Imperialism in decadence

Neoliberalism and military invasions make evident US decline

Apr 25, 2023

In my last two commentaries, I have described the worldwide transition from colonialism to neocolonialism and the capacity of the United States to develop a new imperialism that was well-adapted to the structures of the neocolonial world-system. And I described emergence of the Korean, Vietnamese, Chinese, and Cuban socialist revolutions and the Non-Aligned Movement as forms of resistance and structural transformations that are in essence anti-neocolonial. (See “The conquered peoples seek a more just world: The emergence of socialism in the world of the colonized,” April 18, 2017; “Neocolonialism and the New Imperialism: The persistent quest of the neocolonized peoples for true sovereignty,” April 21, 2023).

Today I discuss the current decadence of the neocolonial world-system and the new imperialism, which is rooted in their essential characteristics and in the incapacity of the leaders of the powerful nations to make the increasingly evident necessary structural adjustments.

The decadence of the new imperialism and its historic roots

The collapse of the European colonial empires and the spectacular rise of the USA through insertion in colonial economic structures created a situation in which the USA would be the most powerful military, economic, and financial power by the end of World War II. Washington and New York City would now be the epicenter of what had become a neocolonial world-system.

However, immediately following the Second World War, the USA had high levels of unemployment, making difficult the reinsertion of armed forces personnel into the economy. At the same time, by war’s end, the U.S. economy had become dependent on war industries, which now experienced stagnation in the demand for its products. This situation constituted an obstacle to a possible reconversion to a peacetime economy.

The long-term solution to this problem would have been investment in the productivity of the nation’s economy and in the manufacturing of industrial and high-technology goods with high market demand in an age of peace and prosperity, taking into consideration questions of ecological sustainability. However, the USA opted instead for a militarist Keynesianism and a permanent war economy, which was an easier solution in the short term.

The turn to permanent militarization of the economy and society was justified before the people by portraying the Soviet Union as an expansionist threat. This was an ideological distortion. In fact, the Soviet Union was seeking a cordon of security along its borders in the context of peaceful co-existence with the Western powers. The strategy of the Soviet Union with respect to the global transition to neocolonialism was to leave the neocolonized peoples to their fate in their conflicts with the Western powers, except when Soviet security interests were directly at stake. The extraordinary success of the U.S. Cold War ideology, despite its mischaracterization of Soviet foreign policy, was due to its legitimation of an arms race, thereby fueling the arms industries and propelling the U.S. economy in the short term.

The Cold War ideology created cultural blinders that left the post-war U.S. political establishment with an incapacity to understand the true challenges that the USA confronted. The U.S. power elite could not see that the nation had arrived to hegemony in a world-system that itself confronted unsustainable contradictions. In the first place, the numerous conquered and colonized peoples of the planet, being human, could not and would not accept the peripheral role that had been assigned to them, because it would mean accepting a condition of permanent and deepening impoverishment and powerlessness. Throughout the 1950s and 1960s, the colonized peoples were looking for ways to at least ameliorate, if not transform, their situation. The neocolonial world-system was characterized by permanent political conflict, giving rise to continuous costs related to social control and the preservation of the established world-system.

Secondly, the capitalist world-economy had reached and overextended the natural territorial and ecological limits of the earth. It could no longer expand economically by means of the conquest and peripheralization of new lands and peoples. Having run out of new lands and peoples to conquer, the world-system had lost its principle economic engine. New means of economic expansion would have to be found, along with new forms of ecologically sustainable production.

Not seeing these contradictions, the United States was proceeding as though they did not exist. In the 1960s, the USA was spending beyond its real productive capacity, as a result of the war in Vietnam, the maintenance of military bases throughout the world, and economically unsupported levels of consumption in the middle class. There emerged a state budget deficit as well as a balance of trade deficit, with the nation buying more goods and services than it was producing and selling. To cover this undisciplined “double deficit,” the government was putting into circulation dollars without adequate backing in gold reserves, with the result that the dollar was overvalued.

