normal functioning of be theorized as an extension of the theory

GLOBAL CAPITALISM AND AMERICAN EMPIRE.. 5 of the capitalist state, not of the theory of is a failure to appreciate the crucial role of crisis. Here too we need to begin by the state not only intervening against ‘free historicizing theory, beginning by markets’, but no less in making ‘free breaking with the conventional notion markets’ happen and work. Just as the that the emergence of the modern emergence of so-called ‘laissez faire’ imperialist state coincided with the stage under mid-19th century industrial of industrial concentration and capitalism involved a highly active state financialization associated with turn-of- to effect the formal separation of the the-century ‘finance capital’. In fact, the polity and economy and to define, transition to the modern form of discipline and police the domestic social imperialism may be located in the British relations of a fully capitalist order, so did state’s articulation of its old mercantile the external policy of free trade entail an formal empire with the informal empire it extension of the imperial role of the state spawned during in the mid-19th century along all of these dimensions. during the era of ‘free trade’. Not only 12. As Gallagher and Robinson showed Schumpeter’s theory of imperialism 50 years ago in a seminal essay entitled (postulating that it reflected the atavistic ‘The Imperialism of Free Trade’, the presence within capitalism of pre- conventional notion that British free trade capitalist exploiting and warrior classes), and imperialism did not mix was belied but also Kautsky and Lenin’s not only by occupations and annexations, misconception that the mid-19th century the addition of new colonies, and British industrial capital and its policy of especially the importance of India to the free trade reflected a ‘pure’ capitalism Empire, between the 1840s and the that was antithetical or at least 1870s. It was belied even more by the ‘indifferent’ to imperial expansion immense extension, for both economic derived from a simplistic understanding and strategic reasons, of Britain’s of the separation of the economic from ‘informal empire’ via foreign investment, the political under capitalism. This bilateral trade and ‘friendship’ treaties, misconception lay at the root of the and gunboat diplomacy, so that notion that the succession of the era of ‘mercantilist techniques of formal empire free competition by that of finance capital were being employed in the mid- had once and for all superceded that Victorian age at the same time as separation, leading to imperialist informal techniques of free trade were expansion, rivarly and war among the being used in Latin America. It is for this leading capitalist states. reason that attempts to make phases of 11. The same confusing counterposition imperialism correspond directly to phases between states and ‘free markets’ in the economic growth of the attending contemporary discussions of metropolitan economy are likely to prove globalization in the context of neoliberal in vain…’18 Gallagher and Robinson’s ‘free market’ policies that have definition of imperialism was cast in succeeded Keynesian modes of state terms of a variable political function ‘of intervention also marked the classical integrating new regions into the accounts of the 19th century era of free expanding economy; its character is trade and its succession by the era of largely decided by the various and inter-imperial rivalry. In both cases there changing relationships between the

GLOBAL CAPITALISM AND AMERICAN EMPIRE.. 6 political and economic elements of the USA and Japan within the rubric of its expansion in any particular region and free trade imperialism. Various factors time.’ On this basis, they called for ‘re- determined this, including the limited fashioning the interpretations resulting capacities of the British state, pre- from defective concepts of organic capitalist social forces that did indeed constitutional empire on the one hand and remain important in some of the newly Hobsonian “imperialism” on the other’, emerging capitalist powers, nationalist so that the limits both of ‘the old, sentiments that accompanied the legalistic narrow idea of empire’ and of development of capitalist nation-states, informal empire as ‘separate, non- strategic considerations arising out of political category of expansion’ could be geo-political and military rivalries, as transcended. well as the increasing organization of 13. In other words, it is the politics as trade competition via modes of tariff- well as the economics of the informal regulation (that served as the main tax empire which we have to include in the base of these states as well as protective account... The type of political lien devices for nascent industrial between the expanding economy and its bourgeoisies and working classes). In formal and informal dependencies… has this context, the institutional apparatuses tended to vary with the economic value of of diplomacy and alliances, British naval the territory, the strength of its political supremacy and the Gold Standard were structure, the readiness of its rulers to too thin and fragile to even guarantee collaborate with British commercial and equal treatment of foreign capital with strategic purposes, the ability of the national capital within each state (the key native society to undergo economic prerequisite of capitalist globalization), change without external control, the let alone to mediate the conflicts and extent to which domestic and foreign manage the contradictions associated with political situations permitted British the development of global capitalism by intervention, and, finally, how far the late 19th century. European rivals allowed British policy a 15. Kautsky was right to perceive, free hand.19 however, that even if inter-imperial 14. This is not to say that there are not rivalry had led to war between the major important differences between informal capitalist powers at a particular moment and formal empire. Informal empire in history, this was not an inevitable requires that economic and cultural characteristic of capitalist globalization. penetration of other states be sustained by Having set out from a position in 1898 political and military coordination with quite similar to that later elaborated by formally independent governments. The Schumpeter, by 1914 Kautsky had main factor that determined the shift after accepted, via Hilferding’s Finance the 1880s to the extension of formal Capital, that ‘a brutal and violent’ form empires was not the inadequacy of of imperialist competition was ‘a product Britain’s relationship with its own of highly developed industrial informal empire, nor the emergence of capitalism.’20 What so incensed Lenin ‘finance capital’ per se, but rather was his view that all the major capitalist Britain’s inability to incorporate the new ruling classes, after ‘having learned the emerging capitalist powers of Germany, lesson of the world war’, might

GLOBAL CAPITALISM AND AMERICAN EMPIRE.. 7 eventually come to revive capitalist matter of teleology but of capitalist globalization through a collaborative history. ‘ultra-imperialism’ in the face of the 17. The role the US state came to play in increasing strength of an industrial this respect was not inevitable but nor proletariat that nevertheless still fell short was it merely accidental. The capacity it of the capacity to effect a socialist developed to ‘conjugate’ its ‘particular transformation. Had he put greater stress power with the general task of on his earlier perception in 1911 that ‘the coordination’ in a manner that reflected United States is the country that shows us ‘the particular matrix of its own social our social future in capitalism’,21 and history’, as Perry Anderson has recently discerned the capacity of the newly put it, was founded on ‘the attractive emerging informal American empire for power of US models of production and penetrating and coordinating the other culture… increasingly unified in the leading the capitalist powers, he would sphere of consumption [that came] to have been closer to the mark. But it could offer a single way of life.’ Coming hardly be yet clearly foreseen that, as a together here were the invention in biographer of Dean Acheson later aptly America of the modern corporate form, put it, ‘only the US had the power to grab ‘scientific management’ of the labour hold of history and make it conform.’22 process, and assembly-line mass 16. The central place the American state production on the one hand, and, on the has come to play in global capitalism other, Hollywood-style media forms of rests on a particular convergence of ‘narrative and visual schemas stripped to structure and history. In the abstract, we their most abstract’ appropriate to can identify specific institutions as appealing to and aggregating waves of reflecting the structural power of immigrants through the ‘recursive capitalism. But what needs to be common denominators… of dramatic explained is what blocks such institutions simplification and repetition’.23 The from emerging and what, if anything, dynamism of American capitalism and its opens the door to their development. The world-wide appeal combined with the crucial phase in the reconstruction of universalistic language of American global capitalism - after the earlier liberal democratic ideology to underpin a breakdowns and before the reconstitution capacity for informal empire far beyond that characterized the last quarter of the that of the 19th century British state. twentieth century — came during and 18. Yet it was not only the economic and after World War Two. It was only after cultural infrastructure of American (and as a state-learned response to) the capitalism, but also the American state’s disasters of Depression and the War that own construction that facilitated informal the conditions came to exist that allowed empire. Against Anderson’s impression for the realization of an American that the American state’s constitutional imperial project of putting capitalist structures lacked the ‘carrying power’ of globalization back on track. This its economic and cultural ones (by virtue depended, however, on the emergence of being ‘moored to eighteenth century and uneven historical evolution of a arrangements’) stands Thomas Jefferson’s unique institution acting as agency: the observation in 1809 that ‘no constitution American imperial state. This was not a was ever before as well-calculated for

