Why the struggling American empire could collapse quickly


America’s lost wars in Iraq and Afghanistan showed imperial reach beyond what even 20 years of war could handle. That the defeats continued for so many years shows that domestic politics and the financing of the national military-industrial complex were, more than geopolitics, the main drivers of these wars. Empires can die from overreaching and sacrificing broadly social goals for the narrow interests of political and economic minorities.

By Richard D. Wolff

The United States has 4.25% of the world’s population, but accounts for about 20% of COVID-19 deaths worldwide. A wealthy global superpower with a highly developed medical industry has proven ill-prepared and unable to cope with a viral pandemic. It is now fighting with a huge part of its population which seems so far removed from major economic and political institutions that it risks self-destruction and claims the “right” to infect others. Refusing to accept the COVID-19 vaccine and mask warrants in the name of “freedom” mixes up a frightening stew of ideological confusion, social division and bitterly growing hostility among the population. The events of January 6 in Washington, DC, only showed the tip of this iceberg.

Debt levels (government, businesses and households) are all close to historic highs and rising. Feeding and thus supporting rising debts is the Federal Reserve with its years of quantitative easing. Senior officials are currently discussing whether to issue a trillion dollar platinum coin for the Fed to extend that amount in new credit to the US Treasury to allow more spending by the US government. The goal goes well beyond political wrangling over the national debt ceiling. The goal is nothing less than to free the government to inject even more massive amounts of new money into the capitalist system to support it in times of unprecedented difficulty. The Fed learned that today’s capitalism needs such an amount of monetary stimulus thanks to the three recent crashes (2000, 2008 and 2020) witnessed by the capitalist system. Desperate Empire is approaching a version of modern monetary theory that the rulers of the empire scoffed at and rejected not too long ago.

Extreme inequalities, already a hallmark of the United States, worsened during the pandemic. This inequality fuels growing poverty and growing social divisions among the haves, have-nots and increasingly anxious thinkers. Attempts by employers to recoup lost profits from the pandemic and capitalist crash in 2020 and 2021 have led many to impose further cuts on employees. This has led to official and unofficial strikes that continue amid an awakening labor movement. Individually, the rate of workers leaving their jobs has reached record levels.

Attempts by employers to recoup lost profits over the past two years are also manifested in the continued inflation that besets the empire. Employers set the prices for what they sell. They know the Fed has increased the purchasing power potential by flooding the markets with new money. Demand, driven back by the pandemic and economic crashes, will, at least for some time, help support inflation. But even if it is temporary, inflation will further worsen income and wealth inequalities and thus prepare the United States for the next crash. In addition to the three crashes of this new century (2000, 2008 and 2020), each worse than the last, another crash, which could be even worse, could jeopardize the survival of the capitalist system.

Fires, floods, hurricanes, droughts: the signs of a climate catastrophe – not to mention its rapidly escalating costs – add to the sense of impending doom brought on by all of the empire’s other signs of decline. Here too, the tiny minority of leaders in the fossil fuel industry have succeeded in blocking or delaying the advocacy needed to deal with the problem. Empires decline when their long habits of serving minority elites blind them at those times when the survival of the system requires overriding the needs of those elites, at least for a time.

For the first time in over a century, the United States has a real, serious and ascendant global competitor. The British, German, Russian and Japanese systems never achieved this status. The People’s Republic of China now has. No established US policy vis-à-vis China has proven to be feasible due to internal divisions within the United States and China’s spectacular growth. Political leaders and “defense” contractors find the bashing of China appealing. Denouncing China serves as a popular scapegoat for many politicians from both parties and a support for the military’s ever-growing defense spending. However, major segments of large companies have invested hundreds of billions in China and in global supply chains linked to China. They don’t want to risk them. In addition, for decades, China has offered one of the cheapest, best-educated and trained, and most disciplined labor force in the world, as well as the world’s fastest growing market for goods. equipment and consumption. Competitive American businesses believe that global success requires their businesses to be well established in this country with the world’s largest population, among the world’s cheapest workers, and with the world’s fastest growing market. Everything that is taught and learned in business schools supports this point of view. Thus, the United States Chamber of Commerce has opposed former President Donald Trump’s trade / tariff wars and now opposes President Joe Biden’s program of bashing China.

There is no way for the United States to change China’s basic economic and political policies since this is precisely what has brought China to its now envied position on a global scale of being a competitor of ‘a superpower like the United States. Meanwhile, China is expected to catch up with the United States. States of equal economic size before the end of this decade. The problem for the American Empire grows and the United States remains stuck in divisions that prevent any meaningful change except perhaps armed conflict and unthinkable nuclear war.

When empires decline, they can descend into self-reinforcing downward spirals. This downward spiral occurs when the rich and powerful respond by using their social positions to offload the costs of decline onto the mass of the population. This only compounds the inequalities and divisions that caused the decline in the first place.

The recently published Pandora Papers offer a useful glimpse into the elaborate world of a vast wealth hidden from tax-collecting governments and public knowledge. Such cover-up is in part motivated by the effort to insulate the wealth of the rich from this decline. This partly explains why the Panama Papers exhibition in 2016 did nothing to stop the cover-up. If the public knew about hidden resources – their size, origins and purposes – the public demand for access to hidden assets would become overwhelming. Hidden resources would be seen as the best possible targets to use to slow or reverse the decline.

The decline causes more concealment, which in turn worsens the decline. The downward spiral is engaged. Additionally, attempts to distract an increasingly anxious public – demonizing immigrants, scapegoating China, and engaging in culture wars – show diminishing returns. The decline of the Empire continues but remains largely denied or ignored as if it didn’t matter. The old rituals of conventional politics, economics and culture continue. Only their tones have become those of deep social divisions, bitter recriminations and overt internal hostilities that proliferate across the landscape. These mystify and upset the many Americans who have yet to deny that crises have beset American capitalism and that its empire is in decline.

This article was produced by Economy for All, a project of the Independent Media Institute.

Richard D. Wolff is Emeritus Professor of Economics at the University of Massachusetts, Amherst, and Visiting Professor in the Graduate Program in International Affairs at New School University, New York. Wolff’s weekly show “Economic Update” is syndicated by over 100 radio stations and distributed to 55 million television receivers via Free Speech TV. His three recent books with Democracy at Work are The Sickness Is the System: When Capitalism Fails to Save Us From Pandemics or Itself, Understanding Socialism, and Understanding Marxism, the latter now available in a new 2021 hardcover edition with a new introduction by the author.


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