“It is a common theme” that the United States, which “only a few years ago was hailed to stride the world as a colossus with unparalleled power and unmatched appeal … is in decline, ominously facing the prospect of its final decay.”1 This theme, articulated in the summer 2011 issue of the journal of the Academy of Political Science, is indeed widely believed—and with some reason, though a number of qualifications are in order. The decline has in fact been underway since the high point of U.S. power shortly after World War II, and the remarkable rhetoric of the decade of triumphalism after the Soviet Union imploded was mostly self-delusion. Furthermore, the commonly drawn corollary—that power will shift to China and India—is highly dubious. They are poor countries with severe internal problems. The world is surely becoming more diverse, but despite America’s decline, in the foreseeable future there is no competitor for global hegemonic power.
To recall briefly some of the relevant history, during World War II U.S. planners recognized that the country would emerge from the war in a position of overwhelming power. It is quite clear from the documentary record that “President Roosevelt was aiming at United States hegemony in the postwar world,” to quote the assessment of diplomatic historian Geoffrey Warner, one of the leading specialists on the topic.2 Plans were developed, along lines discussed above, for the United States to control what was called a “Grand Area” spanning the globe. These doctrines still prevail, though their reach has declined.
The wartime plans, soon to be carefully implemented, were not unrealistic. The United States had long been by far the richest country in the world. The war ended the Great Depression, and American industrial capacity almost quadrupled, while rivals were decimated. At war’s end the United States had half the world’s wealth and unmatched security.3 Each region of the Grand Area was assigned its “function” within the global system. The ensuing “Cold War” consisted largely of efforts by the two superpowers to enforce order in their own domains: for the Soviet Union, Eastern Europe; for the United States, most of the world.
By 1949 the Grand Area that the United States planned to control was already seriously eroding with “the loss of China,” as it is routinely called.4 The phrase is interesting: one can only “lose” what one possesses, and it is taken for granted that the United States owns most of the world by right. Shortly after, Southeast Asia began to slip free from Washington’s control, leading to horrendous wars in Indochina and huge massacres in Indonesia in 1965 as U.S. dominance was restored. Meanwhile, subversion and massive violence continued elsewhere in an effort to maintain what is called “stability.”
But decline was inevitable, as the industrial world reconstructed itself and decolonization pursued its agonizing course. By 1970, the U.S. share of world wealth had declined to about 25 percent.5 The industrial world was becoming “tripolar,” with major centers in the United States, Europe, and Asia, then Japan-centered and already becoming the globe’s most dynamic region.
Twenty years later, the USSR collapsed. Washington’s reaction teaches us a good deal about the reality of the Cold War. The first Bush administration, then in office, immediately declared that its policies would remain essentially unchanged, although with different pretexts; the huge military establishment would be maintained not for defense against the Russians but to confront the “technological sophistication” of Third World powers. Similarly, it would be necessary to maintain “the defense industrial base,” a euphemism for advanced industry highly reliant on government subsidy and initiative. Intervention forces still had to be aimed at the Middle East, where serious problems “could not be laid at the Kremlin’s door,” contrary to half a century of deceit. It was quietly conceded that the problem had always been “radical nationalism,” that is, attempts by countries to pursue an independent course in violation of Grand Area principles.6 These principles were not to be modified in any fundamental way, as the Clinton doctrine (under which the United States could unilaterally use military power to further its economic interests) and the global expansion of NATO would soon make clear.
