The Quiet Imperialism

By Francis Lee, crossposted from the Saker Blog

Many if not most Americans have always been in denial about the imperial ambitions and practices of US foreign policy. There are honourable exceptions – Noam Chomsky, Tulsi Gabbard come immediately to mind. But on the whole the direction of US geopolitical strategy has been guided and implemented by a small cabal of geopolitical fanatics; these are ensconced in various state and non-state organizations such as the media and various think-tanks and have had a wholly negative effect on US foreign policy, both in practise and theory. The US’s global adventurism has been regarded by the US public, insofar that it concerns itself with such matters, as being conceived in good faith and benign in intent. Unfortunately, the facts don’t conform to the popular trust that American citizens put in their government, particularly the Deep State, National Security Agencies, the political elites, and the Military Industrial Complex, not to mention the mainstream media.

This popular narrative of America qua global good-guy was very beautifully illustrated in a novel by the British author Graham Greene. The novel The Quiet American was set against the background of the first Indo-China war, with one of the central characters, Alden Pyle, an ostensibly idealistic young American Aid worker, who presented himself as a proto third-way reformist opposed both to the excesses of French colonialism on the one hand, and Chinese Communism on the other. But in fact he was nothing of the sort, and his baleful motives are soon uncovered by the cynical, world-weary British journalist, Thomas Fowler. As it turned out Pyle had been working for the CIA all along. The novel itself has been made into two motion pictures. Both are well worth watching and instructive. The novel was of course an allegory on what was happening and what has always been happening in geopolitical national rivalries and machtpolitik.

Thus US imperialism is the theory and practise which dare not speak its name. In the third world, however, and increasingly in the developed world, the facts are plain to see for all but the ideologically purblind. The US, particularly since the neo-conservative ascendancy, is a rampaging imperial juggernaut, with a blatant empire-building agenda. The US imperial project was from 1945 onwards held in check by social democratic obstacles in western Europe, the existence of the Soviet and East Asian Communist bloc and national anti-colonialist movements in the south. But with the collapse of communism, the ongoing enervation and retreat of social democracy, and the stalling of the anti-colonial struggle in the south, the rapacious beast of American imperialism was off the leash.

Moreover, the US has made it perfectly clear that it will not tolerate the reconstitution of any economic or military power capable of challenging its global domination. (see The Wolfowitz Doctrine.) To this end it has arrogated to itself the right to wage ‘preventive wars’ against those who may sometime in the future threaten its global ambitions. The global system has been unipolar but now its dominance is being challenged by new adversaries, particularly Russia, China, and perhaps Iran and the Americans are determined to contain what they regard as a strategic challenge.

This project is assuredly not lacking in ambition. It aims at extending the ‘Monroe Doctrine’ to the whole planet; the establishment of a sort of US global suzerainty. This would be difficult for the US to accomplish alone – it therefore has to form alliances and spheres of influence with other (subaltern) partners in the developed world. Roughly speaking the geopolitical configuration for America’s global project is as follows.

The phase of the (present) global development of capitalism is characterised by the emergence of a collective imperialism. The entirety of the Americas, Europe west of the Polish frontier and Japan, to which we should add Australia and New Zealand, defines the area of this collective imperialism. It ‘’manages’’ the economic dimension of capitalist globalization and the political military dimension through NATO, whose responsibilities have been redefined so that in effect it can substitute itself for the United Nations.

This requires some skilful diplomatic balancing between the US and its junior partners – particularly within the EU, where conflict between certain European states and the US is always a possibility. This is clearly evident in the spat between Germany and the US with the contretemps over Nordstream-2 and the stationing of US troops in Germany. To this end the mobilization of various euro-quisling elites – the UK, Poland, and according to Donald Rumsfeld the ‘new’ (Eastern) Europe – are vital for America’s policy of divide and rule in this area. Moreover the globalization agenda (the economic prong in the US global offensive) has become the received wisdom in the EU. As for the Euro it has become a satellite currency of the dollar, although it is in fact a stronger currency since it is based upon a euro economy which runs persistent trade surpluses with the United States (as does most everybody else).

