By Kenny Lake
Our historical narrative left off [in part 2] with the US bourgeoisie making moves to resolve the mid-1970s conjunctural crisis for capital accumulation; however, some aspects of that crisis deepened for US imperialism through the late 1970s and into the early 1980s. The anticolonial movement continued to score victories, with the settler-built apartheid state of Rhodesia unable to defeat the armed national liberation struggle in its borders and under pressure from the British government to negotiate a settlement, resulting in the formation of Zimbabwe as an independent African nation in 1980 (and Bob Marley’s best concert to boot). Revolutionary warfare also gripped Central America, and while the US bourgeoisie actively propped up the most brutal counterrevolutionary forces there, they were reluctant to directly intervene with their own military given recent defeat in Vietnam and the risk of escalating conflict with the Soviet Union and handing a victory to them. As a result, the Sandinistas overthrew the US-backed Somoza dictatorship in Nicaragua in 1979. That same year, the Iranian Revolution swept the Shah from power and kicked US imperialism out of an important strategic location in the oil-producing Persian Gulf region.1
Politically, the world map of the late 1970s was in flux in ways helpful and harmful to US imperialism. The 1976 counterrevolution in China rid the international bourgeoisie of the greatest existential challenge it faced, namely large populations and territories on the socialist transition to communism, off limits to the logic of capital accumulation and posing a radical alternative to it. Under the leadership of Deng Xiaoping, the new bourgeoisie in power in China made a strategic alliance with US imperialism, which served in the short term as a counterweight to Soviet imperialism and in the long term created new opportunities for capital accumulation by outsourcing industrial production to China. But some sort of “socialism”—not in the sense of the socialist transition to communism best exemplified by Maoist China, but in the sense of nationalized industries, social reforms, and popular mobilization—existed in a number of countries in the wake of victorious anti-imperialist struggles. Leaving aside whatever we consider Albania to be during the last years of Hoxha’s leadership,2 from Cuba to Angola to Vietnam, these “socialist” countries generally aligned with Soviet imperialism to some degree, tethering their independence to Soviet capital and relying on Soviet purchase of their exports, an imperialist relationship even if unequal exchange was less unequal with the Soviet Union than it would have been with the US. Consequently, Soviet imperialism became the greatest strategic challenge to US imperialism, with the former making substantial gains in Africa, Asia, and Latin America even as the latter still had the upper hand by far.
In the years after its 1975 defeat in Vietnam, US imperialism was on the ropes to some degree, getting hit with jabs and right hooks but, unfortunately, never a knockout blow. Rather than cowering in the face of challenges, the US bourgeoisie regained its footing step by step, finding methods and taking opportunities to overcome the 1970s crisis. Through that process, the US bourgeoisie consolidated its gains into a reconfigured system of global capital accumulation with US imperialism still on top, and triumphantly so in the 1990s. The boxing metaphor is fitting here considering the Rocky movies of the 1980s as symbolism for the Reagan administration’s drive to shore up US imperial might and project it around the world with a reactionary insistence on its God-given right to do so. The first decisive steps it took in that direction were in the realm of finance capital.
Well before Ronald Reagan took office, US government policy began freeing finance capital to move more freely around the world and exert itself over all other modes of capital accumulation. The Nixon administration’s 1971 decision to end the gold standard, wherein US currency was backed by gold, freed the monetary system from material constraints, at the same time as capital flows were freed from state controls. While this contributed to the bankrupting of New York City in 1975, it also enabled NYC to become the world’s center of finance capital, and rebuild itself as a global city—a nerve-center of global capital accumulation—on that basis.3 During the Carter administration, Paul Volcker took over as Chair of the Federal Reserve (the US’s central bank) in 1979 and began radically raising interest rates with the purported goal of curbing inflation, initiating the so-called “Volcker Shock” that led to a dramatic rise in unemployment in the early 1980s.
What was harmful for the masses proved beneficial for capital accumulation in the long term. The Volcker Shock started a set of economic policies enthusiastically pursued by the Reagan administration to consolidate finance capital’s dominance. Taxes were dramatically lowered for the wealthiest, and government regulations on finance capital were rolled back. The Glass-Steagall Act, an FDR-era response to the Great Depression, which separated commercial from investment banking, was rolled back (and ultimately eliminated by the Clinton administration), paving the way for the replacement of local and regional banks with a few large banking firms that sunk their tentacles into even the smallest of savings accounts to amalgamate bank holdings into vast sums of finance capital. When Volcker was unwilling to pursue these measures to free finance capital from government interference to the fullest, Reagan ditched him and brought on Alan Greenspan to chair the Federal Reserve in 1987, ensuring the institution served not as a check on the rapaciousness of finance capital but as its steward and support. For the masses in the US, this led to rising inequality. Around the world, it put US finance capital in position to pounce on new opportunities for the exploitation of labor and resources and the plunder of state assets, starting with the raised interest rates of the Volcker Shock resulting in a dramatic rise in debt payments owed by the governments of oppressed countries, debt payments they simply could not afford.4
How those new opportunities were manifested by the actions of US imperialism in a postcolonial world is a subject we shall turn to shortly. Before we go there, we must address two interrelated questions: How, after unburdening the bourgeoisie of paying taxes to a substantial degree, did the US government fund itself? And how did it strategically defeat the Soviet Union over the course of the 1980s, rolling back its gains and ultimately precipitating the collapse of its empire? Central to the answer of both questions is debt. In Reagan’s two terms, the federal government’s debt nearly tripled, and increasing military expenditure, in addition to lowering taxes on the bourgeoisie, was one of the main causes. While the threat of world war between the US and the Soviet Union loomed over the 1980s, what wound up transpiring was not nuclear holocaust but one side outspending the other. US imperialism bogged down the Soviet Union’s imperial ventures, in Afghanistan, for example, by supplying proxy fighters—including religious fundamentalists who would go on to become enemies of the US in its so-called “War on Terrorism”—with weapons. Moreover, the armaments spending spree under the Reagan administration forced its adversary to try to compete in the race for the most advanced weaponry—advanced weaponry that would likely have determined the victor in the event of world war—which effectively bankrupted state capitalism in the Soviet Union.
The US’s ability to win the military spending war rested on the alliances it had built up in the decades after World War II. Whereas the Soviet Union had junior partners in Eastern Europe and the support, and imperialist exploitation of, several newly independent oppressed countries, the US had fellow imperialist powers under its hegemony and a number of junior partners able to make important strategic contributions to its objectives. Oil-rentier bourgeoisies in the Persian Gulf region sent hundreds of billions of dollars of their petro-profits through US banks, which could then be invested as US finance capital saw fit.5 Trade and capital flows between the US and Western Europe, as well as Canada, Australia, and New Zealand, constituted a mutually beneficial relationship and bolstered US military capabilities and government spending. And the Japanese bourgeoisie became an important purchaser of US debt, funding Reagan’s armaments spending spree with the profits of their manufacturing efficiency. In effect, US federal debt functioned as the lynchpin of a global gangster protection racket, wherein bourgeoisies in Japan, Western Europe, Saudi Arabia, and elsewhere agreed to fund US military spending, directly through purchasing US Treasury bonds or indirectly in other ways, in exchange for the US keeping the Soviet Union, and any other threats to their capital accumulation, in check.
In the Reagan 1980s, debt extended beyond military spending to permeate US society more generally. Corporate debt joined government debt as a mechanism for the US bourgeoisie to advance its strategic interests, economically in addition to politically. Consumer debt propped up the imperialist way of life that most Americans had come to expect, even as their wages declined and inflation drove up the price of their suburban homes and spending sprees at the shopping mall.6 But whereas for the US, mounting debt served to bolster its position as top imperialist power, in the oppressed countries it played a radically different role, re-subjugating them under foreign imperialism in new forms not long after they had cast off colonial rule.
Countering the crisis through (a return to) pillage: structural adjustment programs, plundering a social-imperialist empire, and privatization generalized
As explained in part two, all postcolonial governments faced the challenge of overcoming the effects of underdevelopment, and virtually all but Maoist China turned to loans from foreign banks and investment by foreign capital to develop their infrastructure and industry, hoping to pay for the imbalance through export production, which in turn ensnared them in the world market and disarticulated their economic base. By the late 1970s, virtually all oppressed countries had accrued crippling levels of debt to banks—private or government-run—in imperialist countries. With re-colonization not an option for the international bourgeoisie, the US reluctant to impose its will by massive military force in the wake of its defeat in Vietnam, and the US and its allies trying to outmaneuver Soviet imperialism, US-led imperialism weaponized debt to re-subjugate the oppressed countries. Conscious policy decisions were made to exacerbate the existing postcolonial debt and turn it into a means for dictating onerous terms of debt payment favorable for capital accumulation centered in the imperialist countries and catastrophic for the masses in the oppressed countries.
The Volcker Shock described above was one such policy decision. The US Federal Reserve raising interest rates meant that oppressed countries had to pay drastically more interest on their debt to US financial institutions. Volcker bringing interest rates up to 21% in 1981 set off a wave of defaults on foreign debt, beginning with Mexico in 1982. As interest rates kept rising, so too did the price of oil, as a result of conscious policy by US-aligned oil-rentier bourgeoisies in the Persian Gulf region as well as the disruption caused by the 1979 Iranian Revolution to international oil supplies. Oppressed countries had to go further into debt in order to purchase the oil necessary to fuel their economies, one of the prime reasons “total debt stock…quadrupled, from $400 billion in 1970 to more than $1.6 trillion” in 1982. Much of the oil profits were in turn funneled through US banks to become loans to oppressed countries to pay for more oil—a new triangle trade centered around debt rather than slaves.7
Suggesting consensus—or conspiracy—by the international bourgeoisie, the institutions created at Bretton Woods in 1944 to oversee the global monetary system and inject capital into rebuilding post-WWII Europe, namely the World Bank and the International Monetary Fund (IMF), turned their attention to the oppressed countries and their mounting debt in the mid-1970s. Unlike in Europe, however, those institutions, together with the US government, were unforgiving of postcolonial debt, literally and metaphorically, and used it to impose their will. For example, in 1985, the US’s “Baker Plan (named after then Secretary of Treasury Richard Baker but drafted by his deputy secretary, Richard Darman) bluntly required the 15 largest Third World debtors to abandon state-led development strategies in return for new loan facilities and continued membership in the world economy.”8
By the 1980s, debt itself became an increasingly important lever of capital accumulation, with the financiers of debt (centered in the imperialist countries) collecting interest annually, making money because they had money in the first place, without having to undertake the pesky process of production to make profit. Consequently, finance capital strengthened its position vis-a-vis other modes of capital accumulation, especially on an international scale. But beyond capital accumulation through interest payments, the debt of the oppressed countries gave foreign finance capital leverage to dictate economic policy, buy off state assets at bargain prices, and pave the way for new rounds of exploitation. And so began a new wave of imperialist pillage in the 1980s called structural adjustment programs (SAPs).
Like global capital accumulation’s first wave of imperialist pillage led by colonial Spain, the SAP wave of pillage got its start by way of violent imposition in Latin America. A CIA-sponsored coup in Chile in 1973 overthrew the Allende social-democratic government and installed a military dictatorship under the leadership of Augusto Pinochet, whose second order of business, after a genocidal massacre of Allende’s supporters, was privatizing the state industries and assets that had been nationalized. From there, the Pinochet regime followed the economic policies advocated by Milton Friedman that demanded privatization wherever possible and the free flow of the free market to ensure optimal conditions for capital accumulation without government obstruction (but plenty of government involvement in setting the terms, as Pinochet’s coup exemplifies).
What was violently imposed in Chile became the model for all oppressed countries to adhere to, and in Latin America especially was often associated with military dictatorships.9 But debt was used to impose the dictatorship of international finance capital with or without a coup, giving imperialism a way to subjugate postcolonial governments through “peaceful” means, or at least by outsourcing military repression to those governments themselves. In exchange for some much needed debt restructuring and relief by the IMF and World Bank, oppressed countries were forced to agree to structural adjustment. They had to sell off state assets, deregulate their national market, slash social welfare spending and government subsidies for agriculture and national industry, and allow the free flow of foreign capital and trade into their borders, all so they could better afford to make debt payments. The beneficiary of this debacle for the masses in the oppressed countries was the imperialist bourgeoisie and finance capital in particular—they were the ones pillaging state assets, flooding markets with their products, and extracting resources and exploiting labor without the barrier of state protection. As anthropologist Jason Hickel points out, “By requiring debtor countries to privatise public assets, the World Bank and the IMF created opportunities for foreign companies to buy up telecoms, railroads, banks, hospitals, schools and every conceivable public utility at a handsome discount, and then either run them for private gain or strip them down and sell off the parts for a profit… The World Bank alone privatised more than $2 trillion of assets in developing countries between 1984 and 2012.”10
In addition, and perhaps more crippling in the long-term than the selling off of state assets, was the deindustrialization and reversal of state-supported agricultural production that took place in the wake of SAPs. In Africa and Latin America, gains made in industrial production were rolled back when SAPs stripped away state protections for national manufacturing and forced oppressed countries to open their markets to a flood of cheaply manufactured products from elsewhere, especially Asia. Consequently, the “big industrial metropolises of Latin America—Mexico City, São Paulo, Belo Horizonte, and Buenos Aires—suffered massive losses of manufacturing jobs.”11 Likewise, in
Abidjan, one of the few tropical African cities with an important manufacturing sector and modern urban services, submission to the SAP regime punctually led to deindustrialization, the collapse of construction, and a rapid deterioration in public transit and sanitation; as a result, urban poverty in Ivory Coast—the supposed “tiger” economy of West Africa—doubled in the year 1987–88.12
Often debt and SAPs started the process of deindustrialization and free trade agreements delivered the knockout blow. For example, in Guadalajara, Mexico, the robust small-scale factory and workshop economy collapsed in the 1980s due to the 1982 debt crisis followed by competition with cheap Asian manufactured goods that could more freely enter the national market after Mexico signed the Global Agreement on Tariffs and Trade in 1986.13
In addition to supporting industrialization, many postcolonial governments attempted to protect agricultural production with subsidies and tariffs and increase its output with state-supported mechanization, irrigation, and modernization. While those attempts only ever went so far outside of Maoist China due to the reluctance of postcolonial governments to challenge feudal relations of production and the landowner class, what little progress was made was reversed by the process set in motion by SAPs. Without state subsidies and facing competition from foreign imports, peasant producers were left to fend for themselves in the global free market, leading to land grabs and further reliance on cash crops rather than producing to feed the nation.14 Capitalist competition did not make good on its promises to lower prices for consumers; in India, for example, “deregulated food grain prices soared 58 percent between 1991 and 1994.”15 While higher food prices hurt the masses generally, the SAPs exerted the logic of global capital accumulation over the global peasantry far greater than even colonial rule had managed to do. For many peasants, that meant being driven off their land, no longer able to sustain themselves in agricultural production, and flocking to the growing slums surrounding cities in oppressed countries. For those still working the land, that land increasingly belonged to someone else, that someone else often meaning a foreign corporation, whether directly or through its intermediaries. Much of the global peasantry has changed in class character, exploited in a more capitalist than feudal relationship, whether by way of wages or market relations—a subject that requires more analytical attention from communists than I am capable of giving here.
By way of deindustrialization and the ruin of the peasantry, the SAPs opened the floodgates to the dramatic growth of slums in oppressed countries. As Mike Davis summed up,
The 1980s—when the IMF and the World Bank used the leverage of debt to restructure the economies of most of the Third World—are the years when slums became an implacable future not just for poor rural migrants, but also for millions of traditional urbanites displaced or immiserated by the violence of “adjustment.”16
The global slum population, which stands at over one billion today, points to an essential feature of post-SAP proletarianization: joining the ranks of the urban proletariat since the 1980s no longer goes hand in hand with factory employment in many cases. Instead, slum populations eke out a precarious existence largely dependent on informal employment, from street vending to rag picking to manufacturing without contract, as well as the illegal economy, with the growth of the drug trade a direct consequence of restructuring in the global capital accumulation process. Indeed, becoming a drug baron is probably the most rational bourgeois aspiration for the masses in the slums, even as it is only attainable for a small few, while working in the lower rungs of the drug economy has become one of the more viable forms of employment for many proletarians in oppressed and imperialist countries.
The growth of the global slum population in Africa, Asia, and Latin America points to the fact that the consequences of pillage by way of SAPs became a universal condition of the oppressed countries in the last two decades of the twentieth century, with few exceptions. In Africa, for example, there were 31 SAPs in the 1980s and 1990s, effectively reversing gains in independent economic development after the fall of colonial rule.17 The conditions of poverty imposed by the IMF and World Bank became the target of resistance by the masses of the oppressed countries, with 146 “IMF riots” from 1976 to 1992, often with women in the forefront.18 Harsh repression, by local governments rather than foreign military forces, put down these rebellions, and unfortunately, except in Peru, genuine communists were largely unable to play a vanguard role in diverting the seething anger at SAP pillage into revolutionary warfare. There was a reconfigured international proletariat and dispossessed peasantry facing profound levels of immiseration in the 1980s and 1990s with a common antagonism with imperialist finance capital, which did result in impressive resistance movements, but there was not an international communist movement capable of uniting that international proletariat to seize power anywhere.
Consequently, debt has remained an effective weapon to impose the dictatorship of finance capital on oppressed countries up until today, and while the main wave of SAPs took place in the 1980s and 1990s, structural adjustment remains a part of the imperialist toolkit as long as the promise of debt restructuring can be used to demand it. As Hickel notes, “since the debt crisis began in 1980, the South [i.e., the oppressed countries] has handed over a total of $4.2 trillion in interest payments to foreign creditors,” with debt service payments going from $238 billion per year in the 1980s to $440 billion in 2000 to $732 billion in 2013.19 Any government that refuses to fall in line with the debt regime has been overthrown (Sankara in Burkina Faso) or otherwise forced to submit to it (Syriza in Greece).20 Indeed, seemingly every victory in the anticolonial struggle gave way to capitulation to the dictates of foreign finance capital. As Horace Campbell sums up, if we look beyond Robert Mugabe’s bluster, we are forced to confront the fact that in independent Zimbabwe,
Socialist rhetoric and capitalist management of the economy between 1980 and 1990 gave way to complete capitulation to international and local financiers. The efforts of the first decade [of independence] to expand social services in the areas of health services, water supplies, public education and sanitation were confronted by the conditionalities of the economic structural adjustment programme.21
As the Zimbabwean experience suggests, since government debt is public debt, it is imposed on the masses as a whole. One postcolonial government leader far more principled than Mugabe, namely Tanzania’s Julius Nyerere, explained in 2000 that
Tanzania’s debt is about US$8 billion. Its population is 30 million. This meant that every Tanzanian man, woman and child carries a debt burden of about US$267. So far, if next year, Tanzanians decided to forego all of their earnings—in other words, if they decided to starve themselves to death in order to pay off their external debts—they would succeed in paying only about 78% of their debt burden. They would all go to their graves with an unpaid debt of US$57 per capita. That kind of poverty cannot pay off that kind of debt.22
That kind of debt in turn only led to more poverty, as “the number of Africans living in extreme poverty more than doubled” and “the number of people living on less than $5 per day increased by more than 1 billion during the 1980s and 1990s,” largely as a result of SAPs.23
While leading to greater immiseration for the masses, the debt and SAP regime did sharpen class contradictions within oppressed countries. Unlike Nyerere, many postcolonial government leaders and the (aspiring) national bourgeoisies they represented sold out to the IMF and World Bank without much protest, at least not beyond words. Moreover, a nouveau-rich emerged in Latin America and Africa of “privatizers, foreign importers, narcotrafficantes, military brass, and political insiders” who took advantage of SAP pillage to advance their class positions on the backs of the masses. As Mike Davis pointed out, “Conspicuous consumption reached hallucinatory levels in Latin America and Africa during the 1980s as the nouveaux riches went on spending sprees in Miami and Paris while their shantytown compatriots starved.”24 The reconfigured and newly created bourgeois classes in the oppressed countries took on the character not of a national bourgeoisie in contradiction with foreign imperialism, but of junior partners and opportunist beneficiaries of finance capital centered in imperialist countries.
