In its attempts to regain its recently lost imperial influence, the U.S. is slowly doing to itself what it wishes it could do to Russia, China, Iran, and its other geopolitical rivals: isolate itself from other countries to a point where it will economically implode to an even greater extent than it has already.
Amid the current campaign from the Biden administration's imperialist consent-manufacturing machine to convince us that Washington is on its way back to dominance, that everything is sure to get "back to normal," it can be hard to see such a grand shift occurring. In August of last year, after the cold war with China had developed towards an essentially formal hybrid warfare effort, socialist columnist Ben Hillier voiced reasonable concerns about the fact that Washington remains an extremely powerful geopolitical force:
The Coalition of the Willing in 2003 will not be repeated in the growing confrontation with Beijing. Indeed, don't be surprised if we see a renewed US hegemony within a growing anti-China bloc. That group need not be even a plurality of states. The often overlooked part of the Cold War was that the formally nonaligned and neutral bloc represented a greater number of states, and people, than either of the Western or Eastern alliances. But the Western bloc under the US didn't need the formal allegiance of all these underdeveloped economies, many of which became dollar dependent anyway--the key imperialist states combined in the anti-Soviet alliance were enough, in the end, to crush the Eastern bloc.
Hillier's thesis was that since China has integrated into global markets so much, if the U.S. can turn enough other economically powerful countries towards joining in its efforts to economically strangulate China, they'll succeed in this due to China's dependence on economic cooperation with these countries. Hillier also pointed out that Washington is still the dominant force in international finance, and therefore has a great deal of leverage in the economic war on China: "more than 60 percent of the world's currency reserves are denominated in dollars, more than 40 percent of cross-border payments are dollar-based, much of the international debt markets is dollar based, and as the pandemic has again shown, when there is a major international crisis, global capital flight has one overwhelming destination: US Treasury bonds."
But as Mao said, the forces of counterrevolution are at the same time real tigers and paper tigers. We shouldn't deny that they're capable of inflicting gargantuan damage, but we also shouldn't treat their power as if it will last forever. It's technically possible that in the coming years we'll see the U.S. empire recover from its losses of the last several decades to lead an expanding anti-Chinese coalition, as Hillier fears. But given the trends we've seen so far in this new cold war, it's more likely that the opposite will occur.
Firstly, there's the fact that simply out of the desperate need to get their economies going again after this last year's COVID-19 depression, the European powers are largely defying Washington's preferences and strengthening their economic ties to China. In December, the E.U. reached an economic deal where China granted unprecedented market access to E.U. investors, and where the E.U. established clear guidelines for Chinese state-owned enterprises.
Plus, not every state within the E.U. is even willing to commit to NATO's economic-warfare designs; Germany is beginning to become at odds with Biden, and with its regional neighbors, by pushing forth with a pipeline partnership with Russia. This defies the Washington anti-Russian sanctions agenda, and by extension the agenda to isolate the pro-Chinese bloc. These developments make the idea of a European decoupling from China highly implausible, and therefore make Hillier's worries about China getting crippled by U.S./NATO economic strangulation far less likely to be realized.
Secondly, while powerful economic actors within China's hemisphere like Australia and India have largely joined Washington in waging economic war against China, since Hillier's essay was published China has made great steps to keep most other countries in the Indo-Pacific from taking similar actions, and even gotten Australia to join the approach of these countries to a certain extent.
In November, 15 Asian and Pacific countries, including the imperialist countries south Korea, Japan, Australia, and New Zealand, signed the Regional Economic Comprehensive Partnership--a trade deal that will facilitate investments between these countries while lowering the already low tariff rates among them. This is not a sign of an imminent economic betrayal on the part of the wealthy powers that surround China.
Thirdly, Washington's financial dominance isn't going to continue for too much longer. In fact, if the recent trends in the health of the dollar continue, Washington's theoretical ability to leverage its currency towards crushing China will be gone a year from now. Economist Stephen Roach predicts that by the end of 2021, the value of the dollar will fall by 35%, a claim he recently defended by writing that:
The push-back on my negative dollar call was all about TINA--There Is No Alternative. In a follow-up commentary, I countered that claim, attempting to make the positive case for the Chinese renminbi and the euro, while also giving a nod to precious metals and even crypto currencies... China's yuan has appreciated about 4% since last June and should continue to strengthen as China leads the post-covid global recovery.
Especially if Biden chooses to impose more sanctions on Russia over the manufactured Navalny outrage, when this anticipated shift in the strength of global currencies occurs, the U.S. will be in a worse financial position than ever; the U.S. has already beenweakening its own currency through its relentless sanctions against its rivals.
These are the kinds of times we're living in: just six months after a columnist seriously worried about Washington managing to create an imperial coalition that crushes the PRC like how the imperialists crushed the USSR, the geopolitical power balance has shifted towards a point where such a scenario no longer really seems plausible.
And now, as Rebecca Gordon of The Nation observed last month, "The U.S. empire is crumbling before our eyes," with the consequences for the empire's core being severe:
The gulf between rich and poor widens by the day to unprecedented levels. Indeed, as millions have descended into poverty since the pandemic began, the Guardian reports that this country's 651 billionaires have increased their collective wealth by $1.1 trillion... our federal priorities virtually take food out of the mouths of children to feed the maw of the military-industrial complex and the never-ending wars that go with it. Even before the pandemic, more than 10% of US families regularly experienced food insecurity. Now, it's a quarter of the population... One problem with such corruption is that it undermines the legitimacy of government in the minds of the governed. It makes citizens less willing to obey laws, pay taxes... Oh, and the barbarians? They are not just at the gate; they have literally breached it, as we saw in Washington when they burst through the doors and windows of the center of government.
The longer Washington continues to fail to subdue rising rivals like Russia, China and Iran, or enact regime change in lost neo-colonies like Cuba, Venezuela, and Bolivia, the more its imperialism will be forced to turn inwards, and the more these internal destabilizing factors will be exacerbated. We're seeing this with the acceleration of austerity policies in the COVID-19 era, which Biden's reactive doubling down on militarism is reinforcing.
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