Imperial America?

Imperial America?

It is common to hear talk of the Roman Empire, the British Empire, or the Soviet Empire, yet comparatively little is said about an American Empire. The reason is that it is often taken for granted that the era of imperialism ended with the collapse of communism, and that the near-universal extension of economic and political liberalism precludes any chance that Empire will again rear its ugly head. Empire is considered an outdated concept of little use for explaining the dynamics of a world increasingly integrated and globalized. Thus, Francis Fukuyama argues that we are witnessing the “end of history,” “the end point of mankind's ideological evolution and the universalization of Western liberal democracy as the final form of human government” (Fukuyama, 39). The age of ideology is over, capitalism's victory is absolute. Implicit in his view is the assumption that the free market is antithetical to Empire, and that imperialism cannot exist when liberal values are widely acknowledged as sacrosanct. Considerably less attention is therefore paid to the ways in which contemporary American power, as exercised on a global level, mirrors that of history's greatest imperialist states.

Here I will argue that the concept of Empire is indeed crucially important to understanding the United States' position within the international system. However, any claim to the imperial nature of United States must be qualified. The US is not an empire in the sense that it wields direct political control over foreign populations and territories, but it is an empire by merit of its unparalleled economic and financial supremacy. American hegemony rests on the perpetual exploitation of an economically-dependent periphery in order to feed its metropolitan core, and uses its hegemonic position within the international economy to prevent countries from opting out of its imperial fold. In these respects, the United States resembles the most powerful empires of past epochs.

What is an “Empire”?

The word “empire” is commonly used to describe an expansionary authoritarian state that uses its political and military power to dominate foreign territory. Dominic Lieven defines it straightforwardly as a “polity that rules over wide territories and many peoples” without the explicit consent of those it governs (Lieven, xi). Although the simplicity of this type of definition makes it appealing, it is insufficient because it overlooks the political economy of Empire—the underlying economic and class forces that push states into adopting imperialist strategies in the first place. Any study of Empire must therefore recognize first and foremost that imperialism (i.e. the practice of Empire) is “the process whereby the dominant politico-economic interests of one nation expropriate for their own enrichment the land, labor, raw materials, and markets of another people” (Parenti, 1). In this sense, Empire is not a particular political regime or system of governance but a set of economic relationships based on exploitative and decidedly unequal conditions.

Although empires are usually envisaged as states which possess formal colonies, Lenin points out that imperialism can manifest itself in many forms. In his study of nineteenth century British imperialism in Latin America, for example, he notes that in addition to the core-periphery relationship that Britain had with its colonies, there were also “diverse forms of dependent countries which, politically, are formally independent, but in fact, are enmeshed in the net of financial and diplomatic dependence” to such an extent that they ought to be regarded as virtual colonial possessions (Lenin, 263). Britain managed to promote its imperial ambitions in Latin America not just through colonial subjugation or military force but by mobilizing its superior economic and political resources. This same process of indirect control can be identified in other empire-building projects throughout history. For example, in ancient Greece, Athens maintained de-facto rule over states within the Delian League that were formally sovereign yet economically dependent on their commercial relations with Athens. Similarly, the Roman Empire often had lax military control over its annexed provinces and instead used economic and political leverage to subordinate foreign territory (Tabb, 5).

It is therefore important not to conflate imperialism and Empire with colonialism—doing so obfuscates the historical variation in colonial-metropolitan relations and makes it more difficult to understand imperialism in its modern forms (Magdoff, 92).

The American Economic Empire

Many commentators who have recognized the existence of a US empire have focused their attention on the closely-knit cabal of neoconservatives well-placed in Washington (Paul Wolfowitz, Richard Perle, Dick Cheney, and others) who have rallied around the Project For The New American Century and its goal of promoting a global “Pax Americana” (PNAC, 11). While obviously this segment of the US ruling class is most vehemently supportive of the idea of an American Empire, it would be inaccurate to suggest that its imperial goals are limited to a small section of the Republican oligarchy. In fact, imperialism goes much beyond the political project of any particular elite group and must be thought of as a phenomenon naturally arising from the imperatives of capitalist development within the United States.

Marx and Engels recognized early on that in order for a capitalist power to sustain itself, it must constantly expand its markets, revolutionize its productive forces, and seek new methods of accumulation. Yet in the decades following the Second World War, American capitalism ran into difficulties in these areas as it began to loose its economic edge to Western Europe, Japan, and the “Asian Tigers” of Hong Kong, Singapore, South Korea, and Taiwan. From 1945 and 1980, the US saw its share of global GDP fall from approximately thirty-five percent to twenty percent (Chase-Dunn, 176). Between 1960 to 1983, the United States experienced the lowest average annual rate of increase in manufacturing productivity of any industrialized country (Melman, 80). In the latter half of the 1970s, the US dollar lost almost a quarter of its value against the yen and the mark (Gowan, 39). Moreover, developing countries throughout the world enjoyed remarkably high rates of economic growth and slowly began to encroach upon American markets and weaken the position of US domestic producers. These economic realities reveal a crisis in American capitalism beginning as early as the 1960s that decisively threatened US hegemony around the globe.