With the debt and SAP pillage playbook having proven so effective for imperialism in the oppressed countries, it was only logical that it be used on the former Soviet empire after the Soviet Union’s dissolution in 1991 due to losing its debt war with the US. The state ownership form of capitalism in the Soviet Union meant there was no shortage of state assets to sell off, and international finance capital as well as corrupt Russian government functionaries and the emerging Russian nouveau-rich bought them up at bargain prices. Vladimir Putin agreed to IMF dictates to end the generous government subsidies for housing and heat that the Soviet bourgeoisie had used to buy the allegiance of wide sections of the people, and as the cost of living skyrocketed, social services and infrastructure crumbled.25 While a small billionaire class rose to prominence in Russia, the privatization of state capitalism from which they gained their wealth provoked a wave of mass impoverishment, with the ranks of the poor in formerly “socialist” (in reality state capitalist after the mid-1950s) countries rising to 168 million from the 14 million it had been before the collapse of the Soviet Union.26 Whereas Eastern European socialist and then state capitalist countries had built up a robust industrial production apparatus, deindustrialization swept many Eastern European cities after 1991, with Sofia, Bulgaria and Elbasan, Albania becoming deindustrialized wastelands27 comparable to Detroit, Michigan.
In addition to fomenting an explosion in global poverty, SAP pillage and debt collection capital accumulation also led to material transformations in the exploitation and oppression of women and sparked reactionary revanchism against women and LGBT people on a global scale. In Africa and Latin America, “deindustrialization and the decimation of male formal-sector jobs, often followed by male emigration, compelled women to improvise new livelihoods as piece-workers, liquor sellers, street vendors, lottery ticket sellers, hairdressers, sewing operators, cleaners, washers, ragpickers, nannies, and prostitutes.”28 Women entered informal proletarian employment in large numbers, while still often bearing the burdens of the tasks of reproduction in the home. Furthermore, without state protections or formal contracts, women were preyed on and forced into some of the most brutal forms of exploitation, with the rise of prostitution and sex trafficking in Eastern Europe as one particularly horrific example.
Accompanying the material exploitation of women’s labor and bodies was an ideological exploitation of the fact that, as a result of SAPs, many men among the proletariat and peasantry had lost the forms of employment and status as breadwinner in the bourgeois family they previously held. That ideological exploitation took shape through the promotion of reactionary revanchism in different forms, with violent consequences. In the former Soviet Union, the rehabilitation of the Russian Orthodox Church, and its most reactionary patriarchal positions, went hand in hand with secular sexual violence against women and the re-assertion of male authority. In Latin America, femicide reached epidemic proportions, and was especially pronounced in places where women found employment in low-wage factory jobs while men struggled to find jobs comparable to their lost ways of making a living (see the 2009 film El traspatio for a chilling account of this reality). Ideologically, the wave of reactionary revanchism against women is evident in popular culture. For example, in bachata music, the soundtrack of the transition from campesinos to slum proletariat in the Dominican Republic, there was a pronounced shift in prominent lyrical subject matter from love (if often unrequited) to revanchism (against women) in the 1980s.
Elsewhere, LGBT people became the prime targets of reactionary revanchism. Uganda’s AIDS crisis is largely due to the fact that “Uganda spends twelve times as much per capita on debt relief each year as on healthcare.”29 However, the Ugandan ruling class chose to point the blame at gays rather than (its capitulation to) foreign finance capital, resulting in anti-gay violence and the passage of an Anti-Homosexuality Act in 2014. In Zimbabwe, the Mugabe government also chose to foment homophobia as a way to misdirect popular frustrations with the failed promises of liberation and with debt-induced impoverishment. Mugabe even attempted to give homophobia an anti-imperialist veneer, declaring in 1995: “Let the Americans keep their sodomy, bestiality, stupid and foolish ways to themselves, out of Zimbabwe”30 (if only he had kept American capital out of Zimbabwe). Assertions of patriarchy and anti-gay vitriol by the Zimbabwean government are another indication of how anticolonial struggles have been turned into their opposite in response to the re-imposition of imperialist domination by means of debt rather than colonialism. As Horace Campbell points out in Reclaiming Zimbabwe: The Exhaustion of the Patriarchal Model of Liberation, the frustrations of male soldiers who were part of the liberation war and the “the effort to claim [B]lack manhood” that was part of African anticolonial movements have been turned against women and LGBT people as an effective way to channel popular frustrations away from the new bourgeoisie in Zimbabwe and the imperialist bourgeoisie abroad.31 Whether reactionary revanchism emerges more organically from the masses or is engineered by the ruling classes, it gains ground in the absence of communist ideology and politics.
Just as the brutal techniques of colonial rule were brought back to the imperialist countries and used against sections of their populations, especially during World War II, the logic and consequences of SAP pillage that were mastered with devastating effects in the oppressed countries made their way to imperialist countries. Policies privatizing state functions and assets, eliminating state protections that benefited the masses, and using the specter of debt to slash social welfare spending were pioneered by the Reagan and Thatcher governments in the US and Britain, and have since become generalized operational procedures, extending further into imperialist society each decade. The results include erosion of many formerly stable forms of employment, decline in government services, increasingly dysfunctional infrastructure, and massive profit-making for the bourgeois beneficiaries of privatization generalized. While the stark divide between imperialist and oppressed countries remains, privatization generalized does connect the class antagonisms of the proletariat in imperialist and oppressed countries, even as those class antagonisms are far sharper in the latter. Moreover, it constitutes a thread across myriad methods of contemporary capital accumulation, from the breakup of the ejido communal land system in Mexico to the selling off of public housing estates in England, and the “[d]estruction of habitat here, privatization of services there, expulsions from the land somewhere else, biopiracy in yet another realm.”32
Often called neoliberalism,33 the sea change from Keynesian economic policies to the implementation of free market fundamentalism advocated by Milton Friedman was an ideological as well as a material victory for the bourgeoisie. It trumpeted entrepreneurship as salvation for the masses, delegitimized state provisions of social welfare and state economic planning, promoted the mysterious, God-like workings of the (capitalist) free market as a panacea capable of solving all social problems, and provided the bourgeoisie with a rationale for its insistence that “there is no alternative” to capitalism. Both the ideological and material side paved the way for how the logic of capital accumulation was reconfigured and consolidated around the world since the 1980s—not caught in an inexorable decline, as the “Marxist” political economists incapable of recognizing pillage as a means for the bourgeoisie to overcome crisis would have us believe.
US imperialism, and global capital accumulation more generally, resolved its 1970s conjunctural crisis not by restoring industrial production outputs and profitability in the imperial heartlands of North America, Western Europe, and Japan (an idea too idiotic for the bourgeoisie, who preserves its class power not by nostalgia but by innovation, to pursue practically but which many “Marxist” political economists obsess over intellectually). Instead, the international bourgeoisie turned to pillage—via SAPs, the dismantling of the Soviet empire, and privatization generalized—as a source of profit and as a means to exert class power over the oppressed countries, the losers of the Cold War, and the masses generally. That pillage, and the strength it gave to finance capital, did, however, create the conditions for a new wave of (industrial) production for the imperialist bourgeoisie to profit from, not in their home countries, but in the oppressed countries themselves.
Moving (from) production (to finance)
The fall of colonialism followed by the SAPs created favorable conditions for a new round of exploitation of labor in the oppressed countries in low-wage manufacturing. Among the onerous conditions postcolonial governments were forced to agree to under SAPs was allowing the flow of foreign capital into their countries, dismantling state support for national industry, and slashing protections, such as minimum wages and contracts, for the working class. In the 1980s and 1990s, multinational corporations and finance capital took advantage of those conditions and sped up the move, already underway, of many manufacturing lines from the imperialist to oppressed countries, where labor could be more profitably exploited and production streamlined to meet more flexible processes of capital accumulation. Often called deindustrialization, in truth this process kept core production functions, such as armaments manufacturing, the energy sector, and subsidized food production, in the imperialist countries, along with a smaller portion of entrenched industries.34
What production lines were moved to the oppressed countries was a selective process that kept the technological and productive advantage in the imperialist heartlands, while failing to develop the industrial base of the oppressed countries in ways that would serve their economic self-reliance. Essentially, the proletariat in the oppressed countries produced cheaply manufactured goods for export, not to sustain and develop their own countries. And the imperialist bourgeoisie set up manufacturing in the oppressed countries in the most flexible ways possible, enabling it to move production from one place to another based on where it would be most profitable, and to pull its capital out of obsolete lines with no regard for the consequences for the producers. The anarchy of capitalist production reigns in ways that benefit the imperialist bourgeoisie.
Technological advances in transportation (containerization, for example) and information and communications technology certainly made the new global assembly line more possible and more profitable,35 but the key bourgeois innovation was organizational. As Intan Suwandi sums up, contemporary capitalist production “is increasingly organized in global commodity chains, governed by multinational corporations straddling the planet, in which production is fragmented into numerous links, each representing the transfer of value.”36 The controlling center of production is in the imperialist countries, where the bourgeoisie retains “exclusive access to knowledge, technology, and development”37 and can keep much of their capital liquid. Production itself is largely outsourced to the subordinate manufacturing bourgeoisie, a class in the oppressed countries tied to and dependent on imperialism and finance capital but usually formally independent as subcontractors. As Suwandi describes the relationship, with
arm’s length production, even more than with traditional direct foreign investment, what is being produced are mere links in a global chain of value, in which particular nodes of production are digitally specified and controlled from abroad. The entire production system is designed to be highly mobile and can be rapidly shifted elsewhere if unit labor costs rise unduly.38
Politically and practically, this was one more nail in the coffin of colonialism as a form of imperialism, since the imperialist bourgeoisie could now go “all over the world in quest of gains instead of seeking an exclusive economic territory of its own.”39 Ideologically, arm’s length production gave the imperialist bourgeoisie the added benefit of “plausible deniability” of the source of its profits in the superexploitation of the proletariat of the oppressed countries. What is bought by consumers in the imperialist countries and displays the brand names of multinational corporations (think clothing labels) has been purchased by those corporations from suppliers (i.e., the subordinate manufacturing bourgeoisie) for cheap. The process involves “the exchange of more labor for less, in which monopoly-finance capital at the center of the system benefits from high markups on [the products of] low-cost labor” in the oppressed countries.40 The profitable unequal exchange has made the imperialist bourgeoisie come to prefer arms-length outsourcing over foreign direct investment within the internal hierarchy of multinational corporations, minimizing risk to themselves and hiding the labor exploitation that makes their profits.41 To accurately calculate the exploitation today, we would have to take into account “the increasing role of value capture and value extraction, as opposed to direct value generation, in determining the profits of multinational firms.”42
The vertically integrated firm with which the US bourgeoisie rose to its top imperialist position has been superseded by a new corporate model—think Walmart or Amazon rather than Ford or General Motors—that uses decentralization of production to amass a huge supply of cheap products to be sold at superprofits, products which in turn prop up the imperialist way of life with abundant consumption. As Giovanni Arrighi described it, whereas General Motors “was a vertically integrated industrial corporation” rooted in the US economy, “Wal-Mart, in contrast, is primarily a commercial intermediary between foreign (mostly Asian) subcontractors, who manufacture most of its products, and US consumers, who buy most of them.”43 But it is not just the structure of multinational corporations that has transformed under the new regime of global production, but also the global structure of class relations. We have already made clear the relationship between the imperialist bourgeoisie and their junior partners in production, the subordinate manufacturing bourgeoisie in the oppressed countries, who do not constitute a national bourgeoisie developing industry that serves the home market, but instead focuses on export production. Of greater consequence is the changed location of the industrial proletariat.
Whereas only 34% of the world’s industrial workers were in the oppressed countries in 1950, the downfall of colonialism tipped the balance toward the oppressed countries. 53% of the world’s industrial workers were in the oppressed countries by 1980, and after the SAP decades, that number reached 79%—541 million workers—in 2010.44 The new, low-wage industrial proletariat is drawn from the ruin of peasant production by the SAPs, and is disproportionately made up of women workers. The subordinate manufacturing bourgeoisie uses peasant dislocation and patriarchy to its advantage to more viciously exploit these workers, and the lack of traditional male breadwinner roles in the new industrial proletariat is another factor fueling the wave of post-SAP misogynist reactionary revanchism.45
The new industrial proletariat is a product of migration, from the countryside to export processing zones (EPZs)—specialized manufacturing regions in oppressed nations making goods for consumption in imperialist countries, which further the problem of uneven and disarticulated economic development. The workers in EPZs are more disposable than the post-WWII industrial workers of the imperialist countries, receiving little specialized training because they work in flexible, low-skill manufacturing, and because the imperialist bourgeoisie may decide to move production to another export processing zone anytime it wishes. The latter fact makes labor struggles for higher wages and better conditions difficult considering the bourgeoisie’s option to move production in the face of class struggle. A recent example of this phenomenon is the manufacturing company Foxconn’s relocation of iPhone production from China, where wages went up, to India beginning in 2019.46
The disposability of the new industrial proletariat makes it a double migratory class—the first migration (from countryside to EPZ) being the original act of proletarianization, the second being a move to a new export processing zone or a slum in the oppressed country or to an imperialist country in search of employment when EPZ jobs dry up. In combination with “the depeasantization of a large portion of the global periphery through the spread of agribusiness,”47 the new global organization of production has made the proletariat a more migratory class. In the imperialist countries, the immigrant proletariat provides the reproductive labor and services necessary for the functioning of the global cities (such as New York and London) where finance capital presides over the global production assembly line, their exploited labor keeping the system running that exploited their labor in their home countries and/or forced them to leave those countries.
Moving people (migration) and moving production (offshoring) both took shape through uneven development, not only between imperialist and oppressed countries, but also between regions, countries, and continents. Besides some regions becoming EPZs, outsourced production was concentrated in 24 oppressed countries, mostly ones with large populations from which to recruit industrial workers, while other oppressed countries were left out of the manufacturing part of the global assembly line. The result was a sort of reserve army of labor and surplus populations on a global scale that helped the bourgeoisie impose and maintain superexploitation of those working in production, especially when postcolonial governments such as in India eliminated protectionist policies, often as part of the terms of SAPs, and after socialism was overthrown in China, opening its large population up to exploitation by foreign capital.48
Much of sub-Saharan Africa was, in effect, “declared ‘redundant,’ superfluous to the changing economy of capital accumulation on a world scale,”49 other than as a provider of raw materials from mines and cash-crop peasant production. The ensuing rapid urbanization in Africa was not the growth of an industrial proletariat, but that of surplus populations cast off their land and traditional ways of life, forced to eke out an existence in slums. As Arrighi made clear, “the unplugging of these ‘redundant’ communities and locales from the world supply system has triggered innumerable, mostly violent feuds over ‘who is more superfluous than whom’”—essentially, fights over scarce resources, not “atavistic hatreds” or “power struggles among local ‘bullies’” as the imperialist ideological state apparatuses portray it.50
Asia, by contrast, became the world’s manufacturing belt for several reasons. For starters, US imperialism already had a strong presence there, including military bases and close political ties. US imperialism could rely on several junior partners, especially Japan, Taiwan, and South Korea, to help oversee the outsourcing of production. The Japanese bourgeoisie established a multilayered subcontracting system, which was expanded throughout Asia.51 South Korea moved up the ladder in manufacturing, ditching “such labour-intensive lines as footwear and apparel,” which were moved to Southeast Asia, in favor of “such technologically sophisticated products as cars, electronics, and semi-conductors.”52 Manufacturing firms headquartered in these junior-partner countries, such as Taiwan’s Foxconn, were often the ones directly overseeing production in other Asian countries, highlighting how arm’s length production works by outsourcing to industrial overseers. In Southeast Asia, the most exploited end of the manufacturing chain, US imperialism could count on the firm hand of bourgeois dictatorship in post-coup Indonesia and the Philippines to ensure the optimal conditions for labor exploitation. The result was a strong expansion of industrial production in Southeast Asia without much compensation—“no upward mobility in the value-added hierarchy of the capitalist world-economy.”53
What really made Asia the world’s manufacturing belt more than anything else, however, was the 1976 counterrevolutionary coup that overthrew socialism in China. Soon thereafter, Deng Xiaoping, the appointed political leader of the new Chinese bourgeoisie, made friends with US imperialism (and Ronald Reagan in particular) and opened up his country to foreign capital to set export manufacturing in motion. That foreign capital in turn benefited from the industrial base, infrastructure, and skilled workers with strong collective discipline created by a quarter-century of socialism. To those ready-made industrial workers were added large numbers of migrants from the countryside, as socialist collective farms and rural communes were broken up piece by piece.54 Though China never went through an SAP, the new bourgeoisie did seize and sell off state assets for their own enrichment, resulting in the collective labor of socialist construction being handed over to the grubby hands of privatization. State-owned industrial production was either made redundant or transferred to private ownership, resulting in mass layoffs of workers (36 million between 1996 and 2001) and intensified exploitation. China’s coastal cities, where industrial production was concentrated, went from “the most egalitarian in Asia” to among “the most egregiously unequal,” with a small portion of “nouveaux riches” existing side by side with a larger mass of “the new urban poor: on one hand, deindustrialized traditional workers, and on the other, unregistered labor migrants from the countryside.”55
As the Chinese experience indicates, local postcolonial bourgeoisies everywhere made “common cause with metropolitan capital to ‘open up’ the world for free flows of capital and of goods and services, to the detriment of vast sections of peasants and petty producers, and even small capitalists.”56 The loss of socialism, the sellout to imperialism of postcolonial governments, including ones that came to power through wars of liberation (Vietnam), and SAPs, where they were imposed, made large numbers of laborers available for outsourced exploitation serving foreign, mainly US, imperialism. Specialization created a division of labor and a hierarchy of exploitation across Asia, with Bangladesh becoming a center of the garment industry and India focusing on services (which, along with manufacturing, can be outsourced to oppressed countries depending on the type of service) and creating a large informal proletariat in its slums. The broader, global picture of capital accumulation that emerged is of Asia as the manufacturing belt, West Asia/the Middle East as the oil spigot, and sub-Saharan Africa providing raw materials and a growing reserve army of labor. Latin America and the Caribbean retained some manufacturing and agricultural production functions, but SAPs turned much of the populations there, migrating in large numbers from the countryside to slums, into an informal proletariat without access to regularized or traditional industrial proletarian occupations.
Both the surplus populations in Africa and the informal proletariat in Latin America point to a core contradiction in post-1970s capitalism-imperialism: the inability of capital to use the growing numbers of dispossessed peasants, ruined independent producers, and unemployed workers in the labor process,57 resulting in mass migrations, expanding slum populations, volatile conditions of life, the growth of the underground economy (including the drug trade and the sex trade), and every hustle for survival imaginable. To the extent capital tries to solve this contradiction economically, it does so by sending mobile capital into outsourced production while immobile capital employs immigrant labor (think, for example, of the meat packing industry in the US becoming run almost exclusively by immigrant labor).58 However, since this contradiction has only intensified since the 1980s, with ecological devastation adding fuel to the fire (sometimes literally) and growing sections of people more desperate for access to resources, the brute force of bourgeois dictatorship has stepped in to resolve the contradiction with repression. Controls on migration from the oppressed to imperialist countries, and the reactionary politics that go with them, are one stark example of this repressive political resolution.59
In imperialist countries themselves, moving manufacturing where labor could be more profitably exploited transformed the internal class structure beyond the aforementioned increase in immigrant proletarians. The post-WWII well-paid working class, working in or associated with industrial production, shrank in size but maintained its class position in key functions that could not be moved overseas for strategic or practical reasons, as well as in the leftovers of industries that flourished in the mid-twentieth century. In some instances, such as construction, there was a literal and visible split in the working class between an upper, well-paid, unionized, protected section enjoying the imperialist way of life and doing little actual labor and a lower, exploited, non-union section made up almost exclusively of immigrants doing arduous labor in dangerous conditions. Since the 1980s, many remaining well-paid working-class jobs have faced stagnant or declining wages, erosion of benefits and protections, and increased risk of being rendered redundant.60 New lines of manufacturing in imperialist countries have mainly been created where there are opportunities, for the bourgeoisie, to pay lower wages and to fight off unionization efforts, such as in US (mostly southern) states with “right to work” anti-union laws and in places with large numbers of immigrant proletarians.
