The End of American Empire

There are multiple signs that the American Empire is crumbling.

In Latin America: Throughout the past decade, U.S.-friendly puppet dictators have been replaced with democratically-elected, leftist regimes that are standing up to U.S. They are consorting more with Cuba these days than the U.S.

The allies of U.S. hegemony - Western Europe and Japan: are also standing up to the U.S. and refusing to comply with its every wish. In fact, U.S. involvement in Libya occured more at the behest of Western European members of the UN security council than vice versa. Western Europe has been strengthening its ties with Russia, while the U.S. is trying to court the former Soviet states who still feel some vulnerability.

The Middle East: Resistance to U.S. domination has been visible for quite some time. However, the declining relations with Pakistan, and one can only assume with Egypt once the dust settles, and possibly at some point even Israel (who is also watching its regional hegemony fall to pieces), in addition to tension with supposedly U.S.-friendly leaders in Iraq and Afghanistan, point to the unraveling of U.S. power.

Asia: U.S. relations with Southeast Asia were forged primarily through mutually beneficial economic arrangements. However, with the "rise" of China, and the collapse of the global economy, there will surely be a realignment of allegiances in this region.

U.S. economic and military power have been weakening precipitously (particularly since the invasions of Iraq and Afghanistan). The U.S. is no longer able to strong-arm other countries like it used to. Instead, everyone seems to be acting in defiance of U.S. aims these days.

Obviously, the global economy has reached a turning point as well. Interestingly, there is some connection between economic patterns and geo-political developments. For example, historically, a decline in a hegemonic power has typically been accompanied, first, by a shift in focus from production/material expansion to financial speculation as a source of profit (started in 1979), and then, a full-scale collapse of the economy, partially driven by the financial speculation (that can be crossed off the list too). This does not bode well for the U.S. as an empire.

Why should this pattern hold? Because, as I have previously argued, the state is merely a tool for enforcing the regional constraints to competition that are necessary for the accumulation of wealth. Thus, the existence of a hegemonic power merely represents a system of restraints necessary to uphold a particular spatial organization of production (both in terms of the social division of labor and the logistics of the production process itself), which itself undergirds a certain form of accumulation of wealth.

Thus, as a particular organization of production reaches the limits of its capacity for profitability, the system is thrown into chaos, and the basis for the regional restrains and spatial organization upheld by the hegemon no longer serve the same purpose. Geopolitical organization is necessarily thrown into chaos as well and hegemonic power dissolves.

Or, in other words, inability to limit competition in the economic sphere (a result of declining profitability, as it both weakens the power of the monopolies and diminishes the ratio of potential profits to competitors) necessarily translates as an inability to limit competition in the political realm, since political institutions derive from economic relations.

So now we find ourselves in a multi-polar world. What will come next?

Alan Greenspan Admits Marxist Principle

A week ago on Sunday (yes, I know, I've gotten behind!) I was watching Meet the Press, and I saw the following interesting interchange between the host, David Gregory, and Alan Greenspan:

MR. GREGORY:  Back now with our roundtable.  Alan Greenspan, I want to talk economy writ large.  And a couple pieces of data here, from the interview with Secretary Geithner, he says, referring to private economists, he thinks that unemployment could get to 8 percent or below by the end of 2012.  And this is interesting, too.  Persistently high unemployment but look at the performance of the stock market while President Obama's been president.  Up in 2009 from 7949 to over 12,000.  We've got, as you always say on this program, that's real money, that's real wealth, and yet we have persistently high unemployment.  What, what is your view?  What is this outlook you're seeing?

DR. GREENSPAN:  Well, first of all, the major reason why the stock market, in fact, asset values in general, came off those extraordinary lows in early 2009 is that productivity improved very dramatically in the business sector.  That meant that profits and cash flows would be engendered in a very substantial amount, which pushed asset prices up to an extent that, coupled with the increased contributions, 401(k)s added a trillion dollars to the actual net worth of the individual households who hold them.  And they are very big spenders, and that has been a very important factor in keeping the economy going up.

MR. GREGORY:  But you're saying companies doing more with less.  The question is when do they start spending and creating jobs?

DR. GREENSPAN:  Well, the problem, basically, is that there was a contradiction in those who say that you want one and not the other. Increasing productivity, by definition, means that you are producing more goods with fewer employers.

MR. GREGORY:  Mm-hmm.

DR. GREENSPAN:  Now, what--employees.  What is happening now is we're now beginning to see that productivity growth flatten out, and that's where all those jobs are coming from very recently.

(Accessed from http://www.msnbc.msn.com/id/42612533/ns/meet_the_press-transcripts/; emphasis mine)

What is Greenspan saying here? In effect, he is acknowledging the fact that there is a CONTRADICTION (a favorite Marxist term) between the personal goals of individual capitalists - increased productivity - and the goals of the general population (in this case, increasing employment).  Of course, what Greenspan does not pick up on is the fact that increasing productivity does NOT, in the long run, increase profitability.  In fact, it decreases the rate of profit, as human labor is the source of surplus value, and thus increasing productivity (utilizing less human labor) decreases the rate at which surplus value can be accumulated.  Furthermore, as our current economic recession is a result of a global crisis of overproduction, increasing productivity most certainly is NOT the solution!  In this case, then, it is not a matter of wanting to have our cake and eat it too, as Greenspan suggests.  Rather, the increased productivity merely represents the determination of corporate billionaires to milk the last bit of juice from the system before it collapses.  It is self-serving and not in any way helpful for the economy as a whole.