Imperialism Today: Toward “Systemic Chaos”?

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The U.S. elections will determine whether Donald Trump continues for another four years or the Democrats return to the White House with Joe Biden. Either scenario could mark a turning point. One salient characteristic of Trump’s first term has been his breaking — with uneven of the mechanisms through which the United States has articulated its dominance since World War II, shunning the more “multilateral” aspects of that dominance in favor of a more exacerbated unilateralism.

In the midst of the countdown to the elections, President Trump did not hesitate to impose a U.S. citizen to preside over the Inter-American Development Bank for the first time since its founding, contrary to an unwritten rule that has existed since the institution’s beginnings at the behest of U.S. imperialism itself.

Most analyses agree that Trump’s aggressiveness and unilateralism are signs not of strength but of weakness. His greater aggressiveness is an effort to forcefully reverse the status quo along many dimensions.

Continuing the discussion on imperialism today, this article (part of an ongoing series) explores a conceptual framework for addressing the implications of the U.S. retreat and its response to maintaining world primacy.

The Contradictions of Productive Internationalization

As I pointed out in a recent article, “Productive internationalization has benefited the multinationals of the imperialist countries, although they have been downgraded when it comes to growth.”

As Claudio Katz observes, “The profits of the most globalized sector of the ruling classes contrast with the losses of the traditional Americanist segment.”1 The country that took the lead in globalization and whose companies were among the main winners suffered a setback in its relative position as a result of achieving its objectives. “The initial success of the first power in globalization has led to the current retreat.”2 The consequence, as Perry Anderson points out in an article with which I have already argued, is that “American primacy is no longer the automatic capstone of the civilization of capital.”3

Against whom is the United States shrinking? It is not being challenged by the European Union (EU), that is, Germany, nor by Japan — the imperialist countries that a few decades ago appeared as the greatest candidates to surpass the United States in matters of development and competitiveness, and capable of disputing its global domination. Both countries faced productive internationalization with strategies that allowed their capitals to take advantage of the situation, but they have also seen a sharp decline in their global positions. Both in terms of financial power and in innovation capacity, some of the pillars of the competition for world leadership today — along with both countries’ limited military development — have relegated both competitors to increasing their gap with the United States. To a different extent and by different means in each case, they are also affected by the conditions of unequal international development that we have been analyzing, which benefited their multinational firms but at the price of displacing their position in the international arena. Meanwhile, to their detriment, countries such as China have moved forward.

This has fueled ideas over the last decade that we could be heading toward a more multipolar world, when in fact it has helped catalyze trends toward a growing “world disorder.”

Global Capital and Disputes among Nation-States

What is our perspective on the United States’ relative decline, even though it is still ahead of several other countries in its ability to deploy global power?

An initial look indicates that, despite how things may seem, the position of the United States and its mechanisms of dominance have not been significantly altered. This is affirmed by Leo Panitch and Sam Gindin, with whom I have already debated on several occasions. In 2019, three years into the Trump administration, they repeated their perspective on the vitality of the U.S. “informal empire.” Trump’s election, according to them, expressed a “political crisis” within the major power, but this did not signal a significant erosion of the United States’ capacity to dominate through the Treasury and the State Department.4 A decade ago it may have seemed plausible, at least at first glance, that the United States could still coordinate global governance with the other powers. But this idea has become increasingly implausible over time, and those believe it cannot explain Trump.

Although he starts from very different assumptions from those of Panitch and Gindin, William Robinson posits that globalized capitalism has undergone a qualitative transformation, giving rise to a transnational capitalist class and pushing, in parallel, toward the formation of a global or transnational state. His theory ends up overlapping with Panitch and Gindin’s, and confronting similar difficulties. The U.S. state apparatus is, according to Robinson, the one that transnational elites use to extend and consolidate the global capitalist system. All the pressures and contradictions of the system are concentrated in that system, on which it must act by coordinating the interventions of other states.5 The thesis of the capitalist class and the transnational state unilaterally extrapolates the growing internationalization of a sector of the capitalist class, which in many aspects was the most dynamic in recent decades, but is far from expressing itself to the entire capitalist class. Not even in these most transnationalized sectors of capital can we really speak of a loss of national base,6 although we can speak, as Michel Husson does, of a certain “distancing” from their country of origin. This is because

large firms have the world market as a horizon, and … one of the sources of their profitability lies in the possibility of organizing production on a global scale so as to minimize costs. They have no constraint forcing them to resort to domestic employment, and their outlets are largely disconnected from the national economy of their home port.7

Leon Trotsky pointed out that capitalism has been incapable of developing a single one of its tendencies to the end. This is clearly expressed in the contradiction we can see between the internationalization of the productive forces, which transformed the world economy into a “higher reality” and “which in our epoch imperiously dominates the national markets,” and the permanence of the national states as the terrain where the relations of production are articulated.8

