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ISR Issue 52, March–April 2007



Crisis of U.S. imperialism

By JOEL GEIER

SIX YEARS ago, American imperialism appeared to have finally overcome its Vietnam defeat. When Stalinist Russia collapsed through its own internal contradictions, American power advanced to a level it could not have achieved by own strength. Initial conjecture that perhaps Germany or Japan were the real victors of the Cold War, able to organize Europe and Asia into a multipolar world of competing blocs, proved to be overstated. America emerged, as the world’s only superpower. No rival could match its impregnable lead in military technology, weaponry, and armed forces.

American economic sway also seemed relatively secure. Decades of one-sided class warfare had busted unions and altered the balance of class forces, resulting in a historically massive transfer of wealth from labor to capital. A prolonged, painful restructuring of industry had raised productivity, extended the workday, lowered wages, and increased surplus value. American capitalism was again the most profitable in the world. For a decade and a half, it had higher growth rates than its advanced rivals. Its crippled banking system of the 1980s was so successfully restructured that its financial markets became internationally hegemonic.

The U.S. was able to impose the neoliberal policies of the “Washington consensus” for participation in the global trading system and capital markets. The “free market” dogma of the American ruling class became dominant throughout most of the world. Most of the world’s ruling classes reluctantly accepted American hegemony as the only viable option. Most of the international Left—social democratic, Stalinist, even many revolutionaries—drew the conclusion that the failure of Stalinism proved that the free market was the only economically efficient model and that American imperialism could not be challenged, indeed, that it could even be supported in its “humanitarian interventions.”

American capitalism seemed stable, secure, and unbeatable. Those feelings were reinforced as the initial response to 9/11 saw the U.S. swept by a tidal wave of social patriotism. Backed by overwhelming international support, America unleashed its war against Afghanistan. The revolutionary movement reached its lowest point in at least a half century. Yet a few short years later, American imperialism faces not just a significant defeat but also a long crisis as profound as that of Vietnam.

The window of opportunity

The Bush administration, backed by solid ruling-class public opinion, viewed 9/11 as a rare historic opportunity. It decided to have it out not just with the Taliban in Afghanistan, but also with an ever-expanding “axis of evil.” American imperial power had painfully clawed its way back in the post-Vietnam years; it now had the chance to use its power militarily to expand to new territory. Its first goal was to reassert strong control over the Middle East by first invading Iraq and using it as a pivot from which to extend its power in the region. With two-thirds of world oil reserves, the key raw material for the functioning of industrial economies—and in a period of possible peak oil, with dramatically rising prices—the U.S. saw the seizure of Iraq as an opportunity to establish unparalleled sway in perhaps the most strategically important region of the world. Whoever controls the production and distribution of this strategic asset has the leverage to dominate the global economy and politics.

The ideological underpinning for these imperial policies was the “war on terror.” The U.S. announced that it had the unilateral right to carry out “regime changes” of “evil” or “failed” states through preemptive wars, and to counter the development of any potential rivals. These aggressive claims were a modern variant on the pre-Vietnam policy of Pax Americana, that peace demanded a world policeman, with American domination the necessary component for providing international stability. The war on terror became the pretext for the U.S. to organize support against its Middle Eastern opponents, by presenting the conflict as one between “civilization” against “Islamic fundamentalism.” Arabs who refused to accept American policies in the Middle East were dubbed “extremists,” and if they resisted forcefully, “terrorists.” When first presented by Bush, Cheney, Powell, Rumsfeld, Rice, and their neocon intellectual coterie, the Bush Doctrine was greeted with acclaim by all sections of a ruling class hungry for the international supremacy it promised. Yet this enormous overestimation of American imperial power was to produce, as aptly stated by General William Odom, the former head of the National Security Agency, the greatest strategic disaster in American history.

From resistance to quagmire

American failure in Iraq was built into the situation from the beginning. The rapid defeat of the Republican Guard and Iraqi army was quickly transformed into its opposite when the war settled into occupation, which the Iraqis’ refused to accept. A war won through superior air power became a guerrilla war of attrition. Soldiers whose political elite promised them they would be greeted as liberators now faced mounting attacks and casualties.