GLOBAL CAPITALISM AND AMERICAN EMPIRE.. 8 extensive empire and self-government.’24 between ‘extended empire and self- Hardt and Negri were right to trace the government’ that Jefferson discerned as pre-figuration of what they call ‘Empire’ embedded in the federal constitution of today back to the American’s the American state. State rights were no constitution’s incorporation of mirage: they reflected the two different Madisonian ‘network power’. This types of social relations — slave and free entailed not only checks and balances - that composed each successive wave of within the state apparatus but the notion new states. This mode of territorial that the greater plurality of interests expansion not only determined the shape incorporated within an extensive and of the conflict that finally led to civil war, expansive state would guarantee that the the defeat of the plantocracy and the masses would have no common motive or dissolution of slavery, but thereafter was capacity to come together to check the the basis for the domination of an ruling class. Yet far from serving as the unfettered industrial capitalism with ‘the basis for the sort of decentred and crucial advantage of possessing the amorphous power that Hardt and Negri largest single domestic market in the imagine characterizes the USA world’, thereby obviating any temptation historically (and ‘Empire’ today), the towards formal imperialism via territorial constitutional framework of the new conquest abroad.26 The very American state gave great powers to the exceptionalism of this state, capable of central government to expand trade and combining extended internal empire with make war. As early as 1783, what George self-government through the course of the Washington already spoke of ambitiously 19th century, provided, as Anderson as ‘ a rising empire’ was captured in the affirms, Federalist Paper XI image of ‘one great 20. ‘the virtually perfect fit… between American system, superior in the control optimal geographical and optimal social of all transatlantic force or influence, and conditions for capitalist development. able to dictate the terms of connection That is: a continental scale of territory, between the new and old world.’25 resources and market, protected by two 19. The state which emerged out of the oceans, that no other nation-state comes alliance between Northern merchants and near to possessing; and a settler- commercial farmers and Southern immigrant population with virtually no plantation-owners against Britain’s pre-capitalist past, apart from its local formal empire evinced from its inhabitants, slaves and religious creeds, beginnings a trajectory to informal and bound only by the abstractions of a empire. Despite the initial form this took democratic ideology. Here are to be found through territorial expansion westward, all the requirements for spectacular largely through extermination of the economic growth, military power and native population, and despite blatant cultural penetration.’27 exploitation not only of the black slave 21. None of this could be abstracted from population but also debt-ridden the specific evolution of the American subsistence farmers, the fact that new state, especially as the outcome of the state could conceive itself as extending Civil War allowed for a full reconstitution republican liberty, and be widely admired of the relationship between both financial for it, was largely bound up with the link and industrial capital and the state so that

GLOBAL CAPITALISM AND AMERICAN EMPIRE.. 9 its political function could be inclined Singer Company establishing itself as the away from mercantilism towards first multinational corporation by jumping extended capitalist reproduction. Herein the Canadian tariff barrier to establish a lies the significance that Anderson subsidiary to produce and sell sewing himself attaches to the evolving juridical machines to prosperous Ontario wheat form of the American state, whereby farmers) that the American informal ‘unencumbered property rights, empire now took shape.30 As compared to untrammeled litigation, the invention of the Canadian model of integration into the corporation’ led to ‘what Polanyi the informal American imperium, the most feared, a juridical system establishment of colonies in Puerto Rico disembedding the market as far as and the Phillippines and the annexation of possible from ties of custom, tradition or Hawaii ‘was a deviation … from the solidarity, whose very abstraction from typical economic, political and them later proved - American firms like ideological forms of domination already American films — exportable and characteristic of American imperialism.’31 reproducible across the world, in a way 23. The broader ideological articulation that no other competitor could quite of American military intervention, as match. The steady transformation of famously expressed in 1904 by Teddy international merchant law and arbitration Roosevelt, presented itself in terms of the in conformity with US standards is exercise of ‘international police power’, witness to the process.’28 in the absence of other means of 22. The expansionist tendencies of international control, to the end of American capitalism in the latter half of establishing regimes that know ‘how to the 19th century (reflecting pressures that act with reasonable efficiency and emanated as much from domestic decency in social and political matters’ commercial farmers as from the and to ensure each such regime ‘keeps industrialists and financiers of the post- order and pays its obligations’: “[A] civil war era) were even more inclined to nation desirous both of securing respect take informal imperial forms, even for itself and of doing good to others without a policy of free trade, than had [Roosevelt declared, in words that have British capitalism. But the modalities now been made very familiar again] must were similar, and they began long before have a force adequate for the work which the Spanish-American War of 1898, it feels is allotted to it as its part of the which is usually dated as the start of general world duty… A great free people American external imperial expansion. owes to itself and to all mankind not to This was amply documented in a paper sink into helplessness before the powers boldly called ‘An Indicator of Informal of evil.’32 The American state’s genius for Empire’ prepared for the Center of Naval presenting its informal empire in terms of Analysis: the US Navy made no less than the framework of universal rights reached 5,980 ports of call to protect American its apogee under Woodrow Wilson. It also commercial shipping in Argentina, Brazil reached, with his Presidency, the apogee Chile, Nicaragua, Panama, Columbia and of hypocricy, especially at the Paris Peace elsewhere in Latin America between 1869 Conference, where Keynes concluded and 1897.29 But it was through American Wilson was ‘the greatest fraud on foreign investment (epitomized by the earth’.33 Indeed, it was not only

GLOBAL CAPITALISM AND AMERICAN EMPIRE.. 10 Congress’s isolationist tendencies, but the densest imperial networks and incapacity of the American Treasury and institutional linkages, which had earlier Presidency to take responsibility for run north-south between imperial states leading European reconstruction after and their formal or informal colonies, World War One that determined Keynes’s now came to run between the U.S. and judgment. the other rich capitalist states. What 24. It was only during the course of the Britain’s informal empire has been unable New Deal, amidst a collapse of global to in the 19th century now was capitalism to which the American state’s accomplished by the American, previous imperial policies had no little integrating all the other capitalist powers contributed, that the administrative and into an effective system of coordination ideological capacity was developed to under its aegis. The devastation of the transform and vastly extend America’s European and Japanese economies, the informal imperialism. But for the weak political legitimacy of their ruling American state to assume explicit classes at the war’s end, the U.S. military responsibility for the relaunching of occupation and subsequent subordination capitalist globalization, also crucially of its important rival capitalist centers - important was the pattern of wartime all this created a historically statebuilding — during the course of unprecedented opportunity which the which ‘the leverage of corporate American state was now ready and executives from industry and finance’ willing to exploit. inside the state operated to shift ‘U.S. 26. Most important here was the immense state capacities towards realizing attention the Treasury and State internationally-interventionist goals department paid during the war to versus domestically-interventionist planning for relaunching a coordinated ones’.34 And, as we shall see, it was the liberal trading regime and a rule-based subsequent evolution of the American financial order via manipulating its main state through the crisis of the 1970s that allies’ debtor status, the complete eventually made global capitalism a domination of the dollar as world reality. currency and the fact the 50% of world 25. The relationship between capitalism production was now accounted for by the and imperialism took on new shape after U.S. economy. The American state had World War Two. The American state’s studied and learned well from the lesson interaction with the dynamics of of its post-World War One incapacity to production and finance allowed for the combine liberal internationalist rhetoric penetration of other states at a time when with an actual institutional commitment the revival of capitalism’s globalizing to manage an international capitalist order tendencies took place through the outside its own hemisphere. Through the reconstruction of the states at the core of very intricate joint planning by the British the old inter-imperial rivalry alongside and American Treasuries during the war (and indeed leading to) the multiplication — i.e. through the very process of making of new states. Among the various Bretton Woods happen — the latter made dimensions of this new relationship it explicitly clear that the former not only between capitalism and imperialism, the ‘were accepting some obligation to most striking and important was that the modify their domestic policy in light of

