The end of 2021 and the beginning of a new year is a convenient time to take stock of the causes of America’s decline since this year saw both Washington’s inglorious exit from Afghanistan after 20 years in the country that had served as the launching pad for its direct military intervention in the Middle East and a historic insurrection at the very heart of the empire. Add to this the absolute lack of traction of President Biden’s recent “Democracy Summit” in contrast to Beijing’s surefooted diplomacy, the erosion of an already weak US economy by Covid-19 followed by uncontrolled inflation, and the deepening of the country’s informal but very real civil war - and it is hard to avoid the sense that we are indeed at the end of an era.
This was a volatile two decades to which two volatile personalities served as book ends: Osama bin Laden at its beginning and Donald Trump at its end.
Varieties of imperial decline
Ever since Paul Kennedy wrote The Rise and Fall of the Great Powers, historians and others have tried to discover the universal elements of the phenomenon he called “imperial overstretch.” This might, however, be a futile enterprise. Tolstoy said that all families are unhappy but each of them is unhappy in its own way. The same thing might be said of the end of empires. All empires end, but each exits in its own distinct unhappy fashion. Bankrupt at the end of the Second World War and facing spiraling financial and political costs as independence movements challenged their hegemony from East Asia to Africa, the British chose to cut their losses and liquidate most of their holdings, passed the task of ruling to indigenous elites, and largely left the defense of global capitalism to the Americans. The French chose to hang on despite defeat in Indochina and a bloody stalemate in Algeria and could only be persuaded to give the latter independence when renegade military men threatened to take over the government itself to continue the empire. The Soviet Union was largely dissolved by a domestic reform effort that ran out of control, though defeat in Afghanistan made a not insignificant contribution.
Like the ascent to the zenith of empire, the descent from it does not follow a predetermined path but one that is shaped by contingencies, many of them surprising and unexpected.
At the beginning of the 1990’s, the US had staved off the economic challenge of Japan and seen the political and military challenge posed by the Soviets dissipate. Moreover, it seemed to have thrown off the “Vietnam Syndrome” with its victory over Saddam Hussein in the first Gulf War. The American Empire appeared to be experiencing a second wind. At this juncture, the choices for maintaining the empire boiled down to two. One, identified with the Democrats, favored the US ruling via a multilateral economic order undergirded by the supremacy of its corporations and a liberal global political order propped up by unchallenged American military power and promoted by the “soft power” of liberal democracy. The other was championed by neoconservatives largely ensconced in the Republican Party who claimed the “unipolar” status of the United States provided a unique opportunity for reordering the world to the lasting advantage of the United States both strategically and economically and demanded unilateral action to bring that about. The debate between these two visions of the imperial future dominated American politics during the eight-year reign of the Democrats presided over by Bill Clinton.
Under the succeeding Republican administration of George W. Bush, US power was primed to do just what the neoconservatives wanted. It was, however, not predetermined that the Middle East would be the prime target of their global push to reorder the world. Tension with China was high in the first months of the new administration, with the Pentagon, in fact, identifying Beijing no longer as a strategic partner, as did the Clinton administration, but as a strategic rival. A new Cold War could have been launched at that juncture, with a China that was much, much weaker militarily and economically relative to the US than it is now. What made the difference in the fateful calculations of the neocons was one man, Osama bin Laden.
Osama’s historic role
Osama puts paid to those historians who belittle the role of personality in history. For what he did, probably without intending it, was to direct US military power to Afghanistan and the broader Middle East with his attack on the Twin Towers on September 11, 2001. Osama hoped to create a hundred Islamic insurgencies by boldly baiting the Great Satan, much like Che Guevara hoped to create more Cubas in Latin America with his guerrilla experiment in Bolivia. Osama failed in bringing about the purifying Islamic revolutions he sought, but he was wildly successful in a way he had not intended. For his move gave the American neocons the opportunity for the military action they had devoutly wished for to enable them to consolidate their new unipolar order.
Desire did not, however, end up with the object of desire, for the terrain in which the US chose to wage an “exemplary war” to teach the rest of the world to get out of the way of America’s hegemonic mission turned out to be populated by people, Afghans and Iraqis, who were no pushovers. Bush II got the war he wanted but not the outcome he sought, and instead of his legions coming back home in triumph, they were plunged into what quickly became a quicksand from which they could not be extricated for two decades, and then only in shame and defeat under a Democratic administration in 2021.
The economic consequences of the forever wars
The US’s being pinned down in what critics called the “forever wars” in the Middle East had momentous political and economic consequences. Washington set aside its definition of China as a strategic rival and sought instead to enlist Beijing as an ally in its “war on terror.” China obliged, but devoted most of its efforts to economic diplomacy to gain markets and cultivate good relations with countries in the global South, a contrast with Washington’s bellicose behavior that did not go unnoticed.