Well-paid working class positions in manufacturing were replaced with proletarian jobs in the service industry. The US bourgeoisie fought for “an historically unprecedented repression of wage growth” in the 1980s and was thus “able to make profitable a large-scale transition into low productivity services that their rivals in Germany and Japan found difficult to duplicate.” The result was “a vast expansion of low-productivity, low-waged jobs, facilitated by the unmatched ‘flexibility’ of the increasingly union-free US labour market” in the service industry.61 The returns that the lower ranks of the bourgeoisie saw in the service industry, however, paled in comparison to the absurd profits made in finance.
As Robert Brenner sums up, “with low returns on capital stock discouraging long-term placement of funds in new plant and equipment, money went increasingly to finance and speculation, as well as to luxury consumption, the way being paved by an undisguised lurch in state policy in favour of the rich in general and financiers in particular.”62 Finance capital was in effect subsidized by US government economic policy and given every latitude imaginable, evading insider trading and anti-trust laws at every turn.63 Monopoly-finance capital’s pre-eminence was consolidated when the “Clinton administration pushed banking deregulation to its logical conclusion, abolishing the landmark Glass-Steagall Act of 1934 so as to open the way to the rise of huge conglomerates that combined commercial banking, investment banking, and insurance, typified by Citicorp and JP Morgan Chase.”64 The center of bourgeois power in the US and imperialist countries more generally became concentrated in banks and investment firms. There, members of the bourgeoisie often function as speculators more than anything else, keeping themselves detached from production, squeezing all they could from the assets they seized through mergers and takeovers, and moving with a vengeance to purge any economic activity that they could not make a desired rate of profit from—hence the wave of “corporate downsizing” of the 1980s and 1990s.65
Bankers, investors, and speculators were joined by insurance and real estate capital as the primary engines of capital accumulation and the most profitable sectors of the US economy, with real estate capital increasingly operating as a form of finance capital over and above construction and the housing market. A manufacturing big bourgeoisie independent of finance capital ceased to exist, for all intents and purposes, in the US and other imperialist countries.66 Besides financiers, multinational corporate heads presiding over outsourced global production and new tech capitalists (the “Silicon Valley” bourgeoisie), whose material products also depended on the global assembly line, occupy a place at the center of bourgeois class power in the imperialist countries. While still anchored to national markets in the imperial heartland, the big bourgeoisie became a more cosmopolitan class, financially meshed together in transnational corporate organization and investments and strutting the globe in their methods of capital accumulation.67
The post-1970s international bourgeoisie, which includes cosmopolitan capitalists, international bankers, investors, speculators, tech entrepreneurs, oil-rentiers, and the nouveau-rich in oppressed countries, share in common their culpability in a wide range of exploitation and dispossession of the broad masses. All their arguments about technological innovation and (capitalist) globalization portending progress for humanity have proven to be ludicrous lies, with virtually all measures of inequality increasing over the last several decades, between imperialist and oppressed countries and within both types of countries, and financial resources more concentrated in the hands of a small few than perhaps ever in human history.68 Just to cite one indicator, Intan Suwandi points out that, as of 2019, the 26 “wealthiest individuals in the world, most of whom are Americans, now own as much wealth as the bottom half of the world’s population, 3.8 billion people.”69
Whereas prior bourgeois fractions depended more on expansions of production and trade to ensure continual capital accumulation, today’s international bourgeoisie, with its distance from production and profit through finance, is not compelled to expand employment in ways that create a stable working class or enlarge the ranks of the petty-bourgeoisie.70 Besides the international bourgeoisie, the subalterns immediately below them are the only beneficiaries, enjoying luxurious lifestyles in a rarified, “high-cost, high technology market for higher-value, increasingly customized goods and services—whether designer clothing or luxury cars and homes.”71 If this is the “development” the international bourgeoisie prattles on about and praises itself for doing, it does nothing for the masses.
Widening, deepening, and broadening class antagonisms between the masses around the world and the international bourgeoisie, however, have not erased the distinction between imperialist and oppressed countries and the masses in them. The imperialist way of life may have eroded somewhat for broad swaths of the population of imperialist countries, but it is still propped up by the global assembly line, with the products of offshored manufacturing made cheaply available in the imperial heartlands, even if often paid for by consumer debt. Keeping those products flowing in a way that served imperialism depended on consolidating a new incarnation of free trade imperialism.
Free trade regime
Free trade has always been first and foremost the pursuit of imperialist powers whose prowess in production, fortitude in finance, triumph in trade and transport, military might, and global hegemony is unrivaled. In the nineteenth century, free trade imperialism reinforced the British bourgeoisie’s pre-eminent position in a global system of formal equality but actual inequality. As rival imperialists crept up on Britain’s lead by the late nineteenth century, free trade imperialism was negated by protected spheres of influence and colonial boundaries, which were subsequently fought over in two world wars. The negation of free trade was furthered by socialist states off limits to capital accumulation, postcolonial governments enacting protectionist measures for developmentalist purposes, and, from 1956 on, the rivalry between US and Soviet imperialism. During the decades of that rivalry, free trade prevailed among firm allies of the US via the General Agreement on Tariffs and Trade, but beyond that, separate spheres of influence defined who traded with whom.
Through SAPs, US imperialism began opening up trade in former colonies in Africa and Asia, battering down the barriers that had been erected after formal independence, while also working to whittle away at the Soviet Union’s sphere of influence. In addition, the US bourgeoisie pursued regional free trade agreements in the 1980s and early 1990s, such as the Asia-Pacific Economic Cooperation started in 1989 and the North American Free Trade Agreement implemented in 1994. These regional agreements allowed the US to flood the markets of oppressed countries (especially Mexico and in Southeast Asia) with its products and incorporated those countries more fully into the global manufacturing assembly line, ruining their peasantry and exploiting their proletariat simultaneously. After the main barrier to global free trade, the Soviet Union, collapsed and with postcolonial governments thoroughly subordinated by SAPs, the international bourgeoisie made a decisive negation of the negation, ending the separate spheres of influence of different imperialist powers that shaped world trade from colonialism through US-Soviet rivalry. They consolidated a global regime of free trade imperialism, presided over by the US bourgeoisie in a position no less powerful than the British bourgeoisie of the nineteenth century, with the creation of the World Trade Organization (WTO) in 1995.
As Jason Hickel sums up, whereas “structural adjustment imposed free-market policies on developing countries one by one, the WTO extended and standardised the neoliberal system across the global South in one fell swoop.”72 Under WTO rules, oppressed countries had to open their markets not only to products from the imperialist countries but also to capital flows, guaranteeing foreign capital the right to exploit labor around the world. The latter empowered the imperialist bourgeoisie to exercise control over the economies of the oppressed countries, who essentially gave up sovereignty over their national markets and the power to protect their agriculture, industry, environment, and labor from the dictates of free trade when they signed on to the WTO. While signing on to the WTO was ostensibly voluntary, centuries of imperialist-induced dependency, with the SAPs as the latest chapter in that saga, exerted tremendous pressure on oppressed countries to join or be cast out of the global supply line and face ruin (the other alternative being the kind of socialist self-reliance accomplished in Maoist China, which of course required proletarian state power).
Under the WTO, specific rules of international trade were constructed to benefit those who had the most property, in one form or another, in their hands. For example, the Agreement on Trade-Related Intellectual Property Rights (TRIPS) gave patent holders power over production and profit from technologies crucial to humanity. TRIPS is literally responsible for innumerable deaths from AIDS, especially in Africa, for it prevents anyone from manufacturing AIDS drugs without permission from the pharmaceutical companies, centered in imperialist countries, who own the drug patents as their property.73 In addition to WTO rules working to the benefit of those who hold the most property, imperialist participants in the WTO have come up with “work arounds” to those rules. For example, they have maintained subsidies for agricultural production within their home markets and then dumped their subsidized products on the markets of oppressed countries, where they can beat the prices of domestically produced goods and ruin the farmers who make them. Yet under the WTO, oppressed countries have been forced to end subsidies for their own agricultural production.74
In these and other ways, free trade imperialism under the WTO exemplifies how capitalism operates through processes of formal equality that mask real inequality. On the surface, the WTO creates a fair system of international trade between equal participants. But in reality, the participants are unequal based on their ownership of capital and control over products to sell, and real decision-making over the rules of trade gets done behind closed doors with no shortage of duplicity. The imperialist bourgeoisie claims that free trade will boost development in oppressed countries by allowing capital to flow into them and products to flow out. But the reality has been that each year, according to Hickel, the $2 trillion that flows into oppressed countries as aid, income, investment, and other forms does not come close to making up for the $5 trillion that flows out in the form of interest payments, profits to foreign investors, payments to patent owners, and various forms of unequal exchange. Making matters worse, oppressed countries are forced to compete with each other in the world market for investment and profits from exports, which only strengthens imperialist domination.75
One consequence of the WTO and the 1990s triumph of free trade imperialism under US hegemony more generally is that the logic of capital accumulation via the impersonal force of the market has become a stronger lever over the masses and even over the governments of many countries. While state power and military force remain absolutely necessary for imperialism (as we will explore below), the imperialist bourgeoisie is able to use all-out military intervention and occupation more sparingly when the laws of capitalist competition can compel countries to fall in line, in contrast to the direct and everyday reliance on colonial state power and military force in imperialism’s past.76
As a means to enforce those laws of capitalist competition, the WTO was an important final addition to the regime of global governance that the US bourgeoisie started constructing at the end World War II. From the 1980s on, US-led international institutions played more assertive roles in enforcing the imperialist order. As Giovanni Arrighi put it, “the IMF was empowered to act in the role of the Ministry of World Finance,” the UN Security Council took on “the role of Ministry of World Police” under the Bush Sr. administration, and “the regular meetings of the Group of Seven made this body look more and more like a committee for managing the common affairs of the world bourgeoisie.”77 The WTO became the means to spread global governance under US hegemony throughout an increasingly interconnected world economy, especially with many lines of manufacturing moved from imperialist countries to Asia and a more lateral flow of manufactured goods across the Pacific. As Arrighi put it, the “shift in the primary seat of the material expansion of capital from North America to East Asia constitutes an additional powerful stimulus for the US-sponsored tendency for the formation of suprastatal structures of world government.”78
With the strengthening and expansion of institutions of global governance under US hegemony came ideological rationales for their imposition around the world, sometimes called the Washington Consensus. Greg Grandin summed up this projected imperialist moral superiority complex as “a shared commitment to democracy, respect for human rights, market economics and free trade.”79 A crucial legitimizing mechanism for this ideological rationale was non-governmental organizations (NGOs), usually funded by imperialist bourgeois philanthropy and taking over social welfare functions in oppressed countries that had been cut under SAPs. Politically, NGOs acted as a bulwark against class struggle, dispensing charity and taking a condescending, clientelistic approach in response to mass impoverishment and buttressing imperialist notions of human rights, democracy, and empowerment through entrepreneurship. Whereas colonialism used missionaries to justify its brutalities and placate the suffering of its subjects, the free trade imperialism of the late twentieth century to the present relies on NGOs to put band-aids on slum poverty, proselytize the impoverished, and admonish itself of sin.
After the establishment of the WTO in 1995, the US bourgeoisie sought to expand free trade imperialism and integrate all countries possible into its system of global economic governance. It did so through new free trade agreements and expansions of existing ones, such as the 2005 Free Trade Area of the Americas, essentially an extension of NAFTA beyond Mexico and further into Latin America. But free trade imperialism met with resistance from the masses, such as the militant protests against capitalist globalization that haunted the meetings of imperialist economic institutions wherever they took place, even disrupting the 1999 WTO meeting in Seattle and fomenting splits among its participants. Furthermore, the US bourgeoisie expected it could add member countries to the WTO while maintaining its upper hand, but the addition of China in 2001 proved contradictory. On the one hand, it further opened China’s economy to US imperialism, but on the other hand, the Chinese bourgeoisie used the manufacturing prowess it had built up over decades to profit from WTO-enabled access to foreign markets, including the US.80
The US bourgeoisie’s 1990s dreams of some sort of Kautskyite ultra-imperialist heaven on earth, where the system worked smoothly to the benefit of the international bourgeoisie without competition among them causing conflict, was not to be. So it adapted, relying more on bilateral, multilateral, and regional free trade agreements (the proposed but doomed Trans-Pacific Partnership, for example) over the last couple decades while the WTO still plays a central regulatory role in global economic governance.81 And the US bourgeoisie has strengthened and relied increasingly on a crucial economic weapon of free trade imperialism in response to challengers to the rules of the game, namely sanctions.
When a country refuses the role US-led imperialism imposes on it in the global order, economic sanctions cut it off from trade flows and financial transactions, with the masses left to suffer the consequences as crucial necessities such as medicine and the means for maintaining infrastructure are prevented from entering the country and funds generated from exports dry up. British and French imperialism had tried sanctions after World War I to little success, and it was only under US hegemony that sanctions became an effective weapon in the imperialist arsenal. Post-revolution Cuba was the first primary target of US sanctions and has been their most longstanding victim. Iran was hit hard with sanctions after its 1979 revolution that overthrew the Shah, a loyal servant and junior-partner of British and US imperialism. Those sanctions prevented, and continue to prevent, the Iranian bourgeoisie from accruing the maximum profits possible from their country’s oil resources, in contrast to allies of US imperialism across the Persian Gulf, and Iran has also faced “a full financial blockade” in addition to restrictions on trade.82
Sanctions have become a sort of “instrument of first resort” for US imperialism, and their imposition on a few countries compels others to abide by the rules of free trade imperialism lest they be cast out like a leper and denied the ability to buy and sell on the world market. They also become a prelude to and rationale for US military intervention, which can be presented as necessary after sanctions did not prevent a defiant country from bowing down before the “rules-based international order.”83
Enforcement by the military supreme
While the US bourgeoisie has heralded the free market as an ideal mechanism that can diminish conflict by promoting peaceful economic competition according to established international rules, it has never been too high on its own fantasy to neglect the need for a pervasive military presence and occasional punitive military action to enforce those international rules. In fact, as Ellen Wood put it, “the more economic competition has overtaken military conflict in relations among major states, the more the US has striven to become the most overwhelmingly dominant military power the world has ever seen.”84 Decades before the 1990s triumph of free trade imperialism, the “United States emerged from the Second World War in possession of by far the most powerful conventional military forces ever assembled.”85 Superior naval power gave it the ability to enforce dominance over trade routes, while superior air force allowed it to stalk its adversaries from the skies, keeping tabs on their movements and threatening fast punishment on anyone who stepped out of line. Adding to the effectiveness of aerial surveillance was the Five Eyes program, an intelligence sharing operation between the primary powers of the Anglo-American Imperialist Alliance (the US, Canada, Britain, Australia, and New Zealand) but with the US exercising a privileged position within it, whose origins date back to World War II.86
The decolonization process made US military power and reach all the more important, as it denied imperialism direct administrative and repressive control over the oppressed countries, having to rely on local, formally independent bourgeois states for those purposes.87 Consequently, US imperialism worked to build a ubiquitous presence around the world, with an extensive network of military bases on the sovereign soil of other countries and consolidation and coordination under regional command structures, from Pacific Command set up in 1947, to CENTCOM overseeing the oil-rich Middle East region beginning in 1983, to AFRICOM’s creation in 2007. The result is an imperial military that is omnipresent and flexible, largely avoiding all-out war and occupation in favor of surgical strikes and ongoing deterrence. US imperialism’s military superiority relies more than anything else on the existence of that superiority itself—an ever-present reminder to its rivals and challengers of the potential punishment they could face.
Paying for that military superiority was a joint venture among the US’s fellow imperialist allies and junior-partners, with a division of labor among them wherein the US took on the role of protection. As we explored in part two, demilitarized Japan and Germany were allowed to outrun the US in industrial efficiency in the decades after WWII while outsourcing their protection to it so long as they paid their share of the costs. Western European countries accepted a US military presence in their borders in exchange for defending those borders from Soviet imperialism. Immediately after the collapse of the Soviet Union, US allies were expected to foot the bill for any military interventions aimed at defending the “rules-based” international order of free trade imperialism. The first such post-Soviet intervention, the 1990–91 war on Iraq, was largely funded by US allies such as Saudi Arabia, Kuwait, and the United Arab Emirates with Japan and Germany also dutifully fulfilling their financial obligations. Those countries contributed $54.1 billion to the war effort, while the US only covered $7 billion. In this way, collective funding for US military actions was the financial confirmation of the “near-monopoly of the legitimate use of violence on a world scale” handed to the US by its allies.88 After that first US war on Iraq, the ongoing imperial logic of we shall protect you if you pay us to also served to build “uncontestable (and very expensive) supremacy” in the military sphere “clearly designed to discourage any substantial build-up of independent Japanese and European military forces—not because this ensures US predominance in the ‘realm of hard power’ but precisely because ‘hard power’ has its own effects on economic ‘leverage.’”89
The first US war on Iraq was also indicative of a shift in military strategy by US imperialism and its allies after US defeat in Vietnam. As Horace Campbell describes,
After the war in Vietnam, the military planners of the West refined the concept of air-land battle… The air force organised for the delivery of bombs, while the army mopped up after the bombing. This form of warfare was inordinately dependent on the air force. The strategy was linked to the fact that, from the 1970s to the turn of the century, the aerospace industry had become one of the prime military contractors for the military-industrial complex in capitalist countries. Advanced weaponry was deployed by the USA and NATO in the Gulf War, the wars in Serbia, and in Afghanistan.90
Between defeat in Vietnam and victory over Iraq, the US avoided any large-scale invasion by ground troops that carried with it the risk of large-scale defeat. Grenada in 1983 was an easy target, with the US military able to deploy overwhelming force against a small island nation that could not expect outside support in its defense. Whereas Grenada was relatively inconsequential to US imperial interests, Panama was small but strategically essential given the Panama Canal’s crucial role in world trade routes. When Panama’s military dictator, Manuel Noriega, went from firm US ally to non-compliant controller of his own personal fiefdom, Panama became the rehearsal site, in late 1989, of the US’s overwhelming power of aerial bombardment, to the detriment of the masses subjected to it. The invasion on the ground that followed it was a clean-up operation after the devastation from above, and posed little risks for US troops. After Panama, the US bourgeoisie had less need for military dictatorships in Latin America, with bourgeois-democracy resting on the threat of military force if that democracy was used to go against US imperial interests. Freed from the constraints of imperial rivalry with the collapse of the Soviet Union, the US could deal with non-compliant states like Noriega’s regime in Panama and Saddam Hussein’s in Iraq as it wished.91
The shift in the balance of imperial power indicated by US aerial bombardments of Panama and then Iraq also pointed to new strategic challenges facing US imperialism in a postcolonial, and then post-Soviet empire, world. As Ellen Wood pointed out, the local states that replaced colonial regimes “are subject to their own internal pressures and oppositional forces; and their own coercive powers can fall into the wrong hands, which may oppose the will of imperial capital.” Furthermore, postcolonial imperialism’s desire and necessity to keep many postcolonial governments in weakened positions with diminished state capacity has resulted in “disorder engendered by the absence of effective state power—such as today’s so-called ‘failed’ states—which endanger the stable and predictable environment that capital needs.” The collapse of central state power in Somalia is the paradigmatic example of imperialism’s “failed state” problem, and the US military’s attempts to resolve the problem in the mid-1990s failed miserably (with moments to celebrate if you consider “Blackhawk down” to be a joyous refrain). Even more of a problem for US imperialism than failed states is “the threat from states operating outside the normal scope of the US-dominated order,” such as North Korea and Iran.92
While the US military’s ubiquitous global presence served to keep challengers in check, hegemony could not be maintained without using that military to its fullest effect from time to time and in smaller ways all the time. As Wood put it, “Boundless domination of a global economy, and of the multiple states that administer it, requires military action without end, in purpose or time.”93 Consequently, US victory over the Soviet Union in the Cold War did not pay a “peace dividend,” as the bourgeoisie said it would, and the Clinton administration “used military power considerably more often than did Bush [Sr.] and Reagan combined.”94 It found a new rationalization for such interventions—not protecting the world from communism but carrying out humanitarian interventions. With humanitarian interventions, US imperialism arrogated itself as the arbiter of moral right, presiding over international political rules presumed to be universal and devoid of class content. Helicopters hovering over Somalia, aerial bombardment of Kosovo, and economic sanctions that deprived children in Iraq of food and medicine were all carried out with the consensus of an “international community” under US bourgeois hegemony and in the name of humanitarian moral principles.