The Nixon administration fixed the situation. It eliminated the gold standard, by which the value of the U.S. dollar was fixed at $35 per ounce of gold, letting the price of the dollar be determined by international currency exchange markets. This resulted in the devaluation of the dollar, thus making U.S. goods cheaper and more competitive in the world market. And it also resulted in volatility, instability, and price uncertainty in international markets.

The dollar devaluation did not address the structural source of the U.S. problem, namely, military expenditures and consumer spending beyond the productive capacity of the nation. What really was needed was a comprehensive, long-term national plan involving reductions in military expenditures, reasonable restraints on consumer spending, and investments designed to increase national production in a diversity of peace-time industries.

Rather than addressing the structural sources of the problems in the U.S. economy, the U.S. political establishment launched in the period 1979-1981 a project that constituted an attack on the weakest states and most vulnerable persons in the world, which at the same time brought more income to itself. The neoliberal project was based on the economic theory proposed by Milton Friedman and others at the School of Economics of the University of Chicago. The “Chicago boys” put forth the notion of the unlimited supremacy of the market, and they maintained that states should not interfere with the free play of supply and demand. For states in the peripheral and semiperipheral zones of the world-economy, this implied “structural adjustments,” including: the elimination of government protection of national currency in favor of the trading of currencies at a free market rate; privatization of government-owned enterprises; reduction of protections for national industry, by reducing or eliminating tariffs and taxes on imported goods; and the facilitating of the free flow of capital internationally.

Neoliberal policies were imposed on Third World governments during the 1980s and 1990s by international finance agencies, such as the International Monetary Fund (IMF) and the World Bank, which used the Third World debt as an arm of coercion. Third World governments faced a choice between defaulting on existing loans or obtaining additional loans. The international finance agencies offered new loans but demanded as a condition the adoption of economic policies favorable to the interests of transnational corporations, packaged as fiscally responsible measures.

The external debt of Third World governments was itself a consequence of the irresponsible conduct of Northern banks, which resolved their situation of excess liquidity—resulting from high deposits due to oil price increases—by channeling funds to Third World governments in the form of excessive loans with floating interest rates, with loan packages sometimes sweetened with bribes to government officials. This game was compounded by declining terms of exchange for non-petroleum raw materials exports, leaving Third World governments unable to sustain debt payments and vulnerable to the demands of international finance agencies.

The imposition of neoliberal policies had direct short-term benefits for core-based transnational corporations. The elimination of the protection of national currency made Third World labor even cheaper. Privatization made state-owned enterprises available for sale at devalued prices. The reduction of protections for national industry facilitated the growth of foreign-made goods and foreign-owned companies in national economies. The imposition of the neoliberal package disheartened and confused Third World intellectuals and leaders, breaking the momentum of the Third World project of decolonization that had been advancing from 1946 to 1979.

As I noted in my last commentary, imperialism in its heyday gave the national bourgeoisie a certain degree of political and economic space, so that it could carry out its supportive functions in the neocolonial world order. Neoliberalism, however, undermines the national bourgeoisie. Neoliberalism bankrupts the industries of the national bourgeoisie, giving it no option but full integration into foreign capital. In addition, neoliberalism destroys the credibility of the national bourgeoisie before its own people. It is no longer able to present itself as defender of the nation, and the government that it controls no longer has legitimacy before the people. With the bourgeoisie politically and ideologically weakened, the neocolonial order stood naked before the people without political or ideological defense, giving rise to popular protests against particular neoliberal policies, which evolved into movements against neocolonialism and against imperialism in all its forms.

In addition, the reign of neoliberalism damaged the economy of the USA. Corporations found financial speculation more profitable than investment in the industrial and high-technology sectors of the nation’s economy, such that financial speculation became a continually increasing tendency. When corporations invested in production, it often took the form of relocating factories to other countries with cheaper labor, thus promoting the deindustrialization of the national economy. The tax and tariff structure of U.S. policies made very little effort to provide incentives for investment in the productive capacity of the nation’s economy.

