The US Empire: Global Imperialism and Internal Colonialism By James Petras Al-Jazeerah, CCUN, March 25, 2018

 

Introduction

            The dynamic of contemporary US imperialism is built around two structural features:  the drive toward global military expansion, conquest and occupation backed by the intensification of exploitation of domestic labor and pillage of the domestic economy.

            In this paper we will challenge the notion that overseas economic exploitation has transferred income to ‘buy-off’ the domestic working and middle classes, in the course of consolidating imperial hegemony.

            We will argue that the empire is no longer based on robust overseas growth but rather the empire today is a costly and declining proposition.

            We will proceed to outline the costs of militarized imperialism and the relative economic decline of the empire.

            We will then turn to analyzing how the US imperial state has resorted to financing the empire though its regressive tax, regulator and budgetary policies.

            We will conclude by refuting the notion that the US turn to protectionism will revive the US economic empire.

Empire:  Past and Present

            From the end of WWII to the end of the Cold War, the US empire was driven by the wealth and power of the multi-national corporations to extract and transfer profits to the domestic economy and sustain a ‘trickle’ down effect on a partially unionized labor force, and to fund its military guardians of global capital.

            The US dominated world trade, and led global investments, as well as acting as the leading force creating the international financial institutions (World Bank, the IMF).  Free trade and neoliberal doctrine flowed from the ‘Washington Consensus’ designed  to induce the denationalization and privatization of  targeted national economies around the world.

            US empire  further ensured global ascendance with the demise of the USSR, the absorption of the ex-Soviet client states and the pillage of the Russian economy.  Washington declared that the world had become a ‘unipolar state’, in which the US was the sole dominant power, free to invade, conquer and exploit any rival. 

            To sustain and further its global military dominance, Washington declared a world-wide ‘war on terrorism’ which accentuated the military dimensions of ‘unipolarity’.  The US empire was redefined through its military capacity to overthrow independent regimes, to carry on multiple wars, and to simultaneously fund overseas economic conquests while maintaining dynamic domestic growth.

            The empire builders pillaged Russia but failed to build a viable productive satellite.  Instead it poured billions of dollars into expanding NATO to Russian borders.  In contrast, Germany profitably incorporated the post-Communist economies into the European Union.

            The empire builders unipolar vision led them to endless billion-dollar wars, which did not finance themselves and reduced the US global economic presence as a source of profits.  The empire’s pursuit of the unipolar world, through global wars ‘on terror’, led to a highly militarized imperial state which greatly reduced US economic competitiveness and the exponential growth of its commercial deficit.

            In response to military demands for state financing, MNC sought lower taxs, cheap labor and lurative overseas markets.  De-industrialization was accompanied by the financialization of the US economy.

            The imperial state was a two-faced Janus:  militarized foreign policy and financialized domestic policy.  Military induced deficits and multiple and inconclusive wars led empire builders to make further demands on the economy. 

            Financialization led to a deep economic crisis in 2008/09 and a decade long trillion-dollar bailout.

            The financial-military empire was a cost not a benefit to the economic empire.  Imperial empire builders found few overseas ‘partners’ willing or able to share the costs.  The empire builders turned to intensifying the exploitation,of the domestic labor market, reallocating the federal budget and reducing taxes for economic elite.  The US redefined empire building as exploiting the domestic economy to militarize the empire.

            Washington debated two parallel options:  one based on further internationalizing the US economy hoping to regain markets and capital; the second option was turning the US into a ‘fortress Americana’ by creating walls around a protectionist state and preparing a ‘trade war’.  Both options depended on lowering labor costs, concentrating wealth and reducing labor and welfare.

            President Obama opted for ‘internationalization’, linking economic and military imperialism.  President Trump chose a protectionist-militarist strategy designed to bring overseas capital to the US domestic market through military and trade threats in    order to intimidate adversaries.  Both approaches were basically premised on domestic colonialism.

The Elements of Internal Colonialism

            The run-up to the financial crises of 2008-09 and the trillion-dollar bail-out led to the pillage of the state and deepened the financialization of the economy.  The large-scale transfer of profits from domestic manufacturing to overseas’ markets and to banking, real estate and insurance (FIRE) sectors contributed to the growing polarization of the economy and deepening social inequalities.

            Theses shifts in the economy were accompanied by regressive changes in the tax burden:  the multi-nationals avoided hundreds of billions in taxes through overseas tax havens (FT 3/12/18 p. 1) and paid less domestic taxes as the effective tax rate declined (FT 3/12/18 p.3.

            National states competed to lower taxes for the elite which led to reducing welfare spending; deregulation of the banking and energy sector led to the rise of speculative capital.

            Global capital grew at the expense of the domestic economy; the growth of financial capital reduced the income of the working and middle class; costly imperial wars increased the commercial deficit; low paid, temporary employment in the services became the norm.

