Immanuel Wallerstein’s “The Decline of American Power” (New Press, 2003) is an insightful analysis of today’s global crises, their origins and their long-term trajectories. Wallerstein situates the 2003 US war on Iraq, global terrorism and the US “War on Terrorism” in a “capitalist world-economy that is in crisis as a historical system” (121). Though this crisis endangers the global economy as a whole, Wallerstein submits, it particularly imperils the US’s leading position within that system.
While suggestions of US decline have been made and defied for decades, Wallerstein argues a compelling case by employing a long-term view that examines several growing structural pressures that have halted global capitalist growth. For example, nearly total global urbanization of traditional rural populations, signifying the historic exhaustion of cheaper first-generation city workforces, is slowing the downward pressure on wages that has hitherto subsidized declining profits. Similarly, growing environmental ruination has led to increasingly higher taxes, raising costs of investment in an already strained economy.
Contrary to popular assumptions that wages and taxes are in overall decline, Wallerstein argues that the recent relative drop in those costs attempts to but fails at redressing their broader, long-term, increase. This long-term increase in the cost of investment had mattered less during unprecedented post-war economic growth. But with the eventual slowdown of profits in 1973-4, these contradictions have increasingly affected economic, political and social policies.
Thereafter, Wallerstein writes, rightist free-marketers, who had been abandoned to the fringes for their inability to predict and respond to the Great Depression, reentered mainstream discourse. Proven partially right by Keynesian capitalism’s unmanageable long-term costs, they were newly accepted for their insistence that the elimination of social spending would lower taxes and free up capital while simultaneously establishing new areas for investment through privatization. Artificially creating investment opportunities, however, did not resolve the underlying crisis in investment resulting from excess productive capacities, but merely extended capitalism’s shelf life at the expense of most people’s living standards.
Wallerstein writes that the failure of the so-called Old Left (the Communist Party, union-oriented Leftist organizations prominent from the 1930s-1960s) to create an alternative to the dominant world system is cause and effect of capitalism’s surprising resilience and is responsible for much of today’s Left defeatism.
For Wallerstein, however, the Old Left’s optimistic view, “this sense of deep hope in the future, this sense of certainty that there would be more equality and democracy… was paradoxically the most depoliticizing worldview possible” (111). Counseling patience based on inevitable improvement, the Old Left “served paradoxically as the most important guarantor of political stability of the world-system in the long run, despite their frequent calls for political turbulence” (111). The growing chasm separating actual Left achievements from its rhetoric led to the social outbursts of 1968 that rejected both the dominant ruling system and its self-professed opposition. We are living, Wallerstein argues, in that aftermath.
While viewing the defeat of the Old Left as a positive and essential prerequisite for reformulating critiques of the world system, Wallerstein also holds that the Left’s decline is responsible for the emergence of Islamic extremism. Noting that the retrogressive Islamist movement is but one expression of what has been occurring all over the “peripheral zones of the world system” (116), Wallerstein explains its rise as, in particular, the outcome of the collapse of Arab Nationalism.
Writing that Arab Nationalism’s inability to achieve promised social transformation led many Arabs to turn to alternative strategies, however, constitutes a rare example of Wallerstein using a simplified and monocausal analysis to explain a complex sociopolitical phenomenon. While Arab Nationalism indeed did not achieve its main objectives, its decline is still inseparable from concerted Western attempts at undermining it, culminating in Israel’s destruction of the Arab Nationalists’ militaries and prestige in 1967. Simultaneously, the United States and Israel played a pivotal role in funding Islamist movements as a counterweight to the secular, relatively progressive, Nationalists.
A particularly valuable aspect of the work is its rejection of the postwar notion that armed conflict between the major capitalist powers is a thing of the past. The underlying political-economic causes of imperialist warfare have not been eradicated with World War II, but rather have only laid dormant due to the US’s uncontested supremacy at the war’s end – resulting from the capital it had extracted from allies and its assumption of world political leadership, made possible with the destruction of its major competitors. Though Europe’s gradual return to power was partially obscured by its acceptance of US political leadership during the Cold War, the demise of the USSR has brought the latent imperialist rivalry out into the open.
This view informs Wallerstein’s interpretation of the US war on Iraq. For the first time in the history of the United Nations, Wallerstein writes, the US was unable to win Security Council support for a measure it badly wanted. Wallerstein goes beyond merely stating that the US’s failure in the UN indicates a political break between the US and Europe, but that the war itself constituted a US war on Germany and France – to the surprise of Iraqis, to be sure. Indeed, in Resurrecting Empire, Rashid Khalidi notes a Bush Administration official speaking of “containing” France and Germany after the fall of Baghdad. That foreign rivals were ignoring the US-led embargo by trading with Iraq while the latter was encouraging the switch of oil purchases from Dollar to Euro, further threatening the US’s economic position, further supports this line.
The historian Paul Kennedy anticipated this scenario in his 1987 work, The Rise and Fall of the Great Powers. Kennedy saw that US dominance in the post-war era was unsustainable since the intrinsic character of the world system insured the relative rise of new (or old) powers at the expense of the relative decline of the top power. For Kennedy, the question was how the US would respond to this change, whether it would graciously acquiesce, sharing power with other nations, or forcefully resist. Ironically, as Kennedy observed, US resistance to its inevitable movement toward equilibrium could lead to military overextension and economic exhaustion, hastening what was being fended off.
While George W. Bush’s aggressive unilateralism in Iraq suggests that the US has taken the latter route, Wallerstein understands that the political-economic equilibrium that Kennedy suggests the US embrace is itself unsustainable. Indeed, it was the unyielding desire to maintain the equilibrium characterizing Europe from 1815-1914 that led France and England to war to suppress German ascension. Here Wallerstein stresses that we no longer have the luxury of repeating past mistakes, arguing that there can be no returning to the policies that have led to today’s crises in the first place. Underlining the limitations of rightwing analyses, while noting the failures of historic leftwing alternatives, Wallerstein asserts that the cycle can only be broken with the establishment of a new world system. Restating that the capitalist world system has reached its breaking point, Wallerstein emphasizes that it is impossible to predict the character of its inevitable replacement.
Based on this fast-approaching future where anything is possible, Wallerstein optimistically suggests that deteriorating material conditions can further, paradoxically, eliminate conceptual limitations imbedded in obsolete Leftist presuppositions, unbridling vigorous popular movements creating change. However, because of the adaptability of ruling powers, as well as the dangers inherent in retrogressive movements from Fascists to Islamists, Wallerstein insists that those committed to change pursue lucidity over mobilization as its own end. The Decline of American Power is a good contribution to that end.