GLOBAL CAPITALISM AND AMERICAN EMPIRE.. 11 its international effects on stability’, but no power whatever to implement their were ensuring the liquidation of the promises.”’ The Bretton Woods British Empire by ‘throwing Britain into conference ended with Keynes’s tribute to the arms of America as a supplicant, and a process in which 44 countries ‘had been therefore subordinate; a subordination learning to work together so that “the masked by the illusion of a “special brotherhood of man will become more relationship” which continues to this than a phrase.” The delegates applauded day’.35 wildly. “The Star Spangled Banner” was 27. But it was by no means only the cache played’.36 of dollars at its disposal that was 28. With the IMF and World Bank operative here, nor was Britain the only headquarters established at American object of America’s new informal empire. insistence in Washington, D.C., a pattern The Bretton Woods conference confirmed was set for international economic as nothing else had yet done the immense management among all the leading managerial capacity the American state capitalist countries that also continues to had developed. The Commission this day, one in which even when it is responsible for establishing the IMF was European or Japanese finance ministries chaired and tightly controlled by Harry and central banks who propose, it the US Dexter White for the American Treasury, Treasury and Federal Reserve that but even under Keynes’s Chairmanship of dispose. The dense institutional linkages the Commission responsible for planning that bound these states to the American what eventually became the World Bank, empire were institutionalized, of course, and with the various committees under not only through the institutions of him also chaired by non-Americans, ‘they Bretton Woods, but also those of Nato, had American rapporteurs and secretaries, not to mention the hub-and-spokes appointed and briefed by White’ who networks binding each of the other arranged for ‘a conference journal to be leading capitalist states to the intelligence produced every day to keep everyone and security apparatuses of the U.S. as informed of the main decisions. He also part of the strategy of containment of arranged daily press briefings, at which Communism during the Cold War. he displayed great charm.’ At his disposal However, most of those who stress the were ‘the mass of stenographers working American state’s linkages with the day and night [and] the boy scouts acting coercive apparatuses of Europe and as pages and distributors of papers’ — all Japan, as conceived for instance in terms written in a ‘legal language which made of what Martin Shaw calls the ‘Western everything difficult to understand Bloc State’ (tending to become a ‘Global [amidst] the great variety of unintelligible Western State’ with the collapse of the tongues’. This was the ‘controlled USSR)37, fail to appreciate how far the Bedlam’ the American Treasury ‘wanted American ‘Protectorate System’, as Peter [to] make easier the imposition of a fait Gowan names it, actually ‘altered the accompli.’ It was in this context that character of the capitalist core.’ For it every delegation finally decided ‘it was entailed, as he puts it, the ‘internal better to run with the US Treasury than its transformation of social relations within disgruntled critics, “who” [as Keynes put the protectorates in the direction of the it] “do not know their own mind and have American “fordist” system of

GLOBAL CAPITALISM AND AMERICAN EMPIRE.. 12 accumulation [that] opened up the 30. This rule, not only in the advanced possibility of a vast extension of their capitalist world but also in those regions internal markets, with the working class of the third world where it held sway, was not only as source of expanded surplus characterized by the penetration of value but also an increasingly important borders, not the dissolution of them. It consumption centre for realizing surplus was not through the territorial expansion value.’38 of formal empire, but rather through the 29. But while permitting the other core reconstitution of states as cohesive and states to act as ‘autonomous organizing integral elements of an informal centres of capital accumulation’, the American empire that global capitalist emulation of US technological and order was organized and regulated. managerial ‘fordist’ forms (initially Nation states remained the primary organized and channeled through the vehicles through which (a) the social post-war joint ‘productivity councils’) relations and institutions of class, was massively reinforced by the property, currency, contract and markets penetration of these states by American were established and reproduced; and (b) foreign direct investment. Here too, the the international accumulation of capital core of the American imperial network was carried out. The vast expansion of shifted away from north-south linkages direct foreign investment worldwide, towards the advanced capitalist core, so whatever the shifting regional shares of much so that Latin America’s share of the total, far from meaning that capital total American FDI fell from 40 to 20 escaped the state, expanded its percent between 1950 and 1970, while dependence on many states. At the same Western Europe’s more than doubled to time, capital as an effective social force match the Canadian share of 30 percent. It within any given state now included both was hardly surprising in this context that foreign capital and domestic capital with sober students of the American informal international linkages and ambitions. empire from both Weberian and Marxist Their interpenetration made the notion of perspectives such as Raymond Aron and a distinct national bourgeoisie (at least Nicos Poulantzas saw in Europe a outside of the American social formation) tendential ‘Canadianization’, bespeaking largely an anachronism. the ‘limited but exemplary instance of the 31. A further dimension of the new relationship between the U.S.A. and relationship between capitalism and Canada’ as the model form of integration empire was that the actual historical into that empire.39 None of this meant of evolution of globalization in this context course that the old north-south dimension entailed not ‘the constitution of a supra- of imperialism became unimportant. But national state or super-state… [as if] what it did mean, as with Canada’s place of was involved was internationalization privilege as a white and rich dependency, within a framework of externally first in the British and then in the juxtaposed states and capitals’, but rather American empire, that the other core the internationalization of the state.40 capitalist countries’ relationships with the This needs to be specifically understood third world, including with their growing in terms of any given state’s degree of number of ex-colonies, were imbricated internalization of the responsibility to with American informal imperial rule. manage its domestic capitalist order in

GLOBAL CAPITALISM AND AMERICAN EMPIRE.. 13 way that contributes to managing global its own responsibility the incorporation of capitalist order. For the American the needs of the subordinate classes of imperial state, however, the other states within its own construction of internationalization of the state had a informal imperial rule. This dimension of special quality. It entailed defining the the new imperial order, as we shall see American national interest in terms of later, is proving to have particularly acting not only on behalf of its own important consequences in the current capitalist class but also on behalf of the conjuncture. extension and reproduction of global 33. This pattern of imperial rule was capitalism. The determination of what founded in the post-war period of this required continued to reflect the reconstruction, a period that, for all of the particularity of the American state and economic dynamism of ‘the golden age’ social formation, but it was increasingly was inherently transitional. The very inflected towards President Truman’s notion of ‘reconstruction’ posed the declaration in 1947 that ‘the American question of what might follow once the system could survive in America only if it European and Japanese economies were becomes a world system.’41 This was rebuilt and became competitive with the encapsulated in the National Security American, and the benign circumstances Council document NSC-68 of 1950 which of the post-war years — so central to one defined the goal of constructing a ‘world of the most impressive periods of growth environment in which the American in world history - were exhausted.43 system can survive and flourish… Even if Moreover, rising economic nationalism in there were no Soviet Union we would the third world (in the wake of the face the great problem… [that] the decolonization from the old empires that absence of order among nations is the American state generally encouraged) becoming less and less tolerable.’42 and rising working class militancy in the 32. Yet the new integral relationship that core capitalist countries (under conditions developed between American empire and of near full-employment) were bound to global capitalism could not be reduced to have an impact on capital’s profits. a one-way (let alone solely coercive) 34. In less than a generation, the imposition. The relationship was often contradictions inherent in the Bretton more properly characterized by the phrase Woods agreement were exposed. By the ‘imperialism by invitation’. But while this time European currencies became fully often meant the active consent of the convertible in 1958, almost all the citizenry of a country, the notion of US premises of the 1944 agreement were state (as opposed to cultural or economic) already in question. The stable exchange hegemony only adequately captured the rates established by that agreement relationship that developed among states depended on the capital controls that all and ruling classes. Active mass consent to countries except for the U.S. maintained even informal imperial rule was always after the war. (The interwar collapse of mediated by the legitimacy that each state the gold standard had demonstrated that integrated within the American imperium capital mobility and democratic pressures could retain for itself and muster for any from below, which limited any particular American state project; just as ‘automatic’ adjustment process, were the American state itself did not take as incompatible with stable exchange rates.)

