by YVES SMITH
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.
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