Secretary of Defense Donald Rumsfeld’s war strategy—superior air power combined with a small army—fell apart when the fight became a guerrilla war, for which the Americans were unprepared. The idea that Arabs would welcome invasion, conquest, occupation, and re-colonization as democracy and liberation was an imperialist delusion. The Iraqi resistance to conquest, moreover, made it impossible for the United States to carry through its other plans in the region—most notably, regime changes in Syria and Iran, isolating and defeating Hezbollah and Hamas, and marginalizing any opponents to its control over the Middle East. A Sunni insurgency was the inevitable result of the “de-Baathification” policy the U.S. imposed in Iraq, a policy that included dissolution of the Iraqi army and the creation of a political regime of collaborators based on ethnic divisions. American policy set the stage for sectarian infighting, which was used at first to bolster American occupation. But eventually the sectarian violence became a threat to the whole American enterprise. This was compounded from the earliest days as it became apparent that the real victor in the war was Iran, upon whose political allies in Iraq (various Shiite parties) America’s political and military position depended.

The tipping point in the war came in the summer and fall of 2006. To provide the U.S. with a victory that it alone could not achieve in Iraq and Afghanistan, Washington enlisted Israel to fight a proxy war against Hezbollah. The aim was to solidify the pro-American Siniora government in Lebanon as well as to set back the rising power of Iran and Syria in the region. The Israelis used the same war plan as the Americans, relying on air power to terrorize the local population into accepting defeat. Hezbollah, with the equivalent of only one division, but trained and equipped by Iran, was able to rally the Lebanese nation and produce an unexpected defeat for the better-equipped Israeli forces. America’s watchdog was not invincible—Israel could also be defeated. The politics of the Middle East equation would no longer be the same. The U.S. war plan had produced three failed wars in four years.

This was soon followed by the failure of Operation Forward Together to secure Baghdad. The political impact at home was swift; the depth of the Iraqi disaster could no longer be managed by spin or the Rove attack machine. The repudiation of Bush and the war at the polls was a turning point. The Republican ascendancy was broken. Since Vietnam, the Republicans have presented their policy of a hawkish national security state as the only realistic safeguard to a world made more dangerous by naïve, ineffectual liberal policy. Yet the results of their muscular policy were incompetence and defeat. The ruling class, strong supporters of the right-wing agenda and the guardian for its growing share of national income, became alarmed at how serious the debacle threatened their interests in the Middle East. Mainstream bourgeois politics for years has been dominated by conservative “wedge issues.” The split at the top over Iraq opens up a political space at the bottom for debate and discussion that hasn’t been seen in the U.S. in years. The division in the ruling class will tend to deepen so long as the war continues. Administration supporters are reduced to accusing its opponents of “appeasing terrorism,” preventing victory, and undermining troop morale. Bush’s opponents are then forced to defend themselves by exposing the corruption, incompetence, lies, and scandals of the administration.

The Bush administration has lost popular support for a war it plans to continue to the end. It no longer has credibility abroad or with most of the population at home, which will make its foreign policy proposals suspect and difficult to implement, exacerbating its crisis. The executive branch, which attempted to claim all the powers of the imperial presidency of the Cold War era, has lost the credibility to carry through imperial measures without challenge. The split in the ruling class, its political representatives, think tanks, and media outlets is not over principles, however. The debate is over how best to protect imperialist interests—by continuing “on to victory,” or trying to find some way to contain this debacle and salvaging as much as can be saved in a defeat. Now that this genie is out of the bottle—that there is no ruling-class consensus—politics will increasingly focus on the war. The Democrats, who originally wanted to avoid discussing it, have been forced to put Iraq back on the agenda. So long as the war goes on, all politics will have the tendency to be viewed through this prism, the credibility gap for the government will grow, and it will be more difficult for U.S. imperialism to have the support necessary to deal with its other international problems.