            Health and environmental conditions deteriorated.  Empire building intensified and domestic ‘under development’ to finance a rising commercial deficit and a declining empire.  Popular dissent grew.

            The imperial state faced two choices to further marginalize the majority or to turn toward a protectionist policy which in effect sought to direct mass discontent outwardly toward  economic and military competitors.

            The Democrats sought to blame Russia, the Republicans pointed to China and  Iran. 

            The election of Trump led to the adoption of a policy of deepening deregulation, increasing the concentration of wealth, massive tax reductions for the MNC , a trade war for local capital , a protectionist policy for labor unions  and a war policy to satisfy the ideological warlords.

            The Obama regime’s resort to military and financial imperialism based on internal colonialism had reached its limits. The Trump regime sought to externalize enemies,  first and foremost directing its “national imperialism” against China.

President Trump:  China and the Commercial Deficit

            The Trump regime backed by the Democrats sought to sustain at militarized imperialism by fabricating a Russian war threat in Syria, Ukraine, UK (the toxin spy caper) The Democrats promoted the Russian conspiracy to control the  US  presidential  elections.

            Trump sought to avoid facing the impending failure of its trickle down economic policy, by blaming China, of  unfairly exploiting the US via one-sided trade, investment and technology relations – all leading to large trade deficits.

            Contrary to Trump, the trade deficit has everything to do with the perverse economic structure and policies of the US, which its ruling elites   created .

            The US trade deficit is a result of the MNC moving to China and exporting back to the US.  US exports from China account for nearly one-third of the deficit.  Washington is unable and unwilling to coerce or attract the MNC to return to the US even with generous tax incentives.

            Secondly, the trade deficit is a result of growing US military spending in multiple and continuing wars, instead of increasing investment in export sectors.  In contrast, China increases its public investments in high growth export sectors which add  value and secure new markets.

            Thirdly, the US restricts exports of high tech and military technology to China to further the interests of the warlord economy, leading to the loss of markets and the ability to lower the deficits.

            Fourthly, the US restricts Chinese investments in sectors that would finance export industries that could rebalance trade relying on the fake argument of ‘national security’.

            Fifthly, US, MNC are allowed - receive incentives from the state- to retain 2.5 trillion dollars abroad in tax havens, thus reducing the capacity of the US to finance its export sector and ‘balance trade’ with China (and the rest of the world).

            Sixthly, the US accuses Beijing of insisting that US corporations which invest in China transfer technology.  This is a win-win situation:  US MNC reap profits, China gains know-how.  If the US invested their profits in constantly upgrading its technology it could continue to retain markets, and profits and its export advantages.

            In a word China is not ‘cheating’ it is learning and growing; it’s up to the US to do the same, instead of taking profit and moving to  tax havens and  the financial sector.

            The US threat of a trade war against China will devastate US exports in technology, transport, agriculture and advanced industries, while undermining the domestic consumer  sectors.

            The net result will be the reduction of employment, income and trade.  The US will have to squeeze the domestic income to sustain the primacy of its military and financial elite – provoking greater domestic discontent.

            One thing is clear:  in the face of a trade war China will adapt to its global infrastructure investments and secure alternative trading partners – it will survive a trade war .

Conclusion

            US military and financial imperialism was a temporary and short lived success based on the demise of the USSR, and a mono-polar world, and the launch of the global war on terror .  With the military rise of Russia, and China’s dynamic economic growth, these short term advantages disappeared and all the vulnerabilities resounded.  Trillion-dollar bank bailouts and prolonged military losses undercut whatever temporary advantages existed.  The pillage of the domestic economy deepened domestic discontent. Trump style “national” imperialism increased profits but lost trade wars.

            A speculative economy, a plundered public treasury and a militarized empire cannot restructure the economy not even with trade war rhetoric and trillion dollar tax handouts.  Time is running out for President Trump; the economy is preparing to plunge and the voters are turning their backs.

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Why the UK, the EU and the US Gang-Up on Russia

By James Petras

Introduction

            For the greater part of a decade the US, the UK and the EU have been carrying out a campaign to undermine and overthrow the Russia government and in particular to oust President Putin.  Fundamental issues are at stake including the real possibility of a nuclear war.

            The most recent western propaganda campaign and one of the most virulent is the charge launched by the UK regime of Prime Minister Theresa May.  The Brits have claimed that Russian secret agents conspired to poison a former Russian double-agent and his daughter in England , threatening the sovereignty and safety of the British people.  No evidence has ever been presented.  Instead the UK expelled Russian diplomats and demands harsher sanctions, to increase tensions.  The UK and its US and EU patrons are moving toward a break in relations and a military build-up.

            A number of fundamental questions arise regarding the origins and growing intensity of this anti-Russian animus.