Besides humanitarian intervention, the drug war became an important justification for US imperialist surveillance and enforcement operations, involving the Drug Enforcement Agency and the military in partnership with local repressive state apparatuses, especially in Latin America. The drug war was used as justification for intervening against guerrilla army insurgencies from Senedero Luminoso in Peru in the 1980s to FARC in Colombia. With the latter case, military-political doctrine developed as Plan Colombia at the end of the Clinton administration became the model to be used more broadly, especially in the Mexico to Central America to Colombia corridor crucial to US imperial interests.95
In the 1990s, the overwhelming power and global reach of the US military, on the one hand, and its reluctance to enter ground wars (Iraq and Kosovo) and failures on the ground (Somalia) as well as its necessity to use its superior power around the world in ways that tactically adapted to the circumstances, on the other hand, point to the contradiction inherent in US global military dominance. The principal aspect of that contradiction, since World War II and especially since the collapse of Soviet imperialism, has been the global superiority of US imperialism. However, the presently secondary aspect of that contradiction—the cracks and weaknesses in US military power and the fact that it cannot rest on its laurels, even for a second, if it wants to stay superior—point to the ultimate truth of Mao’s proclamation that the imperialists are paper tigers. It will take an innovative round of revolutionary people’s wars to change what is principal and secondary in the contradiction.
(Sort of) trying colonialism again (in Afghanistan and Iraq) and failing
Seeking to cash in on the principal aspect of the contradiction was the neocons, a group of bourgeois political strategists and operatives who believed the Clinton administration had failed to sufficiently consolidate US hegemony after the collapse of Soviet imperialism. They especially concerned themselves with ridding non-compliant states from the Persian Gulf region. While the neocons had direct ties to the oil industry, their motives went beyond bourgeois self-interest, recognizing that control over the world’s largest oil reserves would give US imperialism great leverage over competitors and potential rivals, from Europe to China, who, unlike the US, did not have sufficient oil in their own territory to power their economies.96
From Vice President Dick Cheney to Defense Secretary Donald Rumsfeld, the neocons occupied key positions in the George W Bush administration with which to realize their programmatic objectives. They used the September 11, 2001 attacks on the World Trade Center and the Pentagon (and almost the White House) to go full steam ahead with their “Plan for a New American Century.” Afghanistan was their first target, and the Taliban government there was easily overthrown with an international coalition. So began the neocons’ forward march, with the War on Terrorism as an ideological and political construct that united bourgeoisies from Western Europe to Russia to China and gave them popular support for military action against foreign enemies and domestic repression against undesirable populations, from Chechnya to Xinjiang. Inside the US, the War on Terrorism consolidated greater power in the executive branch, ramped up patriotic fervor, launched heightened repression against Arabs and Muslims, and consolidated and coordinated repressive state apparatuses with the creation of the Department of Homeland Security and gave them greater reach and latitude with the Patriot Act.
From Afghanistan, it was on to Iraq to do what a first war and over a decade of sanctions had failed to accomplish: topple the government of Saddam Hussein and replace it with one compliant to US imperial interests. Aerial bombardment followed by invasion got the job done quickly just like it had in Afghanistan. But to build subservient regimes in both Afghanistan and Iraq, the neocons at the helm of the Bush administration had to resort to the old colonial playbook. In Afghanistan, they installed a government headed by Hamid Karzai that was widely viewed as little more than a puppet regime. In Iraq, the US more or less directly administered the country for a year after overthrowing Saddam Hussein’s government, with American career diplomat Paul Brenner given greater governing authority over the internal affairs of the country than the Iraqis that the US invited into their Coalition Provisional Authority. Attempts to broaden the puppet regimes established in Afghanistan and Iraq by and large failed at garnering popular legitimacy and could not mollify internal differences among the occupied populations—if anything, they only exacerbated them.
The puppet regimes themselves only held firm authority in the highly militarized “green zones” established in Kabul and Baghdad, becoming besieged outside their walls and checkpoints (with bombing attacks sometimes reaching those checkpoints). Without strong, sovereign militaries of their own, US and allied imperialist troops were required to protect them. The puppet regimes themselves and the foreign occupation forces in both Afghanistan and Iraq faced increasing insurgency as the populations of those countries refused to accept their legitimacy and a variety of political forces—unfortunately including many reactionary ones—organized armed resistance. The US military and its allies, especially Britain, turned increasingly to the old colonial playbook in ultimately failed attempts to subdue the occupied and stamp out resistance. As Tom Stevenson sums up, “If the main forms of colonial war are urban occupation and rural fort-soldiering, Basra [in Iraq] exemplified the first and Helmand [in Afghanistan] the second.”97
Militarily and for bourgeois profits, the wars on Afghanistan and Iraq were short-term successes for US imperialism. Once the old regimes in both countries were overthrown, US companies had a free hand to pillage, US oil companies got lucrative access to Iraqi oil fields, and the US armaments industry and defense contractors saw their profits rise. The logic of outsourcing combined with legal concerns led to private security companies such as Blackwater playing an important role in Afghanistan and Iraq, almost like a resurrection of the private armies of joint-stock trade monopoly capitalism given state functions back in the days of Portuguese, Dutch, and early British imperialist dominance.
But in the long-term, the neocon plan proved a strategic failure and a considerable setback for US imperialism. Grounded in imperial arrogance, neocon adventurist military aggression could not proceed further than Iraq, and they failed to topple any other non-compliant governments. To some degree, they likely really believed that US troops would be greeted as liberators and the occupied populations would welcome the imposition of bourgeois-democracy under US tutelage. They mistook the unpopularity of the Taliban and Saddam Hussein governments for popular enthusiasm for US imperialism’s universalist project of global governance. When greeted with fierce and determined resistance, they turned to colonial methods, which were doomed to fail in a postcolonial world. The creation of a global rendition, detention, and torture network by the US military, the CIA, and outsourcing (yes, they really did outsource torture to subcontractors in places such as Uzbekistan) only further exposed what spreading democracy really meant and generated widespread hatred for US imperialism, which unfortunately was seized on by reactionary forces more than anyone else. Twenty years later, the results of neocon adventurism were the Taliban easily taking back power in Afghanistan after US troop withdrawal and an Iraqi government with close ties to Iran, after the religious fundamentalist organization Islamic State (IS) took over substantial territory in the country in the 2010s and Iran played a crucial role in defeating it.
Beyond the failure of the old colonial playbook to establish stable and compliant regimes under US imperial hegemony with adequate popular legitimacy to forgo the need for foreign troops, the neocon strategy diminished US imperial hegemony by weakening alliances and giving rivals, regional powers, and challengers opportunities to advance their class interests in opposition to US imperialism. On the former, from the 1980s on, the US bourgeoisie jettisoned reliance on international institutions to carry out its imperial objectives when those institutions refused to function as rubber stamps of approval. The Reagan administration “discarded the United Nations as a source of legitimacy for US hegemony”98 while funding and supporting brutal death squads in Central America. The Clinton administration carried out the Kosovo War without UN approval, intervening with NATO and thereby replacing its purpose of Cold War alliance against Soviet empire with imperial international policing functions.99 The war on Afghanistan was an exception to the overall trend, garnering international support because the Taliban government and al-Qaeda were widely perceived as rogue actors out of step with the global capitalist order. The War on Terrorism rationale with which the war on Afghanistan was justified could be used by bourgeois governments around the world to serve their class interests, such as to advance repression against Muslim and Arab immigrants in Europe, many of whom are proletarians.
But many bourgeois governments understood the war and occupation of Iraq as benefiting the US and British bourgeoisies to the detriment of their own class interests. Their perception was correct, as the “US’s inherited mastery of the Gulf” (inherited from its now junior imperialist power, Britain) “has given it a degree of leverage over both rivals and allies probably unparalleled in the history of empire.”100 As Stevenson specifies, the “developed Asian economies are heavily reliant on Persian Gulf oil and Qatari natural gas,” so by controlling these resources, US imperialism has considerable leverage over even dynamic capitalist countries in Asia such as China and Japan.101 To this we can add that bourgeois governments with significant oil and natural gas reserves in their territory, such as Russia and Iran, could be undercut on the world market if the US had firm junior partners in the oil-rich Persian Gulf region.
Beyond control of the world’s major oil reserves, the US being able to impose its political will and version of bourgeois-democracy through military aggression would have strengthened its sole superpower status and shut imperial and regional rivals out of having any sway over the international order. Consequently, the US waged its war on and occupied Iraq without UN legitimacy or NATO operational action, building an arrogantly titled “coalition of the willing” with Britain as its loyal ally. Unlike the first US war on Iraq, the second one had to be funded far more by the US, with little protection money forthcoming from US allies—loyal subordinate Japan only contributed $1.5 billion, compared to $13 billion in 1991. To many US allies, overthrowing Saddam Hussein’s government and replacing it with a US puppet regime was not perceived as protection of their own class interests.102
Had the neocon strategy worked out, had US imperialism succeeded in building compliant regimes in its image in Afghanistan and Iraq and elsewhere, bourgeois governments that refused to go along with the “Project for a New American Century” would have been weakened and locked out of prospects for profit. Here there is a an important lesson concerning the subjective agency of the bourgeoisie and the consequences of its strategic failures. Retrospectively, the neocon approach appears to be adventurist from the start, making the miscalculation that ruling classes have made for centuries of underestimating the masses and their resistance and overestimating their own power and popular legitimacy. But there was no way to know in advance what the outcome would have been, and the subjective agency of the masses in Iraq and Afghanistan and of political forces and bourgeois governments in response to US wars and occupations is what made the neocon strategy a failure. Unfortunately, none of that subjective agency came from, or was led by, communists, so the failures of US imperialism in Afghanistan and Iraq did not become revolutionary advances for the masses, let alone the development of proletarian state power.
Instead, various bourgeois governments in varying degrees of contention with US imperialism mounted challenges to US imperialism and developed their own independence and spheres of influence while the US was bogged down with attempting to make colonial-style occupations work in two countries. Continental Western Europe modified its alliance with US imperialism, moving in the direction of an imperialist bloc with greater independence from the US, with France and Germany two distinct powers within that bloc. In Russia, Putin’s government took advantage of the failures of the US’s “rules-based international order” to act increasingly outside of those rules to advance its imperial ambitions in Eastern Europe and Central Asia, and to develop trade and diplomatic relations independent of US imperial hegemony. China, having spent several decades building up its manufacturing prowess but in ways that were somewhat subordinate to foreign capital, took advantage of US imperial over-extension to enlarge its reach in the global economy, now as a WTO member, and create trade networks that put its manufacturing capabilities in a central rather than subordinate position.
While the Chinese bourgeoisie scored the greatest global gains in the face of US failures, Iran was the main regional beneficiary. The Iranian bourgeoisie took advantage of political and demographic splits in the Iraqi population and the popular illegitimacy of US occupation to prop up independent militias and build political ties in Iraq. Furthermore, the Iranian government’s central role in defeating IS—whose rise was entirely a result of the instability created by US military aggression—in the 2010s gave Iran broad respect in the region. Another shift in regional power relations was signaled by the change in Turkish government leadership from loyal, and brutally repressive, servants of US imperialism to Recap Tayyip Erdoğan and his Justice and Development Party (AKP). The cultural shift under Erdoğan to an open embrace of Turkey’s Muslim cultural traditions in contrast to Western-style bourgeois secularism went hand-in-hand with a greater assertion of the Turkish bourgeoisie’s independent class interests and a greater political and military role in the region.
In addition to a more independent European Union, two newly assertive regional powers, and two rising imperial powers, US imperialism also lost ground to reformist governments in Latin America refusing to bow down under US hegemony and able to establish more robust and independent trade and diplomatic relations with other countries, especially China and Russia. US strategic attention on the Persian Gulf region gave maneuvering room to challengers in Latin America, and the end of military dictatorships allowed popular movements and bourgeois reformers avenues to make electoral gains. The decade of triumph for US imperialism in the 1990s gave way to trepidation in the 2000s as a result of triumphalist adventurism, with a variety of challenges to US hegemony that the US bourgeoisie could not easily subdue economically, politically, or militarily.
Much as revolutionary defeatist zeal might tempt us to overstate the real losses for US imperialism due to its actions in the 2000s, a sober assessment of US imperialism’s weaknesses, remaining strengths, and ability to adapt is required if we are to figure out how to defeat it through proletarian revolution. And part of that sober assessment includes the acknowledgment that while the resistance of the masses in Afghanistan, Iraq, and elsewhere to US military aggression and occupation was certainly more than justified, it was by and large led by bourgeois and even reactionary political forces in the 2000s. Indeed, the only proletarian revolutionary force posing a serious challenge to US imperial hegemony in the 2000s was the Communist Party of Nepal (Maoist), and unfortunately some of its key leaders sold out and ended the revolutionary people’s war in Nepal after it had become a serious threat to bourgeois rule.
In analyzing the very real strategic setbacks for US imperialism in the last two decades, we need both ideological and analytical clarity. The former is a question we shall return to below, but for now let us affirm that if our aim is not a reshuffling of the balance of power in the global standing of different imperialist and national bourgeoisies, then the gains of the Russian, Chinese, Iranian, Turkish, or any other bourgeoisie against the US bourgeoisie should not be cause for celebration. On the latter, much as US occupations in Afghanistan and Iraq failed, US bourgeois interests in the Persian Gulf region have been fortified by other means. The US military’s CENTCOM maintains a strong presence of bases and troops in the region, US naval ships continue to secure trade routes and keep rivals’ naval power in check in the surrounding seas, and several firm allies, especially Israel and Saudi Arabia, continue to act as sentinels defending US imperial interests in conjunction with their own bourgeois interests. Whereas Israel depends on military aid, political support, and ideological affinity with the US, other regional allies are bound to the US bourgeoisie through US dominance over financial flows and systems and through armaments production, an industrial function that remains robust in the imperial heartlands. As Stevenson points out, arms “sales are useful principally as a way of bonding the Gulf monarchies to the Anglo-American military. Proprietary systems—from fighter jets to tanks and surveillance equipment—ensure lasting dependence, because training, maintenance, and spare parts can be supplied only by the source country.”103
In addition to the remaining strength and ubiquitous presence of the US military around the world, the Obama administration that entered in 2009 made important shifts in military focus and tactics in response to the Bush administration’s failures in Afghanistan and Iraq. It recognized the growing strength, independence, and international ambitions of the Chinese bourgeoisie and pursued a policy of containment known as the “pivot to Asia.” Containment measures included a stronger US naval presence in the seas around China, justified with an insistence that the US military had greater maritime rights off the coast of East Asia than did China. The Obama administration also worked to strengthen existing military alliances by bringing its chief regional junior partners, South Korea and Japan, into cooperation and allowing the latter to build up its military, a radical departure from the post-WWII state of affairs. And under Obama, proposed free trade agreements with Asian countries began to resemble the imperialism of spheres of influence rather than 1990s globalized free trade triumph.
In tactics, all-out invasion and occupation were thoroughly discredited after the Bush administration, with no serious support for them in the US bourgeoisie. During the Obama administration, the US military started dealing with adversaries with more surgical methods, such as deploying special forces in lightning raids and using the new technology of unmanned aerial drones to deliver death from above. As Stevenson points out, by “2016, the US was killing 4,000 people a year using drones, most of them away from traditional battlefields,” with the combination of the most advanced armaments production apparatus and “the unprecedented global surveillance system built by the NSA” giving the US a new military advantage in the art of assassination. Indeed, “in the twenty-first century assassination has radically expanded as a tool of modern states,” and the US military has used it to keep a safe distance from conflagration on the ground.104
With avoidance of ground involvement in mind, outsourcing warfare to proxy forces took on renewed importance. In the wake of the failed occupations of Afghanistan and Iraq, militias without state power and junior-partner bourgeoisies with state power received funding, arms, and political support from US imperialism to destabilize non-compliant governments or put down rebellions from Libya to Yemen. Unable to directly oversee regime change through occupation given how discredited the neocon strategy became, the Obama administration developed a new doctrine for overthrowing non-compliant states in the Middle East and North Africa. The Arab Spring—a series of mass protests and rebellions against entrenched regimes in the region that brought together different streams of discontent into a storm that challenged the very legitimacy of those regimes—provided the objective conditions for this new doctrine. The US bourgeoisie took advantage of mass discontent and rebellion to prop up militias opposed to regimes it wanted overthrown in Libya and Syria while its own military carried out selective aerial bombardment and special forces operations, and economic sanctions put the masses in worse poverty and further fanned the flames of discontent. The point was to destabilize and overthrow the Assad and Gaddafi governments, but unlike in the 2000s, the US bourgeoisie was content with chaos and the replacement of a non-compliant central state apparatus with fragmented and contending power centers. In other words, the US bourgeoisie was happy to get rid of its enemies without a stable replacement—essentially, “if we can’t fix it, break it”—while avoiding putting its own troops on the ground in any substantial numbers.
As Stevenson sums up, the “combination of special forces, local proxies, and air power is now the standard American model of war.”105 Even after neocon strategic blunders and the rise of rival powers, global military supremacy remains US imperialism’s greatest strength, with an extensive network of military bases, an omnipresent navy, superior air power, and the surgical strike capacity of special forces and drones. This superior military power is coordinated from regional command centers, relies on the most invasive international surveillance system ever created, and is armed with the most technologically advanced weaponry by a highly profitable and productive defense industry. And despite considerable political differences from one presidential administration to the next over the last sixteen years, “in the use of the main instruments of power there has been consensus.”106
Domination by debt can work in reverse
How to pay for that military supremacy is another question, and a problem exacerbated by the loosening of alliances and growing economic prowess of rivals. The answer that the Reagan administration had come up with in the 1980s was “one of the most spectacular expansions of state indebtedness in world history.”107 Whereas militarily outspending the Soviet Union was an imperialist strategic necessity, the Reagan administration’s slashing of taxes on the wealthy and “enabling them to profit from their own business failures through lucrative bail outs” and other mechanisms was a gratuitous gift to the bourgeoisie that increased government debt even further.108 The Clinton administration to some extent reversed 1980s government debt by balancing the budget at the expense of social welfare, but then the Bush administration carried out a negation of the negation by reviving the Reagan playbook of tax cuts for the wealthy and increased military spending, in this instance for neocon adventurism rather than imperial rivalry.109 Furthermore, from the Reagan years on, US politicians have made government deficit a means to appease their bourgeois backers and electoral bases, with tax cuts and social welfare spending entering into farcical bourgeois-democratic debates and “the taxpayer” elevated into a symbolic victim of one side or another’s government spending policies.
Whatever differences exist from one US administration to the next, the fact of the matter was that for the US to maintain its top imperialist position while outsourcing much manufacturing to other countries and presiding over a global system of free trade, government and consumer debt would have to increase, a trade deficit would grow, and foreign capital would have to enter the US economy and buy US debt. And this is precisely what has occurred from the 1980s on, albeit with ups and downs along the way. The imperialist innovation by the US bourgeoisie was to treat growing indebtedness not as a weakness but as an advantage in the hands of a world hegemonic power, a scenario that was paradoxically the opposite of debt’s effects on postcolonial governments in the oppressed countries during the same time period.
When it came to government debt, the US being top imperialist power rendered its state-issued bonds a secure investment, as their failure would amount to a crisis of global capitalism as a whole of epic proportions. Therefore, as “sovereign wealth funds (SWF) became huge repositories of capital” for countries with either lots to sell on the world market or acting as nodal points in world finance, a logical place to invest those funds was in US government debt, which also had the advantage of being paid for in the world’s dominant currency. Firm allies of US imperialism, such as Japan, were among the first to get in on the purchase of US government debt, but soon others joined the buyers’ market. As China accumulated capital by way of its key role as mass manufacturer in the global assembly line, its growing sovereign wealth fund was used to invest in US deficit via securities and bonds.110 In addition to governments, US debt was also a safe investment for the private funds of members of the bourgeoisie around the world.
