In 1945
two very different types of imperial project met on the continent of
Europe. Despite all that might have seemed chaotic and spontaneous in
the last years of the Second World War, nothing in this meeting was
left to chance:
In
Europe the demarcation lines had been drawn between 1943-45, both by
agreement at various summits between Roosevelt, Churchill and Stalin,
and by virtue of the fact that only the Red Army could defeat
Germany.1
In
the town of Plzen the triumphant Sixteenth Division of the Third Army
rolled in, only to stop and wait for the Red Army to take Prague. By
any standards of realpolitik,
such casual ceding of ground to an imperial rival looks absurd. Yet
as Eric Hobsbawm pointed out there were real affinities between the
US and the Soviet Union at this point of the War, united as they were
against the Fascist enemy.2
Not only this but the prominence of local communists in resistance
movements across the continent produced, for the first time, several
mass Communist Parties - notably in France and Italy. In
Czechoslovakia the Communist Party had long been a mass political
force, but elsewhere small, previously persecuted bands of party
cadres were elevated to hero status. Yet as the postwar order began
to take shape - in the midst of mass expulsions, expropriation of
property, and sometimes ongoing armed insurgency - it was not the
heroes of the resistance who took up roles in government, but
increasingly a small band of what were known as 'Moscow Communists'.
Meanwhile, in the western portion of the continent an epoch-defining
plan was being put into effect by the highest brass of the American
state. The delayed internationalisation of the Soviet model of rule
(not by revolution but by stealth) would coincide with the
internationalisation of the American state in the particular form it
was given under FDR's New Deal. A global division of power was
emerging that, until at least the early 1970s, looked absolute. This
division would shape the foreign policies of the two empires in very
different ways, and would ultimately produce very different results.
The
Two Empires
To
what extent is it academically useful, let alone theoretically
cogent, to label either the USA or the USSR empires? Certainly
neither was overtly colonialist in its ambitions, and formal colonial
administration never played a defining role in either of their
regional hegemonies. As is often noted, both were revolutionary
states that defined themselves in opposition to traditional power
hierarchies. While the USA tacitly supported an end to colonialism,
the Soviet Union went all out for Third World liberation movements.
Even formal colonies like the Philippines were regarded as anomalous,
and certainly only temporary. Insofar as the Soviet Union inherited
the geographical boundaries of the earlier Tsarist empire it could
not help resembling its predecessor. Yet Lenin had from the earliest
stages supported the right of national self-determination. The
American riposte was President Wilson's Fourteen Points. The Soviet
Union and the USA didn't merely voice opposition to Great
Power imperialism, they acted differently to those old powers,
through entirely different institutional structures of governance.
The Soviet Union was a sort of radicalised autocracy which, though
reminiscent of Tsarism, was much more brutal in its lack of tolerance
for liberal institutions and bourgeois models of incorporation and
inclusion of different classes. The Soviet state reflected very
little of the kind of "class compromise" that characterised
bourgeois liberal states, even those that existed before universal
democratic suffrage. Meanwhile, the US had historically needed a much
weaker national state, its attentions largely turned towards its own
continental divisions. It was only with the recovery from the Long
Depression (1873-79) and the creation of the Federal Reserve (1907)
that US state capacities began the process of coming up to the levels
of centralisation of the European powers, whose warring histories and
often expansive empires necessitated more integrated governmental
power.
Though
they certainly did not resemble past empires, both the Soviet Union
and the USA increasingly after 1945, and perhaps even since the Crash
of 1929, were forced to take on the role of overseers and regulators
of vast territories falling under their informal jurisdiction. Though
Stalin's policy of 'Socialism in One Country' had always represented
a certain confession of weakness - i.e. that the USSR could neither
export its revolution abroad directly - the extraordinary victory of
the Soviet Union in the Second World War supplied ample space into
which previously suppressed political ambitions, along with
paranoias, could expand. Eastern Europe was never strategically all
that useful to the USSR, and at least initially was met with some
lack of enthusiasm. Yet it was widely felt that the Soviet Union had
to be compensated for its losses during the War with Germany, and
that the territories it now occupied seemed most suitable. Thus
Churchill's famous "Soviet sphere", the so called Iron
Curtain, was at least partly a matter of his own devising. It was in
this "informal" sense that the Soviet Union exerted
imperial influence over Eastern Europe. Despite the return, in some
form, of most of the east European states to "independent"
status, the Soviet union exported its own practices to the region
almost immediately. Its principal weapon of coercion and influence
was not the state (widely undermined by Nazi occupation) but the
formation of secret police forces on the model of the Soviet NKVD.
