Concluding with Caution
Rampant capitalism and the nation-s tate form characterize the contemporary world polity. But there is a third feature with which we must end, namely that of the position of the United States.
An earlier comment about the need to maintain open markets was in fact an implicit reference to an important theory in international relations.[1381] In the industrial era, war between competing rivals has been and now always will be catastrophic. Hence capitalist society is likely to work best when it is organized and led by a single great power. What matters is that such a power provides a top currency, insists on free trade, protects its allies, and provides capital and its own market for developing countries. “Hegemonic stability theory” sometimes claims that Britain acted in this way. There is little truth to this: Britain was distinctively part of a multipolar system, and was never in possession of sufficient powers as to make its rivals open their markets. But the theory does have purchase on the American case. At the end of World War II, the United States did design institutions for capitalism (the World Bank, the General Agreement on Trade and Tariffs, and the International Monetary Fund), did provide a top currency, and most certainly protected the core of capitalist society. The economies of small countries prospered within this regime.It is very important to note changes in this situation. One can begin with a remarkable book by Raymond Aron, Imperial Republic (1979). This great friend of the United States wrote just after the United States had abandoned its promise to back up dollars with gold. He was far too intelligent to suggest that American power was thereby coming to an end. Rather, he suggested the hegemony was becoming more predatory. In a sense, how could it be otherwise? Why would a great power sacrifice itself when it had the capacity to extract benefits from its allies? Hence Aron pointed to the importance of seigniorage, that is, to the economic benefits resulting from the dollar remaining the top currency.
Much can be added to this picture: the ability to pass on inflation given the refusal to pay with domestic taxes for Great Society programs and the war in Vietnam; the absorption rather than the export of large parts of the excess capital as the leader gave itself the privilege, denied to others, of living beyond its means—something of a deal, one might say, in which money is lent to pay for protection services; and the direct extraction of resources through hidden payments designed to support the military burden of the hegemon. All of this has amounted to “empire lite,” the control of capitalist society in the interests of a leading power without the need to possess territory overseas.A crucial question that faces the world is whether this imperial presence will fade, and, if so, whether it will lead to a stable multipolar world or one again so riven with conflict as to endanger the workings of capitalist society. This is an enormous subject, dealt with elsewhere in this volume, but something can usefully be said insofar as it relates to the theme of this chapter. Bluntly, there are as yet few signs that the American era is coming to an end. Allied states, the spokes in the wheels of the rimless bicycle dominated by Washington, are often irritated by American behavior, but no state has the desire to challenge its primacy, prepared instead even to prop up the hegemon so that they can continue to live within its purview. China alone might challenge the United States in future years. But why would it do so, given that its rise has depended upon this world order and its codependency with the United States? And what sort of challenge can there be in an era of nuclear weapons? Further, the United States is not really overextended. The share of national product devoted to military affairs is, in historical terms, not great, and certainly not large enough to crowd out investments needed for economic growth, and it can retreat from misguided interventions abroad. Further, there is no real sign that its economy has lost dynamism, not least because of the capacity of its great universities to recognize and to invite a remarkable proportion of the brainpower of the world—whose results can be seen both in the sheer number of Nobel Prizes gained and in the number of patents taken.
But none of this is to deny that change may yet occur. The United States suffers from naive worship of its classic moment of institutional success, and this results at present in a deadlocked political system—a system, one must note, that threatens the world political economy through its failure to regulate the hugely enhanced powers of finance in this moment of capitalist development.The moral is simple: if we want to understand our world, we need to deepen our understanding of the changing character of empire.
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