We are the number one nation and we are going to stay the number one nation. – President Lyndon Johnson, 1968
The U.S. is no longer in the position of complete pre-eminence or predominance. – President Richard Nixon, 1971
Hardly a week goes by that we don’t hear another pronouncement from President Reagan about how the U.S. must revitalize itself, regain the respect it once had in the world, and stop letting itself be pushed around by other countries. These pronouncements reflect the realization of Reagan and the U.S. ruling class that U.S. imperialism is facing serious problems. The ruling class is acutely aware that the U.S. standing in the world today is not what it used to be. And they are aware as well that the serious efforts of previous occupants of the White House were unable to stop the decline of the U.S.
One of the main problems faced by the rulers of this country today is: what foreign policy should they pursue to stop the decline in their world power? But there is no answer to this problem. There is no new policy, no new weapon system, no new approach that will effectively stop the weakening of U.S. imperialism. The world the U.S. lives in today has changed irreversibly from 30 years ago, and there is no going back.
Richard Nixon’s first Administration marked the end of an era of U.S. imperialism. Powerful movements and developments forced Nixon into begrudged recognition that years of undisputed U.S. world supremacy were coming to an end.
The U.S. had emerged from the Second World War with its home area unscathed, its industrial plant greatly expanded and in a position to take over the world empires of England, France, Japan and other old colonial powers. In the post-war period, U.S. imperialism acted not only like the “world’s policeman” but also its banker and boss. It achieved world hegemony.
But by the early 1970’s, it was becoming clear that the U.S. position in the world was changing. U.S. imperialism suffered a strategic defeat in the war in Indochina in the 1960’s and early 1970’s. The U.S. also had to devalue the dollar and revise the international monetary system that had favored the U.S. since the end of World War II. The U.S. even faced a turning point in the United Nations when, in 1971, the General Assembly voted to restore China’s seat to Beijing, prevailing over two decades of vehement U.S. opposition. This signaled the end of U.S. domination over the international organization.
Since those events of ten years ago, the dilemma of the U.S. in the world has become even more pronounced. To be sure, U.S. imperialism is still one of the world’s two superpowers. The U.S. still has the largest and most powerful economy, with an annual gross national product of some $3 trillion. It has the world’s most sophisticated military, with more nuclear missile warheads than any nation on earth. The Pentagon currently runs hundreds of military installations on foreign soil. American business has $200 billion invested in other countries, by far the largest amount of any country in the world.
But the overall margin of U.S. supremacy has sharply declined, and in a number of areas, the U.S. has slipped behind others. Economically, the U.S. gross national product accounted for 45% of the world’s total production in the 1950’s, but today the figure is just 21%.
Undisputed U.S. world domination was brought to an end by several combined factors:
• The rise of the third world. The former colonial regions of the world have by and large achieved political independence and are strengthening themselves economically, politically and militarily. They cannot be exploited and dominated as in the past and are cooperating with one another in many ways.
These developments have seriously eroded U.S. power, which has relied to a large degree on the resources and profits from the third world. The rise of the third world has broken the U.S. monopoly over important markets, sources of raw materials, energy resources and military outposts.
During the past decade there have been a number of events that have dramatized the power of the third world. In the early 1970’s, the Organization of Petroleum Exporting Countries (OPEC) ended the imperialist domination of the world oil supply. This brought huge headaches for U.S. business since the U.S. imports 46% of its oil needs. The U.S. lost control of Southeast Asia. It also could not prevent the fall of the Shah of Iran nor stop the tide of anti-colonialism in southern Africa. Even in the U.S.’s own traditional “backyard” of Central America, mass popular uprisings overthrew the U.S.-backed dictator Somoza in Nicaragua in 1979 and today are vigorous in El Salvador, Guatemala and Honduras.
• The resurgence of the Western capitalist countries. The U.S. benefited from the devastation of the economies of Western Europe and Japan during World War II. U.S. business took advantage of their destruction to establish a world monetary and trade system favoring the dollar. U.S. business also made great profits from exports to and investments in the domestic economies of these countries. For a couple of decades there was little competition for many U.S. goods on the world market.
But this situation is rapidly changing. Europe and Japan have rebuilt their economies and are steadily eroding U.S. advantages. These countries have become major competitors with U.S. business around the world, including in the U.S. domestic market itself. In the late 1950’s, the combined national economies of the European Common Market countries amounted to about 25% of that of the U.S. Today the European community gross income is roughly equal to that of the U.S. It is now the largest and most powerful trading bloc in the world.