Anne Applebaum writes:
Everywhere
the Red Army went - even in Czechoslovakia, from which Soviet troops
eventually withdrew - these newly minted secret policemen began to
use selective violence, carefully targeting their political enemies
according to previously composed lists and criteria.3
Combined
with coalition in government (along with communist loyalists
infiltrating the interior and defence ministries of the region's
states) Moscow-backed communists could soon begin to develop a
hegemony that was only narrowly autonomous from the Soviet Union.
Descended from the kind of highly secretive, clandestine cells that
had also spawned the Russian Bolsheviks, many of the 'Moscow
communists' (Walter Ulbricht in East Germany, Matyas Rakosi in
Hungary, and Boleslaw Bierut in Poland) were utterly ill-equipped to
deal with mass politics. The pervasive presence of Soviet advisers in
the region practically guaranteed that the USSR would effect some
form of domination over it. The reasons it intended to do this are
complex, though undoubtedly the need to buttress itself against the
perceived threat of a renascent capitalist Europe was one of them.
The name 'People's Democracy', given to the states in the
diplomatically negotiated Soviet sphere, was important - it
distinguished them from the true home of socialism, the USSR. In this
sense, the Soviet Union was merely aiming to turn the its surrounding
region away from capitalism.
As
with the USSR, the USA's new empire was informal, though much like
the carefully orchestrated division of the continent, its acquisition
was systematically planned, this time by American minds alone. By
1942 the idea had already filtered through to important elements
within US civil society (specifically the leading businessmen who
took part in Fortune,
Time
and Life's
joint roundtable discussion and subsequent 'American Proposal') that
it would be crucial for the survival of postwar capitalism that
America take a leading role in the system's reconstruction. Not only
this, but liberalism's catastrophic failure - and the real attraction
of socialist policies, along with Fascist and 'economic nationalist'
ones - would require that the system be built on very different
foundations to the those that had led to the Great Depression. It was
also clear to some within the state, like Dean Acheson, that the US
would have to direct capital to needy, strategically important
states. US capital could no longer take shelter behind British naval
pre-eminence. In this both American business and government were in
accord. The future for capitalism lay in the building of a "stable
international monetary system", one whose channels would be
American finance and investment and whose guarantor would be the
American state. This would require that the US sacrifice some if its
extraordinary competitive advantage whilst funding the redevelopment
of the rest of the capitalist world. The trade off, however, was the
emergence of an "informal" capitalist hegemony with the US
at its centre, in charge of an increasingly integrated world system
which, though operating with ever more centrifugal force on small
states, also had the potential for extraordinary costliness.
How
the West Was Won
By the 1870s the US
economy had already overtaken Britain's in terms of industrial
output. However, the breakdown of British global hegemony would not
be complete until during the Great Depression of the 1930s, and the
US would not be in a position to take over Britain's mantle until
after the Second World War. Thus what happened in the intervening
years is essential to an understanding of the global order that
emerged following the war.
My
account draws heavily from Leo Panitch and Sam Gindin's book The
Making of Global Capitalism. In
it these two leading Marxist economists map in detail the various
intersections between an increasingly Americanised capitalist class
and the American state. The latter developed through a long series of
improvisatory, policy-led responses to real and perceived challenges
to its hegemony, not all of them consistent, though most of them
directed at developing the tools to govern capitalism and even to
direct it towards certain ends. To a certain extent there was a
confluence, if not identity, of interests between capital and the
American state, and Panitch and Gindin demonstrate that, the more it
could be shown that novel state institutions could contribute
positively to capitalist accumulation, the more the state was
entrusted to do so. In this sense the American state operated under
conditions of increasing "relative autonomy" from the
capitalist and other pro-capitalist classes it largely represented.
In short, during the first third of the 20th century, the American
state finalised its ability to deliver harsh medicine to the
capitalist system in the name of that system's own interests.
The transformation
started at home with "organisational innovations that American
companies introduced in both production and consumption"
(industrial decentralisation within big corporations; productivity
increases through technological innovations and intensifications).