The US wasted some $3 billion in a fruitless military adventure, but the main economic consequence of the Middle East wars was to boost China’s economic ascent at its expense. With China reaffirmed as a political ally, the US transnational corporations that had promoted the entente with China in their search for cheap labor during the Clinton presidency accelerated the transfer of their manufacturing processes to China, making the 16 years of the Bush II and Obama administrations a period of irreversible deindustrialization, when thousands of factories closed down in the the industrial heartland in the Midwest and Northeast and at least 2.5 million high paying manufacturing jobs were lost to what some economists called the “China Shock.”
China’s rise to industrial prominence was not, in other words, predetermined. Osama’s baiting the US and Washington’s taking the bait was a major reason why the China-TNC alliance continued and gathered force during the Bush II presidency instead of being sidelined by strategic concerns about China that were prominent both at the Pentagon and the neocons during Bush’s first months in office.
Alternative routes from capitalism’s crisis of profitability
If the US’s being bogged down in the Middle East and China’s benefiting from this were not predetermined, some would claim that the broad contours of economic change, at least in the US, were but the unfolding in time of contradictions already present at the heart of the premier capitalist country. True, already in the 1970’s and 1980’s, the rate of profit had plunged from its postwar high of 16 per cent in the early 1950’s to around six per cent. True, accessing cheap labor in the global South, where wages were a fraction of those in the United States, was certainly seen as a key solution. Still, breaking the social democratic compromise between labor and capital undergirded by Keynesian technocratic economics, where social peace was the quid pro quo for relatively high wages and limited profits, was no easy, largely predetermined process.
Even before China came into the picture in the 1990’s, two “superstructural” factors were decisive in conditioning the way capital would respond to the crisis of profitability, one that would clear the way for the massive migration of US jobs there. The first was political in nature. The showdown between Ronald Reagan and PATCO, the air traffic controllers’ union, in 1981 became the key battle for US labor’s future, and Reagan’s victory, like Margaret Thatcher’s triumph over the miners in Britain, made the rest of management’s campaign to break unions a mopping up operation. As in Britain, had the AFL-CIO come out in full support of the PATCO strike and had the air controllers won, it is conceivable that the right’s offensive to destroy labor’s power could have been slowed down, if not stopped, and neoliberalism’s triumph could have been averted or, at the least, been much less thorough. The political consequences of concrete class struggles can never be underestimated.
The other critical condition for capital’s triumph in the 1980’s and 1990’s was ideological in character. With the US economy stuck in the 1970’s in the “stagflation” whose underlying cause was the crisis of profitability, a revived classical market economics centered at the University of Chicago came to the rescue. Neoliberalism faulted state intervention as the central cause of US economic stagnation, and capital, politicians, and academics united in a common cause for sweeping deregulation. This political and ideological coalition was not, however, inevitable. Had the Democratic Party remained faithful to its New Deal roots and Social Democratic academics put up more of an intellectual fight, neoliberalism’s rise could have encountered more resistance that, at the least, could have made its hegemony more fragile, a point to which we will return later.
In any event, it was the virtually unopposed neoliberal counterrevolution that made possible the corporate capture of public policy in the 1980’s and 1990’s, a development that set the stage for the large-scale transfer of American factories and jobs to China over the next two decades. Moreover, with their assertion, more by fiat than by proof, that market forces had “determined” that the US’s competitive advantage no longer lay in manufacturing, the neoliberals not only promoted deindustrialization but, equally significant, the wholesale “financialization” of the US economy.
Financialization was a process that involved focusing on the financial sector as the cutting edge of the economy owing to the greater returns on investment it offered compared to industry; promoting debt-driven consumption as the engine of growth; and converting workers from wage-earners to “shareholders” in US corporations, thus reconciling labor and capital. This “new” American economy created by neoliberalism was alleged to have entered a “mature” phase of permanent prosperity known as the “Great Moderation” in the 2000’s. It fell apart with a vengeance with the financial crisis of 2008, which ushered in years of stagnation and high unemployment that gutted the economy of what dynamism it had left. By the beginning of the third decade of the 21st century, China, while still just the world’s second biggest economy, had clearly displaced the US as the center of global accumulation, accounting for 28 per cent in global growth in 2019, more than twice the share of the US, according to the International Monetary Fund.
Trump and the crisis of the imperial order
The US’s being bogged down in its imperial adventure in the the Middle East and the unravelling of the financialized US economy are, however, insufficient to explain the drastic decline of the empire from “unipolarism” to severe dislocation in less than two decades. One must bring into the equation the unfolding of what I have called elsewhere the informal civil war in the US Central to explaining this cancer eating at the heart of the American political system was the evolution of white supremacy as a political and ideological force. While the Republican Party had exploited the racial insecurities of the white population successfully since the late sixties through the so-called “Southern Strategy” and racist dog whistle politics, it was not predetermined that white supremacy would become the dominant stream in conservative, right-wing politics that would subordinate and fuse with other streams such as cultural and religious conservatism, anti-liberalism, and populist disdain for scientific expertise.
