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Yves here. One key point by Richard Wolff is that despite the US having overwhelming advantages at the end of World War II via the Soviet Union having been so weakened by the conflict and European powers losing their empire, US military efforts to preserve and extend its hegemony, even very early on, were not particularly successful (coups were an entirely different matter, witness for instance Mossadegh in Iran). Despite our role in World War I, even as of the 1930s, the US did not have a very large military by the standards of the day (why would we, given our secure geographic position?). So I wonder if part of our hubris is due to our belief in our PR about winning World War II, when the Soviet Union was overwhelmingly responsible in Europe, that we conflated our economic dominance with our ability to deploy power physically.
By Richard D. Wolff, professor of economics emeritus at the University of Massachusetts, Amherst, and a visiting professor in the Graduate Program in International Affairs of the New School University, in New York. Wolff’s weekly show, “Economic Update,” is syndicated by more than 100 radio stations and goes to millions via several TV networks and YouTube. His most recent book with Democracy at Work is Understanding Capitalism (2024), which responds to requests from readers of his earlier books: Understanding Socialism and Understanding Marxism. Produced by Economy for All, a project of the Independent Media Institute
The evidence suggests that empires often react to periods of their own decline by over-extending their coping mechanisms. Military actions, infrastructure problems, and social welfare demands may then combine or clash, accumulating costs and backlash effects that the declining empire cannot manage. Policies aimed to strengthen empire—and that once did—now undermine it. Contemporary social changes inside and outside the empire can reinforce, slow, or reverse the decline. However, when decline leads leaders to deny its existence, it can become self-accelerating. In empires’ early years, leaders and the led may repress those among them who stress or merely even mention decline. Social problems may likewise be denied, minimized, or, if admitted, blamed on convenient scapegoats—immigrants, foreign powers, or ethnic minorities—rather than linked to imperial decline.
The U.S. empire, audaciously proclaimed by the Monroe Doctrine soon after two independence wars won against Britain, grew across the 19th and 20th centuries, and peaked during the decades between 1945 and 2010. The rise of the U.S. empire overlapped with the decline of the British empire. The Soviet Union represented limited political and military challenges, but never any serious economic competition or threat. The Cold War was a lopsided contest whose outcome was programmed in from its beginning. All of the U.S. empire’s potential economic competitors or threats were devastated by World War II. The following years found Europe losing its colonies. The unique global position of the United States then, with its disproportional position in world trade and investment, was anomalous and likely unsustainable. An attitude of denial at the time that decline was all but certain morphed only too readily into the attitude of denial now that the decline is well underway.
The United States could not prevail militarily over all of Korea in its 1950–53 war there. The United States lost its subsequent wars in Vietnam, Afghanistan, and Iraq. The NATO alliance was insufficient to alter any of those outcomes. U.S. military and financial support for Ukraine and the massive United States and NATO sanctions war against Russia are failures to date and are likely to remain so. U.S. sanctions programs against Cuba, Iran, and China have failed too. Meanwhile, the BRICS alliance counteracts U.S. policies to protect its empire, including its sanctions warfare, with increasing effectiveness.
In the realms of trade, investment, and finance, we can measure the decline of the U.S. empire differently. One index is the decline of the U.S. dollar as a central bank reserve holding. Another is its decline as a means of trade, loans, and investment. Finally, consider the U.S. dollar’s decline alongside that of dollar-denominated assets as internationally desired means of holding wealth. Across the Global South, countries, industries, or firms seeking trade, loans, or investments used to go to London, Washington, or Paris for decades; they now have other options. They can go instead to Beijing, New Delhi, or Moscow, where they often secure more attractive terms.
Empire confers special advantages that translate into extraordinary profits for firms located in the country that dominates the empire. The 19th century was remarkable for its endless confrontations and struggles among empires competing for territory to dominate and thus for their industries’ higher profits. Declines of any one empire could enhance opportunities for competing empires. If the latter grabbed those opportunities, the former’s decline could worsen. One set of competing empires delivered two world wars in the last century. Another set seems increasingly driven to deliver worse, possibly nuclear world wars in this century.
Before World War I, theories circulated that the evolution of multinational corporations out of merely national mega-corporations would end or reduce the risks of war. Owners and directors of increasingly global corporations would work against war among countries as a logical extension of their profit-maximizing strategies. The century’s two world wars undermined those theories’ appearance of truth. So too did the fact that multinational mega-corporations increasingly purchased governments and subordinated state policies to those corporations’ competing growth strategies. Capitalists’ competition governed state policies at least as much as the reverse. Out of their interaction emerged the wars of the 21st century in Afghanistan, Iraq, Syria, Ukraine, and Gaza. Likewise from their interaction, rising U.S.-China tensions emerged around Taiwan and the South China Sea.