Surging failure

The new “surge” of 21,000 more troops to Baghdad and Anbar Province is a testament to the difficulties the U.S. is having producing enough troops to bolster the occupation. During Vietnam, the monthly draft call of 17,000 was escalated to 35,000 a month. Even Bush’s supporters are skeptical about the surge, defending it on flimsy grounds—that it should be “given a chance” because there are no other credible alternatives to defeat. Cheney, who defends it as a winning strategy, is even dismissed by the editors of the New Republic as “delusional.” The addition of 21,000 troops barely brings troop levels back to where they were a year ago. But more troops can’t be brought in, because the army simply does not have them—an indication of how much the war has set back the American military machine. It is now dependent on the backdoor draft—extending tours of duty for reservists.

The political assumptions of the surge are also based on delusion. The premise is that American soldiers embedded in Iraqi army units can destroy or dissolve Shiite militias as a road to bringing Sunnis into the political process. In the midst of a sectarian civil war, the Shiites view the militias as their only protection against Sunni attackers. Meanwhile, the al-Maliki government, which rests on the Shiite militias and their parties, is expected to carry out this plan. The Iraqi forces that are to join the U.S. troops in this fight against the militias are the army and police, infiltrated if not controlled by the Badr Brigades and Mahdi Army. Even if the operation has the appearance of success and gives the Bush administration some breathing room, it will merely reflect the fact that the Shiite militias have temporarily faded into the background until the American heat is off. This is the typical method of guerrilla warfare—avoid set battles, and disappear into the population until there is a favorable moment for engagement.

The Sunni insurgency immediately tried to counter the surge strategy, by probing the disappearance of the Shiite militias. It carried out a wave of severe bombings in early February, the aim of which seems to be to create pressure to bring the militias back into the open and thereby undermine the U.S.-al-Maliki arrangement. The fate of the surge may be sealed even before it starts. The military surge cannot solve the political problem of the U.S. in Iraq. When the surge plan fails, which it will sooner or later, new plans to avoid defeat will be presented. Competing plans are already being drafted with versions of redeployment, and possible new tripartite regional government arrangements, agreements with Syria, etc. These plans will be designed to reduce the consequences of defeat. But in the meantime, the Bush administration continues a losing war that is having tremendous economic, political, and military consequences for American imperialism internationally. In Vietnam the U.S. “never lost a battle, but could not win a war.” The same contradiction exists in Iraq. The U.S. is too powerful to be militarily dislodged—especially in the context of sectarian bloodletting between Iraqis—which allows it to sink deeper into the quagmire of war. On the other hand, its setbacks internationally and mounting opposition at home have convinced one section of the ruling class that it is better to cut their losses now, before more damage is done. The military, with a failed war plan, and an inability to raise adequate troop levels, needs to be restructured before it can be a fit instrument for future imperial engagements; but this is impossible to do during the war, when, if anything, the army’s position will get even worse.

The immediate outcome of the war has been to strengthen the relative position of all U.S. rivals and opponents—most importantly, Iran. The war with Iraq from the beginning was also about Iran. Iraq was the low-hanging fruit, but Iran was the end game. Saddam after the first Gulf War was never a threat to U.S. control of Middle East oil. Iran, the strongest regional power, has always been the threat to regional domination. Yet Iran is the main beneficiary of the U.S. war. The U.S. has gotten rid of Iran’s enemies in Afghanistan and Iraq. It has put Iran’s allies, the Iraqi parties SCIRI (the Supreme Council for Islamic Revolution in Iraq) and Dawa in power, and opens the possibility of either an Iraqi alliance with Iran, or a Shiite client state in southern Iraq.

The tying down of American forces in Iraq (and to a lesser extent in Afghanistan) has allowed Iran to strengthen its influence in Lebanon, in Palestine, and with Syria, and to thwart American aims in the region. The functioning of Hezbollah, with Iranian military equipment and training, is indicative of how formidable a military opponent Iran may be. Iran is the main competitor the U.S. has for influence and hegemony in the area. Washington’s greatest fear is of an Iran-Russia-China axis developing. The recent news that Russia and Iran, who have 41 percent of the world’s natural gas reserves between them, are discussing forming a natural gas cartel similar to OPEC caused alarm bells in the United States.