Thus the EU – with the possible exception of France – has tended to meekly follow in the wake of the US hegemon ensnared in an Atlanticist doctrine for which the raison d’etre – if there ever was one – definitively ended with the cold war. And the world pays a heavy price for this.

According to Samir Amin:

‘‘The US economy lives as a parasite off its partners in the global system, with virtually no national savings of its own. The world produces while North America consumes … The fact is that the bulk of the American deficit (on Federal and Current Account) is covered by capital inputs from Europe and Japan, China and the South, rich oil-producing and comprador classes from all regions in the Third World – to which should be added the debt service levy that is imposed on nearly every country in the periphery of the global system. The American superpower depends day to day on the flow of capital that sustains the parasitism of its economy and society.’’ (1)

This was written by Amin back in 2006, but the US’s drive has not really altered that much in the interim. If anything it has become even more bellicose in pursuit of its quest for world hegemony. However, today, we not only have a clash of interests with the Germans and the US over the above issues. And despite the nominally peaceful intentions between the US and its allies (vassals) eventually the rising nations find that pursuing their own interests hits the barriers of the prevailing international order. And the further the old powers try to sustain their outdated settlement, the more the ascending powers – both within Europe and without – are frustrated. The entire post-war system itself becomes a source of international tension.

NATO exemplifies this. Established as we saw in a different era to coordinate western military power since the Cold War 1, after the end of that war NATO has turned into a disruptive force. Pursuing an ‘open-ended and ill-conceived eastern expansion’ the EU has rekindled inter-state tensions instead of assuaging them. (2) This illustrates a broader trend; that conflicting attitudes to the entrenched institutional structures generate dissension triggered by outdated economic and strategic pressures. National differences are expressed and often inflamed through opposing or supporting the existing and outdated systems and rules.

It could be said that NATO is a locus classicus of a dysfunctional bureaucracy. It exists ‘in order to solve the problems which it created.’ Or as Schumpeter first noticed, that ‘’ … in Egypt a class of professional soldiers formed during the war against the Hyskos persisted even when those wars were over along with its warlike instincts and interests … ‘‘ He noted with a pithy summary of his viewpoint that ‘’Created by wars that required it, the machine now created the wars which were required.’’ NATO anyone!?

With regard to International Political Economy, It is not generally understood that the US with its chronic federal and trade deficits is actually on the brink of technical bankruptcy, particularly when long term commitments on Medicaid, Medicare and Pensions, and Social Security payments are factored into the calculations. According to research carried out by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve, Fed liabilities come to a staggering $70 trillion – this is roughly 5 times the size of the US GDP. However these figures are now out of date. Given the fact that sovereign (or government) debt currently stands at $24 trillion which in terms of DEBT-to-GDP ratio of 107% is bad enough. Then comes private DEBT-to-GDP which stands at 220% minus unfunded future liabilities. (See below).

Figure 1. Sovereign debt to GDP 107%

Figure 2. Private debt to GDP 220%

The TOTAL DEBT i.e. municipal, household, financial, corporate, cars and student fees/debts AND, unfunded future liabilities, social security, Medicare, and pensions, are pushing on to a figure of total debt of 2000% in the not too distant future. This according to a CNBC report by Jeff Cox, September 09, 2019. This whole process has more or less been on track since the demise of the Bretton Woods system in 1971. The date was significant since this was when the US defaulted on its gold IOUs handing its trading partners paper dollars, or near dollars such as US Treasuries (Bonds) which it insisted were as good as gold. As a result the holders of this US government paper have been subsidizing the US and its economy ever since. The ability to palm off its trading partners with green paper meant that the US has been able to buy stuff from the western world without actually paying for any of it. It gets better. The US has been able to buy foreign made goods with monies loaned to them by foreign governments! The ultimate free lunch! See below. Only one way up apparently! Bear in mind also that the figures shown only go up to 2014. It’s odds on that the debt has grown further in the ensuing time span.