There was a period of euphoria after the collapse of the superpower enemy, replete with excited tales about “the end of history” and awed acclaim for President Bill Clinton’s foreign policy, which had entered a “noble phase” with a “saintly glow,” as for the first time in history a nation would be guided by “altruism” and dedicated to “principles and values.” Nothing now stood in the way of an “idealistic New World bent on ending inhumanity” which could at last carry forward, unhindered, the emerging international norm of humanitarian intervention. And that’s to sample just a few of the impassioned accolades of prominent intellectuals at the time.7
Not all were so enraptured. The traditional victims, the global South, bitterly condemned “the so-called ‘right’ of humanitarian intervention,” recognizing it to be nothing but the old “right” of imperial domination tricked out in new clothing.8 Meanwhile, more sober voices among the policy elite at home saw that, for much of the world, the United States was “becoming the rogue superpower,” “the single greatest external threat to their societies,” and that “the prime rogue state today is the United States,” to quote Samuel P. Huntington, Harvard professor of the science of government, and Robert Jervis, president of the American Political Science Association.9 After George W. Bush took over, increasingly hostile world opinion could scarcely be ignored; in the Arab world in particular, Bush’s approval ratings plummeted. Obama has achieved the impressive feat of sinking still lower, down to 5 percent approval in Egypt and not much higher elsewhere in the region.10
Meanwhile, decline continued. In the past decade, South America has also been “lost.” That is serious enough; as the Nixon administration was planning the destruction of Chilean democracy—the U.S.-backed military coup on “the first 9/11” that installed the dictatorship of General Augusto Pinochet—the National Security Council ominously warned that if the United States could not control Latin America, it could not expect “to achieve a successful order elsewhere in the world.”11 Far more serious, however, would be moves toward independence in the Middle East, for reasons recognized clearly in early post–World War II planning.
A further danger: there might be meaningful moves toward democracy. New York Times executive editor Bill Keller wrote movingly of Washington’s “yearning to embrace the aspiring democrats across North Africa and the Middle East.”12 But polls of Arab opinion revealed very clearly that it would be a disaster for Washington if there were steps toward the creation of functioning democracies, where public opinion would influence policy: as we have seen, the Arab population regards the United States as a major threat, and would expel it and its allies from the region if given a choice.
While long-standing U.S. policies remain largely stable, with tactical adjustments, under Obama there have been some significant changes. Military analyst Yochi Dreazen and his coauthors observed in the Atlantic that while Bush’s policy was to capture (and torture) suspects, Obama simply assassinates them, rapidly increasing the use of terror weapons (drones) and Special Forces personnel, many of them assassination teams.13 Special Forces units have been deployed in 147 countries.14 Now as large as Canada’s entire military, these soldiers are, in effect, a private army of the president, a matter discussed in detail by American investigative journalist Nick Turse on the website TomDispatch.15 The team that Obama sent to assassinate Osama bin Laden had already carried out perhaps a dozen similar missions in Pakistan. As these and many other developments illustrate, though U.S. hegemony has declined, its ambition has not.
Another common theme, at least among those who are not willfully blind, is that American decline is in no small measure self-inflicted. The comic opera in Washington centering around whether or not to “shut down” the government, which disgusts the country (a large majority of which thinks that Congress should just be disbanded) and bewilders the world, has few analogues in the annals of parliamentary democracy. The spectacle is even coming to frighten the sponsors of the charade. Corporate powers are now concerned that the extremists they helped put in office may choose to bring down the edifice on which their own wealth and privilege relies, the powerful “nanny state” that caters to their interests.
The eminent American social philosopher John Dewey once described politics as “the shadow cast on society by big business,” warning that “attenuation of the shadow will not change the substance.”16 Since the 1970s, that shadow has become a dark cloud enveloping society and the political system. Corporate power, by now largely made up of financial capital, has reached a point where both political organizations—which by now barely resemble traditional parties—are far to the right of the population on the major issues under debate.
For the public, the primary domestic concern is the severe crisis of unemployment. Under prevailing circumstances, that critical problem could have been overcome only by a significant government stimulus, well beyond the one Obama initiated in 2009, which barely matched declines in state and local spending, though it still did probably save millions of jobs. For financial institutions, the primary concern is the deficit. Therefore, only the deficit is under discussion. A large majority of the population (72 percent) favor addressing the deficit by taxing the very rich.17 Cutting health programs is opposed by overwhelming majorities (69 percent in the case of Medicaid, 78 percent for Medicare).18 The likely outcome is therefore the opposite.