Funding the US deficit also became crucial to realizing a profit for the manufacturing bourgeoisie around the world. As David Harvey points out, the “alacrity with which the central bankers of countries like China, Japan, and Taiwan lend to cover US deficits has a strong element of self-interest: they thereby fund the US consumerism that forms the market for their products.”111 Consequently, US debt to manufacturing countries was part of a symbiotic relationship maintaining the imperialist order. For its part, the US bourgeoisie accepted a trade deficit as part of this symbiotic relationship, with the practice of “sucking in imports” paid for with debt “no longer a disease to be cured…but a symptom of economic health,” as Radhika Desai puts it.112 And in addition to imports of goods, the “US-dominated world financial structure essentially acted like a giant vacuum cleaner, sucking up capital from the rest of the world and pouring it into the US economy.”113 In contrast to the imperialist order that Lenin described a century ago, at the turn of the new millennium, US imperialism thrived on both the export of surplus capital to oppressed countries and the import of surplus capital from its junior partners and even potential rivals.
Foreign capital and government debt also served to prop up the imperialist lifestyle in the US, with consumer goods, imported from around the world, purchased with credit card debt and a rise in household borrowing and spending even as less and less was being produced in the US itself. Indeed, economic growth in the US increasingly depended not on domestic industrial production, but on homeowner spending, retail, health services, hotels and restaurants, the real estate market, and, of course, finance.114 As Brenner explains, and quite forebodingly, “the real-estate bubble fed upon itself, and increasingly so, with increased borrowing facilitated by rising paper wealth and easy credit making for greater housing demand and still higher real estate values, which provided the collateral for still more borrowing making for more demand and higher housing prices, and so on.”115
What made domination by debt possible, if unstable, was the global domination of the US dollar in a post-gold standard monetary system where “fiat money” is “called into existence by states” with “no ‘backing’ other than its status as legal tender.”116 Whatever ups and downs there were in the value of the US dollar, it remained the central currency of global finance, especially after the collapse of the Soviet Union. Tellingly, the Russia that emerged from the Soviet Union’s dissolution “became the ultimate experiment in dollarization, a nuclear-armed, former superpower with a currency supplied from Washington.”117 When even its former imperialist rival was dominated by the hegemony of the US dollar, the US bourgeoisie could manipulate its currency advantage to ensure its government debts would not cripple its class power. Indeed, the decline in the dollar’s value via inflation in fact made interest payments by the US government on debt worth less, in effect defaulting on debt without penalty and “wiping trillions off the value of foreigners’ dollar assets.”118 The bonds issued by the Bush administration to pay for wars on Afghanistan and Iraq thus posed no existential problem for US imperialism.
The success of the US bourgeoisie in making US government and consumer debt work to its advantage has not been without disadvantages, however. The obvious one is the economic equivalent of (military) over-extension, with asset bubbles, financial markets, and consumer spending increasingly divorced from production and thus prone to collapse, the subject of the next section of our narrative. In addition, indebtedness and importing capital may deprive US imperialism of financial and economic maneuvering room. For example, the US Federal Reserve’s power to direct economic growth by way of setting interest rates diminished in the 2000s by virtue of the fact that as surplus capital came into the US, “this pushed down US interest rates, stoking the domestic economic upswing and sucking in imports, above all from China”119 And unlike in the 1990s, in the early 2000s the US failed to play as much of an interventionist role in economic crises around the world, for example, allowing Argentina’s crisis that began in 2001 to spiral out of control, with disastrous and far-reaching consequences for the broad masses there.120
The deeper contradiction created by making debt and trade deficit advantages for US imperialism was that they also became advantages for the Chinese bourgeoisie. Even as foreign capital exploited the Chinese proletariat, manufacturing goods for export to the US allowed the Chinese bourgeoisie to accumulate capital, and bringing its products into the world market via WTO membership made the Chinese bourgeoisie less exclusively dependent on the US market for export profits. The Bush administration’s attention fixated on failing military occupations in Afghanistan and Iraq, funded in part by Chinese purchases of US debt, together with the fact that cheap Chinese imports were propping up the imperialist way of life inside the US, made it reticent to attempt to curb the growing class power of the Chinese bourgeoisie.121
As the profits of Chinese manufacturing were invested in US debt, the class power of the US and Chinese bourgeoisies became more deeply entangled, and not just by trade, in a way that on the surface may seem to vindicate Kautsky’s theory of ultra-imperialism. Adam Tooze suggests that US debt to China functions like an economic version of the Cold War’s mutually assured destruction between the US and Soviet Union that held back either side from launching nuclear war. And clearly the Chinese bourgeoisie is strategically invested in US debt, rejecting Russia’s suggestion to sell off US bonds in 2008.122 But within the economic entanglement between China and the US, each country’s ruling class is pursuing its bourgeois interests to reap maximum advantage, and the US currently having military superiority and holding the commanding heights within global finance does not guarantee it the upper hand indefinitely. Furthermore, the increasingly interconnected globalization of production, trade, and finance meant that crisis on any economic front had greater potential to spread from one country to many others.
Finance capital meets and (sort of) escapes fate
From reliance on debt as a means of domination to moving much manufacturing to the oppressed countries, finance capital has come to occupy a more commanding position within global capitalism from the 1970s on. Going beyond its fusion with industrial capital into large monopolies that Lenin described a century ago, finance capital now asserts itself over and above production and trade, developing an array of increasingly speculative mechanisms to profit from various methods of capital accumulation. Those speculative mechanisms and the pre-eminent position of finance capital within global accumulation processes point to a key feature of the division of the world into imperialist and oppressed countries today: finance is concentrated in the former and production in the latter. Consequently, the internal economy of the top imperialist power has transformed to the point where in “the early 2000s 35 percent of all profits in the US economy were earned by the financial sector.”123
Finance capital’s position, while highly profitable for the imperialist bourgeoisie, has also set in motion new contradictions and/or intensified existing ones for capital accumulation. For starters, while finance derives its profits from production, it does so in ways that are increasingly detached from the material reality of production, which makes it more profitable but also more fictitious—based on numbers in financial transactions rather than amounts of goods produced and sold. By the 1990s, the profits of finance capital had come to rely on “bubbles,” wherein the (financial) value of blocs of capital was inflated by investment pouring in without a corresponding increase in material production and trade, and with speculative financial activity expanding the bubble on top of the investments. The first major bubble to burst was the dot.com one of the 1990s. Investment had poured into tech startups that were turning the internet into a mechanism for generating profit, and while an increase in manufacturing of computers was required to expand that bubble, the profits of many tech companies were more on paper than in production. When that dot.com bubble burst, a recession hit the US in the early 2000s, and between “2000 and 2004, private firms eliminated 1.97 million jobs.”124
The next major bubble to burst, beginning in 2007, was the one in housing, and the scale of the crisis it set off owed to the fact that it crashed on the shaky foundations of commercial banks, household debt, and financial speculation and then reverberated around the world owing to the globalization of finance capital. Post-WWII suburbanization made home ownership a coveted feature of the imperialist way of life, with bank loans and mortgages used to enable wide swaths of the American population to purchase homes on credit and able to pay for them over time based on petty-bourgeois and well-paid-working-class salaries and wages. Before the housing bubble burst, approximately 70% of US households owned their own homes.125 The banks loans and mortgages used to purchase those homes used to come from local and regional “savings and loans” banks with a direct connection to the borrower. However, from the 1980s on, many of those small banks were taken over by and merged into large, national commercial banks, which in turn were consolidated to the point where the “top ten banks increased their share of total assets from 10 to 50 percent between 1990 and 2000.”126 The rise of investment banks, through which corporations and the wealthy could make strong returns on their money, occurred in the same time period, and they merged with commercial banks to create what might be called speculative monopoly banks. All this was enabled by successive presidential administrations from Reagan on, with the 1999 Financial Services Modernization Act releasing “the final restraints on the fusion of commercial and investment banking.”127
For speculative monopoly banks and other finance firms, US real estate was a logical arena from which to derive profit, given that perhaps 20% of global wealth is parked there and it constitutes “the most important form of collateral for borrowing.” As Tooze sums up,
Between the 1990s and the outbreak of the crisis in 2007, American housing finance was turned into a dynamic and destabilizing force by a fourfold transformation—the securitization of mortgages, their incorporation into expansive and high-risk strategies of banking growth, the mobilization of new funding sources and internationalization.128
Among the financial products that banks and financial firms created and sold were mortgage-backed securities, wherein mortgages—some stable, some likely to fail—were thrown together and given credit ratings higher than they deserved, with the lender divorced from the borrower by several degrees of separation.129 They became financial products on the basis of the expanded production of homes and the predatory actions of the real estate capital, which offered subprime mortgages featuring low down payments to sections of the American population who were previously locked out of the housing market, especially Black, Latino, and proletarian families. As Adam Tooze points out, “By 2006, 70 percent of new mortgages were subprime or other unconventional loans destined for securitization not by the GSE [government-sponsored enterprise], but as private label MBS [mortgage-backed securities].”130 Rather than rein in financial products constructed on shaky ground, finance capital doubled down on its speculative activity, creating and intensifying the use of mechanisms such as credit default swaps to find new ways of realizing profit that were increasingly divorced from production and the guarantee of consumers able to pay for the products of that production.
The beginnings of the 2007–9 crisis resembled a classic crisis of overproduction, with more homes constructed in the US than there were buyers, with a twist—many of those homes were bought, but with debt. A credit bubble that relied on flows of capital into the US and the invention of speculative mechanisms for propping up and profiting off of debt was responsible for that twist,131 which in turn made the crisis of production also a crisis of overaccumulation of capital. That overaccumulation crisis also came with a twist—the capital (over)accumulated was largely based on debt and speculation. And because it was an overaccumulation crisis in finance, and because finance had been globalized, dependent on international capital flows, with financial products sold on the world market, and with commercial banks linked across the globe, it could not stay confined to the US.
In the US, probably $20 trillion in household wealth was wiped out, home values plummeted, and foreclosures ended home ownership for millions of families, with Black and Latino families hit especially hard.132 Together with decaying public infrastructure owing to privatization generalized, there has been a decline in the imperialist way of life for many in the US and other imperialist countries, which may create greater revolutionary potential in imperialist countries while also propping up reactionary revanchism, as is typical when imperialist parasitism no longer provides the same privileges it used to.133 As the collapse of the housing market revealed the fictitious nature of the capital accumulated by mortgage-backed securities and other speculative financial products, monopoly banks and financial firms faced devaluation and failure on a grand scale. Lehman Brothers, an investment bank, and Washington Mutual, a commercial bank, outright collapsed, and a stock market plunge cut “$1.2 trillion off the value of American businesses in a matter of hours.” In order to prevent the entire banking system from going under, the US federal government used $700 billion in government funds to buy up bad assets and prop up finance capital, rescuing the banks while offering no relief for the masses facing homelessness and unemployment. Prioritizing finance capital’s continued operations while ignoring the masses guided both the Bush and the Obama administration’s response to the crisis.134
With the crash of consumer spending and capital accumulation based on debt came a worldwide decline in industrial production, from what remained of auto production in the US to the global assembly line around the world. A decrease in imports and exports everywhere and in every type of traded good went hand in hand with capital flows plummeting by 90%. Virtually all segments of the bourgeoisie were affected; for example, a decline in oil prices hurt the oil-rentier bourgeoisie and ruined the construction boom then underway in Dubai. As investment in production and trade dried up, global unemployment skyrocketed; 27–40 million people lost jobs worldwide at the height of the crisis.135 Finance becoming the commanding heights of global capitalism meant that its failure commanded a similar fate for other means of capital accumulation and increased misery for the masses.
At those commanding heights, European banks and financial institutions proved especially vulnerable to the crisis that started in the US, precisely because their portfolios possessed many of the financial products that were failing as a result of the housing bubble bursting and because cross-Atlantic capital flows between the US and Europe where at the center of global financial transactions. Those cross-Atlantic capital flows were a means by which the oil-rentier bourgeoisies in the Middle East and the manufacturing bourgeoisies in Asia channeled funds to the US for speculative investments, turning the European financial system into a sort of “global hedge fund.” At the center of these capital flows was the City of London, a financial district set apart from London itself and the national economy of England so that it can act as a hub of foreign exchange under US dollar hegemony and host international branches of hundreds of foreign banks, all made possible by deregulation measures enacted from the Thatcher to Blair governments.136
Consequently, what started as a financial crisis for US banks and financial firms spread to their European counterparts, with its effects trickling down to the masses. Unemployment reached 10% in the eurozone in 2011, with those European countries with greater finance capital and imperial power able to stave off the worst effects while those with large amounts of sovereign debt or with limited or no real imperial status faced economic ruin. Greece and Portugal became “small bankrupt sovereign debtors,” while Ireland and Spain were “victims of the real estate boom with big liabilities from the banking crisis.” Italy was also deep in debt and lost much of its ability to fund social welfare and pensions. Eastern European countries formerly under Soviet imperial hegemony whose economies had been integrated, in subordinate positions, into the Western European imperial bloc were hit especially hard and required IMF bailouts so that the Western European banks that invested in them would not suffer.137
Popular revolt and political realignments followed, from mass upsurge in Latvia to the turn towards fascistic nationalism in Hungary and elsewhere, and increasing bourgeois and popular contention in Eastern European countries over whether to align with a German/French-led imperial bloc or a Russian one. The imposition of austerity measures to pay for public debt and the slashing of social welfare provoked mass protest, with 7% of Spain’s population taking to the streets on 19 June 2011, and the large anarchist movement in Greece setting the standard for militant action. In both Spain and Greece, electoral parties (Podemos and Syriza, respectively) scored gains by promising to restore twentieth-century European social welfare and stand up to the IMF, the European Central Bank, and the austerity dictates of the German and French bourgeoisies. In both instances, the aforementioned European institutions and powerholders of global finance refused to allow popular will to get in the way of enforcing debt payments and structural adjustment and forced elected governments to bend to their will at the expense of the masses.138 Nowhere in Europe was there communist vanguard parties capable of turning mass discontent during an economic depression comparable in some countries to the 1930s into a revolutionary movement aimed at the overthrow of the system behind the crisis.
The united defense of finance capital and debt repayment against even reformist challenges in Greece and Spain was in contrast to the failure, on the part of European bourgeoisies, to come together to mount a collective response to the crisis overall, with the German bourgeoisie especially opposed to doing so. Consequently, economic crisis continued in the eurozone through the 2010s, and the class power of European bourgeoisies was weakened as a result. England propped up its big banks with recapitalization and other European countries followed suit, but each moved as separate nation-states more than as a common imperial bloc, and their central banks and top financial institutions relied significantly on intervention by the US, a matter we will turn to below.139
Beyond Western Europe, the degree to which the collapse of the US housing market and the failure of speculative finance capital affected national economies depended on how much they were financially integrated with the US and Europe. Russia and South Korea, for example, were hit especially hard due to both financial entanglement and the global drop in commodity prices. What saved so-called “emerging market countries,” i.e., junior-partner or upper-tier oppressed countries with a significantly productive role in the global capitalist economy such as Mexico, Indonesia, and Thailand, from the worst effects of the crisis was that many had retooled their financial systems to ensure greater autonomy after having to subject themselves in the late 1990s to onerous IMF bailouts due to crises. In all cases, state intervention was necessary to counter the drop in volume and prices of exports.140 The consolidation of the G20 in Fall 2008, essentially an expansion of the G7 to include junior partners and rising powers whose share of world trade and production had increased dramatically since the 1970s, helped to coordinate state intervention at the international level. Despite difficulty finding firm unity given the contradictory national bourgeois interests it encompassed, the G20 succeeded in creating a Global Financial Stability Board in 2009 and strengthened the IMF with an increase in funding.141
Besides the US, the Chinese bourgeoisie took state intervention the furthest, using fiscal and financial stimulus as a counterweight to the drop in profits from exports amid global downturn in trade and to prop up production for the home market, which in turn put the Chinese economy in a more central role internationally.142 However, it was those responsible for the crisis to begin with, the US bourgeoisie, who led the international bourgeoisie out of the crisis with innovative rescue plans for global finance capital, which in turn strengthened US imperial hegemony. Unlike its European counterparts, the US bourgeoisie moved quickly and decisively, with the Federal Reserve taking on an interventionist role internationally rather than just rescuing US banks. As Tooze sums up, the “main mechanisms for intervention were fourfold: (1) loans to banks; (2) recapitalization; (3) asset purchases; and (4) state guarantees for bank deposits, bank debts or even for the entire balance sheet.”143 Learning from the reverberations of big banks going under, the US developed techniques “for identifying and maintaining the so-called systematically important financial institutions (SIFI).” Loans to the tune of trillions of dollars were extended to the “coterie of bankers, their shareholders, and their outrageously remunerated senior staff” that presided over SIFI to keep them afloat.144
Beyond loans to private institutions, in order to ensure that capital kept flowing in the face of a global downturn in production and trade and the financial institutions above that production and trade did not collapse, the Federal Reserve established “swap lines” with other central banks. The Fed would swap US dollars with the currency of those central banks, who in turn lent those US dollars to large private banks with liquidity problems, with an agreed exchange rate that the Federal Reserve wound up profiting from. In doing so, the Fed “established itself as liquidity provider of last resort in the global banking system,”145 keeping finance capital flowing. The Fed’s swap lines were initially created with only a handful of US-allied imperialist central banks with crucial roles in global finance (the European Central Bank, the Bank of England, the Bank of Japan, and the Swiss National Bank). But given the spread of the crisis, swap lines were extended to fourteen additional central banks.146 The Fed also increased the supply of Treasurys as a safe investment amid instability, and between “2007 and 2011, demand in the world economy was stabilized by the largest surge in public debt since World War II.”147
By taking on a state interventionist role, the US “emerged as the sole growth economy in the G7” after 2008, in stark contrast to its European allies.148 Beyond domestic economic growth, providing global liquidity through swap lines and strengthening the role of US Treasury bonds as “the de facto reserve asset around the world” buttressed dollar hegemony.149 Despite lots of talk about global de-dollarization and European and Chinese bourgeois bluster about decentering the US, the international bourgeoisie and central banks in much of the world came to rely on the US dollar and on the US’s central bank (the Federal Reserve) to prop up and stabilize global capitalism in the aftermath of the 2008 crash. Indeed, the swap lines created as a quick fix to global liquidity problems became a permanent fixture connecting the Fed to the European Central Bank and the central banks of Canada, England, Japan, and Switzerland, and were extended globally and hierarchically through regional subnetworks, with Japan providing swap liquidity to Asian banks, for example. Wall Street overtook the City of London as a center of global banking in 2014. And with European powers failing to cohere a collective way out of the crisis, it was US leadership and financial dealings that rescued European finance capital from collapse.150 Through bold and innovative state intervention, US imperialism saved finance capital, in its home turf and internationally, from meeting the fate it deserved for fucking over the masses around the world by speculation gone wild.
Inter-imperialist rivalry
As innovative and effective as the US bourgeoisie’s moves to stabilize the flow of finance capital and prevent the 2007–9 crisis from spiraling out of control were, they were nevertheless preservationist moves. Their aim was not to radically reconfigure the capitalist-imperialist order of finance capital in the commanding position over a global assembly line of production and international free trade under US hegemony, but to prop it back up after a crisis of overaccumulation and overproduction had boiled over. Even the trend towards increasingly speculative mechanisms of (finance) capital accumulation that had sparked the crisis was not fundamentally curbed. The specific form of mortgage-backed securities hiding large percentages of subprime mortgages met its end, but new mechanisms for profit through speculation continue to crop up and expand into other economic sectors.151 Beginning in 2005, finance capital started moving from mortgage derivatives to speculation on commodity futures. This led to an increase in food prices in 2007–8, which hit oppressed countries hard—finance’s capital speculative moves literally starved masses of people. Then came land grabs, as finance capital recognized the potential profits in agricultural production for food and biofuels, especially as some resources become more scarce. The US bourgeoisie led the way in land grabs, but rising bourgeoisies in China and India, as well as oil-rentiers in the Persian Gulf region, also got in on the action. In a new, postcolonial scramble for Africa, in addition to ever more rapacious exploitation of the continent’s metal and mineral resources, “66 percent of the land that was grabbed [around the world] between 2000 and 2010 was in Africa, accounting for up to 4 per cent of the continent’s total land mass.”152
The US bourgeoisie’s preservationist moves after the 2007–9 crisis relied on its class power to prop up the capitalist system as a whole through control over vast sums of finance capital and the international mechanisms and institutions that ensure the global flow of finance capital which even rivals rely on. In addition, by virtue of US-led free trade, globalized production, and an international division of labor bestowing benefits to other bourgeoisies around the world, most especially in Europe and Japan but also for oil-rentiers in the Persian Gulf region and manufacturing bourgeoisies in East Asia, US imperialism maintained global hegemony even after being responsible for systemic crisis. However, beginning in the 2000s and accelerating in the 2010s, challenges to that hegemony have made significant headway owing to the ways globalized production and free trade created opportunities for some bourgeoisies to advance their class power against US imperialism—opportunities seized by subjective bourgeois agency.