China presents a unique analytical problem. The private capitalist half of its hybrid economic system exhibits growth imperatives parallel to those agitating economies where 90–100 percent of enterprises are private capitalist in organization. The state-owned-and-operated enterprises comprising the other half of China’s economy exhibit different drives and motivations. Profit is less their bottom line than it is for private capitalist enterprises. Similarly, the Communist Party’s rule over the state—including the state’s regulation of the entire Chinese economy—introduces other objectives besides profit, ones that also govern enterprise decisions. Since China and its major economic allies (BRICS) comprise the entity now competing with the declining U.S. empire and its major economic allies (G7), China’s uniqueness may yield an outcome different from past clashes of empires.
In the past, one empire often supplanted another. That may be our future with this century becoming “China’s” as previous empires were American, British, and so on. However, China’s history includes earlier empires that rose and fell: another unique quality. Might China’s past and its present hybrid economy influence China away from becoming another empire and rather toward a genuinely multipolar global organization instead? Might the dreams and hopes behind the League of Nations and the United Nations achieve reality if and when China makes that happen? Or will China become the next global hegemon against heightened resistance from the United States, bringing the risk of nuclear war closer?
A rough historical parallel may shed some additional light from a different angle on where today’s class of empires may lead. The movement toward independence of its North American colony irritated Britain sufficiently for it to attempt two wars (1775–83 and 1812–15) to stop that movement. Both wars failed. Britain learned the valuable lesson that peaceful co-existence with some co-respective planning and accommodation would enable both economies to function and grow, including in trade and investment both ways across their borders. That peaceful co-existence extended to allowing the imperial reach of the one to give way to that of the other.
Why not suggest a similar trajectory for U.S.-China relations over the next generation? Except for ideologues detached from reality, the world would prefer it over the nuclear alternative. Dealing with the two massive, unwanted consequences of capitalism—climate change and unequal distributions of wealth and income—offers projects for a U.S.-China partnership that the world will applaud. Capitalism changed dramatically in both Britain and the United States after 1815. It will likely do so again after 2025. The opportunities are attractively open-ended.
I regret to say that some sort of conflict between China and the US is already baked into the cake. Previously, is was that the major financial interests in the US coveted China’s wealth and wanted to set up a regime in China that would allow them to extract if not loot that country. The amount of trillions of dollars was simply too tempting. When that was not working there was even a semi-serious offer for the US to go into partnership with China to run the world about twenty years ago – with China being the junior partner of course and providing the wealth and the troops. When China let it be known that they were not interested in running the world but only developing their country, I think that this is when the fear set in. That China was overtaking them and was going to become the more powerful country. Instead of reforming the country to meet this challenge, a military option was decided on instead with Obama’s pivot to the Indo-Pacific. NATO would be encouraged to send their forces into this areas, a NATO equivalent was set up called AUKUS which was hoped to be the kernel of an anti-China coalition, the original TTP was negotiated as an everybody but China trade pact and now we see more US bases being set up from Australia to the Philippines to threaten China with. Going to make for interesting times the next coupla years.
It’s not like China is a pure virgin maiden with no hostile geopolitical interests vis-a-vis its neighbors.
If you’ve got a fact based argument this is the place to make it.
Thank you. Of course the causes of imperial breakdown are various, and have been attributed to vested interests throttling the effective functioning of the economy (Mancur Olson), excessive complexity (Joseph Tainter) or relative success resulting in a migratory overload that subverts the integrity and unity of the polity (Peter Heather). One factor which I don’t think receives sufficient emphasis is the extent to which imperial peripheries affirm and sustain empire but also increase costs which ultimately debilitate the metropole and lead to collapse or at least implosion. The article mentions the UK, but what is striking about the British imperial experience is the way in which it hobbled itself even at its supposed zenith. The cost of waging war in Europe and the Mediterranean basin, as well as in North America during the period c. 1790 to 1815 meant that debt was 270% of GDP by the end of the French wars. A very large portion of that cost burden related to the UK’s underwriting the finances of its allies, notably Austria, Prussia, Russia and in Iberia. The UK had done as much during previous wars against France, but the revolutionary wars were on a scale and of a duration that exploded the debt to an almost ungovernable extent. There are a number of articles railing against Labour’s reversion to austerity, but the Treasury’s fear of ‘crowing out’ was a real and present one for much of the 19th century, and as Charles Read has recently demonstrated, increased public expenditure on famine relief in 1844-46 on top of a very heavy existing debt burden led to a devastating gilts strike and mass panic in 1846, forcing the Russell government to slash famine relief, with catastrophic consequences for Ireland. Thereafter candle-paring remained the order of the day, permitting Goschen’s conversion of 1888 until the debt rose once again during the second Boer war.