The clash between Iran and the U.S. for dominance in the Middle East (prior to the Iraq War, Iran would not have been able to seriously contend for that) will eventually lead to a confrontation. The other part of Bush’s surge plan involves provocations directed at Iran—the sending of two aircraft carriers to the Persian Gulf, changing the rules of engagement to include firing on Iranian “hostiles” in Iraq, opening the door to hot pursuit, and imposing banking measures to restrict Iran’s economy. The U.S. war in the Middle East will not be over until it has it out with Iran for control of the region. The Iraq War could be escalated to include Iran—though bombing seems more likely than a ground invasion. Alternatively, there could be an interlude before another confrontation. The Iranians may back off on some things because time is on their side—the longer the war in Iraq goes on, the weaker the Americans are, and the more the confrontation is put off, the closer they are to gaining nuclear weaponry.

The one important development working against Iran is that the civil war in Iraq creates a distance between Arab Sunnis and Shiite Iran that the Americans are attempting to exploit. Since the execution of Saddam Hussein, the U.S. and its allies in the region, chiefly Saudi Arabia, have deliberately fostered anti-Shiite sentiment regionally by claiming that Iran, Hezbollah, Hamas (though it is Sunni), and various Shiite forces in Iraq are part of a “Shiite crescent” under Iran’s hegemony that are threatening the interests of the Sunni Arab majority.

Imperialism hamstrung

In Latin America, economic conditions independent of the Iraq War have propelled a years-long revolt against the neoliberalism championed by the United States. Neoliberal growth benefited the rich, and working-class living standards stagnated—the last recession was horrendous, particularly in Argentina. The Iraq quagmire has provided political openings for this economic revolt against American dominance to continue, most recently in Bolivia and Ecuador. The rise in oil prices has allowed Hugo Chávez in Venezuela to both deepen his support in Venezuela, and to extend his influence in the region. His ability to organize Bolivia, Ecuador, and Nicaragua into a competing center to American influence, and to leverage oil in Mercosur policies makes him the strongest opponent the U.S. has had in Latin America since the Cuban political challenge in the 1960s and early 1970s. Iraq has forced the U.S. to accept a tempering of its political interference that they would not have previously contemplated. The continued American preoccupation in Iraq may allow for further revolts and lead to a further decline in U.S. ability to influence events in Latin America.

The main beneficiary of the Iraq War in the long term may be China. The economic advance of China during the years of the war on terror has raised it to a position where it impacts global growth, commodity prices, trade, monetary policy, and interest rates. Its boom has spurred the growth rate of most commodity-producing countries. China’s economic impact has now made it a serious rival to the U.S. as a trading partner in Latin America and Africa, and as a competitor for world oil supplies. China is the main importer of oil from Sudan, and a major protector of the Sudanese government. With economic advance comes military competition. The Chinese are developing a strong navy, and they have just shown they can launch a missile strike to destroy space satellites. These developments are opening a race for control of space between China and the U.S., which until now has been able to place drones, spy satellites, and other vehicles throughout space without challenge. Though China’s military capabilities remains far weaker than that of the United States, China’s entry into space caused a shudder of fear through the American military. But given the Iraq quagmire, and the economic problems of the U.S., American options remain limited.

Economic consequences of the war

The cost of the war officially is over $660 billion, but that vastly underestimates its true costs. The Pentagon budget for this coming year is $481 billion. If you add the $141 billion supplement for Iraq and Afghanistan, it equals $622 billion before additional funding requests. To this sum $35 billion should be added for “homeland security,” for a subtotal of $657 billion. The true amount would have to include various veterans’ benefits and the interest on borrowed Iraq War expenditures, for an informed estimate in the neighborhood of $700 billion for this year alone. The Pentagon budget for 2001 prior to the war on terror was $299 billion. The war budget is now a little over 5 percent of gross national product (GNP)—shades of the post-Second World War permanent arms economy. These sums, after adjustment for inflation, are much greater than war spending during the Vietnam War, and are placing a heavy burden on an already stressed and imbalanced economy. The havoc the war is causing probably will only appear in the next recession. (Recessions usually don’t occur in wartime because of the stimulus of deficit war spending, but that was made up for by three severe recessions in the decade following Vietnam, from which living standards have never recovered.)