With victory over the Soviet Union and its dissolution, the US bourgeoisie expected to be able to subordinate the Russian bourgeoisie under its reconfiguration of globalized capitalism, and, as outlined above, was able to do so in the 1990s. But owing to an industrial base built through socialist development up until 1956, a powerful and well-armed military, and, crucially, substantial oil and natural gas reserves in a global economy powered by their flow, the Russian bourgeoisie had the material basis to potentially overcome its subordination. Making the most of that material basis required subjective bourgeois agency, concentrated in Vladimir Putin’s leadership. Elected president in 2000, Putin quickly moved to bring the lucrative energy sector under state control, curbing the power of the new billionaires who had advanced their positions by opportunistically buying up state assets in the 1990s and in their place creating a capitalist class tied closely to Russian state power via companies, such as Gazprom and Rosneft, rather than international finance capital. A boom in oil prices in the 2000s gave the Russian bourgeoisie the capital to rebuild the domestic economy that had been pillaged by international finance capital in the 1990s, and Putin worked to stabilize the ruble and build up “a national reserve of food and vital raw materials.”153
The Russian bourgeoisie’s re-emergence as a global power after its historic defeat at the dawn of the 1990s depended on entanglement within world trade. It was the oil and natural gas sold to Western Europe that built up a dollar reserve and provided the profits to reinvigorate other spheres of production and rebuild the military necessary for foreign intervention.154 Nevertheless, Russia was behind the curve in technology, and its domestic production apparatus remained uncompetitive outside the energy sector. Furthermore, many of Russia’s former allies and spheres of influence were brought closer to US-led and Western European imperialism through economic ties (a decade after the fall of the Soviet empire, “around half of all Eastern European manufacturing capacity was in the hands of European multinationals”155) and political and military alliances, especially through incorporation into NATO. To regain its imperial power, the Russian bourgeoisie needed to leverage its role as oil supplier to neutralize the German bourgeoisie’s productive and political strengths, win back its spheres of influence through political or military means, and develop strategic partnerships internationally to acquire technology, trade revenue, and necessary imports. Putin’s assertive geopolitical moves since the 2007–9 crisis have all been in service of those objectives, from territorial takeover through war in Ukraine, to pipeline construction across Europe, to military intervention in Syria, to supplanting French imperialism in West Africa, to partnerships with Iran, North Korea, and China that supply technology, trade, and diplomatic maneuvering room. Since it is impossible to make these moves without impinging on US dominance, there has been a negation of the negation in inter-imperialist rivalry, with the 1990s subordination of Russia to the US-led global order giving way to proxy way in Ukraine, and Putin perceiving US moves against Russian bourgeois interests in increasingly existential terms, and not without reason.
Far better positioned than the Russian bourgeoisie to take advantage of the US-led reconfiguration of global capitalism from the 1970s on was the new bourgeoisie in China that seized power in a coup following Mao’s death in 1976 and reversed the socialist transition to communism. Precisely because US imperialism relied on the Chinese bourgeoisie economically (to provide a manufacturing belt in the global assembly line), politically (in alliance against the Soviet empire), and ideologically (to extol the virtues of capital accumulation against communism) in the reconfiguration of global capitalism, the Chinese bourgeoisie was able to benefit from that reconfiguration greatly. China took in foreign direct investment—imperialist capital—but on its own terms and often in economic partnerships between foreign and Chinese companies. China created vast economic processing zones where foreign capital exploited its proletariat, but expanded its production capacity as a result, including in advanced technology lines. And owing to a strong agricultural and industrial base built up through two and a half decades of socialist self-reliance, the Chinese bourgeoisie was not indebted to foreign banks and did not have to submit to a structural adjustment program or otherwise follow IMF/World Bank mandates.156
Between its role presiding over export manufacturing and its pillage of state assets, the Chinese bourgeoisie accumulated vast sums of capital from the 1980s to the 2000s on the backs of peasants cast out of agricultural communes and proletarians, migrant and already entrenched in urban areas, viciously exploited in export production. When those peasants and proletarians erupted in class struggle in the 1990s and early 2000s, in an array of protests, riots, and strikes, they were brutally suppressed by a powerful state apparatus that formerly served the masses.157 In addition to repressing the struggles of the masses, bourgeois state power was also used to guide the capital accumulated through export manufacturing into domestic infrastructure projects and to fund the training and class position of an educated, urban petty-bourgeoisie who could provide the technical expertise (organizational and scientific) necessary to advance China’s production capacity.158 Domestic investment of the capital accumulated in turn created a stronger home market, with China less dependent on exports than imperialist Germany, and thus better able to weather downturns on the world market. Indeed, the Chinese bourgeoisie mitigated and moved beyond the 2007–9 crisis through massive public spending, becoming the world leader in high-speed rail networks.159
The paradox of Chinese bourgeois power is that it rests substantially on the superexploitation of its country’s proletariat, including by foreign capital, and participation in US-led global free trade, but on terms favorable to its own capital accumulation, technological capabilities, and productive capacity. Those favorable terms have been fought for by the Chinese bourgeoisie, and it has used them, beginning in the 2000s, to develop imperialist relationships with countries in Africa and Southeast Asia, as well as favorable trade relationships with countries in Latin America. Given US military superiority, rising Chinese imperialism has relied on infrastructure projects, trade deals, and loans with slightly better terms than IMF/World Bank ones in order to extract raw materials and manufactured goods from oppressed countries. That US-led imperialism relegated much of Africa to a peripheral position in the global economy, a provider of raw materials and cash crops largely left out of industrial production in the global assembly line, and consequently with large surplus populations unemployed and living in slums, has allowed Chinese capital to enter the continent in the absence of investment from others.
China’s international moves, and the domestic production, infrastructure, and technological prowess that made them possible, required considerable class unity among its bourgeoisie. The elevation of Xi Jinping to top political and state leadership in 2012–13 was the key to achieving that unity, including through reining in sections of the bourgeoisie with strong ties to foreign capital and/or whose profits rested on speculation or outright corruption. Xi’s leadership suppressed bourgeois self-interest in favor of the larger strategic interests of the Chinese bourgeoisie as a whole, and reasserted the state’s role in setting the terms for and direction of capital accumulation. On the basis of bourgeois unity around China’s national interests, Xi has proven adept at international maneuvering to move some US allies closer to China economically and politically and probe US imperialism for weaknesses, with the battle for technological advantage, especially as pertaining to military matters, taking on increasing importance.
Capitalism in China is not without crises, however. The massive build-up of industrial production capacity central to the rise of the new Chinese bourgeoisie in the last five decades cannot but come with points of overproduction. Housing and infrastructure construction, both receiving strong state support, have both reached overcapacity, leaving newly built cities empty and real estate unsold and devalued, leading to a plunge in the Chinese stock market in 2015. More recently, youth unemployment has skyrocketed, with the drastic expansion in education becoming out of sync with capital’s need for mental and skilled labor. The larger point here is that no amount of state intervention under capitalism can prevent periodic crises, as such events are bound up with the logic of capital accumulation, and China’s robust home market and state controls on finance capital flows can insulate it but cannot wall it off from the booms and busts of the world market.
The rise of the Chinese and the Russian bourgeoisies since 2000 and their pursuit of imperial ambitions point to important contradictions in the US-led reconfiguration of capitalism-imperialism since the 1970s. The US bourgeoisie had to draw more and more countries into relations of free trade and various specialized roles in globalized production, which in turn gave opportunities for the bourgeoisies of some countries to expand their capital accumulation and class power. US hegemony is enforced by the most powerful military in the world, but as Gramsci made clear, hegemony cannot be maintained purely through repression. It requires that at least some of the subordinates, in this case in the global imperialist order, have a material stake in maintaining the hegemonic power, and as that material stake increased, so too did the ability of those subordinates to assert their class interests and act more independently. The unity of opposites at work here is that as subordinates become more deeply invested in maintaining the hegemonic power, they often also develop the ability and even class interest in undermining it.
Consequently, in addition to the Russian and Chinese bourgeoisie being able to cash in on their gains in the system of free trade and globalized production and pursue imperial ambitions, various junior-partners of US imperialism have emerged as regional powers with greater capacity to assert their specific bourgeois class interests. In some cases, they pursue higher status within the imperialist order in ways that overall correspond to US hegemony—Saudi Arabia bombing Yemen, Israel’s genocidal war on Gaza and violent incursions in the West Bank, and South Korea’s increasing economic and technological prowess, for example. In other instances, they may be acting more independently of US imperialism if not in ways that diminish its hegemony—the United Arab Emirates’ role in the civil war in Sudan, Rwanda’s role in civil war in the Democratic Republic of the Congo, for example. Still in other cases, regional powers assert their bourgeois interests in ways that conflict with US imperialism’s desired outcome—Turkey’s interventionist role in Syria, for example—and in so doing become increasingly independent from US hegemony and stake out advantageous positions within rivalries between different imperialist powers. Outside of US hegemony, regional powers such as Iran have found favorable conditions to advance their bourgeois class interests in the overall increase in imperial and regional rivalries and the fraying of US-led institutional arrangements.
The biggest losers in the shifting balance of bourgeois power internationally since the 2007–9 crisis are the European bourgeoisies, whose failure to take decisive action to shore up finance capital in fact extended the crisis longer in Europe than elsewhere. Dependent on Russia and oil-rentier bourgeoisies elsewhere for energy resources, reliant on free trade to make profits from the exports produced by their advanced industrial capacity, falling behind in the development of new technology that is crucial to staying ahead in capitalist competition, their banks and capital flows rescued by US state-finance capital, the 2010s was a decade of economic stagnation for Europe. In addition to losing economic prowess, the European Union has fared poorly in geopolitical maneuvering, failing to find bourgeois class unity in international matters, and has not developed the independent military force necessary for an independent imperialist bloc. Even France, a “hardened postcolonial war fighter,” has lost much of its military presence in its former West African colonies recently, supplanted by Russia. More generally, European imperialists have remained subordinate to the US in NATO, still relying on the US imperial protection racket even as they face a rising imperialist power to their east.160 A weakened Western Europe winds up weakening US imperialism, as the historic alliance between the two has bolstered the latter economically and politically for decades.
The picture of contemporary capitalism-imperialism that emerges is one of increasing inter-imperialist rivalry, of rising powers and regionally assertive ones testing US imperialism for weaknesses and jockeying for advantage wherever possible. As a result of and furthering that contention is the fraying of the international arrangements and institutions through which the US bourgeoisie exercised global hegemony. The World Trade Organization has been hollowed out, and regional, bilateral, and multilateral free trade agreements, and with them separate spheres of influence, are taking its place. Yet trade and globalized production still links much of the world together, even across geopolitical lines of demarcation. An increasing contradiction in the imperialist order is that many countries have decided to strengthen their longstanding military and political ties with the US, including as a conscious effort at encirclement and suppression of China, while continuing profitable trade partnerships with China. Australia is one of the greatest paradoxes in this respect: an imperialist country deeply invested in basic commodity export, especially of the metals and coal it mines, whose primary trading partner is China. But Australia is a core part of the Anglo-American imperialist alliance (AAIA), has fervently joined US military measures aimed at containing China, and is part of the recently formed Quad, a US-led alliance against China that also includes India and Japan.161
Thus far, longstanding strategic alliances grounded in decades-long diplomatic relationships and mutual military activity and training have trumped trade partnerships in determining allegiances, giving US imperialism the advantage. Russia has only been able to count on alliances with states outside of US hegemony (Iran, North Korea) and the remnants of its former empire that it has cobbled back together. But it has been making inroads in Africa and moving strategically closer to China. China itself has made deeper inroads in Africa and picked up partnerships with small countries neglected by the US, and, unlike Russia, has become an economic power virtually every country has dealings with in trade, investment, infrastructure, or technology. That explains why the US bourgeoisie began to treat China as its greatest adversary in the long-term, from Obama’s “pivot to Asia” to the trade war started by the first Trump administration, continued under Biden, and likely to ramp up during Trump’s second administration. By contrast, Russia’s weaker overall position but remaining military strength make conflagration between it and the US more likely, in part because the Russian bourgeoisie, unlike its Chinese counterparts, must make strong short-term strategic gains to stay in the imperial game.
US imperialism’s greatest strengths remain its military prowess and presence and dominance in global finance, especially by virtue of the expanded role of the dollar in international transactions since the 2007–9 crisis. On the latter, the use of sanctions as a weapon against US adversaries has increased in recent years (2,350 new sanctions during Obama’s second term and 3,800 during Trump’s first term), and US imperialism made sanctions more economically lethal by cutting Iran and then Russia off from the SWIFT international banking system. Russia has been able to find ways around sanctions and financial ostracization even while taking a hit, but smaller countries such as Venezuela have faced economic ruin as a result of being cut out of world trade and financial flows.162 Another economic weapon in US imperialism’s arsenal is manipulating production and prices to the detriment of its enemies. Saudi Arabia’s decision to end self-restraint on oil production in Fall 2014 and thus send oil prices plummeting, almost certainly a joint decision with the US, dramatically eroded oil profits for Russia, Iran, and Venezuela, rapidly depreciating the Russian ruble.163
As ubiquitous as US military strength is, the US bourgeoisie has had difficulty bringing it to bear in imperial rivalry and to eliminate states outside US hegemony since the failures of neocon adventurism. Key US allies have been hesitant to sign on to US intervention, with Germany voting alongside China and Russia at the UN against the aerial bombardment of Libya.164 Obama, perhaps the most ego-driven US president ever, was so concerned with his image and legacy that he avoided actions, military or otherwise, that would up the ante with rivals. NATO has shown considerable weakness in its capacity for deterrence, backing Putin into a corner by bringing Eastern European countries into its fold but then failing to act decisively against Russian invasion of Ukraine. Beyond the current proxy war in Ukraine, indecisiveness, disunity, and lack of funding from Western European powers, on the one hand, and Trump’s transactional approach to international alliances, on the other, have diminished NATO’s capacity to act as the strong arm of a unified Western imperialism. That the US bourgeoisie has failed to produce strategically savvy and bold statesmen for over two decades while its counterparts in Russia and China have theirs firmly in place is a subjective variable with potentially great consequences.165
The various statesmen at the helm of the imperialist powers have so far avoided direct military conflict with their principal imperialist rivals in favor of proxy warfare. In January 2018, “J-2, the intelligence directorate of the Joint Chiefs of Staff,” put forward the “by – with – through” doctrine—another term for proxy warfare, and this is what the US military used in Syria, Yemen, and elsewhere.166 The Biden administration’s response to Russia’s invasion of Ukraine was proxy warfare to the max—massively funding and supplying the Ukrainian military—while studiously avoiding the US military being drawn directly into the war.
Proxy warfare is no longer the preserve of the top imperialist rivals, with regional powers employing the tactic to great effect: Turkey in Syria, Rwanda in the Democratic Republic of Congo, the United Arab Emirates in Sudan, etc. For these regional powers, “proxy warfare offers an outlet for pursuing national interests while avoiding the wrath of the powerful.”167 Iran got so effective at proxy warfare—in Iraq against the US, in Yemen against Saudi Arabia, and in Lebanon and Palestine against Israel—that the US assassinated Qasem Soleimani, the Iranian master of the art form.168 (A point of clarification: proxy warfare between bourgeois states does not mean that the “proxies” fighting the war do not have their own reasons, and sometimes well-justified reasons, to wage warfare, just that the outside forces using them as proxies are doing so in pursuit of their own bourgeois class interests.)
As the world map becomes a loaded chessboard of proxy warfare and rival navies jockeying for access to sea lanes, trade wars and tariffs shaping lanes of production and commerce, and international espionage used to steal technological advantage and launch cyber attacks, the potential for any piece on the board to move in a way that sparks greater conflict increases. Whether or not growing inter-imperialist rivalry leads to a major war fought directly between imperialist powers, the shifting balance of power is bound to result in a substantial reconfiguration of global capitalism in the coming decades. The question for us to answer is whether that reconfiguration includes the overthrow of capitalism anywhere, and if so, in how much of the world.
Wild cards added to the (Titanic’s) deck
What makes the future of capitalism all the more unpredictable are the variables in the equation that, to varying degrees, do not operate according to the logic of capital accumulation even if they were created by it. Fascist politics, ecological catastrophes, and the COVID-19 pandemic have all been conjured up by the motions of capital but spread in ways that do not follow its logic.
COVID-19 and whatever global pandemics lay ahead are the result of capitalism’s exacerbation of what Marx and Engels called the contradiction between town and countryside. The massive quantitative change in this contradiction in recent decades, with the emergence of numerous cities with populations numbering in the tens of millions and the growth of megaslums in the oppressed countries, add up to a qualitative transformation. Globalized production and trade have entangled cities around the world by virtue of the accelerated pace and increased volume of international travel. Massive urban population centers connected by international travel and trade are recipes for deadly diseases to spread easily and quickly, and the gutting of bourgeois state spending on public health since the 1980s leaves those populations with little defense and mitigation mechanisms. When urban population centers retain links to, or incorporate into their domain, agricultural production, diseases jumping from animals to humans become inevitable.
It is the anarchy of capitalist production and the system’s inability to carry out social planning in relation to urban and rural development and demographics that calls forth pandemics. Pandemics are social phenomena, but the viruses and bacteria behind them operate according to biological imperatives. Consequently, COVID-19 and any future pandemics will affect capital accumulation in unpredictable ways, in 2020 shutting down many lines of production and dramatically curtailing world trade. For the bourgeoisie, this meant a temporary loss of profits, while for the masses it meant illness, death, and unemployment. In the longer term, the COVID-19 pandemic had a purgative effect that was productive for capital accumulation, forcing some lines of production, trade, and services to go under and allowing larger blocs of capital that could sustain a temporary loss of profits to eat up smaller blocs of capital that could not. Furthermore, sections of the population that capital has little use for—the elderly and the infirmed who are unable to produce surplus value—were wiped out in significant numbers during the pandemic, unburdening the bourgeois state of any obligation to care for them. Italy is a prime example of this cold logic at work, where quick spread of COVID-19 killed off some of the elderly and freed the Italian state from paying the pensions that had been part of post-WWII European imperialist social welfare measures.
The COVID-19 pandemic also sparked a wave of bourgeois state intervention comparable in scope to the one in response to the 2007–9 crisis of finance capital. As with the 2007–9 crisis, the priority, shared universally by bourgeois governments around the world, was to prop up capital. Public health measures, by contrast, varied widely from one bourgeois government to the next, with the wellbeing of the masses a matter for bourgeois subjective agency to decide—a strong indictment of the logic of capital accumulation and a compelling argument for socialist social planning.
Similar to pandemics, climate change and ecological devastation, from rising temperatures and sea levels to melting polar ice, from wildfires to droughts to ever more intense and frequent storms, are the result of the anarchy of capitalist production over centuries. Clearing forests to make way for agricultural production, stripping the earth for raw materials, and industrial production along capitalist lines have all been great levers of capital accumulation with great consequences for the air we breathe, the water we drink, and the earth we live on. Capitalism’s necessary aversion to social planning, to letting long-term consequences impinge on profits, has now created the potential for many more regions of the planet to become uninhabitable and for devastating weather events to wreak havoc on humanity and its built environment, not to mention the other inhabitants of our planet. For the bourgeoisie and the masses, ecological devastation has become an unpredictable and anarchic force, one that will alter the motions of capital accumulation and can only be remediated through socialist planning.