Nor was that all. As Jeffrey Williamson argued in 1984 the enormous post-1815 debt load eviscerated investment in public goods, which crowded out capital accumulation, flattened growth (even at the height of the industrial revolution British growth was little more than 1% p/a) and depressed workers’ real wages. If Britain was the sole European superpower in the decades after 1815 it was a heavily debilitated, indeed crippled one, and the consequences for British society have endured to this day.
The US has risked going down the same path. In order to ‘defeat’ communism, ‘Islamism’ and other real or imagined rivals, it has sunk enormous capital into providing a defence shield for its ‘allies’. Even as growth remained brisk in the first generation following 1945 the enormous surplus drawn from Europe (and, specifically, the UK) during WW2 ran down very quickly as military expenditures overseas weighed upon current account and as the US was obliged to provide liquidity to the international economic order it oversaw. The US has only been able to live well beyond its means since 1971-73 because of the overhang of military and political suasion which its vast array of overseas bases established during the cold war has been able to exert on much of the rest of the World, as well as the absence of alternative payment systems. The Ukraine and Gaza wars have underscored the problem: in order to preserve the decaying fiction of US hegemony the US has embarked on wars of subsidy which weigh on its finances and so subvert the very financial hegemony those same wars have been intended to defend. The US is now desperately trying to pass the financial buck for Ukrainian reconstruction costs onto a Europe which it is simultaneously trying to bleed in order to offset its inability to reduce its deficit with China (this bleed is ‘recompense’ for the many decades in which the Europeans reduced the US wartime surplus by free riding on the US defence shield). Paradoxically, the more the US bleeds the Europeans, the less effective they will be as allies and consumers of US goods, and the more unwilling they will be to function as a defensive rampart for US interests and as the financiers of a rehabilitated Ukraine. Indeed, the reconstruction costs will themselves be a deterrent to further Russian territorial advances: the Russians and Chinese will probably be content to sit back and watch the Americans and Europeans fall out over who is to pay for the rehabilitation of Ukraine, as per the war debt disputes of the 1920s and early 1930s.
The cost burden is likely to force the US to the negotiating table. Britain was a major proponent and exponent of the post-1815 ‘concert’ or ‘congress’ system. This was not merely out of deference to the other powers or the need to re-establish the status quo ante bellum, as a recognition of the fact that Britain’s financial predicament was such that it had to reduce costs through a policy of international co-operation, tact and goodwill, at least until the collapse of the first entente cordiale in the fateful year of 1846 (the antagonism between Palmerston and Guizot). The US has reached a fork in the road: it can either writhe against an emerging multipolarity, with the thrashing of a dying dragon, and risking omnicide in the process, or it can re-establish a concert system with the other leading players: China, Russia, India and perhaps Brazil, Indonesia, Nigeria, etc. It is possible that some of the less purblind policymakers in Washington are slowly starting to appreciate where uniting China with Russia, Iran and Turkey has got them, but that the time is not yet ripe to admit defeat, at least publicly. However, it is also possible that when presented with such an imponderable geopolitical choice – one with grave reputational consequences and potential costs (respecting the ability of the US to finance its debts at present discounts), they will simply follow the Yogi Berra strategy: ‘when you meet a fork in the road, take it’.
When the pretension of primacy becomes ruinously expensive, bend or you shall break. I was once reasonably well read in the history of the 19th century. This comment was a useful reminder to refresh that knowledge and understanding. Richard Wolff’s article and this comment put paid to the notion of the United States as “the exceptional nation.” The position of the US was exceptional after 1945. Others had done most of the bleeding and dying. Others had taken all of the physical destruction. To continue to think and act as if nothing would change has been hubris at best, willful blindness as a median position, and stubborn stupidity at worst. While apparent for the last generation, it has been blindingly obvious for over a decade that purported hegemony was a fantasy and that it was time to discuss multi-polar co-existence, a new Congress system. It is time to ease the ideologues aside with whatever degree of force is required.
Following on the back of Yves’s opening comments, it’s always been amazing to me to behold the infantile neo-con obsession with hard military power and building security architecture. It’s never been a demonstrable long-term success anywhere, unless the metric is how much money got drained out of the US Treasury and into the coffers of various contractors.
The most effective tool to extend US influence around the world has always been our various types of soft power. Our strength in WWII was our ability to out-produce the Axis powers. Yes, the USSR did most of the heavy lifting against Germany, but the US did beat Japan in the Pacific. I suppose it could be argued that the Japanese army was overextended in China, but the US just plain out-produced the Japanese in the naval arena. We cranked out a bunch of aircraft carriers and they couldn’t keep up. It was obvious ahead of time, too, as the Japanese top-brass acknowledge the long-term strategic short-comings in their archives.
When you compare the somewhat pedestrian military success of the US in WWII to what the US built AFTER the second world war, well, the latter is much more interesting and attractive for other countries to participate in.