GLOBAL CAPITALISM AND AMERICAN EMPIRE.. 14 Yet the very internationalization of trade beyond the growing dependence of and direct foreign investment that Bretton Europe and Japan on American markets, Woods promoted (along with domestic the crucial factor in cementing the new developments in mortgages, credit, imperial bond was the growing centrality competition, and innovation within the of American direct investment as the United States that strengthened the form taken by capital export and capacity of the financial sector) international integration. American contributed to the restoration of a global corporations were evolving into the hubs financial market, the corresponding of increasingly dense host-country and erosion of capital controls, and the cross-border networks amongst suppliers, vulnerability of fixed exchange rates.44 financiers, and final markets (the 35. Possibilities of a return to the importance of free trade itself was greatly international economic fragmentation and enhanced as part of securing the tighter collapse of the interwar period were international networks of production). widely discussed in the early sixties as the Even where the initial response to the American economy went from creditor to growth of such investment was hostile, debtor status; the dollar moved from a this generally gave way to competition to currency in desperately short supply to attract that investment, and then one in surplus; and the gold standard emulation to meet ‘the American behind the dollar, which had been challenge’ through counter-investments in embedded in Bretton Woods, crumbled.45 the United States. Yet the past was not replayed. American 37. Unlike trade, which involves cross- dominance, never fundamentally border exchanges, this penetration of the challenged, would come to be reorganized social formations of host countries on a new basis, and international directly affected domestic class structures integration was not rolled back but and state formation.46 Tensions and intensified. This reconstitution of the alliances that emerged within domestic global order, like earlier developments capitalist classes could consequently no within global capitalism, was not longer be understood in only ‘national’ inevitable. What made it possible ⎯what terms. German auto companies, for provided the American state the time and example, joined with (if not followed) political space to renew its global American auto companies in wanting ambitions ⎯was that by the time of the European-wide markets; they shared crisis of the early seventies, American mutual concerns with the American ideological and material companies inside Germany over the cost penetration/integration of Europe and of European steel; they had reason to be Japan was sufficiently pervasive to wary of policies that discriminated in foreclose any considerations of their favour of European companies but might, retreating from the international economy as a consequence, compromise the or of posing, from within it, any treatment of their own growing focus on fundamental challenge to the leadership markets and investments in the United role of the American state. States; and if instability in Latin America 36. Beyond the United States having or other ‘trouble spots’ threatened their established itself as the military own international investments, they protectorate of Europe and Japan, and looked primarily to the American rather

GLOBAL CAPITALISM AND AMERICAN EMPIRE.. 15 than their own government to defend their their nation states had come to accept a capital. responsibility for creating the internal 38. With American capital a social force conditions for sustained international within each European country and with accumulation. The real tendencies at work national capital developing parallel out of the crisis of the 1970’s were ‘the ambitions to get within the American internalized transformations of the state, domestic capital tended, as national state itself, aimed at taking Poulantzas understood, to be charge of the internationalization of ‘disarticulated’ as a coherent and public functions on capital’s behalf’.49 In independent national force.47 The class this, nation states were not fading away, base domestic capital had for challenging but adding to their responsibilities. American dominance ⎯as opposed to 40. If, however, there were structural renegotiating the terms of American reasons to expect continuity in the leadership⎯ was eroded. Though trajectory of the post-war order, the European and Japan as centers of specifics of how this would happen accumulation had been rebuilt in the post- remained uncertain. The established war period, the nature of their integration structures did not, in themselves, provide into the global economy tended to tie the a resolution to the generalized pressures successful reproduction of their own on profit rates in the United States and social formations to the rules and Europe. They did not suggest how the structures of the American-led global U.S. might revive its economic base so as order. However much their states may to consolidate its rule. Nor did they have wanted a renegotiation of the include an answer to how tensions and arrangements struck in 1945, now that instabilities would be managed in a world only 25% of world production was in which the American state was not located in the U.S. proper (a percentage omnipotent but rather depended, for its that by the end of the century would rule, on working through other states. The move back up to 30%) neither they nor contingent nature of the new order was their bourgeoises were remotely evidenced by the fact that a ‘solution’ interested in actually challenging the only emerged at the end of the seventies, hegemony that the American informal two full decades after the first signs of empire did indeed establish over them. trouble, almost a decade after the dollar ‘The question for them’, as Poulantzas crisis of the early seventies, and only after put it in the early seventies, ‘is rather to a sustained period of false starts, reorganize a hegemony that they still confusion, and uncertain 50 accept…what the battle is actually over is experimentation. the share of the cake.’48 41. The first and most crucial response of 39. It was in this context that the the Nixon administration, the dramatic internationalization of the state became end to the convertibility of the American particularly important in the course of the dollar in 1971, restored the American protracted and often confused state’s economic autonomy in the face of renegotiations in the 1970’s of the terms a threatened rush to gold, and the that had bound Europe and Japan to the subsequent devaluation of the American American empire at the end of World dollar did, at least temporarily, correct the War Two. These negotiations showed that American balance of payments deficit.

GLOBAL CAPITALISM AND AMERICAN EMPIRE.. 16 Yet that response hardly qualified as a dollar market was a source of concern, global solution to the larger issues but also recognized as making dollar involved. The American state took holdings more attractive, and advantage of its threatened but still subsequently encouraging the important dominant position to unilaterally defend recycling of petro dollars to the third its own economic base, but in the process world. The liberalization of finance it neither provided leadership in terms of enormously strengthened Wall Street putting forth a universal solution to the through the 1970’s and proved crucial to problems facing all the developed the broader changes that followed. This capitalist economies, nor did it lay the should not, however, be seen as coming at basis for its own future dynamism.51 By the expense of industrial capital. Rather, the end of the seventies, with the it was a (somewhat belated) recognition American economy facing a flight of on the part of American capital generally capital (both domestic and foreign), a that the strengthening of finance was an Presidential report to Congress essential, if sometimes painful, cost of (describing itself as ‘the most reconstituting American economic power. comprehensive and detailed analysis of 43. The critical ‘turning point’ in policy the competitive position of the United orientation came in 1979 with the States’) confirmed a steep decline in ‘Volcker shock’ — the American state’s competitiveness — one that it advised self-imposed structural adjustment could be corrected, but not without a program. The Federal Reserve’s radical reorientation in economic policy determination to establish internal to address the persistence of domestic economic discipline via allowing interest inflation and the need for greater access rates to rise to historically unprecedented to savings so as to accelerate investment. levels brought the confidence the money 52 markets and central bankers were looking 42. The concern with maintaining and for, and the restructuring of labour and attracting capital was especially crucial to industry which were considered crucial. what followed. The developments that Along with the more general neoliberal had already taken in terms of the opening policies that evolved into a coherent up of domestic and global capital markets alternative through the eighties, the state- was both an opportunity and a limit for reinforced new strength of finance set the the American state. Liberalized finance stage for what came to be popularly held out the option of shifting an known as ‘globalization’ ⎯the important aspect of competition to a acceleration of the drive to a seamless terrain on which the American economy world of capital accumulation. had its greatest advantages, yet those 44. The mechanisms of neoliberalism advantages could not become an effective may have been economic (the expansion instrument of American power until other and deepening of markets and economic and political changes had competitive pressures) but the essence of occurred. That ambivalence was reflected neoliberalism was a political response to in the American state’s policy responses the democratic gains that had been since the sixties: capital controls were previously achieved by subordinate introduced in 1963, but were made open classes and which had become, in a new to significant ‘exceptions’; the Euro- context and from capital’s perspective,