            Why do the Western regimes now feel Russia is a greater threat then in the past?  Do they believe Russia is more vulnerable to Western threats or attacks?  Why do the Western military leaders seek to undermine Russia’s defenses?  Do the US economic elites believe it is possible to provoke an economic crisis and the demise of President Putin’s government?  What is the strategic goal of Western policymakers?  Why has the UK regime taken the lead in the anti-Russian crusade via the fake toxin accusations at this time?

            This paper is directed at providing key elements to address these questions.

The Historical Context for Western Aggression

            Several fundamental historical factors dating back to the 1990’s account for the current surge in Western hostility to Russia.

            First and foremost, during the 1990’s the US degraded Russia, reducing it to a vassal state, and imposing itself as a unipolar state.

            Secondly, Western elites pillaged the Russian economy, seizing and laundering hundreds of billions of dollars.  Wall Street and City of London banks and overseas tax havens were the main beneficiaries

            Thirdly, the US seized and took control of the Russian electoral process, and secured the fraudulent “election” of Yeltsin.

Fourthly, the West degraded Russia’s military and scientific institutions and advanced their armed forces to Russia’s borders.

Fifthly, the West insured that Russia was unable to support its allies and independent governments throughout Europe, Asia, Africa and Latin America. Russia was unable to aid its allies in the Ukraine, Cuba, North Korea, Libya etc.

With the collapse of the Yeltsin regime and the election of PresidentPutin, Russia regained its sovereignty, its economy recovered, its armed forces and scientific institutes were rebuilt and strengthened.  Poverty was sharply reduced and Western backed gangster capitalists were constrained, jailed or fled mostly to the UK and the US.

            Russia’s historic recovery under President Putin and its gradual international influence shattered US pretense to rule over unipolar world.  Russia’s recovery and control  of its economic resources  lessened US dominance, especially of its oil and gas fields.

            As Russia consolidated its sovereignty and advanced economically, socially, politically and militarily, the West increased its hostility in an effort to roll-back Russia to the Dark Ages of the 1990’s. 

       The US launched numerous coups and military intervention and fraudulent elections to surround and  isolate Russia .  The Ukraine, Iraq, Syria, Libya, Yemen and Russian allies in Central Asia were targeted.  NATO  military bases proliferated.

            Russia’s economy was targeted : sanctions were directed at its imports and exports.  President Putin was subject to a virulent Western media propaganda campaign.  US NGO’s funded opposition parties and politicians.

            The US-EU rollback campaign failed.

            The encirclement campaign failed.

            The Ukraine fragmented – Russia allies took control of the East; Crimean voted for unification with Russia.  Syria joined with Russia to defeat armed US vassals.  Russia turned to China’s multi-lateral trade, transport and financial networks.

            As the entire US unipolar fantasy dissolved it provoked deep resentment, animosity and a systematic counter-attack.  The US’s costly and failed war on terror became a dress rehearsal for the economic and ideological war against the Kremlin ..Russia’s  historical recovery and defeat of Western rollback intensified the ideological and economic war.

            The UK poison plot was concocted to heighten economic tensions and prepare the western public for heightened military confrontations.

            Russia is not a threat to the West: it is recovering its sovereignty in order to further a multi-polar world.  President Putin is not an “aggressor” but he refuses to allow Russia to return to vassalage.           

            President Putin is immensely popular in Russia and hated by the US precisely because he is the opposition of Yeltsin – he has created a flourishing economy; he resists sanctions and defends Russia’s borders and allies.

Conclusion

            In a summary response to the opening questions.

The Western regimes recognize that Russia is a threat to their global dominance; they know that Russia is no threat to invade the EU, North America or their vassals. Western regimes believe they can topple Russia via economic warfare including sanctions.  In fact, Russia has become more self-reliant  and has  diversified its trading partners, especially China, and even includes Saudi Arabia and other Western allies.

The Western propaganda campaign has failed to turn Russian voters against Putin.  In the March 19, 2018 Presidential election voter participation increased to 67% ..Vladimir Putin secured a record 77% majority.  President Putin is politically stronger than ever.

            Russia’s display of advanced nuclear and other advanced weaponry has had a major deterrent effect especially among  US military leaders, making it clear that Russia is not vulnerable to attack.

            The UK has attempted to unify and gain importance with the EU and the US via the launch of its anti-Russia toxic conspiracy.  Prime Minister May has failed.  Brexit will force the UK to break with the EU.

            President Trump will not replace the EU as a substitute trading partner.  While the EU and Washington may back the UK crusade against Russia they will pursue their own trade agenda; which do not include the UK.

            In a word, the UK, the EU and the US are ganging-up on Russia, for diverse historic and contemporary reasons. The UK exploitation of the anti-Russian conspiracy is a temporary ploy to join the gang but will not change its inevitable global decline and the break-up of the UK.

            Russia will remain a global power. It will continue under the leadership of President Putin .The Western powers will divide and bugger their neighbors – and decide it is their better judgment to accept and work within a multi-polar world.

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