As a result of its negative consequences, neoliberalism exposes the false claims of neocolonialism. It demonstrates that the U.S. political establishment is in decadence, unable to understand the challenges that it confronts, and indifferent to the quest for constructive solutions for the nation and the world. The politicians, lackeys of the corporate elite, cynically put forth notions that have a certain degree of resonance among the confused and divided people, resolving nothing.

When the new imperialism was proposed by U.S. monopoly capitalists at the end of the nineteenth century, its purpose was the construction of a neocolonial world, a politically stable world with continuous access to world markets by the transnational corporations, without the need for costly and unstable colonial empires. However, when the USA turned to the global neoliberal project, it turned to a decadent form of economic imperialism, thus embarking on the self-destruction of neocolonialism itself, without a plan for the construction of a post-neocolonial world.

Endless wars: The military dimension of imperialism in decadence

The turn of the American power elite to a permanent war economy and to financial speculation and insufficient investment in the productivity of the national economy had the consequence that, by the beginning of the twenty-first century, the USA was compelled to attain through military force objectives that it could no longer attain by economic and diplomatic means. As a result, the democratic face of the neocolonial world order was even further exposed to the world as a façade.

The turn to a militarist aggressive imperialism occurred step-by-step. The U.S. escalation of the war in Vietnam was a departure from the policy in place since Franklin D. Roosevelt of keeping to a minimum direct military intervention in the semi-colonies of the world. According to the 1995 memoir of then-Secretary of Defense Robert McNamara, the fateful escalation was driven by the view of U.S. policymakers that national liberation governments and movements in southeast Asia constituted “the spreading menace of communism.” They considered it their moral duty to stop this spreading threat to democracy.

The colossal failure of the Vietnam War profoundly affected the people of the United States, especially with respect to their level of trust toward the federal government as well as their willingness to support military interventions in other lands. The Reagan and George H.W. Bush administrations adapted to this attitude of the people by adopting a strategy of “low-intensity war,” in the case of Nicaragua; or direct military actions in which the objectives could be quickly attained in Grenada, Libya, and Panama. In the four cases, the governments were demonized in the U.S. media.

The 1991 war against Iraq signaled that the government and the people were moving beyond the precautions provoked by the failure of the Vietnam War. The 1991 Iraq war constituted a return to a pre-neocolonial epoch, in that it was the first U.S. war conducted to directly attain specific economic objectives since the U.S. invasion of Nicaragua in 1926, before the nation ascended to neocolonial hegemony. However, it was not presented to the people in these terms but as a war of defense.

Iraq had invaded Kuwait in 1990, seeking to acquire strategic islands and oil fields that had been in dispute since British colonial officials had established an arbitrary boundary between Iraq and Kuwait. Saddam Hussein believed that the USA, with whom he had been allied during the 1980s, was signaling permission for the invasion. But in fact, the USA was opposed to the invasion, because it threatened U.S. access to oil. Kuwait and neighboring Saudi Arabia together had control of 40% of the world’s oil reserves, and both governments were solidly allied with the USA. In contrast, Hussein was not necessarily an ally that could be controlled.

Following a sustained campaign of massive bombing, not seen since Vietnam, the USA launched the invasion, and it pushed the Iraqi forces from Kuwait in 100 hours. Although many of the American people viewed it as a demonstration of power, the first Iraq War was in reality made necessary by American decline; in the heyday of its hegemony, the USA could attain its objectives through economic and/or diplomatic means.

During the Clinton administration, the USA conducted direct military actions through NATO in Bosnia in 1995 and Kosovo in 1999. The military actions were noteworthy for their breakthrough on the ideological plane, in that “humanitarian intervention” was invoked for justification. This innovation marked the beginning of the use of alleged violations of human rights as justification for military invasion. When Jimmy Carter began his presidency in 1977 with the call for attention to human rights, what he had in mind was putting an end to U.S. alliances with infamous military dictatorships that protected U.S. interests. He may not have intended that this progressive concept be used to justify U.S. military actions for the purpose of attaining U.S. economic objectives.