We built a Golden Age of prosperity in Western Europe, and we redesigned Japan, and then South Korea into prosperous, middle-class nations. We even created space for several South American countries to make big leaps forward until the 1960s and 1970s when we decided to launch coups to squash political and democratic progress and then in the 1980s, we kicked them in the teeth and stopped their economic progress.
Nonetheless, pacifying Western Europe was unprecedented after hundreds of years of very violent imperial competition amongst those countries was a monumental achievement. Doing the same with Japan was even more remarkable and the Chinese took careful notes. Then, bringing along Taiwan and South Korea really hammered home the point that the US can really guide countries to a peaceful, prosperous future.
When the Soviets ran into problems (largely due to low oil prices) in the late 1980s, it wasn’t hard to pitch the idea that there was going to be a place for them in our reasonably well-designed economic architecture. Russia had plenty to offer. Lots of natural resources, skilled engineers, well-designed cities and an intelligentsia that had long yearned to be seen as equal to any in Western Europe. Russian elites wanted to show off St. Petersburg and Moscow to the west and hear visitors rave about how glorious their culture and history was. They wanted take vacations in New York, Los Angeles, London, Paris and Rome and do the same back to us. Putin himself has spoken many times on how Russia wanted to reintegrate with the Western world.
When looking at this story, it seems laughable that the Russians were intimidated into surrender by our ballistic missiles, our M1A1 tanks, our F-16s, and our Apache helicopter gunships. After all, history shows it’s the various western countries that invade Russia, and usually fail, not the reverse!
China watched the Russian episode very carefully and as the debacle unfolded and Russian society in the 1990s plunged into the abyss they understood the West hadn’t changed its ways at all. They weren’t taking newcomers into their club and were still looking to exploit and ravage; — just as they spent the 1800s doing to China.
American empire has always been most successful when it uses soft power of the economic kind. The hard military power just destroys stuff, but it usually doesn’t “win”, at least in the long term.
And it’s if interest to note that it wasn’t only the neocons who pursued muscular power towards Russia – but Bill and Hillary Clinton (under Obama) and now Biden as well. I’m always amazed when I discuss foreign relations with my liberal friends and family… they almost wholeheartedly believe that Democratic leaders always use soft power tactics no matter what evidence I bring up to the contrary. They seem to be motivated by the idea of wanting to share their privileged lifestyle with others – and beware of anyone that gets in the way.
I think your perspective is leading in the right direction. After WWII, the US had the opportunity to be the city on the hill as well as a financial empire. As described above, efforts to support the development of European and Asian countries met with real success. The US managed the construction of a system of successful allies who were also expansive markets. After the fall of the Soviet Union, the neocon hawks saw an opportunity to become a traditional empire based on naked military power. We can see now that the result has been a multifaceted failure. We must be strong, but we must lead by example. We cannot be successful if we present ourselves as a criminal enterprise. If the Monroe Doctrine is valid, why not begin by supporting the development of the Western Hemisphere, including South American countries.
I encourage Wolff to take a look at the work of Johan Rockstrom – we have passed six planetary boundaries and probably have no more than a generation left.
It is simple ’Limits To Growth’ dynamics – we soil our nest so that it can no longer sustain us. But we have pursued our blind and obsessives imperative to the point that the nest is, now, our planet and the life it supports, including us. Climate change is but a symptom of something bigger – our war on life by means of land appropriation for agriculture, chemicals, pollution of all kinds and rapacious extraction and consumption – with appalling consequences for biodiversity.
The insane economic model that drives all this is ‘growth’ – extracting wealth (or trying to with increasing and despairing savagery) – from a future that is rapidly declining.
Talk of lessons from past empires is all very well but is increasingly irrelevant. As is any thought that US financial exploitation can have any share, whatsoever, in a world future.
Nate Hagens makes the point fittingly – today’s American economy is a way of creating microlitres of dopamine from megalitres of oil. It is insanity.
Given our existential crisis we don’t have much time to look for new ways of thinking and cooperation and living. The trouble with Wolff and his ilk is he is not even trying.
It is indeed amusing to read people’s talk of some future multipolar world or whether the U.S. will “win out” in competition with China and Russia.
Mother Nature cares not for petty human trifles such as these. She will take care of our pathetic global industrial society in the same way “we” took care of countless species: ruthless extirpation.
Enjoy indoor plumbing and plentiful McDonald’s while you still have it, folks. Mother Nature is coming to collect her debts.
Great insight- thank you!
BAU. Hard to shift off pair of dimes.
I’d think Antifa or Wuk could come up with some alternative lyrics, to the tune of The Rivington’s
Um Poppa Mau Mau
Seeing footage of drones dropping thermite– humans can innovate all right, we simply seem to not want to evolve beyond war and disrespect, toward love and cooperation. No Lives Matter?