This growing economic strength has brought Western Europe and Japan into more conflict with the U.S. over a number of issues. There are serious differences over trade; over political matters, such as the West’s attitude towards the Soviet Union; and over military issues, like the deployment of new nuclear weapons in Western Europe. As noted by Business Week, “The United States has become just one strong player – albeit still the strongest – among several very powerful players.” (The Business Week Team, Bruce Nussbaum, et al., The Decline of U.S. Power and What We Can Do About It, p. 202)
• The challenge of Soviet imperialism. U.S. conflict with the Soviet Union changed in the late 1950’s as the Soviet Union degenerated from socialism into a rival imperialist state. During the past 20 years, the Soviets have become an aggressive, domineering power in the international scene.
Militarily, the Soviets have engaged in a massive arms buildup and are now roughly equal to the U.S. in nuclear capacity and superior in many conventional weapons. The Soviets have also cultivated a number of powerful military and political allies in Viet Nam and Cuba who are helping to advance Soviet ambitions around the world.
In the 1950’s, the Soviet economy had one-third the gross national product of the U.S., while today it is about two-thirds. In a number of key industrial areas, Soviet production is much higher than in the U.S.
As a consequence, U.S. imperialism now is faced with a rival world superpower which is challenging the U.S. for advantages from the outer reaches of space to the floors of the oceans. This worldwide contention for power threatens to engulf the globe in a new world war.
Over the past several decades, Washington has tried various tactics to counter the decline of the U.S. position in foreign affairs. The aim of Henry Kissinger’s “detente” with the Soviet Union was to find a way to accommodate, but also restrain Soviet expansionism. Carter’s “human rights” approach attempted to lessen hostility from the third world and promote anti-Sovietism. Neither of these achieved their goals and were dropped.
Reagan’s “get tough” stance expresses U.S. desire for aggressiveness and frustration towards its international problems. He stresses building up U.S. economic and military power in the belief that the U.S. needs to improve its home base in order to advance its world position. But the results of Reagan’s first two years already show that it is doubtful he can achieve his goals. Last year Newsweek characterized U.S. foreign policy under Reagan as a “muddle”; “the administration’s dithering has confused allies and adversaries alike. There is absolutely no strategic notion other than an enormous amount of rhetoric.” (Newsweek, July 5, 1982, p. 25, 28)
But the quandary of U.S. policy-makers is not that they lack sufficient intelligence, will or determination to defend U.S. imperialism. They face conditions vastly different than the 1940’s-1960’s when the U.S. had clear economic and military hegemony in the world.
The U.S. would like to protect its vested interests in the world, but its options have been greatly narrowed. U.S. foreign policy and international finance journals are full of articles debating the goals and approaches for U.S. foreign policy. There is a common recognition that U.S. power has seriously eroded over the last decade, but there is a wide diversity of opinions in the ruling class over the specific direction for U.S. foreign affairs.
The agreement that does exist is based on the limited perspective of trying to simply prevent further loss of U.S. power in the world. But in heated events such as the Iranian hostage crisis or the Israeli invasion of Lebanon, sharp differences surface over how best to advance U.S. interests. Hence there are dramatic surprises like the Haig resignation last year, or Reagan’s abrupt reversal on sanctions against European countries doing business on the Soviet pipeline.
U.S. General Bernard Rogers, the Supreme Allied Commander in Europe, concisely stated current U.S. foreign policy objectives: “Simply put, we seek a more stable and less hostile world order.” (Foreign Affairs, Summer, 1982) This aim well summarizes the U.S. approach today: Washington wants to maintain as much of the existing international system as possible in order to protect U.S. economic, military and political advantages. Washington’s strategic approach is fundamentally conservative, that is, it opposes change as destabilizing and threatening to its interests. Washington favors change only insofar as it is necessary to prevent greater instability.
Rogers’ hope for a “less hostile world order” also reveals his accurate perception of the international environment: namely that many countries and peoples are hostile to U.S. imperialism. This sentiment is the result of decades of U.S. aggression, exploitation and arrogance. Rogers’ objective of lessening this hostility contrasts sharply to the past U.S. delusion that most of the world was friendly to U.S. imperialism.
Reagan and Haig emphasized stability and the preservation of the status quo in another way when they entered office in 1980. They issued four principles they said would govern their foreign policy:
• restore U.S. economic and military strength
• reinvigorate traditional alliances and friendships
• support progress in developing countries through peaceful change
• seek greater Soviet restraint and reciprocity with the U.S.