GLOBAL CAPITALISM AND AMERICAN EMPIRE.. 17 barriers to accumulation. Neoliberalism capital to do the same.54 That Europe and involved not just reversing those gains, Japan lagged in following this direction but weakening their institutional strengthened the relative competitiveness foundations ⎯ including within the state of the U.S. in the short run. But in the via a shift in the hierarchy of state longer term, this lag created a problem: apparatuses towards the Treasury and the American state needed Germany and Federal Reserve at the expense of the old Japan to share the burden of global New Deal agencies. The U.S. was of stimulus through their growth and course not the only country to introduce acceptance of a higher level of global neoliberal policies, but once the imports. American state itself moved in this 46. The renewed confidence on the part of direction, it had a new status: capitalism American capital consolidated capitalism evolved to ‘a new form of social rule’ that as a global project through the promised, and largely delivered, (a) the development of new formal and informal revival of the productive base for mechanisms of international coordination. American dominance; (b) a universal Neoliberalism reinforced the material and model for restoring the conditions for ideological conditions for guaranteeing profits in other developed countries; and ‘national’ treatment for foreign capital in (c) the economic conditions for each social formation, and for integrating global capitalism.53 ‘constitutionalizing’, by way of NAFTA, 45. American labour was restructured to European Economic and Monetary Union provide American capital with an even and the WTO, the free flow of goods and greater competitive flexibility vis-à-vis capital (the WTO was a broader GATT, Europe. Inefficient firms were purged (a but one that had also been given teeth). process that had been limited in the The American economy’s unique access seventies). Existing firms restructured to global savings through the power of internally, outsourced to cheaper and Wall Street within global money markets more specialized suppliers, relocated to allowed it to import freely without the increasingly urban south, and merged compromising other objectives. This with others —all part of an accelerated eventually brought to the American state reallocation of capital within the the role, not necessarily intended, of American economy. Global savings (and global macro manager - the ‘importer of foreign investment) channeled through last resort’ that limited the impact of Wall Street made capital cheaper in slowdowns elsewhere, while also America. This enhanced investment in the reinforcing foreign investors’ and foreign development of new technologies (which exporters’ dependence on American also benefiting from public investments in markets and state policies. The G-7 education and subsidies via the military). emerged as a forum for Ministers of The available pools of venture capital Finance and Treasury officials to discuss were in turn integrated into management global developments, forge consensus on restructuring strategies and disseminated issues and direction, and address in a into sectors far beyond ‘high tech’. The concrete and controlled way any American economy not only reversed its necessary exchange rate adjustments. The slide in the early eighties, but also set the Federal Reserve, though allegedly standards for European and Japanese concerned only with domestic policies,

GLOBAL CAPITALISM AND AMERICAN EMPIRE.. 18 kept a steady eye on the international states in the ‘third world’, that leads context. The BIS re-emerged, in the American imperialism today to present context of the greater role being played itself is an increasingly unconcealed by increasingly ‘independent’ central manner. bankers, to improve capital adequacy 48. Those who would try to understand standards within banking systems. The America’s imperial posture today as IMF and the World Bank were also having its roots in what they see as the correspondingly restructured. The IMF unresolved economic crisis of the shifted from the ‘adjustment’ of balance 1970s,56 as expressed through over- of payments problems to addressing accumulation, excess competition and structural economic crises in third world increased rivalry among the advanced countries (along the lines first imposed on capitalist states, are repeating the same Britain in 1976), and increasingly became mistake as the classical theorists of the vehicle for imposing a type of imperialism. They fail to recognize that conditionality in exchange for loans that the constitution of the new imperial order, incorporated global capitalism’s and the relaunching of the tendency to concerns. The World Bank supported this, capitalist globalization, took place in the although by the 1990’s, making the case post-war golden age itself, and they that states were necessary to the making underestimate both the dynamism of of ‘free markets’, it focused its attention capitalism in the last quarter century, and on capitalist state-building —what it the capacity of the advanced capitalist called developing ‘effective states’.55 states, by virtue of the density of the 47. The reconstitution of the American networks that link them together, to empire in this remarkably successful manage its instabilities. The end of the fashion through the last decades of the American boom of the 1990s, and the 20th century has not meant that global growing US trade and fiscal deficit are capitalism had reached a new plateau of real problems, but there is as yet no stability. Indeed it may be said that reason think that this is leading to a crisis dynamic instability and contingency are of the dollar that can’t be managed. This systematically incorporated into the is what lies behind the confidence of reconstituted form of empire, in good part Andrew Crockett, general manager of the because the excess competition Bank for International Settlements and characteristic of neoliberalism and the chairman of the Financial Stability Forum hyper-mobility of financial liberalization (comprising central bankers, finance aggravate the uneven development and ministry officials and market regulators extreme volatility inherent in the from the G7 states) that ‘they have the functioning of this global order. network of contacts, [and] the Moreover, this instability is dramatically contingency plans, to deal with shock to amplified by the fact that the American the markets.’57 state can only rule this order through 49. To the extent that there is a problem, other states, and turning them all into it lies not in over-acculumation leading to ‘effective’ states for global capitalism is back to anything like interimperial no easy matter. It is the attempt to address economic rivalry, but in the limits that the these problems by the American state, American empire ruling through states especially vis a vis what it calls ‘rogue poses to a strategy of coordinated

GLOBAL CAPITALISM AND AMERICAN EMPIRE.. 19 neoliberal growth even among the 51. The real problem for the American advanced capitalist countries. In the empire lies in its relations with the states liberal democratic states, the strength of outside the capitalist core. Where these domestic social forces - in spite of, and are, as in much of the third world and the sometimes because of, the former Soviet bloc, relatively internationalization of domestic capital undeveloped capitalist states, yet and the national state —have limited their increasingly located within the orbit of incorporation of neoliberalism (e.g., the global capital, the international financial difficulties in introducing flexible labour institutions as well as the American state markets in Germany or overcoming the directly have intervened to offset that inertia of the Japanese state in weakness, imposing ‘economically restructuring its banking system). This correct’ responses. In the context of has frustrated the ‘reforms’ that are seen financial liberalization, this has spelt a as necessary, along the lines of the steady stream of economic crises. Some American state’s own earlier of these could be seen as a functionally restructuring, to revive economic growth necessary part of neoliberalism’s success in these countries which would allow (as may perhaps now be said of South them to share the burden of the U.S. role Korea after the Asia crisis in 1997⎯8), as ‘absorbing global imports and relieving but all too often, this intervention has pressure on the American trade deficit. aggravated rather than solved the problem 50. There is indeed is a systemic because of the abstract universalism of complexity in today’s global capitalism the remedy. Whatever neoliberalism’s that includes, even at its core, instabilities claims for strengthening an already and even crises. This needs to be seen not developed capitalist economy, it so much in terms of structural crisis increasingly appears as a misguided tendencies and their outcomes, but as strategy for capitalist development itself. everyday, normal dimensions of the 52. As for so-called ‘rogue states’ ⎯those system’s functioning and, indeed, even of who are not within the orbit of global its successes. The issue for capitalist capitalism so that neither penetrating states is not preventing episodic crises — external economic forces nor international they will inevitably occur in this world institutions can presume to effectively order— but containing them. The restructure the state⎯ direct unilateral American state has, to date, demonstrated intervention on the part of the American a truly remarkable ability to limit the state has come to be increasingly duration, depth, and contagion of crises. tempting. It is this that has brought the In itself this does not guarantee that it, term empire back into mainstream along with the other core capitalist states currency, and it is fraught with all kinds with which it rules the international of unpredictable ramifications. The economic and financial institutions, collapse of the Communist world that always has the capacity to cope with all stood outside the sphere of American contingencies. We would, however, argue empire and global capitalism for so much that the future development of such of the post-war era has become imperial state capacities cannot be particularly important in this context. The foreclosed on the basis of any inherent rapid penetration and integration of so economic contradictions alone. much of what had been the Soviet bloc,