Each state, says Husson, seeks to “combine the divergent interests of capital turned towards the world market — and organizing production accordingly — with those of the fabric of enterprises producing for the domestic market.”9 At the same time, states “seek to ensure coherent national regulation and at the same time the conditions for optimal insertion into an increasingly globalized economy,”10 objectives that are in many ways contradictory. Spyros Sakellaropoulos notes that “the process of co-decision by nation-states within the framework of supranational integration entails a number of complexities which greatly transcend the one-dimensional state-supranational entity relationship.” It remains the privileged sphere within which class relations are constituted — that is, the domination of the proletariat over the rest of the subordinate classes. He concludes, therefore, that in “a more internationalized and more intensively capitalist context states continue to concern themselves with defense of their national bourgeoisie both against national working classes and against other competing national bourgeoisies.”11

Another thesis of “globalized capitalism,” postulated by Ernesto Screpanti, maintains — in contrast to Robinson — that no state has become the guarantor of the global reproduction of capital. On the contrary, it is transnational capital itself that dominates this process. States do not disappear; far from it. Rather, “the political actions of the traditional great powers need to be bent to serve the collective interests of multinational capital.” Thus, “a sovereignless (rather than stateless) global governance” is configured.12 “For the first time in at least five centuries,” Screpanti continues, “the states of the former great imperial powers are losing their sovereignty and, with it, the ability to govern accumulation.”13 An important corollary for Screpanti is that “interstate rivalries continue to exist, but they are not disruptive as long as national policies are conditioned by multinational capital and its ‘markets.’”14

Multinational capital, contrary to Screpanti’s claim, did not become a source of power and autonomous sovereignty. It is true that the internationalization of production strengthened the characteristic mechanisms through which capital accumulation shapes and “disciplines” the operation of the capitalist states. But this is not a one-way relationship, nor is there any evidence of an irreversible trend toward more globalization, as Screpanti asserts. On the contrary, the trend toward greater internationalization is at a standstill, to the point that some people are beginning to speak — perhaps too hastily — of “deglobalization.” As a result of the weakening of capital accumulation linked both to the persisting consequences of the Great Recession, Trump “America First,” and more recently of “trade wars,” many multinationals have frozen the expansion of their international value chains. That is why the United Nations Conference on Trade and Development (UNCTAD) refers to the period from 1990 to today as one “during which international production saw two decades of rapid growth followed by one of stagnation. Flows of cross-border investment in physical productive assets stopped growing in the 2010s, the growth of trade slowed down and GVC [Global Value Chains] declined.”15

Returning to the United States, Trumpism cannot be explained by approaches such as those of Robinson or Screpanti, since it represents a deep division in the American bourgeoisie.16 This division takes place above all between a mostly globalist big bourgeoisie and a middle bourgeoisie, in which those sectors that prevail are more willing to protect the internal market and identify with “Americanism.” These gaps are further spurred by the devastating effects the Great Recession has left on extended sectors of society.

Another more comprehensive and far-reaching analysis of the rise and fall of global powers was developed by the late Giovanni Arrighi. He proposed the existence of cycles of hegemony, of more or less a century’s duration, beginning with the 12th-century Italian city-states all the way until the United States today. Arrighi’s journey through almost 800 years of cycles of hegemony illuminates many aspects of these eras and raises suggestive hypotheses about how each was characterized by specific combinations of territorial expansion and economic accumulation (the two variables whose contradictory relationship orders succession). One conclusion of his work, which is very useful in addressing the coordinates of the world being configured, is that each cycle of hegemony concludes with a period of “systemic chaos,” during which the old world does not end up dying and the new one does not end up being born. The rise of China was another of his great intuitions, expressed at a time when few could have imagined it. But Arrighi combined his farsighted projection with a little-supported expectation that China could displace American hegemony to establish a noncapitalist market order; that is, the definitive closure of the cycles of hegemony he analyzed would enter a different stage. The great missing piece in Arrighi’s construct, as a most varied group of critics pointed out to him and as even the author himself came to recognize, are the social actors.

Arrighi’s omission is not a minor one. He leaves the cycles of succession of power and the dynamics of confrontations to the result of purely objective tendencies. In the classical Marxist tradition from which Arrighi proposed to turn his back almost at the beginning of his theoretical journey when he wrote The Geometry of Imperialism,17 we can find an approach in which these elements that he separates are actually united in the same strategic analytical framework.