Reporting the results of a study of how the public would eliminate the deficit, Steven Kull, director of the Program for Public Consultation, which conducted the study, writes that “clearly both the administration and the Republican-led House are out of step with the public’s values and priorities in regard to the budget … The biggest difference in spending is that the public favored deep cuts in defense spending, while the administration and the House propose modest increases … The public also favored more spending on job training, education, and pollution control than did either the administration or the House.”19
The costs of the Bush-Obama wars in Iraq and Afghanistan are now estimated to run as high as $4.4 trillion—a major victory for Osama bin Laden, whose announced goal was to bankrupt America by drawing it into a trap.20 The 2011 U.S. military budget—almost matching that of the rest of the world combined—was higher in real (inflation-adjusted) terms than at any time since World War II, and slated go even higher. There is much loose talk about projected cuts, but such reporting fails to mention that if they take place at all, they will be from projected future Pentagon growth rates.
The deficit crisis has largely been manufactured as a weapon to destroy hated social programs on which a large part of the population relies. The highly respected economics correspondent Martin Wolf, of the Financial Times, writes, “It is not that tackling the US fiscal position is urgent…. The US is able to borrow on easy terms, with yields on 10-year bonds close to 3 per cent, as the few non-hysterics predicted. The fiscal challenge is long term, not immediate.” Significantly, he adds: “The astonishing feature of the federal fiscal position is that revenues are forecast to be a mere 14.4 per cent of GDP in 2011, far below their postwar average of close to 18 per cent. Individual income tax is forecast to be a mere 6.3 per cent of GDP in 2011. This non-American cannot understand what the fuss is about: in 1988, at the end of Ronald Reagan’s term, receipts were 18.2 per cent of GDP. Tax revenue has to rise substantially if the deficit is to close.” Astonishing indeed, but deficit reduction is the demand of the financial institutions and the superrich, and in a rapidly declining democracy, that’s what counts.21
Though the deficit crisis has been manufactured for reasons of savage class war, the long-term debt crisis is serious, and has been ever since Ronald Reagan’s fiscal irresponsibility turned the United States from the world’s leading creditor to the world’s leading debtor, tripling the national debt and raising threats to the economy that were rapidly escalated by George W. Bush. For now, however, it is the crisis of unemployment that is the gravest concern.
The final “compromise” on the crisis—or, more accurately, the capitulation to the far right—was the opposite of what the public wanted. Few serious economists would disagree with Harvard economist Lawrence Summers that “America’s current problem is much more a jobs and growth deficit than an excessive budget deficit,” and that the deal reached in Washington to raise the debt limit, though preferable to a (highly unlikely) default, is likely to cause further harm to a deteriorating economy.22
Not even mentioned is the possibility, discussed by economist Dean Baker, that the deficit might be eliminated if the dysfunctional privatized health care system were replaced by one similar to those in other industrial societies, which have half the per capita costs and at least comparable health outcomes.23 The financial institutions and the pharmaceutical industry, however, are far too powerful for such options even to be considered, though the thought seems hardly Utopian. Off the agenda for similar reasons are other economically sensible options, such as a small financial transactions tax.
Meanwhile, new gifts are regularly lavished on Wall Street. The House Committee on Appropriations cut the budget request for the Securities and Exchange Commission, the prime barrier against financial fraud, and Congress wields other weapons in its battle against future generations. In the face of Republican opposition to environmental protection, “a major American utility is shelving the nation’s most prominent effort to capture carbon dioxide from an existing coal-burning power plant, dealing a severe blow to efforts to rein in emissions responsible for global warming,” the New York Times reports.24
Such self-inflicted blows, while increasingly powerful, are not a recent innovation. They trace back to the 1970s, when the national political economy underwent major transformations, bringing to an end what is commonly called “the golden age of [state] capitalism.” Two major elements of this shift were financialization and the offshoring of production, both related to the decline in the rate of profit in manufacturing and the dismantling of the postwar Bretton Woods system of capital controls and regulated currencies. The ideological triumph of “free market doctrines,” highly selective as always, administered further blows as these doctrines were translated into deregulation, rules of corporate governance linking huge CEO rewards to short-term profits, and other such policy decisions. The resulting concentration of wealth yielded greater political power, accelerating a vicious cycle that has led to extraordinary wealth for a tiny minority while for the large majority real incomes have virtually stagnated.