Against this backdrop the foreign policy of the US becomes clear. Its purpose is loot pure and simple. The south must continue to be plundered for cheap inputs and raw materials and in order to do this comprador elites must be promoted who are friendly to US interests. Economic development of course cannot take place in this context as there will be an outflow of capital from South to North. Markets must be opened up to the rapacious incursions of US and other western capitals. Possible rivals – Russia, China – must be regarded as long-term enemies and will be divided and marginalised or possibly in 1970s geopolitical jargon ‘Finlandised’. And uppity allies in Europe – like France – must be slapped down and brought to heel.

Whether the Americans can pull this off is a moot point. It rather depends on whether and how the rest of the world will continue to take the green paper from the Fed/US-Treasury (they are now conjoint BTW similar to a pantomime horse).

When other countries and other private lenders borrow, in this instance from the US, they must consider the economic and financial strength and resilience of that economy. Let’s put ourselves into the position of a creditor. As follows.

  • US sovereign debt is greater than national GDP and is only going to get worse. That puts the US economy in what historically has been the danger zone for ruinous trouble of one kind or another: economic stagnation, default, or runaway inflation. As we have seen however it’s the TOTAL DEBT. Which makes the situation dramatically worse.
  • Manufacturing industry has been hollowed out by a strong dollar policy which makes US export costs rise leading to deindustrialisation.
  • The Economy has been left with little capacity for recovering from shocks – both internal and external. Despite the unprecedented money printing and deficit spending evoked by past – 2008 – and presently – 2020 – even greater and further shocks will arise which will only be comparable to the 1930s.
  • Zero or negative interest rates, courtesy of the Fed, which have resulted in a bonanza for corporations to juice up their stock-market capitalisation. Essentially by stealing money off of savers.
  • Investment markets can’t go anywhere without creating bubbles that eventually burst. 1. Dot.com bubble, 2000, 2. Property bubble, 2008, 3. Everything bubble 2020.

This seems to be the story of the 20/21 centuries with each crisis being bigger and deeper as the one before. Does this look like the picture of a healthy super-power? Or is it the picture of a vulnerable giant close to its historical inflexion point? I know where I would put my money.

But given the tsunami of dollar bills flooding the markets an engineered inflation or a Volcker style 20% hike in interest rates seems likely; my own view is that there will be an engineered inflation; in fact, it’s happening already. This means any persons, corporations or states holding US$s or dollar denominated assets, e.g. Treasury Bills is going to take a big hit.

Of course this US offensive, both political and economic, has and will continue to be met with stiff resistance. Most of this has been spontaneous and centered around the crisis in the Middle East, South East Asia, with the growing opposition to the reputedly Promethean gifts of globalisation.

Samir Amin identifies 4 aspects of a political programme which would give organizational coherence to this opposition. ‘’(i) A campaign against all American ‘preventive’ wars and for the closure of all foreign US bases, (ii) A campaign of right to access to the land, which is of crucial importance to the world’s 3 billion peasants, (iii) A campaign for the regulation of industrial outsourcing, and (iv) A cancellation of third world external debts.(v)’’ (3)

One could of course add more to this – capital controls, global minimum wage and labour standards … and so forth. This would only be a beginning, however. Amin himself looks forward to the reconstitution of the UN as a forum where the third world and smaller countries could find legitimate voice, as opposed to the dominant – i.e., US controlled – institutions of the present – the IMF, WTO, WORLD BANK, and NATO which are frankly little more than instruments of US/EU/NATO Triad collective imperialism.

Get ready for a long period of Sturm Und Drang.

(1) Beyond US Hegemony – Samir Amin – 2006

(2) Stephen Walt – 2018

(3) Amin Op.cit. 2006