In the 1990s, conservative think tanks financed by international corporations reformulated the conservatism of Reaganism. Seeking to reverse U.S. decline, they envisioned the re-establishment of the American concept of democracy and of American civilization as the universal world standard. They sought to convert popular insecurity resulting from the structural crisis of the capitalist world-economy and from the U.S. decline into a social fear that would generate support for military interventions necessary for the attainment of U.S. objectives. The terrorist attack of September 11, 2001 provided an opening.

In 2002, President George W. Bush announced a doctrine of “preventive war,” which claimed that the USA has the right to invade any country that has the potential capacity to produce weapons of mass destruction. Inasmuch as potentiality is a loose guideline, the declaration in effect proclaims that the USA has the right of aggression in defense of its political and economic interests. The doctrine of preventive war ignores internationally accepted standards concerning the legal and moral use of force by states, and it thus renders irrelevant international institutions that have been developed since the end of the Second World War for the purpose of giving legitimacy to U.S. policies and military interventions. The preventive war doctrine signaled the abandonment of established protocols of imperialist neocolonial domination.

The long wars in Iraq and Afghanistan did not provoke the kind of popular resistance that was caused by the Vietnam War, because the military draft had been eliminated, and because the number of U.S. casualties was much lower. Nevertheless, the long wars influenced popular consciousness, and there emerged a reaction to “endless wars,” and a skepticism with respect to their officially declared goals of “defending democracy.” Indeed, the U.S. entertainment industry produces movies and television series that emphasize the physical and psychological damage of the Iraq war on American soldiers.

In addition to endless wars in Iraq and Afghanistan, the U.S. government has launched during the last decade “unconventional war” against Venezuela, Cuba, Nicaragua, Bolivia, Russia, China, Iran, and Syria. Unconventional war strives to topple governments without the direct use of Armed Forces personnel, using instead paid civilian actors who operate from the United States and in the targeted country. In the unconventional war, states are attacked in a variety of ways: economic blockades; financial and ideological support for opposition political parties and organizations; financing fascist gangs and destabilizing activities; enlisting the support of NGOs in the targeted country; and ideological attacks through the mainstream media and the social media. U.S. naval forces have presence in the region, constituting a continuous threat of direct military intervention. But ideally, military forces would not be directly committed; and if used, their presence would be short-term. The targeted nations are those that are infamous for their defiance of the USA and for their noncompliance with the rules of the decadent neocolonial world-system. See “The doctrine of preventive war plus unconventional war: The aggressive face of imperialism in decadence,” July 23, 2021.

As the U.S. political establishment began to discern the revitalization of Russia under a renewed nationalism as well as the capacity of China to expand its economy and to cooperate with Third World nations in forging in practice an alternative world-system, the U.S. political establishment began to use the expansion of NATO as an instrument of Western imperialist aggression against Russia and against the emerging Russian-Chinese economic, political, and military alliance. The expansion of NATO culminated in the use of various tactics of unconventional war in Ukraine, beginning in 2013-2014. See “The new tactics of US imperialism: The US unconventional war against Russia in Ukraine,” April 8, 2022

The U.S. unconventional war against Russia in Ukraine is one more sign of the decadence of U.S. imperialism. It no longer has the capacity to maintain its hegemony through the established rules of the neocolonial world-system, so it undertakes aggressive policies that undermine its own economy and prestige.

As a consequence of its limited political culture and political consciousness and its declining economy, yet its continuing military dominance, the United States continues to be oriented to military invasion and unconventional war in pursuit of its economic interests.

Conclusion

The U.S. turn to neoliberalism, military aggression, and unconventional war during the last forty-five years shows the decadence of a U.S. political establishment that has led the nation to decline as it protected its own short-term economic interests. The people of the United States have the duty to take power from the hands of the political establishment and put it in the hands of delegates of the people. In imagining these possibilities, it would be helpful for the people of the United States to study the struggles of the peoples of the world against decadent imperialism since 1980.

The struggles against decadent imperialism by the peoples of the Third World plus China will be the subject of my next commentary.

Knowledge, ideology, and real socialism in our times

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