Capitalist Equilibrium and Its Rupture

As I discussed on another occasion, Trotsky proposed a very useful method to characterize “capitalist equilibrium” — a concept that integrates the tendencies of the economy, the relations between classes in the different states, and those that are constituted between the states. If anything distinguishes Trotsky’s approach, it is that, unlike in Arrighi’s, the class struggle and geopolitics are united in the same scheme, determined by — and at the same time determining — the economic tendencies. In his speech at the International Congress in 1921, Trotsky points out,

Capitalist equilibrium is an extremely complicated phenomenon. Capitalism produces this equilibrium, disrupts it, restores it anew in order to disrupt it anew, concurrently extending the limits of its domination. In the economic sphere these constant disruptions and restorations of the equilibrium take the shape of crises and booms. In the sphere of inter-class relations, the disruption of equilibrium assumes the form of strikes, lockouts, revolutionary struggle. In the sphere of inter-state relations, the disruption of equilibrium means war or — in a weaker form — tariff war, economic war, or blockade. Capitalism thus possesses a dynamic equilibrium, one which is always in the process of either disruption or restoration. But at the same time, this has a great power of resistance, the best proof of which is the fact that the capitalist world has not toppled to this day.18

This method was presented there for the analysis of situations or conjunctures. Starting from these coordinates, Trotsky polemicized against the ultraleft sectors that at the beginning of the 1920s denied that capitalism could achieve some momentary stabilization.

Taking some license, we can employ the same concept of capitalist equilibrium to characterize longer periods, although in this case we would be talking about a less dynamic and variant situation. It would be one more equilibrium in the sense of general conditions for reproducing capitalist relations under a certain balance of class and state forces. Without explicitly using the term, Trotsky appealed to the same integrative conceptual scheme to think about the relationship between the decline of Europe, especially of Britain, and the rise of the United States. Continuing the elaboration on imperialism after World War I (the “classical” elaborations had been written before or during the war), Trotsky described in a penetrating way the “systemic chaos” that derived from the irreversible hegemonic decline of Britain and of Europe as a whole. In 1925, he proposed,

The world share of the whole of the British and of the whole of the European economies in general is falling — and, in the meantime, the economic structure of England and of Central-Western Europe arose from the world hegemony of Europe, and depended upon this hegemony. This contradiction, both inevitable and unavoidable, is progressively deepening, and is the basic economic prerequisite of a revolutionary situation in Europe.19

As Paula Bach argues, “This method allowed him to identify not only very early on the growing U.S. hegemony since the early 1920s, but that this would develop into a conflictive process in permanent confrontation with Europe and the other capitalist powers”20.

We can see this in “Nationalism and Economic Life”:

The law of the productivity of labor is of decisive significance in the interrelations of America and Europe, and in general in determining the future place of the U.S. in the world. … Sooner or later American capitalism must open up ways for itself throughout the length and breadth of our entire planet. By what methods? By ALL methods. A high coefficient of productivity denotes also a high coefficient of destructive force.21

Trotsky did not formulate a theory of “hegemonic succession,” like Arrighi’s, but characterized the situation as leading to war and revolution. The result could be the triumph of American imperialism, reaffirming its position as the main revolutionary force in the entire world — which would lead in his opinion to the liquidation of the USSR — or the triumph of the revolution in Europe and the United States, which was inseparable from the political revolution in the USSR itself to sweep away the Stalinist bureaucracy. In fact, World War II gave rise to revolution in a good part of Europe and accelerated the struggle for decolonization in the oppressed countries, but the very actions of Stalinism and the counterrevolutionary intervention of imperialism gave rise to a “combined” result: the United States imposed itself as the hegemonic power in the capitalist world, but the Soviet Union survived — despite the bureaucracy and thanks to the heroism of the masses — and extended its sphere to the countries of eastern Europe, strengthening the features of bureaucratic degeneration in the USSR that also characterized the rest of the countries in which the bourgeoisie had been expropriated from the beginning.

Thus, a capitalist equilibrium was established, based on the Yalta order.22 This equilibrium was struck by the U.S. military defeat in the Vietnam War and the tendency toward the confluence of the revolution in the periphery and the center during the 1960s and 1970s. But the deviation or defeat of these revolutionary processes, and the capitalist offensive against the working-class and popular sectors since the 1980s that was intimately linked to productive internationalization and neoliberal policies, allowed the United States to recreate the conditions of its ascendancy over the rest of the powers, which participated in this search for the world expansion of U.S. capital.

For some time now, the “law of productivity” has been clearly turned against the United States if we consider its entire productive structure and not just the leadership it maintains in some high-tech sectors.23 This is, as pointed out above, the result of how U.S. capital embraced internationalization. But the consequences are measured in a profound social deterioration that has fed the discontent that explains what lucid liberal analysts such as Martin Wolf have defined with concerning terms like “populist fury,” from which Trump arose. The same structural path also explains the divisions between sectors of the bourgeoisie already mentioned. On top of this, as U.S. strategists themselves make clear, it is increasingly difficult for the United States to impose its designs internationally.

There were similar trajectories of “organic crises” and “furies” during the last decade in other latitudes. Since the 2008 crisis, in addition to Brexit and the corrosion on the right and left of the “extreme center” of the political regimes in the European Union, we have also registered two waves of deep class struggle that have traversed the planet. This is now being revived in the heat of the pandemic.