At the same time, the cost of elections skyrocketed, driving both parties ever deeper into corporate pockets. What remains of political democracy has been further undermined as both parties turned to auctioning off congressional leadership positions. Political economist Thomas Ferguson observes that “uniquely among legislatures in the developed world, US congressional parties now post prices for key slots in the lawmaking process.” The legislators who fund the party get the posts, virtually compelling them to become servants of private capital even beyond the norm. The result, Ferguson adds, is that debates “rely heavily on the endless repetition of a handful of slogans that have been battle tested for their appeal to national investor blocs and interest groups that the leadership relies on for resources.”25
The post–golden age economy is enacting a nightmare envisaged by the classical economists Adam Smith and David Ricardo. In the past thirty years, the “masters of mankind,” as Smith called them, have abandoned any sentimental concern for the welfare of their own society. They have instead concentrated on short-term gain and huge bonuses, the country be damned.
A graphic illustration is on the front page of the New York Times as I write. Two major stories appear side by side. One discusses how Republicans fervently oppose any deal “that involves increased revenues”—a euphemism for taxes on the rich.26 The other is headlined “Even Marked Up, Luxury Goods Fly Off Shelves.”27
This developing picture is aptly described in a brochure for investors produced by Citigroup, the huge bank that is once again feeding at the public trough, as it has done regularly for thirty years in a cycle of risky loans, huge profits, crashes, and bailouts. The bank’s analysts describe a world that is dividing into two blocs, the plutonomy and the rest, creating a global society in which growth is powered by the wealthy few and largely consumed by them. Left out of the gains of the plutonomy are the “non-rich,” the vast majority, now sometimes called the “global precariat,” the workforce living an unstable and increasingly penurious existence. In the United States, they are subject to “growing worker insecurity,” the basis for a healthy economy, as Federal Reserve chair Alan Greenspan explained to Congress while lauding his own skills in economic management.28 This is the real shift of power in global society.
The Citigroup analysts advise investors to focus on the very rich, where the action is. Their “Plutonomy Stock Basket,” as they call it, has far outperformed the world index of developed markets since 1985, when the Reagan-Thatcher economic programs for enriching the very wealthy were really taking off.29
Before the 2008 crash for which they were largely responsible, the new post–golden age financial institutions had gained startling economic power, more than tripling their share of corporate profits. After the crash, a number of economists began to inquire into their function in purely economic terms. Nobel laureate in economics Robert Solow concludes that their general impact is likely to be negative, because “the successes probably add little or nothing to the efficiency of the real economy, while the disasters transfer wealth from taxpayers to financiers.”30
By shredding the remnants of political democracy, these financial institutions lay the basis for carrying the lethal process forward—as long as their victims are willing to suffer in silence.
Returning to the “common theme” that the United States “is in decline, ominously facing the prospect of its final decay,” while the laments are considerably exaggerated, they contain elements of truth. American power in the world is, indeed, continuing its decline from its early post–World War II peak. While the United States remains the most powerful state in the world, nevertheless, global power is continuing to diversify, and the United States is increasingly unable to impose its will. But decline has many dimensions and complexities. The domestic society is also in decline in significant ways, and what is decline for some may be unimaginable wealth and privilege for others. For the plutonomy—more narrowly, a tiny fraction of it at the upper extreme—privilege and wealth abound, while for the great majority prospects are often gloomy, and many even face problems of survival in a country with unparalleled advantages.
First published in Who Rules the World, May 10, 2016.
- Giacomo Chiozza, review of America’s Global Advantage: US Hegemony and International Cooperation, by Carla Norrlof, Political Science Quarterly (Summer 2011): 336–37.
- Geoffrey Warner, “The Cold War in Retrospect,” International Affairs 87, no. 1 (January 2011): 173–84.
- Noam Chomsky, On Power and Ideology (Chicago: Haymarket Books, 2015), 15.
- “The Chinese Revolution of 1949,” U.S. Department of State, Office of the Historian, https://history.state.gov/milestones/1945-1952/chinese-rev.
- Robert Kagan, “Not Fade Away,” New Republic, 2 February 2012.
- Noam Chomsky, Powers and Prospects: Reflections on Human Nature and the Social Order (Chicago: Haymarket Books, 2015), 185.