These principles reflect the essentially defensive position of the U.S. Washington seeks to recoup past power, strengthen the status quo and contain challenges. These approaches are only a holding pattern, expressing no more of a long-term view than trying to hold onto the present.
And yet even these limited goals face immense obstacles. For instance, efforts to improve U.S. business cause trade and monetary conflicts with the European community. These will weaken the key “traditional” political and military alliance of U.S. imperialism. U.S. military planners cannot even agree on a plan to base the new MX missile.
In the short term, Reagan may be able to bolster U.S. military might with his massive infusion of funds into the defense budget, but the underlying problems facing U.S. imperialism make it impossible for the U.S. to get out of its declining strategic position. In the coming years, U.S. foreign policy efforts will face continued major difficulties.
There are also important contradictions in the domestic situation that make it impossible for the U.S. to resume its preeminent world position.
• Weakness of the domestic economy. This is not a temporary problem. The U.S. finds itself in a protracted crisis which has steadily developed over the past 20 years. It will not be resolved in the foreseeable future. This deep, long-term crisis is reflected in a number of ways – the persistently high unemployment rate, periodic high inflation, the balance of payments deficit and government debt. There is no indication that any of these trends can be basically reversed. Reagan’s current $200 billion budget deficit will only compound the country’s economic problems.
The weakness of the U.S. economy is more dramatically understood in comparison with other major Western capitalist powers. U.S. economic power has declined significantly in comparison to Europe and Japan. The U.S. industrial base is considerably older than that of its capitalist allies. The number of U.S. research and development personnel has been falling, while its competitors have increased theirs at a rapid rate.
What complicates the recovery of U.S. monopoly capitalism is that the domestic economy has become more intertwined with foreign business than ever in the past. U.S. capital export continues at a high rate as U.S. corporations find higher profit rates outside the country, which contributes to the low level of capital investment in the country. At the same time, many foreign companies and banks are investing in the U.S., attracted by the large U.S. domestic market and favorable currency exchange rates. Ten years ago, there were few foreign banks operating in the U.S. – today there are over 400, having $230 billion in assets or 15% of the total in the U.S. This means that a growing share of the domestic economy is actually being run by foreign capitalist interests.
In addition, foreign trade now plays a much larger role in the economy than in the past. Before World War II, only 5% of the U.S. gross national product involved imports and exports. In 1970 it was 11%, and today it is over 22%. International commerce accounts for one-sixth of all domestic jobs and one-third of all profits. Forty percent of U.S. farm production is sold overseas. U.S. reliance on imports of key raw materials such as tin, bauxite (for aluminum) and petroleum are well-known.
The implication of all this is that, on the one hand, the fortunes of U.S. business are much more bound up with the world capitalist economy, and on the other hand, the U.S. domestic economy (market, production, finance) is increasingly penetrated by foreign capitalist concerns. Efforts to revitalize U.S. monopoly capitalism will have to contend with these factors, and they will undoubtedly have a decisive influence on foreign policy.
The weakness of the domestic economy has direct bearing on foreign policy. As one example, the Reagan plan to increase military spending will be seriously hampered by the economic difficulties. How will militarization be financed? While military spending will boost some business sectors, this spending will compete with demands from other areas of the economy, not to speak of major sections of society.
The weak economy also will mean that international business affairs will loom larger in foreign policy concerns. Already we see this trend in the conflicts between the U.S. and Japan and Germany over imports. The arrests of Japanese businessmen for theft of industrial secrets became a national political issue last year”.
No matter how grand a vision presidents and their advisers may have about the U.S. role in the world, the continuing weakness of the domestic economy will be a principal problem for U.S. foreign policy-makers. As one of the leading financiers of Wall Street said, “We cannot be strong abroad if we are weak at home.” (Joint Economic Committee of Congress of the U.S., March 30, 1981. Prepared statement by Peter G. Petersen, “Reagan’s Economic Plan,” p. 18)
• Sharpened conflicts among capitalist groups in the U.S. Different sectors of the capitalists in the U.S. often have conflicting opinions over foreign policy, but the economic problems and weakened U.S. position are aggravating these conflicts. These in turn will create dissension and instability in foreign policy. We cite only two recent examples.
