The USA as hyperpower By Colin Foster OME FELL. Babylon fell. Scarsdale’s turn will come”. The super-plu- tocracy of the US rich, symbolised by such posh commuter towns as “ R Scarsdale (near New York), is fated to decline. Thus Paul Kennedy summed up the message of his book The Rise and Fall of the Great Powers, which was the central reference point for discussions of the shape of the world at the time it was published, in 1987.1 3 workers’ liberty The USA would still be a big power for the indefinite future, wrote Kennedy. But soon it would be one big power among many. It was suffering “relative industrial decline, as measured against world production”; “turbulences in the nation’s finances”, expressed in its shift, within only a few years, from being the world’s largest creditor to the world’s largest debtor nation, and its federal bud- get deficit; and economic-military “imperial overstretch”. The true strategic task for US leaders was “to ‘manage’ affairs so that the relative erosion of the United States’ position takes place slowly and smoothly”, rather than being made more convulsive and damaging by unrealistic diehard attempts to resist it. 2 Fifteen years on, the USA’s military spending exceeds (since 1997) the total of the world’s nine next-biggest powers. The US has military bases in around 60 countries around the world. The US government is so little bothered by the cost of such firepower that it plans large increases in military spending. The USA claims the right to wage what it calls “pre-emptive” war to keep the world in what it considers proper shape, and has named Iraq as the first target for this doctrine. The USA justified its war in Afghanistan in 2001 on grounds of self-defence against the terrorist-Islamist Al Qaeda. Its war with Serbia over Kosova (1999) aided the Kosovars to survive the Serbian attempt to massacre them and drive them out. It said that the Gulf War of 1991 was to liberate Kuwait from the Iraqi conquest of 1990. In Vietnam, between 1965 and 1975, the USA claimed it was helping supposedly free South Vietnam resist external Stalinist aggression. The official rationales were never the whole story, and sometimes very far from it. Nevertheless, the new doctrine, according to which the USA can bomb and invade a state to get “regime change” whenever it thinks it might do harm in future, is a step on from doctrines of self-defence or aid to peoples resisting conquest. It is not quite the old high-imperialist doctrine according to which Britain and other powers claimed the right to conquer territories and rule them in the cause of taking civilisation to the “lesser breeds”. But it is not far off it. Putting the new military doctrine together with the pattern whereby, since the Mexican foreign debt crisis of 1982, economic policies in more and more countries have been set by IMF debt-management plans, many socialists now see the global story of the last decade or two as one of US “reconquest” of the ex-colonial world. What are the facts and prospects? Are there underlying weaknesses beneath the USA’s current hyperpower, just as there were underlying strengths beneath its apparent relative decline in the 1970s and 80s? Kennedy, in 1987, saw the world as moving to a “multipolar system”, with, probably, five main poles: the USA, the USSR, China, Japan and the European Union. He saw the USSR in difficulties, but emphatically “not... close to col- lapse”.3 He was wrong about that. In 1989-91 the USSR and its whole empire in Eastern Europe did collapse. Long term, the huge proportion of USSR resources given to the arms race with the USA surely sapped its economy. But the USSR’s military burden was not what was new. Its economy had been highly military-biased ever since the 1930s, including in times when its growth rates outstripped the USA’s. Nor was it some sudden US reflorescence that unexpectedly tilted the scales and brought down its Cold War adversary. The USA had suffered its biggest-ever stock market crash in October 1987; its biggest financial collapse to that date, that of its Savings and Loans industry (similar to building societies in Britain), in 1985-9. By 1990-1 the US economy was in outright recession. The boom which generated talk of a brilliant “new economy” did not pick up pace until the second half of the 1990s. No, the USSR and its bloc collapsed because of its internal contradictions and 4 USA weaknesses. Its collapse was the collapse of the always-illusory programme of “socialism in one country”. Marxists had always argued that the cooperative commonwealth, the free association of producers, the new and more rational society, could be built only on the basis of the technology generated by world- market capitalism and by the action of the working class also generated by that system. No socialism could be built through schemes on the margins of the world economy. What the bureaucrats tried to build in one, or a few, countries, walled off from the world market by barriers of totalitarian state control, was not working-class socialism, but a variant of what Marx called “reactionary socialism”. The princi- pal means of production were owned collectively, but by a privileged bureau- cracy rather than the working people; the economy was planned, after a fash- ion, but to expand the wealth and power of the bureaucracy rather than for the common good; the workers were as exploited as in the most repressive capital- ist state. This “socialism” was not post-capitalist, but a peculiar parallel to cap- italism, a detour within the world-historical era of capitalism. It was doomed for the same reason that any “socialism in one country” was doomed. In the fragmented, trade-bloc world between the two World Wars, it had plau- sibility. In the era after World War Two when middle-class forces leading inde- pendence battles in the ex-colonial countries were seeking schemes to build some autonomous industrial base for themselves, Stalinism could become, as an Algerian Marxist put it, “more and more the ‘theory’” — the philosophy, the ide- ology — “of the manager”.4 But, by the side of an increasingly integrated world- market economy, its days were numbered. Stalinist state power, once a tool for dynamic, terroristic forced-march indus- trial development, mutated into stifling, clogging, bureaucratic inertia. Mikhail Gorbachev’s efforts to shake it up ended up shaking it apart. The USSR and its bloc collapsed. The USA became the world’s sole military superpower. But the windfall gains of the USSR bloc collapse went rather more to Germany and the European Union than to the USA. The European Union owns 60 to 80% of the stock of foreign investment in all the countries of Eastern Europe. In all the important countries except Romania Germany has the biggest share of the EU total. It has 30% of the overall total stock in the countries with the biggest stocks, the Czech Republic and Hungary. In Russia the USA is a slightly larger investor (34% of the stock, 27% for the EU), but the EU dominates trade (the USA has only 5% of trade with Russia). 5 Eight of the East European economies are due to be integrated into the EU in May 2004. Meanwhile, many of the trends 1980s writers saw as proof of the USA’s rela- tive decline have continued, or not been clearly reversed. The USA’s trade in manufactured goods went into deficit in 1983. That deficit has increased. By 2001 the USA was importing $310 billion more manufactured goods from the rest of the world than it exported to the rest of the world. Its share in world exports of manufactures rose only slightly in its boom of the 1990s. The share was 13.0% in 1980, 12.2% in 1990, 14.0% in 2000. In higher-tech manufactures — machinery and transport equipment — the USA’s share in world exports was smaller in 2000 (16.1%) than in 1980 (16.4%). The USA’s share of world manu- factured imports has soared, from 11.2% in 1980 to 20% in 2000, but those extra imports have been bought, essentially, on credit, by the flood of foreign invest- ment money into the USA. The USA’s debts to the rest of the world have con- tinued to balloon. Yet, where many thought that the removal of the rigidities of the Cold War would accelerate movement to a “multipolar” world, in fact the world has become more unipolar. The unremarked surprise of the 13 years since 1989 is that the web of international regulatory institutions built up on the US side of 5 workers’ liberty the Cold War, and mostly lynchpinned by the USA — IMF, WTO, G7, World Bank, NATO, European Union — has proved strong and flexible enough to integrate vast new territories. It has been able to do that despite the follies of the free-mar- ket ideologues who advised the ex-Stalinist state leaders on how to transform their economies; despite the pauperisation of many millions in the process; despite the shocks of the 1997-8 Asia-centred world economic crisis. The G7 (“Group of Seven” leading states) was set up in 1975, and brought in Russia to become the G8 in 1998.6 The World Trade Organisation was set up, as a higher-powered successor to the old General Agreement on Tariffs and Trade, in 1995 with 76 members.