GLOBAL CAPITALISM AND AMERICAN EMPIRE.. 20 and the opening of China to foreign regime of sanctions against Iraq that the capital and its integration in world American state insisted on through the markets even under the aegis of the 1990s, and even though Nato came in to Communist elite, has been remarkable. play its allotted role in relation to This also removed the threat that direct Kosovo, other governments sensed a U.S. intervention in states outside the growing unilateralism on the part of the American hemisphere would lead to U.S. that made them increasingly World War Three or nuclear nervous, if only in terms of maintaining Armageddon. The ability of the American their own states’ legitimacy. The first state to secure international support in the Gulf War had shown that the majority of first Gulf War and again in war on the world’s states could be bribed and Yugoslavia over Kosovo, and indeed the bullied into getting the United Nation to fact that liberal human rights advocates serve ‘as an imprimatur for a policy that and institutions through the 1990s called the United States wanted to follow and for the U.S. to act even more as an either persuaded or coerced everybody international police power, reflected the else to support,’ as the Canadian strength of the empire in the new ambassador to the UN put it at the time. conjuncture. But thus playing ‘fast and loose with the 53. But both the hubris and sense of provisions of the UN Charter’ had costs burden that came with such a unique role in terms of unnerving ‘a lot of developing for the American state in the management countries, which were privately outraged and maintenance of a fully global order at by what was going on but felt utterly the same time provided space for those impotent to do anything —a within that state who questioned whether demonstration of the enormous US power even the limited compromises the US had and influence when it is unleashed.’59 Yet to make in operating through multilateral at the very same time, it also made institutions were unnecessarily American strategists aware just how little constraining its strategic options. The they could rely on the UN if they had to 'loneliness of power' was increasingly go such trouble to get their way. The involved here as well. The felt burden of United Nations, by its very nature as a ultimate responsibility promotes the quasi-parliamentary body made up of all desire to retain full 'sovereignty' to act as the world’s states, could not be as readily needed. This was already seen in the restructured as were the Bretton Woods economic sphere in the actions of the institutions after the crisis of the 1970s. American Treasury under Rubin and This, as evidenced in the repeated use of Summers, especially their direct the American veto in the Security intervention in the East Asian crisis of Council, was a constant irritant. And 1997-98, where it dictated a harsh while Nato could be relied on as a far conditionality right in Japan’s back more reliable vehicle for the American yard.58 And it was even more apparent in intervention in Yugoslavia (with the the actions taken reaction to ‘rogue states’ added benefit of making clear to the and international terrorist actions even Europeans exactly who the international under the Clinton administration. police power would continue to be in 54. Even though the UN did support the their own backyard), even here the effort first Gulf War and oversaw the long entailed in having to keep each and every

GLOBAL CAPITALISM AND AMERICAN EMPIRE.. 21 Nato member onside was visibly resented This is turning out to be a challenge even in the American state itself. greater than that faced by the lesser 55. Bush’s isolationist rhetoric in the former formal empires with their colonial 2000 election campaign, questioning the state apparatuses. The need to try to need for American troops to get involved refashion all the states of the world so in remote corners of the globe, was bound they become at least minimally adequate to be reformulated, once Bush was for the administration of global order— actually burdened with (and appropriately and this is now also seen as a general socialized in) the office of a presidency condition of the reproduction of the that is now as inevitably imperial as is it reproduction and extension of global domestic in nature. For this, the explicitly capitalism — is now the central problem imperial statecraft that the geopolitical for the American state. But the immense strategists close to the Republican Party difficulty of forging outside the core had already fashioned was ready and anything like the dense networks the new waiting. September 11th alone did not American imperialism distinguished itself determine their ascendancy in the state, by forging with the other leading but it certainly enhanced their status, as capitalist states is clear from the only the sheer dominance of American power halting progress that has been made in led to its unsurprising response to that extending the G7s functions even to that power being tweaked so ruthlessly. This of the G20. For the geopolitical stratum response has revealed all the tensions in of the American state, this shows the the American state’s combination of its limits of any 'effective states' approach imperial function of general coordination outside the core that primarily operates while simultaneously reflecting its through economic linkages alone. This particular power. Defining the security explains not only the extension of US interests of global capitalism in a way that bases and the integration of intelligence also fits with the matrix of the American and police apparatuses in the wake of social formation and state becomes September 11th, but the harkening back to especially tricky once the particular the founding moment of the new security interests involved are so American empire in the military manifestly revealed as primarily occupations of Japan and Germany as American. This means that, while threats providing the key to ensuring Iraq’s to the U.S. are still seen by it as an attack adequate reconstruction within the on all of global capitalism, the American framework of American empire. The state is increasingly impatient with logic of this posture points well beyond making any compromises that get in the Iraq to all states ‘disconnected from way of its acting on its own specific globalization’, as a U.S. Naval War definition of the global capitalist interest college professor advising the Secretary and its untrammeled use of its particular of Defense has put it: state power to cope with that threat. 57. Show me where globalization is thick 56. The unconcealed imperial face that with network connectivity, financial the American state is prepared to show to transactions, liberal media flows, and the world in this context above all collective security, and I will show you pertains to the increasing difficulties of regions featuring stable governments, managing a truly global informal empire. rising standards of living, and more

GLOBAL CAPITALISM AND AMERICAN EMPIRE.. 22 deaths by suicide than murder. These be seen in this light. These tensions parts of the world I call the Functioning pertain very little to economic rivalries. Core… But show me where globalization Indeed their bourgeoisies —visibly is thinning or just plain absent, and will troubled by and increasingly complaining show you regions plagued by politically about not being on the same page as the repressive regimes, widespread poverty Americans— are even less inclined to and disease, routine mass murder, and - challenge American hegemony than were most important —the chronic conflicts in the 1970s. The tensions pertain rather that incubate the next generation of global more to an inclination on the part of these terrorists. These parts of the world I call states themselves (in good part reflective the non-integrating Gap… The real of their relative lack of autonomous reason I support a war like this is that the military capacity) to prefer the use of resulting long-term military commitment international financial institutions and the will finally force America to deal with the WTO to try to fashion the effective states entire Gap as a strategic threat global capitalism needs. environment.’60 60. It pertains most of all, however, to the 58. In this ‘Gap’ are listed Haiti, danger posed to these states’ legitimacy Colombia, Brazil and Argentina, Former once they are located in a framework of Yugoslavia, Condo and Rwanda/Burundi, American imperialism that is so visibly Angola, South Africa, Israel-Palestine, imperialistic. The American empire, as Saudi Arabia, Iraq, Somalia, Iran, we indicated before, has certainly been Afghanistan, Pakistan, North Korea and hegemonic vis a vis these states and their Indonesia, to which which China, Russia capitalist classes, but it has never and India are added, for good measure, entailed, for all of the American ‘as new/integrating members of the core economic and cultural penetration in their [that] may be lost in coming years.’ The societies, a transfer of direct popular trouble for the American empire as it loyalty ⎯call it a sense of ‘patriotism’⎯ inclines in this strategic direction is that to the American state itself. Indeed, the very few of the world's states today, given American form of rule —founded on the their economic and political structures constitutional rinciple of extended empire and the social forces, are going to be able and self-government— has never to reconstructed along the lines of post- demanded this. In this sense the war Japan and Germany, even if, indeed unpopularity, and even the absence of especially if, they are occupied by the US core state endorsement of the American military, and even if they are penetrated military intervention, is not new — as rather than marginalized by globalization. evidenced by the distance taken from What is more, an American imperialism repeated interventions in Latin America that is so blatantly imperialistic risks and the Caribbean by the American state losing the very appearance that since 1945, and indeed since 1975, not to historically made it plausible and mention the American subversion of attractive. governments elsewhere, or the Vietnam 59. The current open disagreements over War. the war on Iraq between France, Germany 61. Today, the American state’s war of and even Canada, on the one hand, and aggression in Iraq, precisely because it so the American state, on the other, need to flagrantly imperial and is so openly