Fascist politics, by contrast, are a decidedly human phenomena, and as such are more tied to the logic of capital accumulation. However, they operate with greater relative autonomy from economic logic than other forms of bourgeois politics and affect capital accumulation in more unpredictable ways. Fascist politics, and their entering into the bourgeois state, unleash and rely on sections of the people, especially the revanchist petty-bourgeoisie and the well-paid working class, to a far greater degree than traditional bourgeois-democratic politics. At times initiated by representatives of the bourgeoisie and reliant on bourgeois backing to dominate the bourgeois state, fascist movements nevertheless have a strong “middle up” (not bottom up) dynamic. Today’s fascist politics, especially in the US and Europe, provide some of the strongest, if reactionary, critique of the failures of the reconfiguration of global capitalism since the 1970s. For the perceived loss of status of sections of the petty-bourgeoisie, the well-paid working class, men, and white people, fascist politics point the blame at the operations of international finance capital, albeit through the lens of conspiracy theories, alongside sections of the petty-bourgeoisie tied to it (professional intellectuals and state bureaucrats, for example) or sections of the masses dislocated and exploited by it (migrant proletarians, for example). Their unbrazen critique of the status quo, unleashing of reactionary sections of the people, and willingness to reconfigure the present global capitalist order make fascist movements an unpredictable and chaotic force, even if one ultimately responsible to and unwilling to challenge bourgeois rule.
The larger point here concerning pandemics, ecological devastation, and fascist politics is that the post-1970s decades and the longer arc of global capitalism’s history have conjured up highly destructive biological, environmental, and social forces beyond the control of capital accumulation and bourgeois rule, at least to some extent. How the bourgeoisie and the masses respond to those forces will not be a mechanical working out of objective contradictions or economic laws, but a matter of subjective agency with existential consequences.
Conclusion
The worst slogan never spoken: “For a new cycle of accumulation!”
Among the reasons for writing the preceding historical account of capitalism’s trajectory is a recognition of a growing gap between the analytical work of the communist movement and “Marxist” political economists. As discussed in Interlude #2, the communist movement—in the sense of the political forces consciously and genuinely fighting for communist revolution—has had an increasingly stale and uncreative approach to the intellectual work of political economy and historical analysis, content to reiterate the principles articulated in canonic texts and fit reality into categories. In contrast, some “Marxist” political economists—professional intellectuals usually writing from positions within academia—have carried out important intellectual work rethinking capitalism’s history and creatively analyzing the more recent motions of capital. However, even the best of them and the best of their work are mired in an ideological problem: a fundamental belief that revolution is impossible, and perhaps even undesirable. They have no faith in the masses, whom they are separated from in practical life and in political activity, to become the conscious social force that can overthrow capitalism. Consequently, even if they genuinely hate the exploitation and oppression perpetrated by the bourgeoisie and even if they have a materialist understanding of the motions of capital behind that exploitation and oppression, they look for something other than proletarian revolution to mitigate capitalism’s worst excesses and perhaps (this is where they get nonsensical) gradually move beyond capitalism itself.
As for what that something other than proletarian revolution is, “Marxist” political economists are split into a unity of opposites, with both sides rejecting the role of the conscious initiative of the masses in favor of one or another bourgeois force from above. Some, such as David Harvey and Jason Hickel, more or less look back to the heyday of Keynesian social welfare in Western Europe as a model, perhaps adding a little postcolonial nationalist developmentalism, and hope that reformist programs might be able to turn back the trends of growing inequality and ever more rapacious finance capital taking a commanding position in the global economy. They wind up objectively siding with US-led imperialism, viewing, not without reason, Western bourgeois-democracy as the best political form for achieving their desired reforms.
Others have decided to respond to the decline of US imperial hegemony and the rise of new imperial rivals by cheerleading some of US imperialism’s competitors and hoping for the start of a new cycle of capital accumulation, driven by China or Russia, or perhaps multipolar in nature. They like to imagine, against all historical evidence and mountains of Marxist theory showing how capital accumulation always depends on exploitation and results in wars and brutal oppression, that somehow a new, non-US centered, cycle of accumulation will be better for the masses, and marshal as evidence that rising competitors of the US have thus far avoided colonization and warfare (an argument that gets more and more difficult lately, especially when it comes to Russia). Though they would never openly admit their implicit desire, it is one of wishing for a new cycle of capital accumulation rather than seeking the end to all cycles of accumulation perpetuated by the logic and motions of capital.
These advocates for a new cycle of accumulation sometimes articulate what might be called a neodevelopmentalist program, an updated version of the nationalist economic development programs of postcolonial governments during the post-WWII decades. They come up with twisted and often Trotskyite ideas, such as Radhika Desai’s “uneven and combined development,”169 that imagine some form of economic development that is neither capitalist nor socialist exactly but can somehow pave the way for the latter. Politically, they take positions opposing US-led imperialism, but not really standing with the masses, instead placing their hopes in bourgeois governments whose interests happen to collide with US imperialism. They then proceed to justify the reactionary moves those governments make against the masses they rule over and, where applicable, the foreign populations they exploit and subjugate. This puts these neodevelopmentalist “Marxist” political economists in alignment with various revisionists and Trotskyites who attempt to paint present-day China and sometimes other countries that are in conflict with US imperialism as either a socialist paradise or some form of capitalism with socialist characteristics. Objectively, these revisionists and Trotskyites hate the masses of oppressed and exploited people, at best relating to them as condescending saviors, and wish to rule over them like Putin or Xi. Their rationalizations are so absurd that they are not really worth detailed refutation beyond pointing out the existence of billionaires in present-day China and Russia; scorn and ridicule are the appropriate forms of polemic.
By contrast, the intellectual work of neodevelopmentalist “Marxist” political economists, which increasingly populates the pages of Monthly Review, has some intellectual sophistication and intellectual rigor and thus might require some intellectual engagement to refute. Whether praising petro-populism in Latin America, Iran’s role in supporting armed resistance against Israel and Saudi Arabia, Russia’s military interventions and invasion of Ukraine, China’s economic prowess and international investments, or the role of BRICS and other alternatives to US-led international alliances and institutions, they always obfuscate or ignore the bourgeois class interests driving their objects of praise and wind up making ridiculous contortions in their analysis. To cite one example from one of the best among them, Giovanni Arrighi offered the following description of what happened in China as a consequence of Deng Xiaoping’s policies in the decades after the 1976 counterrevolutionary coup:
the reforms created myriad opportunities for the reorientation of entrepreneurial energies from the political to the economic sphere, which party cadres and officials eagerly seized upon to enrich and empower themselves in alliance with government officials and managers of SOEs [state operated enterprises]—often influential party members themselves. In the process, various forms of accumulation by dispossession—including appropriations of public property, embezzlement of state funds, and sales of land-use rights—became the basis for huge fortunes.170
But after this clear description of the rise of a new bourgeoisie from within the Chinese Communist Party itself that confirms Mao’s prescient analysis of class struggle under socialism, Arrighi absurdly argued that it was unclear whether the Party officials enriching themselves through privatization and bloated salaries constituted a capitalist class.
From their contorted analysis, the conclusions that the neodevelopmentalist “Marxist” political economists draw are always ideologically capitulationist (accepting some form or another of bourgeois rule) and only offer paltry reformist programs full of fantasy and aimed at making capital accumulation bestow more benefits to the masses and become more equal between bourgeoisies around the world.171 Under neodevelopmentalist fantasy, their mantra is multipolarity, either seeing the non-US poles within multipolarity as great saviors or insisting that the conditions of multipolarity will allow (or, in determinist thinking, are a necessary prerequisite for) revolutionary political forces to make breakthroughs. In reality, to the extent multipolarity is supplanting US imperialism’s hegemony, the effect has been to strengthen opportunism in at least three ways.
(1) Opportunism exaggerates the extent of multipolarity for the purposes of false optimism and to mask actual avoidance of the necessary revolutionary struggle to end bourgeois rule. Undoubtedly, inter-imperialist rivalry has increased in the last decade, and several regional powers have been able to challenge US hegemony to some degree. But as Tom Stevenson reminds us,
The US still has military superiority over all other states, control of the world’s oceans via critical sea lanes, garrisons on every continent, a network of alliances that covers much of the industrial world, the ability to render individuals to secret prisons from Cuba to Morocco, Poland, and Thailand, preponderant influence over the global financial system, about 30 per cent of the world’s wealth, and a continental economy not dependent on international trade.172
By minimizing this reality and taking the rhetoric of bourgeois governments claiming to be moving away from US hegemony more seriously than their actions, opportunists make supposed multipolarity out to be a sign of US imperialism’s inevitable coming defeat, absolving themselves of the need to overthrow imperialist rule by relying on the masses.
(2) The non-US poles of multipolarity give opportunists “good guys” to cheer for against the bad guy of US imperialism, and they would rather cheerlead than make a materialist analysis of the class interests involved in any conflict and consistently stand with the masses. The identification of “good guys” buttresses opportunist reliance on dogmatic thinking and analysis, and allows opportunists to claim moral high ground by cheering for the right team. It is also used to justify staying on the sidelines of the struggles of the masses against imperialism—cheering for the right team while never being down for the struggle—or even to condemn the masses when they struggle against a non-US pole of bourgeois power.
(3) The greater class power of bourgeoisies outside of the historical imperialist countries of Europe, the US, and Japan has strengthened a social base for opportunism in their countries by enlarging the ranks of urban petty-bourgeois professionals. Those non-Western bourgeoisies need petty-bourgeois professionals to fulfill managerial and technical functions, and the petty-bourgeois strata created have a material stake in their bourgeoisie’s class power. Meanwhile, the masses in their countries get little if any benefit from the ascendance of their bourgeoisies.
The first and second of the above ways that multipolarity has strengthened opportunism are subjective in nature, having everything to do with the strengthening of opportunist forces and politics in the last two decades, especially in imperialist countries, while the third is a matter of changes in class structure that give a material boost to subjective opportunism. The conclusion to draw here is not that more multipolarity inevitably means more opportunism, but that in the specific subjective conditions of today it has strengthened opportunism.
Were the subjective conditions to change, then certainly genuine revolutionaries might be able to take advantage of increasing imperialist rivalry or the rise of regional powers to defeat bourgeois governments of one stripe or another. But there is no law of materialist dialectics that inter-imperialist rivalry or even splits in a given ruling class will present more favorable conditions for revolutionary advance. We should treat whatever objective conditions are presented to us by the motions of capital as the ground that we must transform, and take whatever opportunities come our way, including the clarity that can come with bourgeois unity, within a country or internationally, in revealing the enemy class. An irony for today’s opportunist cheerleaders of multipolarity is that the national liberation movement that has been able to take greatest advantage of inter-imperialist and regional bourgeois rivalry is the Kurdish one in Rojava, which got support from US imperialism rather than Russia or China. We can criticize Kurdish revolutionary leaders for their all too uncritical use of US support, but we cannot deny the fact of the matter here (nor can we deny that the Chinese and Russian bourgeoisies have given no meaningful support to the Palestinian struggle even in the face of Israel’s genocidal war on Gaza—and it is worth asking the opportunists why that is the case).
Taking a more sweeping historical look at national liberation struggles and inter-imperialist rivalry, it becomes clear that imperialist bourgeoisies have a long history of selectively supporting national liberation and self-determination for oppressed countries when it suits their class interests. They also have no problem subsequently betraying those oppressed countries or using their liberation from colonialism or other forms of imperialist domination in order to subjugate them under their own imperialist domination. History is full of such examples, especially by the US imperialist bourgeoisie during anticolonial struggles. To avoid stupidity on the question of multipolarity, we will need to get good at analyzing the class interests behind geopolitical maneuvering, even and especially when that geopolitical maneuvering assists a genuine liberation struggle.
“Study some political economy” for a lotta Lottas, not a harvest of Harveys
Analyzing class interests and the political programs that advance them, as well as the motions of capital that set the stage for our revolutionary activity, is where the study of political economy comes in. Given the dearth of quality work in the study of political economy by genuine communists over the last several decades, we have no choice but to turn to the texts produced by various “Marxist” political economists. Since even the best of those texts is stamped with a (petty-)bourgeois ideological viewpoint, the question for us is how to perform a Hegelian act of sublation and take what is good and necessary from their analysis and insights while negating their capitulationist standpoint, reformist political programs, and, where present, opportunism.
The easy part of doing this is rejecting the the rather obvious reformism that always crops up in the conclusions of the “Marxist” political economists’ books. Their concluding reformist programmatic prescriptions imagine ways to somehow get the bourgeoisie to act against the logic of capital accumulation, and are often so full of fantasy as to be absurd. For example, Jason Hickel’s book The Divide provides a helpful general overview of the history of global inequality since capitalism began five hundred years ago, and even gets a lot of the reasons for that inequality and the historical trajectory of capitalism correct, with no shortage of factual information that makes good fodder for exposure. However, once Hickel starts proposing solutions (in chapters 8 and 9), all he can come up with is advocacy for fairness, (bourgeois-)democracy, and reforms, with no ways to implement these propositions other than to convince the bourgeoisie to do so. Good luck with that.
Where things get more tricky is in teasing out how the (petty-)bourgeois outlook of “Marxist” political economists shapes their analysis of capitalism, not just their proposed solutions, especially when their analysis masks their class outlook and political program in opportunism. John Smith’s book Imperialism in the Twenty-First Century is a case study in in this regard, exemplary of opportunism in the theoretical domain. It provides lots of excellent exposure and analysis of how industrial production has been moved to the oppressed countries in recent decades and how the capital accumulation of imperialist bourgeoisies is derived from the exploitation of the proletariat in the oppressed countries. But Smith masks his Trotskyite conclusions until towards the end of his book, where he flagrantly distorts the socialist period in China and offers post-revolution Cuba, with its reliance on sugar production for export on the world market, as a model.173 The astute reader, however, should be able to pick up on Smith’s Trotskyism before the end of his book, and not just because of the footnotes referencing writings by the US Socialist Workers Party that he starts sneaking in on page 122 (or by way of reading his author biography on the back cover). The Trotskyism comes through in the way Smith insists, in opposition to Lenin’s analysis, on downplaying the role of finance capital in the workings of imperialism, which ironically refutes his own analysis of imperialism given that industrial capital is increasingly in the hands of a manufacturing bourgeoisie in the oppressed countries.174 Trotskyites can never resist the urge towards economism, towards reducing the fundamental contradiction of capitalism to the exploitation of the proletariat by the bourgeoisie in the production process, and consequently fail to account for the different motions of capital at work and the various levers of capital accumulation and their interrelationships.
We could go down the list of recent books by “Marxist” political economists and go in depth into their distortions in analysis and reformism in political program. That becomes necessary to the extent these books train people outside of narrow intellectual circles in how to think and how to act in the world, or when we are engaging with and trying to win over the more advanced from the small circles of intellectuals who read these books. I will leave it with the two above examples for now and skip to the larger point: if we want to make revolution, we need to study some political economy, but in studying political economy, we enter into a theoretical and analytical minefield full of Trotskyite, social-democratic, neodevelopmentalist, and otherwise bourgeois ways of thinking. The way we walk through that minefield without losing our grounding in communist principles is to get better as discerning line and get comfortable being grounded in communist principles while being flexible, sophisticated, and above all dialectical in our intellectual methods. As we do so, we will get familiar with some of the common weaknesses in today’s “Marxist” political economy, such as viewing state power as something other than a class dictatorship that looks out for the interests of the ruling class as a whole and failing to see internal contradictions as the basis for radical ruptures and transformations.175
Besides a proletarian class outlook and a firm faith in the masses’ ability to make revolution, our study of political economy should also be distinguished, from the “Marxist” political economists, by its subordination to the strategic objectives of the genuine communist movement, including through the organizational structures of democratic centralism. In other words, we need Party intellectuals in the sphere of political economy, whether or not a vanguard party has yet come into existence, carrying out intellectual and analytical work to train communist cadre and the masses in a more sophisticated understanding of the workings of capitalism. Furthermore, their work should help sharpen our collective strategic focus so as to make practical breakthroughs in revolutionary work, and to do that, political economists need to carry out their intellectual work as part of, and subordinated to, a strategic plan for revolution. All this is in opposition to the petty-bourgeois position (usually in the ivory tower of academia), lifestyle, and sense of self characteristic of today’s “Marxist” political economists, which reinforces their worst qualities and divorces their intellectual work from the masses and the revolutionary movement.
Taking a global view of the fundamental contradiction of capitalism
One important shift in thinking we should take from recent “Marxist” political economists is viewing capitalism’s rise and origins as global in scope rather than flowing principally out of a change in production relations in England that then radiated out to the rest of the world. That shift should in turn strengthen our ability to take a more global view of the fundamental contradiction of capitalism, in opposition to reducing it to specific class antagonisms, most especially that between the industrial proletariat and the bourgeoisie, and privileging those class antagonisms in revolutionary strategy. The longer history of capital accumulation demonstrates that the bourgeoisie privately appropriated not just or even necessarily in the main from wage labor in industrial production, but from socialized production on a world scale, going back to the plunder of Indigenous populations in the Americas and their exploitation in mines as well as the slave trade and the plantation agricultural production it served.
Before capitalism created social means of production that required proletarians working collectively in factories, capitalism created what we might call (if we can appreciate purposely incorrect uses of Marxist terminology) international socialized relations of production ruled by private appropriation, wherein the exploited labor of different classes in disparate parts of the world entered into a social production process. An early example of this process is the flow of slaves to the Americas, production of cotton by slaves in plantations in the Americas, and the textile mills in England turning that cotton into finished goods, which were then shipped around the world for sale. Capitalism’s subsequent development only furthered and broadened this process, yes, with industrial production and an industrial proletariat at the center of it, but with various other exploited classes in different parts of the world conjured into existence and/or drawn into the process. This way of understanding capitalism is, in my opinion, in line with Mao’s emphasis on the relations of production rather than mechanical and deterministic views of the productive forces that Mao sharply criticized and moved beyond in order to locate the revolutionary potential of the peasantry in China and the pathways for advancing the socialist transition to communism.
By looking at the international scale and historical sweep of socialized production and not just its concentrated expression in the factories of industrial production, we can take a cue from Mao and identify a broader array of classes and class antagonisms that can be the engines of communist revolution. Doing so is crucial for creatively forging revolutionary strategy in different parts of the world, and for not being stuck in strategies that worked in past conditions but do not apply to, or need to be substantially modified for, today. For example, both Walter Rodney and Amilcar Cabral drew attention to the importance of the cash-crop peasantry in Africa and the way its exploitation was tied to capital accumulation and industrial production in the imperialist countries. Since their time, the peasantry around the world has become increasingly under the command of global capital accumulation rather than local feudal lords and thereby drawn deeper into international socialized production.
With historical sweep, we can see how capitalism has created, liquidated, dispossessed, and transformed various exploited classes over the past five hundred years. Besides being the last class in history, the proletariat is also the most fluid class in history, with its conditions of work and labor exploitation, the means of production it works on, its relative concentration in different forms of production, and its geographic concentration points changing over the course of its existence as a class, and sometimes quite radically and rapidly. If we remain stuck staring at an image of industrial proletarians of the glory days of the international communist movement last century, our nostalgia will not enable us to see the proletarians of the present as the revolutionary force they can become, from the slums to the export processing zones, from the deindustrialized wastelands to the service jobs, from the underground economy to the reserve armies of labor left unemployed. Instead of looking for an ideal type of revolutionary agent based on that of past revolutionary movements, we need a way of looking at capitalism that comprehends its global scope, fluidity and trajectory, and the many possibilities for its overthrow.
Towards a nonbinary nation typology and a more subjective understanding of nations
In taking a global view of the fundamental contradiction of capitalism, Maoists have generally insisted that the principal contradiction in the world is between imperialist and oppressed countries. This was certainly true in the 1960s, and to some extent seems true down to today. However, as this truth has become a mantra, it has bred dogmatism and been used to justify reneging on the responsibility to make revolution in imperialist countries. Perhaps it would be more helpful to say that the principal contradiction in the world today is between the favorable objective conditions for revolutionary struggle and the abysmal state of the subjective factor that is needed to lead that revolutionary struggle. If we are to put our focus on transforming that contradiction, we will need a more thoroughly dialectical materialist understanding of nations and their motion and development in the decades since WWII.