Factory productivity alone grew by 75% in the first decades of the
century. By the end of the 1920s America's share of total global
production stood at 40%. Thus the US was financially transformed from
a debtor nation, heavily dependent on Britain, to an export-driven
creditor. Yet as contemporary China shows, industrial pre-eminence
does not amount of itself to any kind of global hegemony. Not only
this but basic weaknesses in the state's ability to manage America's
economic expansion were not overcome. Uneven development within the
US - especially in the underdeveloped south - along with a lack of
income-support programs, growing income inequality, and a
wage-productivity gap, making mass consumption vulnerable in a system
increasingly reliant on it, left the economy open to shocks. The 1929
stock market crash became a global depression precisely because of
the US state's inability, along with the British Treasury, to
coordinate an effective global financial response. Deflationary
protectionist measures were taken up throughout the capitalist world.
However accurate
Giovanni Arrighi's observation that, by contrast to the British
"extensive" (naval; imperial; financial) hegemonic cycle of
capital, the American was "intensive" (domestic;
industrial), the US clearly could not assert its obvious strength
until it could coordinate world financial markets to its benefit.
Though tentative to begin with, the Democratic government elected in
1932 was returned triumphantly to office in 1936 largely owing to the
"social turn" of the New Deal in 1935: the Wagner act
legalized union campaigns, collective bargaining and the right to
strike; the Social security Act created the US welfare state. Yet,
despite Roosevelt's private claim that it was time for America to
"turn radical for a generation", the President was a
committed capitalist and in many ways a budgetary conservative. More
than this (never having voiced public support for the Wagner act),
Roosevelt and Henry Morgenthau (his Secretary of State) soon set
about smoothing over relations with a flustered capitalist class. Not
only this but the most militant sections of the working class were
(in the era of the Popular Front) at least momentarily submerged
within the Democratic Party. According to Panitch and Gindin:
This
shift in the balance of class forces effectively ended the reforms of
the New Deal's second phase. Nevertheless, a transformation in the
capacities of the American state had been effected which the halting
of the New Deal's momentum did not undo.4
However, there was no
"dichotomy of purpose and function between state and capitalist
actors" - true to Roosevelt's insistence, the state concerned
itself with stimulating investment and stabilizing and rejuvenating
capitalist markets. Financial regulation, in which a symbiotic
relationship developed between public, semi-public and private
bodies, was mostly insulated from democratic pressures. By creating
such a complex the "commanding heights" of finance were
elevated above the working class, the grounds for the integration of
which were laid by the new model of mass consumption. Unions would
increasingly trade off workplace control and economic democratisation
for negotiated pay increases. For Panitch and Gindin the state had
increased its relative autonomy from particular capitalist interests,
integrated a broad section of the working class into capitalism (with
the promise of steadily increasing wages, home-ownership, and mass
consumption), while taking control of many aspects of financial
regulation.
After US entry to the
Second World War, plans for the internationalisation of the American
state were officially laid. As the potential for US hegemony over
global financial markets increased, so too did the state's capacity
to coordinate markets. The US government continued to believe in free
trade and market liberalisation as the key to prosperity. Yet the
administration was quick to realise that America's future prosperity
and stability lay in the ability of other key countries to catch-up
with America's dominance. Thus "trade could only be liberalized
on the basis of an international monetary arrangement that would also
allow for economic growth and domestic consumption on other
countries". This would not be a colonial form of dependency, nor
would it rely on the subordination and impoverishment of rivals, but
rather the supervision of financial flows to a capitalist 'core'
aided and coordinated by the American state. In a sense the New Deal
itself was to be internationalised. Less interventionist than
regulatory, the planners would become liberal "custodians of an
economy owned by the capitalists."
In early drafts of the
famous White plan, the World Bank was envisaged as a public lender to
redeveloping states. But owing to Roosevelt's desire to integrate
Latin America into the word system and align its with the US, and
also the need for the US public monies not to be directly responsible
for European debt, the Bank became an incentiviser of private
investment. J.M. Keynes' proposal, at Bretton Woods, for an
international clearing fund and special international currency to
facilitate lending to indebted countries on relatively easy terms
was summarily ditched. Instead policy-makers within the US
administration insisted on tight conditionality of borrowing, thus
ensuring a continuous pace of capital liberalisation and expansion of
free trade, regardless of the social cost to debtor nations.