- For these and other pronouncements, see Noam Chomsky, New Military Humanism: Lessons from Kosovo (Monroe, ME: Common Courage, 2002) and Noam Chomsky, A New Generation Draws the Line: Kosovo, East Timor, and the Responsibility to Protect Today, Updated and Expanded Edition (Boulder, CO: Paradigm, 2011).
- Noam Chomsky, Hopes and Prospects (Chicago: Haymarket Books, 2010), 277.
- Samuel P. Huntington, “The Lonely Superpower,” Foreign Affairs 78, no. 2 (March/April 1999); Robert Jervis, “Weapons Without Purpose? Nuclear Strategy in the Post–Cold War Era,” review of The Price of Dominance: The New Weapons of Mass Destruction and Their Challenge to American Leadership, by Jan Lodal, Foreign Affairs 80, no. 4 (July/August 2001).
- Jeremy White, “Obama Approval Rating in Arab World Now Worse Than Bush,” International Business Times, 13 July 2011.
- Department of State Bulletin, 8 December 1969, 506–07, as cited in David F. Schmitz, The United States and Right-Wing Dictatorships, 1965–1989 (Cambridge: Cambridge University Press, 2006), 89.
- Bill Keller, “The Return of America’s Missionary Impulse,” New York Times Magazine, 17 April 2011.
- Yochi Dreazen, Aamer Madhani, and Marc Ambinder, “The Goal Was Never to Capture bin Laden,” Atlantic, 4 May 2011.
- Nick Turse, “Iraq, Afghanistan, and Other Special Ops ‘Successes,’” TomDispatch, 25 October 2015, http://www.tomdispatch.com/blog/176060/.
- See also Nick Turse, The Changing Face of Empire: Special Ops, Drones, Spies, Proxy Fighters, Secret Bases, and Cyberwarfare (Chicago: Haymarket Books/Dispatch Books, 2012) and Nick Turse, Tomorrow’s Battlefield: U.S. Proxy Wars and Secret Ops in Africa (Chicago: Haymarket Books/Dispatch Books, 2015).
- Robert Westbrook, John Dewey and American Democracy (Ithaca, NY: Cornell University Press, 1991), 440.
- Jennifer Epstein, “Poll: Tax Hike Before Medicare Cuts,” Politico, 20 April 2011.
- Jon Cohen, “Poll Shows Americans Oppose Entitlement Cuts to Deal with Debt Problem,” Washington Post, 20 April 2011.
- University of Maryland–College Park, “Public’s Budget Priorities Differ Dramatically from House and Obama,” press release, com, 2 March 2011, http://www.newswise.com/articles/publics-budget-priorities-differ-dramatically-from-house-and-obama.
- Catherine Lutz, Neta Crawford, and Andrea Mazzarino, “Costs of War,” Brown University Watson Institute for International and Public Affairs, http://watson.brown.edu/costsofwar/.
- Martin Wolf, “From Italy to the US, Utopia vs. Reality,” Financial Times (London), 12 July 2011.
- Lawrence Summers, “Relief at an Agreement Will Give Way to Alarm,” Financial Times (London), 2 August 2011.
- “Health Care Budget Deficit Calculator,” Center for Economic and Policy Research, http://www.cepr.net/calculators/hc/hc-calculator.html.
- Matthew L. Wald and John M. Broder, “Utility Shelves Ambitious Plan to Limit Carbon,” New York Times, 13 July 2011.
- Thomas Ferguson, “Best Buy Targets are Stopping a Debt Deal,” Financial Times (London), 26 July 2011.
- Robert Pear, “New Jockeying in Congress for Next Phase in Budget Fight,” New York Times, 3 August 2011.
- Stephanie Clifford, “Even Marked Up, Luxury Goods Fly Off Shelves,” New York Times, 3 August 2011.
- Louis Uchitelle, “Job Insecurity of Workers Is a Big Factor in Fed Policy,” New York Times, 27 February 1997.
- Ajay Kapur, “Plutonomy: Buying Luxury, Explaining Global Imbalances,” 16 October 2005, as found at http://delong.typepad.com/plutonomy-1.pdf.