GLOBAL CAPITALISM AND AMERICAN EMPIRE.. 23 connected to a doctrine that expresses the broader purposes of establishing assimilation of the conquered nations to Roman neoliberal capitalist order on a global culture and political worldview. The conquered became partners in running the empire. It was a scale, has evoked an unprecedented selective process that applied directly only to the opposition on a similar scale, including upper level of subject societies but it trickled within the capitalist core states. This is down to all classes with benefits for some, especially significant because since the negative consequences for others…. Roman American empire can only rule through supremacy was based on a masterful combination of violence and psychological persuasion — the other states, the greatest danger to it is harshest punishment for those who challenged it, that the states within its orbit will be the perception that their power knew no limits and rendered illegitimate by virtue of their that rewards were given to those who conformed.’ articulation to the imperium. To be sure, Antonio Santosuosso, Storming the Heavens: only a fundamental change in class and Soldiers, Emperor, and Civilians in the Roman Empire, Westview: Boulder, 2001, pp 151-2. structure within each of these states can 6 Monthly Review 42:6 November 1990, pp. 1⎯6. bring about a disarticulation from the 7 Such were the attachments to the old theory that empire, but the political space may now even scholars like Magdoff and O’Connor who in be seen as opening up for the kind of the 1960s ‘were most alert to the changing pattern mobilization from below that can of intercapitalist relations felt obliged to pay a eventually lead to this. tribute to Lenin thus compounding the confusion.’ Giovanni Arrighi, The Geometry of Imperialism, London: NLB 1978, p. 17. I. ENDNOTES 8 ‘Der Imperialismus’, Die Neue Ziet Year 32, XXXII/2, Sept 11th, 1914, p. 908. Only the last part of this famous essay was translated and published in New Left Review in 1970. Thanks are 1 ‘Great Britain, The United States and Canada’, due to Sabine Neidhardt for providing us with a Twenty-First Cust Foundation Lecture, University full translation. Note Arrighi’s use of almost of Nottingham, May 21, 1948, in H. Innis, Essays identical words in 1990: ‘What happened to the in Canadian Economic History, Toronto: term imperialism is by the time it flourished in the University of Toronto Press, 1956, p. 407. early 1970s, it had come to mean everything and 2 The Friedman manifesto appeared in the New therefore nothing.’ See ‘Hegemony and Social York Times Magazine on March 28, 1999, and the Change’ Mersham International Studies Review, Ignatieff essay on January 5, 2003. Ignatieff adds: 38, 1994, p. 365. ‘It means laying down the rules America wants 9 Bob Rowthorne, ‘Imperialism in the Seventies: (on everything from markets to weapons of mass unity or Rivalry’, New Left Review 69, 1971. destruction) while exempting itself from other 10 ‘In recent years no topic has occupied the rules (the Kyoto protocol on climate change and attention of scholars of international relations the International Criminal Court) that go against more than that of American hegemonic decline. its interests.’. The erosion of American economic political and 3 The Grand Chessboard, New York 1997, p. 40. 4 military power is unmistakable. The historically See "Rebuilding America's Defenses: Strategy, unprecedented resources and capabilities that Forces and Resources For a New Century," A stood behind United States early postwar Report of the Project for the New American Century. diplomacy, and that led Henry Luce in the 1940s http://www.newamericancentury.org/publicationsr to herald an ‘Amerjcan century,’ have given way eports.htm; and The National Security Strategy of to an equally remarkable and rapid redistribution the United States of America, Falls Village, of international power and wealth. In the guise of Connecticut:Winterhouse, 2002. theories of “hegemonic stability,” scholars have 5 On the face of it, as with Brzezinski’s been debating the extent of hegemonic decline and terminology, this is by no means absurd since its consequences.’ G. John Ikenberry ‘Rethinking Romanization could indeed be ‘understood as the the Origins of American Hegemony’, Political

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Science Quarterly 104:3, 1989, p. 375. For the time tends to bring the outside world ‘in’ (i.e. into leading critique of this view, see Susan Strange, capitalism). And so the crisis of ‘The Persistent Myth of Lost Hegemony’ underconsumption/ overproduction is simply International Organization, 41:4, Autumn 1987. regenerated on a larger scale. 11 Andrew Glyn and Bob Sutcliffe, ‘Global But 18 John Gallagher and Ronald Robinson, ‘The Leaderless’, Socialist Register 1992, p. 93. Imperialism of Free Trade’ The Economic History 12 Peter Gowan, ‘Neo-Liberal Theory and Practice Review, VI:1, 1953, p. 6. Nor did the move for Eastern Europe’, New Left Review 213, Sept- towards responsible government in the colonies Oct 1995. that coincided with the era of free trade mean, as 13 ‘Towards a Theory of Transnational Empire’, in Lenin imagined, that the policy of ‘free E-O. Czempiel and J. Rosenau eds. Global competition’ entailed, in the opinion of leading Changes and Theoretical Challenges, Lexington bourgeois politicians, ‘that the liberation of the 1989, p.p. 171-2. colonies and their complete separation from Great 14 Michael Hardt and Antonio Negri, Empire, Britain was inevitable and desirable.’ This Cambridge, MA: Harvard University Press, 2000, reflected a conventional misconception that free p. xiv, emphasis in text. See our review essay, trade rendered empire ‘superfluous’, which ‘Gems and Baubles in Empire’, Historical severely misconstrued the significance of changes Materialism 10, 2002, pp. 17-43 in constitutional forms. As Gallagher and 15 The Great Transformation, Beacon, Boston: Robinson put it: ‘[R]esponsible government far 1957, p. 18. from being a separatist device, was simply a 16 Philip McMichael, ‘Revisiting the question of change from direct to indirect methods of the transnational state: A comment on William maintaining British interests. By slackening the Robinson’s ‘Social theory and globalization’, formal political bond at the appropriate time, it Theory and Society 30, 2001, p. 202. was possible to rely on economic dependence and 17 Just how far this fundamental mistake continues mutual good-feeling to keep the colonies bound to to plague us can be discerned from the fact that Britain while still using them as agents for further even those who insist today that the old theory of British expansion.’ .Ibid, p. 2. imperialism no longer can be made to fit 19 Ibid, pp. 6-7. contemporary global capitalism, nevertheless 20 See John Kautsky, ‘J.A. Schumpeter and Karl accept the underconsumption/overproduction Kautsky: Parallel Theories of Imperialism’, theory of crisis as explaining the pre-World War Midwest Journal of Political Science, V:2, May, One imperialism. This has been most recently 1961, pp. 101-128. seen in the way Hardt and Negri completely 21 Ibid, p. 115. follow Lenin and Luxemburg in this respect, 22 Quoted in William Appleman Williams, Empire arguing that capitalism by its very nature as a Way of Life, New York: Oxford University confronts a contradiction in trying to realize Press, 1980, p.185. surplus value: workers get less than what they 23 Perry Anderson, ‘Force and Consent’, New Left produce (underconsume), so capital must look Review 17, Sept/Oct 2002, p. 24. outside its own borders for markets. Since this is 24 Quoted in Williams, Empire as a Way of Life, p. a problem in each capitalist country, the ‘solution’ 61. requires constant access to markets in non- 25 Ibid, pp. 43, 48. capitalist social formations. The focus on non- 26 See Gareth Stedman Jones, ‘The Specificity of capitalist markets is reinforced by the need for the US Imperialism’ New Left Review 60 (first series) raw materials to feed workers and supply Mar/Apr 1970 p. 65. Written at the time of a brief production at home. But the successful realization revival of interest in the theory of imperialism, it of the surplus and the expansion of production is notable that Stedman saw this essay as breaking simply recreate the contradiction or crisis of with a discussion of imperialism that ‘has so far underconsumption as a crisis of overproduction. lacked any serious historical or sociological This forces capital ‘abroad’ to find outlets for its dimensions…. The Left has tended to treat surplus capital. That overall search for foreign imperialism as an undifferentiated global product markets, materials and investment opportunities of a certain stage of capitalism.’ Ibid., p. 60, n. 1. involves the extension of national sovereignty 27 Anderson, ‘Force and Consent’, p. 25. beyond its borders - imperialism - and at the same 28 Ibid.