Again, this was not inevitable. A key contribution to the expansion and consolidation of white supremacy was the defection from the Democratic Party of large sections of its white working-class base — the pillar of the once solid “New Deal Coalition” put together by Franklin Delano Roosevelt — as “Third Way” Democrats from Clinton to Barack Obama legitimized and led in promoting neoliberal policies that had such a damaging consequences on the jobs and income of workers.
The Democratic Party leadership’s surrender to neoliberalism has been well analyzed by Thomas Piketty, who noted that the base of the party from the 1960’s on increasingly became composed of people with relatively high levels of education, professionals, academics and other intellectuals, and even managers. The relatively well-educated leadership of the party increasingly responded to the interests of these like-minded followers, resulting in many in the old union, working class base being steadily alienated from them. Increasingly, what Piketty terms the “Brahmin Left” in the Democratic Party represented by the Clintons and Obama found a coincidence of intellectual and material interests with conservatives traditionally ensconced in the Republican Party. Their common agenda came to be espousal of neoliberalism, with the difference that the Democrats favored neoliberalism with “safety nets.” This ideological convergence assured that while the independent left would be loud in its denunciation of neoliberalism, the dominant political response to neoliberalism would not come from the left but from another quarter when the right conjuncture emerged.
That conjuncture came with the the outbreak of the Great Recession in 2008. Its volatile mix of high unemployment and high inequality provided an indispensable context for white supremacy’s breaking out to become the driving force of the politics of the white population, a development that took liberals and others by surprise. Still, it could not have turned into the virulent, destabilizing movement it became were it not for one man. This brings us again to the role of personality, a factor that at certain historical junctures can become decisive. It was a volatile opportunist with weak ties to either the Republican establishment or Democratic establishment who elevated white supremacy from one of several streams of American right-wing politics to its hegemonic status. In the 2016 elections, Donald Trump smelled an opportunity that a Democratic leadership tied to Wall Street ignored. By tying the crisis created by deindustrialization, financialization, and neoliberalism to anti-migrant rhetoric and dog whistle anti-black appeals in a boisterous, redneck-captivating style, he was able to break through to the white working class that had already given signals earlier that it was ripe to be mobilized along racial lines.
The culmination of that process was the January 6 insurrection, a battle that Trump lost which may actually serve as a prelude to his winning the war, just as the failed Munich Beer Hall Putsch in 1923 prefigured Hitler’s gaining power in 1933.
The complex configuration of American imperial decline
The decline of the American empire cannot be explained by military-driven overstretch in the Middle East alone, though that certainly played a role. Moreover, as we have argued, at the beginning of the Bush presidency, the US was not limited in its options for military engagement to just the Middle East. The role of one man, Osama bin Laden, in bringing about a concatenation of events that led to US military overextension in that part of the world, must not be underestimated.
Similarly, the pattern of the US’s economic decline cannot simply be attributed to the “working out” over time of the falling rate of profit. It is conceivable that the US economy could have followed a route with a softer landing, one where it would be in a place different from where it is stuck today. To understand the deindustrialization, financialization, and the corporate capture of policy, one cannot discount labor’s historic defeat in the PATCO strike of 1981 and the ideological ascendancy of neoliberalism, which was not inevitable.
The third key factor in the decline of the empire, the racialization and severe polarization of domestic politics, likewise cannot be explained in simplistic terms. Race-based politics has always been a major force in US politics, particularly after the 1970’s, but one cannot ignore two developments that made it overwhelmingly the driving force of white politics over the last decade. One is the Democratic Party leadership’s cooptation by neoliberal ideology, that led to more and more of its working-class base leaving it and becoming permeable to populist racist explanations for its woes. The other is Donald Trump, who, more than anyone else, successfully married white supremacy to the economic resentments of the working class to create a powerful force that has now completely taken over the Republican Party.
In assessing the critical period of the decline of the American Empire from 2001 to 2021, one cannot ignore the two extraordinary personalities, two “forces of nature” that have served as the bookends of this historic era: Osama in the beginning and Trump at the end.
A third wind?
In sum, as era 2001 to 2021 comes to an end, the American empire continues to be dominant, but its pillars have been severely eroded. Its ability to discipline the rest of the world has been shattered by its defeat in Afghanistan. Its credibility even among its western allies as a reliable partner is at an all-time low. Its economy may still be the largest in the word, but it is no longer the center of global capital accumulation and confronts the prospect of its unravelling accelerating, especially now that the $1.75 trillion “Build Back Better” social and climate public spending bill that was supposed to be its program for revitalization faces uncertain approval in a deeply divided Congress. White supremacist politics has become the hegemonic force in the politics of the white population, creating not only deep polarization but an existential threat to the world’s oldest democracy itself.
In the 1990’s and 2000’s, the US empire seemed to have a second wind, appearing to have put the “Vietnam Syndrome” behind it and its economy apparently gliding into a prosperous maturity. As events proved, that illusory second wind was short lived. A third wind is, of course, a theoretical possibility. But, while we should be wary of deterministic projections, how such a rejuvenation can take place is much, much less evident today.