In the last several years the U.S. has lost its competitive edge on the world market, increasing its international debt to a point that it threatens the dollar, the lynchpin of its economic dominance. The 2006 trade deficit has ballooned to an unsustainable $763 billion, the current account deficit to over $800 billion. The war was expected to pay for itself through the production and sale of Iraqi oil, which was also expected to keep oil at $20 a barrel. Instead, Iraq has become a money pit, and a destabilizing factor regionally that has pushed oil to $50–$70 a barrel. Coupled with this is the wars’ unaddressed detrimental impact on America’s rapidly declining competitive capability on the world market. In just six years, the U.S. share of world GNP has dropped dramatically from 30.8 percent in 2000 to 27.7 percent in 2006, with BRIC’s (Brazil, Russia, India, and China) share of the world GNP share rising from 7.8 percent to 11 percent (the bulk of this rise is in China and Russia, America’s only serious military rivals). Coupled to the trade deficit is the federal government deficit, which has averaged $300 billion the past several years. During Vietnam, the U.S. was the world’s major creditor; it is now the world largest debtor. The U.S. has borrowed internationally over $3 trillion in the last five years, an astounding 80 percent of world savings. China now holds over $1 trillion in foreign reserves, 90 percent in dollars, with which it makes international loans to developing countries outside the framework of the International Monetary Fund, further eroding U.S. economic influence.

The deficits and the dollar’s dependence on the kindness of strangers has created the new contradiction that China, the major long-term strategic rival of the U.S., has become its major banker. The U.S. ruling class, despite hawkish rhetoric about “sacrifice,” refuses to tax itself for its war, but instead depends on unsustainable foreign loans that are undermining its imperialist power relations.

The Vietnam defeat caused runs on the dollar and the collapse of the Bretton Woods agreement, after which the U.S. was no longer able to set monetary and fiscal policy for the capitalist world. The cut in working-class living standards that followed has still not been overcome after thirty years. Wages in the mid-1970s when inflation adjusted for 2006 dollars averaged $19 an hour, whereas now they are $17 an hour. Vietnam ended the era of “guns and butter”—of social welfare measures granted to maintain domestic stability to better pursue world domination. Now in the midst of the war, the burden of its staggering costs is being used to justify calls for cuts in Medicare, Medicaid, social, and educational programs. The economics of the war on terror has capitalist politicians trying to force the working class to pay for this ruling-class war for oil and empire. The connection between the war abroad and the class war at home is coming more sharply into focus.

A wounded beast

The impact of the U.S. defeat in Iraq is only beginning to unfold. It is impossible to predict all of its ramifications or how it will play out, but the past can be a helpful guide. While some sections of the Left have over-hyped the power of American imperialism, others have grossly underestimated its ability to recuperate from defeat. Despite the shambles of Vietnam, no rival supplanted the United States; over a period of more than two decades, it painfully restored its power. Despite its current setbacks, the U.S. remains the dominant superpower. Despite the unsustainable dynamics of the global trading system, the American multinationals and banks remain the most profitable and hegemonic in decisive fields. Militarily, the U.S. currently has no rival capable of displacing its power. No other power has the resources to draw upon allies, satellites, and sub-imperialist surrogates with the same depth as American imperialism. The U.S. is therefore not completely without options or room to maneuver. While bogged down in Iraq, America was recently able to use Ethiopia to subdue Islamists in Somalia, and Saudi Arabia to generate the new unity government in Palestine. Sectarian strife in Iraq, and regionally, also weakens the opposition to U.S. power in the Middle East.

But there are limits to the aggressiveness of American imperialism when it is faced with its setbacks and defeats. The revival of anti-imperialist politics has begun in Latin America and the Middle East. As America’s crisis matures, the rebirth of an anti-imperialist Left in the rest of the world, including the U.S, appears on the horizon. The long-term crisis of American imperialism resulting from the Iraq disaster is an enormous opening for the revival of anti-imperialism as a credible alternative to both wings of imperialist politics, the Republican and Democratic parties. U.S. imperialism has to be challenged by a mass opposition from below at home, and linked to the struggle for liberation internationally. That is still in the future, but the defeat in Iraq is bringing that future into focus.


Joel Geier is associate editor of the ISR.
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