With Trump, all these preexisting tendencies have accelerated, marking the beginning of a breakdown of any capitalist equilibrium. Whatever the outcome of the November election, there will be no recomposition of the preexisting situation. The “return to normal” has fallen into an eternal sleep.

We have to start from conceptual coordinates that allow us to analyze “systemic chaos” as something more than a mere power game. Undoubtedly, Trotsky’s method can and should be enriched with contributions from the authors mentioned in this article and others who help us understand how U.S. imperialism has operated since World War II, beyond just the unilateral aspects, and the consequences that the greater internationalization of production entails. But the unavoidable framework for addressing a world situation determined by the intensification of the class struggle and the rivalries between powers and those who aspire to be is this: a world marked by the “tendency toward crises, wars, and revolutions.”

First published in Spanish on September 27 in Ideas de Izquierda.

Translation: Scott Cooper

Notes   [ + ]

1. Claudio Katz, “América Latina en el capitalismo contemporáneo. II — Geopolítica, dominación y resistencias” [Latin America in Contemporary Capitalism II: Geopolitics, Domination, and Resistance], blog post, March 7, 2020.
2. Katz, “América Latina.”
3. Perry Anderson, “Imperium,” New Left Review, no. 83 (September/October 2013): 111.
4. Leo Panitch and Sam Gindin, “Trumping the Empire,” in Socialist Register 2019: A World Turned Upside Down?, ed. Leo Panitch and Greg Albo (London: Merlin Press, 2019), 13.
5. William I. Robinson, “The Great Recession of 2008 and the Continuing Crisis: A Global Capitalism Perspective,” International Review of Modern Sociology 38, no. 2 (August 2012): 169–198.
6. As Alexander Anievas argues, only a handful of the 100 most transnationalized firms identified by UNCTAD appear to be genuinely transnational in terms of their activity and the focus of their operations. Alexander Anievas, “Theory of the Global State: Globality as an Unfinished Revolution,” Historical Materialism 16, no. 2 (2008): 190–206.
7. Michel Husson, “De l’impérialisme à l’impérialisme” [From imperialism to imperialism], Nouveaux cahiers du socialisme, no. 13 (2015).
8. Leon Trotsky, Permanent Revolution, “Introduction to the German Edition,” (1930).
9. Husson, “De l’impérialisme.”
10. Husson, De l’impérialisme.”
11. Spyros Sakellaropoulos, “The Theoretical Weakness of Theses Positing Emergence of a Transnational Bourgeoisie and a Transnational State: A Critique of the Views of William Robinson,” Άρθρα, September 1, 2020.
12. Ernesto Screpanti, Global Imperialism and the Great Crisis: The Uncertain Future of Capitalism (New York: Monthly Review Press, 2014), 12, emphasis in original.
13. Screpanti, 123.
14. Screpanti, 206.
15. UNCTAD, World Investment Report 2020: International Production Beyond the Pandemic, “Key Messages and Overview,” xii.
16. On this topic, see Gabriel Esteban Merino and Patricio Narodowski, Geopolítica y economía mundial: El ascenso de China, la Era Trump y América Latina [Geopolitics and world economy: The rise of China, the Trump era, and Latin America] (La Plata, Argentina: CIG-IdIHCS-Conicet, 2019); see also Katz, “América Latina.”
17. Giovanni Arrighi, The Geometry of Imperialism (London: New Left Books, 1978).
18. Leon Trotsky, “Report on the World Economic Crisis and the New Tasks of the Communist International,” part I, June 1921, in The First Five Years of the Communist International.
19. Trotsky, “Towards the Question of the ‘Stabilisation’ of the World Economy: Comrade Trotsky’s Speech on Comrade Varga’s Report,” in The Ideas of Leon Trotsky, ed. Hillel Ticktin and Michael Cox (London: Porcupine Press, 1995), 347.
20. Paula Bach, introduction to Naturaleza y dinámica del capitalismo y la economía de transición [The nature and dynamics of capitalism and the transitional economy] (Buenos Aires: CEIP León Trotsky, 1999), 25
21. Trotsky, “Nationalism and Economic Life,” Foreign Affairs, April 1934.
22. On the conditions of the world order during the Cold War, see chap. 8 of Emilio Albamonte and Matías Maiello, Estrategia socialista y arte militar (Buenos Aires: IPS Editions, 2017), 489–524. Forthcoming in English (2021).
23. See the stark panorama offered by Robert D. Atkinson, “The Case for a National Industrial Strategy to Counter China’s Technological Rise,” Information Technology & Innovation Foundation, April 13, 2020.

About author

Esteban Mercatante

Esteban Mercatante

Esteban is an economist from Buenos Aires and a member of the PTS.