The nation, as a social formation, is bound up with the division of society into classes. The nation was consolidated as a social formation in nineteenth-century Europe in service of the class interests of the bourgeoisie to develop national (or home) markets to serve capital accumulation. National markets require a common language, an interconnected territory with clear boundaries united into a distinct political entity, and a common culture binding the people within that territory together. The bourgeoisies of nations in formation drew on existing commonalities among the people in their desired national market, flattened out cultural differences among those people (for example, by imposing a national language), and forged a subjective sense of belonging through common culture, with mass media playing a crucial role in the process. In this respect, Stalin’s Marxism and the National Question is correct in identifying the basis for forging a nation, but does not adequately address the subjective element in nation formation, hence the synthesis of Stalin with Perry Anderson in the above explanation of the constitution of nations.176
To this explanation, we must add that the formation of oppressed nations took shape through a different process, one imposed by a foreign power whose bourgeoisie sought to extract resources and capture surplus value from from production in (what became) the oppressed nation, or by a dominant, oppressor nation within a multinational nation-state.177 In the latter scenario, the bourgeoisie of the multinational nation-state, usually drawn exclusively or mostly from the dominant oppressor nation, formed the objective existence of oppressed nation(s) within their borders through various means, including dispossession, land theft, slavery, and stratification of the exploited classes, with specific social structures set up to enforce these means. In both scenarios, securing markets for the sale of commodities within the oppressed nations is part of the imperialist or oppressor-nation bourgeoisie’s class interests, but usually more important is securing conditions of extraction, plunder, and superexploited labor. The other aspects of nation formation of oppressed nations—common territory, common language, and common culture—are forged in ways that serve the imperialist or oppressor-nation bourgeoisie’s class interests, but cannot be done (or at least has never been done successfully) simply by imposing a culture from without. The subjective sense of belonging to an oppressed nation is forged through a contested process, with the liberation struggle of the oppressed nation and the development, or lack, of a national bourgeoisie within the oppressed nation having a great effect on that process.
Since the nation, as a social formation, is bound up with capitalism and serves the class interests of the bourgeoisie, the goal of communism requires getting beyond nations by superseding them—eliminating them—as a social formation. How to carry out that process, as part of the communist revolution, has been a contentious question in the communist tradition that led to an antagonistic split between two opposed lines. Not surprisingly, that split occurred within the Second International during the period of high colonialism, after the process of nation formation in Europe had been completed and when the European imperialist powers directly ruled much of Africa and Asia as colonies. The correct side of that split, represented most especially by Lenin, forcefully argued for the centrality of national liberation of the oppressed nations as part of the communist revolution, with the right of self-determination for all nations and achieving equality between nations as necessary steps towards the eventual abolition of the nation as a social formation. The wrong side of the split, represented especially by Kautsky, argued that the oppressed nations needed imperialism to develop their productive forces, in effect using the final goal of communism, viewed from the mechanical materialist prism of supposedly historical materialist stages of development, as a justification for national chauvinism. The struggle between these two lines continued in new forms; in the Soviet Union, Stalin mainly upheld, fought for, and applied Lenin’s line while Trotsky betrayed it, using the term “world revolution” to argue against national liberation. With each split over this question, the wrong side in the split has joined the ranks of counterrevolution.
The fall of high colonialism brought the question of national liberation to the forefront by virtue of the fact that national liberation struggles were the primary reason for the fall of high colonialism. Where communists led national liberation struggles, they sought to make national liberation serve the final goal of communism rather than the class interests of the emerging national bourgeoisie in their country. The Chinese Revolution stood out as the great success in this respect. Most national liberation struggles, however, wound up serving the class interests of the national bourgeoisie rather than the masses of people and, as explained in part two, the national bourgeoisies in the former colonies by and large wound up subordinating themselves to imperialism in new forms.
Within the genuine communist movement of the time, there was a strong tendency to tail nationalism, and to use the correct political line of insisting on the need for national liberation in the oppressed nations in order to justify adopting the (bourgeois) ideological outlook of nationalism. In the imperialist countries, this took on a “left in form, right in essence” style of capitulation by way of insisting that the principal task of communists in imperialist countries was to support national liberation struggles in the oppressed countries rather than to make revolution in their own countries. In more recent decades, that capitulationist logic in the imperialist countries has been fused with postmodernist identity politics to further retreat from making revolution. The decline in genuine communist forces, especially with the collapse of the Revolutionary Internationalist Movement, means that the correct line—fought for by Lenin, Stalin, Mao, and the RIM—on the final goal of communism and the place of national liberation in the struggle towards that final goal is practically nonexistent today as an intellectual and material force.
Consequently, postmodernist and neodevelopmentalist logic has buttressed an analysis—if you can call it that—of nations as either good nations or bad nations. The result is idiotic moral arguments that paint the people, and, where they exist, sovereign governments, of oppressed nations as inherently morally virtuous. In opposition to this idiocy, we must insist on a materialist analysis of nations and the principle of supporting national liberation for the oppressed nations, without elevating some nations to some inherent morally virtuous status, as well as the general principle of the right of nations to self-determination.
Materialist analysis of nations, however, cannot stop at fitting them into static categories of imperialist or oppressed ones. There are certainly many nations that clearly fit into one or another side of that binary distinction, and it is a distinction that should remain our categorical starting point. But even with those nations that fit into one of the two categories, we must get far more specific with their particular features. There are also many nations that do not fit clearly into the categories imperialist or oppressed, either because they fall somewhere in the middle or because they have aspects of both. China, for example, has clearly developed imperialist relationships with oppressed countries in Africa, but foreign capital exploits the labor of Chinese proletarians on the global assembly line. Other examples of in-betweenness have been outlined in the preceding analysis, such as junior partners of imperialist countries or rising regional powers. The larger point is that categories are always limited in their analytical value and, if we do not go further than categorizing, we will become dogmatists and mechanical materialists. Instead of resting content with categories, we need to examine the specific position of nations within global capitalism in relation to their internal contradictions, and be attuned to their motion and development over time rather than seeing their position as fixed.
In defense of the multinational socialist state
For all the theoretical and historical problems and objective challenges our narrative of capitalism’s history has drawn our attention to, we have a solution: the multinational socialist state. The Russian and Chinese revolutions both brought this form of proletarian state power into existence, a form which pulled the people and territory under its sovereignty out of the logic of capital accumulation and the imperatives of the world market and set those people on the socialist transition to communism. Their achievements, especially when measured against the exploitative and oppressive societies they replaced and the efforts of the international bourgeoisie to undermine and overthrow them, are truly impressive.
On the national question in particular, both the Soviet Union and the People’s Republic of China established policies and brought forward mass initiative advancing the equality of nations against a long history of oppressor-nation domination and chauvinism in the Russian empire and feudal China. They did so in a variety of ways, but within the context of a unified central state power in the hands of the masses of different nationalities. If we subject their policies on the national question to closer scrutiny, as we should, we will undoubtedly encounter shortcomings and mistakes, but none that take away from what is principal: their support for national liberation and model of equality between nations as part of the socialist transition to communism and a world beyond nations.
Where these two shining examples of socialist states in the twentieth century entered our narrative, it was largely to take account of how they impinged on capital accumulation. A deeper examination of the socialist period in the Soviet Union and in China is a crucial task of historical analysis and popularization, and one that readers can expect the journal Going Against the Tide to take up soon. Here it is worth noting that the “Marxist” political economists mentioned above, to the extent they examine this history, distort it through an anti-communist prism and reject it as an alternative model to the capitalist system they critique. Maoist China in particular is treated with derision by them, precisely because it offered a revolutionary solution to the problems of imperialism they are analyzing but look to the bourgeoisie to resolve. That many of these “Marxist” political economists have, of late, become apologists for and even ardent defenders of the counterrevolutionary governments and capitalist economic paths that took the place of proletarian state power in the Soviet Union and China is an indictment of their failure to stand with the masses.
Knowing, by way of the examples of the Soviet Union and Maoist China, that it is possible for humanity to live without the brutal logic of capital accumulation defining our societies and relations to one another should firm up our faith in the masses to realize that possibility once again and take it even further next time around. And since, as important as it is to have, faith alone will not sustain us, we will have to continue studying the logic of capital accumulation, using its history to learn the contradictions inherent in it and predicting how they will play out in the future, and probing for weaknesses in the bourgeoisie’s class rule. As we smarten up in this way, as we get to know our enemy even better than they know themselves and their system, we can use that wisdom to become the revolutionary strategists the masses need us to be. The more we do that, the more that capitalism’s days are numbered.
1Giovanni Arrighi, The Long Twentieth Century: Money, Power, and the Origins of Our Times (Verso, 2010 [1994]), 330–35.
2The 1984 Declaration of the Revolutionary Internationalist Movement offers some analysis of this question that is probably the most helpful starting point to those who want to look into the matter.
3David Harvey, The New Imperialism (Oxford University Press, 2005 [2003]), 62. On global cities as centers of finance capital, see Saskia Sassen, The Global City: New York, London, Tokyo (Princeton University Press, 2001).
4Jason Hickel, The Divide: Global Inequality from Conquest to Free Markets (Norton, 2018), 129–30, 143.
5Harvey, 62; Hickel, 141.
6Robert Brenner, The Economics of Global Turbulence: The Advanced Capitalist Economies from Long Boom to Long Downturn, 1945–2005 (Verso, 2006 [1998]), 158.
7Hickel, 141–43 (quote on 142).
8Davis, Planet of Slums (Verso, 2006), 152–53.
9Ibid., 156.
10Hickel, 161.
11Davis, 164.
12Ibid., 156.
13Ibid., 159–60.
14Utsa Patnaik and Prabhat Patnaik, Capital and Imperialism: Theory, History, and the Present (Monthly Review Press, 2021), 270, 274–75.
15Davis, 171.
16Ibid., 152.
17Hickel, 151.
18Davis, 161.
19Hickel, 166.
20Ibid., 169–70.
21Horace Campbell, Reclaiming Zimbabwe: The Exhaustion of the Patriarchal Model of Liberation (Africa World Press, 2003), 277.
22From a speech at a 2000 anti-debt protest in Germany, quoted in Campbell, 121.
23Hickel, 149.
24Davis, 157.
25Ibid., 167.
26Ibid., 166.
27Ibid., 167–68.
28Ibid., 159.
29Ibid., 153.
30Campbell, 131–34, 155.
31Ibid., 163–64.
32Harvey, 158–61, 174.
33Given the common usage of the term neoliberalism, it seems impossible to avoid it. However, we should be conscious of the fact that this term carries with it ideological and political baggage of the reformist, petty-bourgeois variety. Its usage often suggests a set of bad policies rather than the workings of global capital accumulation during a certain historical period—bad policies contrasted with the supposedly better ones of Keynesianism.
34Harvey, 185.
35John Smith, Imperialism in the Twenty-First Century: Globalization, Super-Exploitation, and Capitalism’s Final Crisis (Monthly Review Press, 2016), 274.
36Intan Suwandi, Value Chains: The New Economic Imperialism (Monthly Review Press, 2019), 42.
37Ibid., 73.
38Ibid., 152.
39Utsa Patnaik and Prabhat Patnaik, Capital and Imperialism, 268.
40Suwandi, 54.
41Smith, 68, 82.
42Suwandi, 48.
43Arrighi, Adam Smith in Beijing, 171.
44Suwandi, 23, 50.
45On the growing portion of women in the low-wage industrial proletariat, see Saskia Sassen, “Toward a Feminist Analytics of the Global Economy” and “Notes on the Incorporation of Third World Women into Wage Labor Through Immigration and Offshore Production” in Globalization and Its Discontents (The New Press, 1998).
46Suwandi, 62.
47Ibid., 54.
48Smith, 51; Suwandi, 54.
49Arrighi, The Long Twentieth Century, 341.
50Ibid., 341–42.
51Ibid., 355.
52Brenner, 285.
53Arrighi, The Long Twentieth Century, 348–49.
54See Zhun Xu, From Commune to Capitalism: How China’s Peasants Lost Collective Farming and Gained Urban Poverty (Monthly Review Press, 2018).
55Davis, 168–69.
56Utsa Patnaik and Prabhat Patnaik, Capital and Imperialism, 270.
57Ibid., 275.
58Smith, 44.
59As Ellen Wood put it in Empire of Capital (Verso, 2003), there is an “indispensable function of the state in controlling the mobility of labour, while preserving capital’s freedom of movement… It has been one of the state’s most essential functions to keep a firm grip on the mobility of labour, so that the movements of labour enhance, rather than endanger, capitalist profit” (19).
60An excellent dramatization of this state of affairs for coal miners in England can be seen in the 1996 film Brassed Off.
61Brenner, 208, 162, 189.
62Ibid., 189.
63Ibid., 162, 213.
64Ibid., 197.
65Ibid., 213. Mike Judge brilliantly lampooned corporate downsizing in his 1999 film Office Space.
66Radhika Desai, Geopolitical Economy After US Hegemony, Globalization, and Empire (Pluto Press, 2013), 180. Economists call these sectors FIRE (finance, insurance, and real estate).
67Utsa Patnaik and Prabhat Patnaik, Capital and Imperialism, 268; Harvey, 67. Other, more longstanding sections of the bourgeoisie, such as the upper tier of entertainment industry capitalists, could perhaps also be included in the ranks of the big bourgeoisie—that is a question for communists to work out collectively in the context of their countries and as part of the task of developing a Party Program.
68Smith, chapter 5 and Hickel, chapters 1 and 2 provide helpful overviews of, and statistics on, the growth of global inequality over the last five decades. Hickel notes that there were “more than 1 billion people added to the ranks of the poor since 1981,” and in “1960, at the end of colonialism, per capita income in the richest countries was thirty-two times higher than in the poorest country” and “over the next four decades, the gap more than quadrupled: by 2000, the ratio was 134 to 1.”
69Suwandi, 65.
70Arrighi, The Long Twentieth Century, 325.
71Desai, 179.
72Hickel, 177.
73Suwandi, 163; Hickel, 187–90.
74Hickel, 22, 182.
75Ibid., 25–26.
76In chapter 1 of Empire of Capital, Ellen Wood argued that “Old colonial empires dominated territory and subject peoples by means of ‘extra-economic’ coercion, by military conquest and often direct political rule. Capitalist imperialism can exercise its rule by economic means, by manipulating the forces of the market, including the weapon of debt.” While I believe Wood had a point here, she probably went a little too far in separating bourgeois state power from the economic means she described, or of minimizing the persistent role of the former to ensure the latter.
77Arrighi, The Long Twentieth Century, 342.
78Ibid., 350.
79Greg Grandin, Empire’s Workshop: Latin America, the United States, and the Making of an Imperial Republic (Picador, 2021 [2006]), 244.
80Giovanni Arrighi, Adam Smith in Beijing (Verso, 2007), 277.
81Hickel, 192, 198.
82Tom Stevenson, Someone Else’s Empire: British Illusions and American Hegemony (Verso, 2023), 78–82.
83Ibid., 76, 83.
84Wood, 143.
85Stevenson, 107.
86Ibid., 52–59.
87Arrighi, Adam Smith in Beijing, 5.
88Arrighi, Adam Smith in Beijing, 258; Arrighi, The Long Twentieth Century, 366.
89Wood, 158.
90Campbell, 247.
91Grandin, chapter 13.
92Wood, 155–56.
93Ibid., 144.
94Grandin, 245.
95Ibid., chapter 15.
96Stevenson, 155.
97Ibid., 33.
98Arrighi, Adam Smith in Beijing, 257.
99Ibid., 185.
100Stevenson, 159.
101Ibid., 156.
102Arrighi, Adam Smith in Beijing, 185, 260.
103Stevenson, 156–57, 161 (quote).
104Ibid., 223.
105Ibid., 33.
106Ibid., 2.
107Arrighi, The Long Twentieth Century, 327.
108Brenner, 211–12.
109Arrighi, The Long Twentieth Century, 327; Brenner, 199; Adam Tooze, Crashed: How a Decade of Financial Crises Changed the World (Penguin Books, 2018), 26–27. Tooze describes that tax cut to the wealthy as “estimated to cost the federal government $1.35 trillion over ten years.”
110Tooze, 34–35.
111Harvey, The New Imperialism, 72.
112Desai, 200.
113Ibid., 223.
114Brenner, 295, 316.
115Ibid., 318.
116Tooze, 10.
117Ibid., 120.
118Arrighi, Adam Smith in Beijing, 196–97.
119Tooze, 38.
120Ibid., 32–33.
121Arrighi, Adam Smith in Beijing, 261, 302–8.
122Tooze, 137.
123Tooze, 65.
124Brenner, 306–14. See also Arrighi, Adam Smith in Beijing, 223; Harvey, The New Imperialism, 190; Utsa Patnaik and Prabhat Patnaik, Capital and Imperialism, 95, 294–95.
125Tooze, 42–43.
126Ibid., 51–54.
127Ibid., 68.
128Ibid., 43.
129Ibid., 48–52.
130Ibid., 63.
131Desai, 229.
132Tooze, 155–57, 281.
133The post-crisis decline in the imperialist way of life is especially evident in the decline of social welfare and infrastructure spending and public employment in the United Kingdom. From 2009 to 2016, there was a decline in UK public-sector employees from 6.44 million in 2009 to 5.43 million in 2016. “Between 2010 and 2016 public spending by local councils on everything from elderly day-care centers to bus services, public parks and library facilities fell by more than a third.” All this amounted to greater austerity than was enacted under the Thatcher government (Tooze, 350).
134Tooze, 171–88 (quote on 184).
135Ibid., 157–61.
136Ibid., 79–83.
137Ibid., 227–36, 326, 328, 374, 387.
138Ibid., 374–75, 514–33.
139Ibid., 184–95.
140Ibid., 8, 255–61.
141Ibid., 261–72.
142Ibid., 251.
143Ibid., 167
144Ibid., 13.
145Ibid, 8.
146Ibid., 211–12.
147Ibid., 284–85.
148Stevenson, 5, 20–21. China and South Korea also rebounded from 2008 as growth economies, but they are not G7 members.
149Ibid., 75.
150Tooze, 214, 219, 444, 482–83,
151On the increasingly speculative motions of finance capital, see Saskia Sassen, Expulsions: Brutality and Complexity in the Global Economy (Harvard University Press, 2014).
152Hickel, 219–23.
153Tooze, 128–30.
154Ibid., 129–30.
155Ibid., 123.
156Arrighi, Adam Smith in Beijing, 352–57. See also Isabella Weber, How China Escaped Shock Therapy: The Market Reform Debate (Routledge, 2021).
157Arrighi, Adam Smith in Beijing, 369–75.
158Ibid., 219–20, 357–58.
159Tooze, 242–46.
160Tooze, 17, 115–22.
161Stevenson, 60–61.
162Ibid., 76–77, 84–86.
163Tooze, 503.
164Ibid., 373.
165That the most strategically savvy and bold US president since Clinton is Donald Trump is confirmation of this assessment, as Trump is very much an outsider whom the US bourgeoisie collectively tried to prevent from coming to power…three times (only one of those times successfully).
166Stevenson, 106.
167Ibid., 115.
168Ibid., 104.
169See the Introduction to Desai’s Geopolitical Economy. Desai opportunistically claims that “uneven and combined development” was a theory collectively adopted by the Bolsheviks rather than one of Leon Trotsky’s justifications for capitulation.
170Arrighi, Adam Smith in Beijing, 368–69.
171See, for example, chapter 21 of Utsa Patnaik and Prabhat Patnaik’s Capital and Imperialism.
172Stevenson, 223.
173See Smith, 209–10, 213–16. On Cuba, see Rudi Mambisa’s “Notes on the Political Economy of Cuba: Burn Down the Cane Fields!,” published in A World To Win #14 (1989) and #15 (1990), and available online at goingagainstthetide.org.
174See especially chapter 10, where Smith’s analysis of the 2008 economic crisis attempts to put production capital over finance capital.
175On the latter, Desai’s implication that US imperialist hegemony is weaker than its colonial predecessors is predicated on the presumption that imperial hegemony means without contradictions. See especially chapter 4 of Geopolitical Economy.
176See Perry Anderson’s Imagined Communities: Reflections on the Origin and Spread of Nationalism (Verso, 1983).
177I realize that “multinational nation-state” is a contradiction in terms. I use it to (1) distinguish between this modern capitalist state formation and the feudal multinational states of the past, such as the Austrian empire, and (2) because what I am calling multinational nation-states, such as the US, subjectively foreground national unity, including by way of the dominance of the oppressor nation within the multinational state, in their construction of a national culture, language, politics, etc. In case you haven’t noticed yet, I’m good with the existence of contradictions, including in the terminology we choose.
Going Against the Tide: A journal charting a path for communist revolution in the US 