To confront this situation, in the 1970s and 1980s the United States began to pursue aggressively the creation of a new world economic and political order that would radically tilt the international economic situation back in its favor. One central aspect of this plan was orchestrating a shift from the Bretton Woods gold standard to the Dollar-Wall Street Regime (DWSR). This new global monetary regime, characterized by floating exchange rates and free capital mobility, and which utilizes the US dollar as the global reserve currency, gave the United States unprecedented power in reshaping the international economy to suits its interests. For example, Robert Wade points out that under the DWSR, developing countries became almost completely dependent upon private international and financial institutions such as the IMF for gaining access to credit (Wade, 245). These lenders place strict neoliberal conditionality on their clients, forcing states to open up their labor and capital markets, lower taxes on business, reduce spending on social services, adopt liberal intellectual property and investment regimes, and make other reforms that are congruent with the interests of US multinationals.

Peter Gowan likewise explains the significance of the DWSR by showing how it gives enormous exclusive benefits to American capital by liberating it from the balance of payments constraints that other countries face. Dollar seigniorage means that the United States can spend far more than it actually earns abroad. It therefore doesn't need to worry about foreign exchange constraints when it comes to things like building military bases, buying foreign companies, engaging in FDI, and sending out large flows of funds into portfolio investments (Gowan, 25). Although this situation benefits handsomely American capitalist interests, many other countries (rich and poor alike) have seen economic stagnation or decline. OECD countries have experienced much lower rates of growth and higher inflation under the DWSR than they did under Bretton Woods, while developing countries have endured far more banking and currency crises (Wade, 245-6). Rising financial volatility encourages poor countries to run large current-account surpluses and maintain large foreign exchange reserves instead of using their monetary resources for economic development and social welfare.

This new global financial architecture is in many respects an imperial one. While benefiting the narrow interests of US capital, it has increased global economic instability and stunted economic growth and development in much of the rest of the world. Michael Mann thus concludes that “we see that states are actually being coerced into changes from outside, by the US and its international front organizations. We see that Empire is not dead, though it is now informal, its powers mainly emanating from Washington and New York in the form of international banking practices—and also the dollar's role as reserve currency (Mann, 232).

In addition to the DWSR and the renewed financial dominance of the United States, the US Empire maintains itself through its ability to influence multilateral organizations and pressure countries to apply neoliberal reforms. I have already briefly mentioned how international financial institutions such as the IMF and the World Bank serve the interests of US capitalism, but it is important to discuss this issue in further detail.

By the 1970s and 1980s, intensified competition and increasing congestion and saturation in world markets pushed the United States into seeking new ways of maintaining high levels of profit. Instead of continuing to rely on the normal capitalist method of accumulating wealth (by expanding production and appropriating the newly-created surplus), the US began instead to revert to primitive accumulation, or what David Harvey calls “accumulation by dispossession.” This process, rather than generating new wealth, relies on the appropriation of the already-existing surplus of other countries. Neoliberalization is the primary tool the US uses for accomplishing this goal.

Neoliberal reform packages are often pushed onto countries as a prerequisite for gaining access to funds from international lending agencies such as the IMF and the World Bank, within which the US Treasury wields dominant authority (Mann, 232). Yet the pro-market agenda advanced by these bodies is not designed to foster economic growth. Instead, neoliberal restructuring is used as a means to expropriate land, capital, social infrastructure, and natural resources that are publicly owned and sell them at very low cost to transnational investors. Harvey explains this as a method of “open[ing] up new fields for capital accumulation in domains hitherto regarded off-limits to the calculus of profitability” (Harvey 160). Even sources of value such as indigenous knowledge and biological resources that were previously never even thought of as marketable products can be turned into commodities and monopolized (Parenti, 33).

This redistribution of assets from lower to upper classes by means of forced privatization and commodification is a principal method through which the US maintains its imperial relations with poor countries. The neoliberal strategy allows the United States to extract far more wealth from the developing world than it to puts in through investment. It is therefore no surprise that while during the 1960s, “only” three dollars flowed to the northern hemisphere for every dollar flowing to to the southern hemisphere, by the late 1990s this ratio grew to seven to one (Rees, 258). The unfair trade and investment rules that the US promotes throughout the global South in order to enable accumulation by dispossession are thus principle means through which the United States maintains its global economic supremacy.

Conclusion

Ellen Meiksins Wood points out that there is an “there is an analogous difference between non-capitalist and capitalist imperialisms (Wood, 12). Whereas old colonial empires used “extra-economic” coercion (such as military conquest and direct political rule) to dominate territory and subject peoples, capitalist imperialism can exercise its rule by economic means—by manipulating the market and using financial leverage to indirectly colonize weaker countries. While these nations may be granted the trappings of sovereignty, foreign capital can still retain control over their most profitable resources.

It is in this sense that we can talk about the United States as a global empire. Although the US's means of imperial domination and surplus extraction may differ from those used by earlier empires, the economic result remains the same. Wealth is methodically extracted from the colonized periphery in order to feed the imperial core. While this arrangement provides ruling interests within the United States with an unprecedented degree of wealth and power, chronic underdevelopment and poverty is endured by the rest.

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