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29 Williams, p. 122. 38 Peter Gowan, ‘The American Campaign for 30 See L. Panitch, ‘Class and Dependency in Global Sovereignty’, Socialist Register 2003, Canadian Political Economy’, Studies in Political London: Merlin, 2002, p. 5. Economy 6, 198Autumn 1980 pp. 7-34; W. 39 See Raymond Aron, The Imperial Republic: Clement, Continental Corporate Power, Tornto, The United States and the World 1945-1973, McLelland & Stewart, 1977; and M. Wilkins, The Cambridge, MA: Winthrop, 1974, esp. pp. 168 Emergence of Multinational Enterprise, and 217; and N. Poulantzas, Classes in Cambridge, Mass, 1970. Jefferson had justified Contemporary Capitalism, London: NLB, 1974, the war of 1812 (sparked by American concerns esp. pp. 39 and 57. the British were encouraging Indian resistance to 40 N. Poulantzas, , p. 73. And see Robert Cox, western expansion) in these terms: ‘If the British Production, Power and World Order, New York: don’t give us the satisfaction we demand, we will Columbia University Press, 1987, esp. p. 254. take Canada, which wants to enter the union; and 41 Quoted in C. Jagan, Forbidden Freedom , 3rd when, together with Canada, we shall have the ed., London: Harbis, 1994, p.I. Floridas, we shall no longer have any difficulties 42 Quoted in Williams, p. 189. with our neighbors; and it is the only way of 43 The special post-war conditions included the preventing them.’ The passage from the urge to application of technologies developed during the continental expansion though internal empire to war; catch up to American technology and expansion through informal external empire, with methods (the gap had already been rising during Canada representing the model of successful the thirties and obviously accelerated during the American imperialism in the 20th century, was war); pent-up demand; subsidized investments for marked, almost exactly 100 years later, when rebuilding and the productivity effect of new President Taft spoke in terms of ‘greater economic facilities - all of which providing enormous scope ties’ being the way to make Canada ‘only an for accumulation after the destruction of so much adjunct of the USA.’ See Williams, pp. 63-4, 132. value during the Depression and the War. See 31 Stedman Jones, ‘The Specificity’, p. 63. Moses Abromowitz, ‘Catching Up, Forging 32 Quoted in G. Achcar, The Clash of Barbarisms, Ahead, and Falling Behind’ Journal of Economic New York: Monthly Review Press 2002, p. 96. History, 46:2, June, 1986, and also ‘Rapid 33 Letter to Duncan Grant, quoted in Nicholas Growth Potential and Realization: The Experience Fraser, ‘More Than Economist’, Harper’s of the Capitalist Economies in the Postwar Period’ Magazine, November 2001, p. 80. The issue here, in Edmund Malinvaud, ed. Economic Growth and of course, was the American state’s refusal to Resources, London, 1979. Also crucial was the forgive Allied war debts, with all the unique role of the American state in opening up its consequences this entailed for the imposition of market, providing critical financial assistance, and heavy German reparations payments. See Michael contributing to international economic and Hudson’s Super Inperialism: The Economic political stability internationally. Strategy of American Empire, New York: Holt, 44 On the relationship between the collapse of the Rinehart and Winston, 1971(?). gold standard, capital mobility, and the 34 Brian Waddell, ‘Corporate Influence and World development of democratic pressures see Barry War II: Resolving the New Deal Political Eichengreen, Globalizing Capital: A History of Stalemate”, Journal of Political History 11:3, the International Monetary System, Princeton: 1999, p. 2. Princeton University Press,1996, Chapters 2-3. 35 Robert Skidelky’s , John Maynard Keynes: 45 On the mood at that time, two Vice-Presidents Fiighting for Freedom, 1937-1946, New York: of Citibank, looking back to that time, observed Viking, 2001, pp. xxiii. that ‘…it is not surprising that economists were 36 All the quotations in this paragraph are derived so sure in the late 60’s and early 70’s that the from Skidelsky’s account, pp. 334, 348, 350-1, breakdown of fixed exchange rates would further 355. weaken economic links between countries.’ See 37 Martin Shaw, Theory of the Global State, Harold van B. Cleveland and Ramachandra Cambridge, U.K.: Cambridge University Press, Bhagavatula, ‘The Continuing World Economic 2000. Crisis’, Foreign Affairs, Vol 59, No.3, 1981, p.600. See also Lou Pauly’s observation that, at the time, ‘[i]nternational monetary disarray

GLOBAL CAPITALISM AND AMERICAN EMPIRE.. 26 appeared quite capable of restoring the world of 56 See esp. Robert Brenner, The Boom and the the 1930s’. Louis B. Pauly, Who Elected the Bubble: The US in the World Economy, London: Bankers?, Ithaca: Cornell University Press, 1997, Verso, 2002. p.100. 57 Financial Times, March 26, 2003. 46 The ‘induced reproduction of American 58 See L. Panitch, ‘The New Imperial State’, New monopoly capitalism within the other Left Review 2, March/April, 2000. metropolises…implies the extended reproduction 59 ‘The United Nations after the Gulf War: A within them of the political and ideological Promise Betrayed’, Stephen Lewis interviewed by conditions for [the] development of American Jim Wurst, World Policy Journal, Summer 1991, imperialism.’ N. Poulantzas, 1974, p.47. pp. 539-49. 47 ‘It is this dis-articulation and heterogeneity of 60 See especially, Thomas P.M. Barnett, ‘The the domestic bourgeoise that explains the weak Pentagon’s New Map: It Explains Why We’re resistance, limited to fit and starts, that European Going to War and Why We’ll Keep Going to states have put up to American capital’. Ibid, War’, Esquire, March 2003 (on the U.S. Naval p.75. War College website at 48 Ibid, p.87. http://www.nwc.navy.mil/newrules/ThePentagons 49 Ibid, p.81. On the internationalization of the NewMap.htm). state, see also Robert Cox, Production, Power, And World Order, New York: Columbia University Pres, 1987, pp.253-267. 50 At one time or another, policy during the seventies included import surcharges, attempts at international co-operation on exchange rates, wage and price controls, monetarism, and fiscal stimulus. 51 A New York Times reporter captured the unilateralist aggressiveness driving the American response: ‘What is entirely clear is that the United States in a single dramatic stroke has shown the world how powerful it still is….in breaking the link between the dollar and gold and imposing a 10% import tax, the United States has shown who is Gulliver and who the Lilliputians…by “Lilliputians” are meant not the Nicaraguans or Gabons but West Germany, Japan, Britain, and the other leading industrial nations’, cited by H.L.Robinson, ‘The Downfall of the Dollar’ in R. Miliband and J.Saville, The Socialist Register, 1973 ,London:Merlin Press, 1974, p. 417. 52 Report of the President on U.S. Competitiveness, Office of Foreign Economic Research, U.S. Department of Labour, Washington, September, 1980. 53 The term ‘ a new for of social rule’ is from G. Albo and T. Fast’s ‘Varieties of Neoliberalism’ paper presented to the Conference on the Convergence of Capitalist Economies, Wake Forest, North Carolina September 27-29, 2002. 54 See S. Gindin and L. Panitch, ‘Rethinking Crisis’, Monthly Review, November, 1999. 55 See L. Panitch, ‘”The State in a changing World”: Social-Democratizing global Capitalism?’, Monthly Review, October, 1998.

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