In this text, I want to briefly – very briefly, and only for the purpose of stimulating a discussion -- address three points. First, I want to make an evaluation of the impact of globalization, neo-liberalism, and the disintegration of the Russian bloc, on the world economy over the past twenty years. Second, I want to consider the possibility that the vast overhang of fictitious capital and the massive debt of the US, together with its dependence on fresh, continuing, and mounting, infusions of capital, may result in a decision or series of decisions by foreign lenders to “pull the plug” and cut off the flow of dollars to the US. Third, I want to consider the results of such a possible “decision” and its impact on the world economy and the hegemony of American capital.
The twentieth century witnessed the consolidation and global hegemony of the Anglo-American world market, first with its center in London and increasingly after World War One with its centers in New York and Washington. Quite apart from the tensions between Britain and the US as power shifted from one to the other, the twentieth century saw three challenges to the global domination of the Anglo-American world market: The German challenge in World War One, the challenge of Nazi Germany and Japan in World War Two, and the Challenge of Stalinist Russia after 1945. Each of these inter-imperialist conflicts, hot or cold, led to the consolidation of Anglo-American hegemony – however tenuous or short-lived it may prove to be (either through a challenge posed to capitalism as a civilization by the “collective laborer” (Gesamtarbeiter) or by new imperialist rivals seeking the destruction of the hegemony of the Anglo-American world market). The “globalization” of the economy, and the policies of neo-liberalism over the past twenty years are hallmarks of the (provisional) triumph of Anglo-American hegemony. The end of the import substitution regimes in Latin America, NAFTA and its probable expansion, the institutions of the European Union, through which both monetary and fiscal policy has been significantly transferred from the nation-state to supra-national bodies, thereby incorporating national markets into the global market presided over by Anglo-American capital and its institutional structures (IMF, WTO, etc.), the opening of previously closed Asian markets to the commodities, investments, and capital linked to the Anglo-American world market (the fruit of the Asian financial crisis of the late ‘90’s) and the incorporation of China in the WTO, and finally the incorporation of the ex-“Soviet Union” within the structures of globalization, all constitute the visible signs of the consolidation and hegemony of the Anglo-American world market. These developments constitute the other side of the coin of the emergence of the US as the world’s sole super-power, as the military behemoth that sits astride the globe today.
The Anglo-American world market as presently constituted rests on a massive build-up of fictitious capital, huge and growing trade and balance of payments deficits for the US (which alone make it the “locomotive” of the world economy), an enormous and mounting structure of debt (consumer, corporate, and governmental), and a seemingly unsustainable and yet necessary transfer of capital from the rest of the world to the US on a virtually daily basis that alone permits the financial system – and thereby world trade -- to function. In short, the world economy based on the hegemony of the Anglo-American world market is like a house of cards, sustained only by the strength of the dollar as the world’s reserve currency and the willingness of global financial markets and government policies in dozens of (creditor) countries to keep the system afloat. Either the conscious decisions of creditors or the shock of a financial crisis could lead to the collapse of that house of cards, and the financial bases that underpin the Anglo-American world market, whose final consolidation is not even a decade old. How likely is such an outcome? How probable is such a challenge to American global economic hegemony?
Inasmuch as it is virtually impossible to predict a financial crisis, and inasmuch as its contours depend in large part on the responses of governments and financial institutions, I want to focus on the prospects for conscious decisions to pose a challenge to American hegemony and the role of the dollar. It is not difficult to understand why the capitalist class in Europe, Japan, the oil producing states of the Middle East, the Asian “tigers” and even China, would resent the organization of the world market that compels them to underwrite the American trade and payments deficit, and to provide fresh infusions of capital to a US already burdened with a mountain of debt that can never be repaid, or only repaid in continuously devalued dollars. The Anglo-American world market rests on a constant transfer of capital from the rest of the capitalist world to a hegemonic US; on a capitalist world held ransom to New York/Washington (and its junior partner in London). Yet, the obstacles to any decision(s) to pull the plug, to seek to replace the dollar with a new reserve currency (or currencies), to let the house of cards (and the mountain of fictitious capital) collapse, are formidable. Even putting aside the military hegemony of the US (no small matter), the financial/trade reasons that make any decision to dismantle the Anglo-American world market unlikely over the short term seem overwhelming. Such a course would put at risk the very financial stability of America’s creditors even more than that of the US itself, inasmuch as it would raise the spectre of the destruction of trillions of dollars of capital values. Without the continuous transfer of capital to the US, the global financial system would collapse, and the harm to Washington’s creditors would likely be greater than the harm to American capital itself. Moreover, world trade on its present gigantic scale is only possible because the American market provides a necessary outlet for the plethora of commodities produced in the rest of the world; without the American market the accumulation process would come to a screeching halt, condemning world capital to a catastrophic crisis, the impact of which would be far greater in Japan, Europe, and Saudi Arabia, than even in the US. It is difficult to envision a scenario where the European Central Bank, the Bank of Japan and the MITI, or the Saudi royal family, for example, would cease to grease the wheels of world trade and risk dismantling the Anglo-American world market to which their own fate is tied. Moreover, it is – for the moment – difficult to see how those factions of the ruling class in Europe and Japan that are prepared to challenge American hegemony (on the extreme right and left) could come to power and translate their ideologies into practice. Only a devastating financial crisis beyond the capacity of the capitalist class to control would create the pre-conditions within which those factions of capital prepared to challenge American hegemony could come to power. But even in such an eventuality, surely a distinct possibility in a world shaped by the operation of the capitalist law of value, would the dominance of American capital, its power relative to that of potential rivals, be shaken?
Let us assume such a hypothetical disruption of the Anglo-American world market. In the shakeout that resulted, would the US lose its pre-eminent geo-political and economic position? The US and Britain are the only two countries in the world that have a global military reach. Indeed, American military supremacy is today unchallenged, and that would give it a decided advantage in the reconstitution of trading blocs, in the control of vital sources of raw materials and markets. Much of Europe, especially Central and Eastern Europe, fears and hates Germany and Russia to such a degree that it would be a faithful Trojan horse within Europe for the US. Moreover, if Europe or Japan were to try to compete with the US militarily, not only would it take decades to mount a serious challenge, but it would entail such a diversion of resources from the productive sectors of the economy as to risk undercutting the very economic bases of competitiveness, and such a reduction of variable capital, in particular the “social wage,” as to undercut the social stability upon which capitalist class rule depends. In the case of China, a serious challenge to American supremacy in East Asia and the Pacific is decades away, and itself depends on China’s ability to be an integral part of the Anglo-American world market at least until the economic bases for an independent imperialist policy have been secured. That may take decades, and means that for the foreseeable future China’s stake in the stability of the Anglo-American world market, on which its own economic development now depends, is far greater than any stake in dismantling it. That could change, especially if integration in the world market threatens the political hegemony of the Stalinist party in favor of newly emerging corporate interests, but for now, the Chinese ruling class would lose more than it gained from a serious challenge to American hegemony.
Indeed, were the disruption of the very bases of the Anglo-American world market to occur, the re-constitution of economic/financial/military blocs that would follow – assuming that a revolutionary crisis did not intervene – would see an American bloc dominating the whole Western hemisphere, Australia and the Pacific, probably the British isles, and large parts of the raw material rich African continent, and even the Middle East, emerge. Such a bloc would be stronger than any of its rivals, thereby assuring that, even in a world sundered by new bloody conflicts, American imperialism would be the dominant player. It is not a prospect that provides any particular comfort to Marxist revolutionaries.
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