In response to foreign competition, steel, auto and textile manufacturers have called for some sort of protectionism from imports. This trend is trying to reverse the historical U.S. emphasis on free trade and open markets, a policy that mainly benefited U.S. imperialism when it possessed the most powerful industrial base in the world. Important sectors still oppose protectionism (for example, agribusiness) as they fear trading partners will erect trade barriers of their own and restrict U.S. exports. Various forms of this protectionism vs. anti-protectionism struggle will affect U.S. foreign policy and also become hotly debated domestic issues as the industrialists try to appeal to workers and communities hard hit by the recession to support demands for import restrictions.
There are divisions over domestic and foreign policy concerns among the capitalists, such as over the questions of refugees, undocumented workers and immigration policy. Some ruling forces have favored Indo-chinese refugee resettlement in the U.S. and a relatively liberal immigration policy up to now. They also did not place a great deal of attention on undocumented workers, except during certain well-publicized campaigns.
A major reason for these policies is these capitalists fear the potential danger of destabilization and social unrest in critical regions such as Thailand, Malaysia and Mexico if there were a big crackdown on those entering the U.S. Some capitalists oppose immigration restrictions because they profit from the cheap labor of undocumented workers. Other ruling forces however focus more on the domestic cost of resettlement or on the social conflicts which have been whipped up by demagogues. They favor more restrictive policies. This is an example of conflict between foreign and domestic policy interests that will also sharpen in the coming years.
• Conflicts between economic and political interests. Jimmy Carter’s grain embargo against the Soviets due to the Poland crisis was extremely unpopular with agribusiness, although it was favored by those in the ruling class who felt the U.S. must do something to counter Soviet involvement in Poland. But Reagan, despite his belligerent anti-Sovietism, lifted the embargo due to pressure from grain dealers.
Another example of this conflict between economic and political demands is the U.S. attitude towards the Middle East. Washington has had a longstanding commitment to Israel, but due to some major economic considerations, the U.S. is slowly trying to shift its policies to accommodate the Arab oil-producing states.
• U.S. domestic social unrest and discontent. The U.S. ruling class cannot ignore American public opinion in the conduct of foreign policy. Especially since the war in Indochina, the American public has become more sensitive and aware of foreign policy issues. This factor was taken into account in areas such as Africa, where the U.S. Congress stopped proposed U.S. involvement in the Angolan civil war. U.S. domestic opinion is currently restraining possible escalation of U.S. intervention in El Salvador.
But in addition, there is widespread domestic concern with unemployment and the declining standard of living. There is tremendous resentment against Reaganomics and the arms race. Many oppose the nuclear arms race out of peace concerns, of course, but also because the arms race is such a blatant waste in the midst of crumbling cities and the general decay of society. The U.S. imperialists cannot ignore these sentiments. It is therefore much more difficult for the U.S. to launch foreign intervention and adventures today than in the past. Strong popular support for a bilateral nuclear weapons freeze is having an impact on the arms positions of both the U.S. and the Soviets.
In conclusion, what are the prospects for U.S. imperialism and its foreign policy? What can we expect in the coming years?
There are three broad prospects for U.S. foreign policy in the next decade:
• The most likely is that the U.S. will continue along the general course of the past several years, a course marked by inconsistency, vacillation and ambiguity in the pursuit of its imperialist interests. Weaknesses in the economy, competing interests, inability to affect events abroad all will combine to destabilize foreign policy.
The U.S. will not be paralyzed. It still has great resources and power and will continue to try to play a dominating world role. Its foreign policy will not crumble in shambles, but seen in a strategic perspective, it most likely will be unsettled over a protracted period of time.
• Another path is that Washington will draw inward, emphasize domestic concerns and reduce its international ambitions and overall role. It would try to act more in concert with its close capitalist allies, strive for accommodation with the Soviet Union once again, and blunt its bullying of the third world. This path could be characterized as coming to the recognition of the need to develop a foreign policy commensurate with the reduced capabilities of U.S. power.
But this approach would be very difficult to adopt, considering the mass of U.S. interests that remain overseas and the deep-seated superpower orientation of the ruling class. It might only be able to come about as part of resurrecting the domestic life of the country, as part of a new major federal intervention in the economy and society under a reform guise.
• The third possibility is that the U.S. will adopt an extreme chauvinist and aggressive policy, connected to a major turn towards racism and repression domestically. This would be a desperate attempt at fascism to solve U.S. imperialism’s ills.
This would be the most extreme alternative for U.S. imperialism and would come about if influential elements in the ruling class felt they had no other way to turn and if domestic and foreign conditions allowed it.
At this time, these three paths are not mutually exclusive. We can see already tendencies in each of these directions today.