In neither Giovanni
Arrighi's account of what he calls the "hegemonic cycle of
accumulation" of US capital, nor in the economist Robert
Brenner's account of America's return to growth do peculiar class
composition and alignments play such a central role. Brenner mentions
the "containment" of militant US labour, but this appears
to play little part in the developing story of American political
consensus and disensus. The depression, Brenner confirms, was a major
source of 'creative destruction', following which:
The
way was prepared for the new epoch of growth by the huge reductions
in the costs of production that were achieved during the crisis - by
way of the enormous shake-out of obsolete capital stock, the strong
downward pressure on real wages that resulted from record levels of
unemployment, and the building of a backlog of unused innovations.5
For
Brenner the huge potential of this process was only realized with the
onset of the equally extraordinary mobilisation of the War economy.
Nowhere does he mention the integration of the labour movement and
the working class as a whole in political terms; nor does he account
for what Panitch and Gindin see as the broad development of US state
capacities (in the form of New Deal regulatory and institutional
expansion) in the making of postwar US hegemony.
The
neat division of the postwar era - into the industrially productive,
Keynesian Golden Age (1945-1973) and the financialised, monetarist
Age of Turbulence - prove to be deceptive. As Panitch and Gindin
stress, state regulatory capacity and financial markets grew
concurrently, if at different speeds at different times. The
immediate postwar years - which spawned such extraordinary rates of
growth throughout the capitalist and non-capitalist world - should be
understood, they argue, as laying the foundations for the "explosion
of global finance that occurred in the last decades of the 20th
century." This took place, they stress, "within the
framework of the New Deal and Bretton Woods regulations." The
reason for this development - and the alliance that quickly developed
between postwar European Social Democratic governments and the
Democratic Party of the New Deal and Civil Rights era - was the need
for urgent redevelopment of a liberal capitalist 'core'. Japan and
the rest of South East Asia would later be ushered into this core.
And with the expansion and deepening of financial markets as the
crucial conduits of developmental capital, so too would the rest of
the world become part of capitalism's periphery. Thus western
European states found themselves at the centre of a newly globalised
capitalist empire, not solely as client states but as competitors
within an arrangement of reciprocal expansion.
Dismantling the
Cold War
Though stalemate was the
default political position of the Cold War balance of forces, from
every consideration in the economic sphere the USA was quickly
dominant. Although engendering its own contradictions (through which
the American state and economy accepted debtor status in orderto
maintain its increasingly chaotic financial hegemony), American power
- both coercive and consensual - over the world system was never in
doubt. While the 1980s generation of neoliberals in Washington, and
their bastard offspring the neoconservatives, saw the war of position
against the Soviets as vitally strategic, it was in the Third World
that American elites found they could fight an ever-spiralling war of
manoeuvre. Though the former grabbed more headlines in the
neoliberal decade, it was the latter which from our perspective
appears more relevant for contemporary struggles. It was, however,
the existence of the Soviet empire which inadvertently allowed
America to effectively police global order. In an international
division of gendarmerie, the American state could allow a drawn out
Soviet invasion of Afghanistan to cripple its rival while funding
jihadist proxies and engaging in multiple fronts elsewhere.
The Soviet collapse would end not only the Cold War stalemate but
also the global balance of forces structurally weighted in America's
favour.
Though successive
Washington administrations were deeply committed to ending the Cold
War and subjugating and stabilising the postcommunist states through
NATO, these efforts could not stop the spread of ex-Soviet arms, the
loss of Soviet demand in the world economy, nor the rapid loss of
authoritarian Soviet power. All of these factors would force the US
to thrust itself deeper into Middle Eastern and Asian geopolitics
with a verve that would once have seemed impolitic. Even if the
dollar was ultimately maintained by extraordinary efforts in the
State Department and the Foreign Office, via the Plaza Accords and
beyond, there was nonethless a creeping fragmentation of global
political order. Thus the American state was left to carry the burden
of Wall Street's bullishness, its own costly currency hegemony, and a
raft of growing economic competitors it could no longer outflank. Not
only this but military-industrial complex developed initially to
combat communism was now constantly engaged in global fire-fighting
efforts in the world communism had now vacated. With the defeat of a
long wave of Third World liberation movements have emerged sectarian
fundamentalisms promising no hope of a brighter future. A world
conjured in the shadow of an American hegemony that is slowly taking
on elements of a more straightforward kind of military domination,
one certainly familiar to the KGB old guard. This is surely one irony
not to escape them.
2ibid.,
166-67
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