Theory & Science (2006)

ISSN: 1527-5558

Imperialism in the Twenty-First Century

Paula Cerni MPhil

AFFILIATION: Independent
ADDRESS: 1752 NW Market Street #109, Seattle, Washington, 98107, USA.

Imperialism and Political Economy

The US invasion of Iraq, advertised as a forceful attack on global terror and tyranny, was supposed to mark the rise of a stronger and more assertive American imperialism. Few expected that, three years after its March 2003 launch, US forces would have failed to take control of the country. Today, as casualties mount, ethnic conflict intensifies and instability spreads to neighbouring nations, the Iraq war has become an emblem of American weakness abroad, just as the aftermath of hurricane Katrina has starkly illustrated American weakness at home.

Could we then be witnessing, as Giovanni Arrighi (2005) has argued, the closing act in the story of US hegemony? In this article, I draw from the classical Marxist theory of imperialism to support Arrighi’s contention, while offering an alternative account of America’s hegemonic decline, and reaching different political conclusions. My argument is that such decline originates in the changing relations of production within the world economy; in particular, in the de-industrialisation of the US and the rise of new global centres of production. The rivalries created by these trends are likely to spark major conflicts in the coming years, potentially culminating in hegemonic war.

Of course, neither American imperialism nor warnings about its impending collapse are new phenomena. Through both formal colonies and protectorates, and informal spheres of influence, the US has been an imperialist nation – in the classical Marxist sense - for over a century. Since the end of WWII, she has also been the globe’s imperial hegemon. American decline was diagnosed as far back as the 1950-53 Korean war, and even earlier (Hanson, 2005). After the 1970s experiences of Vietnam, Watergate, the breakdown of Bretton Woods, and a major recession, the perception of a faltering America became commonplace. Soon, historian Paul Kennedy declared military overstretch a sign of US economic decline, forecasting that the world’s future great powers would be sited in the Pacific region (Kennedy, 1987). But the demise of the Soviet Union and the 1990s economic boom seemed to usher in a new age of US preeminence. It was not to last; with the new millennium, America was once again beset by economic, social, political and military troubles.

A strong case can be made that this decades-long trajectory of decline and recovery demonstrates the historical resilience of American hegemony. Yet, even the most resilient of superpowers cannot go on forever. As Joseph Nye remarks, ‘the United States has been compared to the Roman Empire, but even Rome eventually collapsed’ (Nye, 2002: xi). Since history does not stand still, Pax Americana must eventually come to an end. But to what extent can we predict when and how? Is America falling as we speak? Or is this a premature judgement, overly influenced by the temporary blunders of an incompetent Administration in the most powerful empire the world has ever known?

Such questions on the fate of the American empire have reawakened an interest in the theory of imperialism. In this respect, Leo Panitch’s and Sam Gindin’s recent criticism of Marxists for having abandoned this theory is important, while their attempt to reconstruct it not as an extension of political economy, but of a theory of the capitalist state, is problematic (Panitch and Gindin, 2004). If the concept of imperialism has languished in the last few decades, it is partly because political thought has been uprooted from the material undergrowth of human history. Under the influence of postmodernism, even Marxist accounts have tended to address ideological, cultural and institutional themes as autonomous from modes of production. In the field of international relations, this trend is best exemplified by the neo-Gramscian definition of hegemony as the interplay of consent and coercion, which reduces materiality to either an effect or a resource of state power (Bieler and Morton, 2003).

The economic basis of imperialism is the substance of Nikolai Bukharin’s classical Marxist polemic against Karl Kautsky, appropriately entitled Imperialism and World Economy, and written on the eve of WWI (Bukharin, 1972 ; see also Lenin, 1968). Bukharin agrees with Clausewitz that war is the continuation of politics by other means; but, against Kautsky’s over- political view, he adds that politics is, in turn, the continuation of a specific mode of production. Accordingly, it is productive power that determines political and military might, and not the other way round; and it is the changing balance of productive forces between national sections of the world economy that makes war inevitable in the imperialist epoch. If these arguments are still correct, political economy should be at the heart of the debate about American decline and its consequences for the global order.

By exploring the articulation of economics, politics, and culture, the recent debates on globalisation have already begun to reclaim the role of political economy (Held and McGrew, 2003). If it is to renew itself, the Marxist theory of imperialism needs to engage with this important discussion, just as it needs to re-examine its own theoretical roots. But this project of theoretical renewal cannot proceed without a detailed empirical knowledge of today’s world economy. Classical Marxism defines imperialism as the highest stage of capitalist development, a stage that capitalism itself cannot transcend (Lenin, 1968). Yet imperialism, a part of human history, also has a history; in the last hundred years, it has neither disappeared nor remained unchanged. Consequently, a historical materialist theory of imperialism for today needs to start from an analysis of contemporary world economic relations.

The New Global Relations of Production

A first step in that analysis would be to assess America’s position in today’s global economy. The most commonly-used indicator in such assessments of national economic performance is Gross Domestic Product (GDP), which shows the US share of the world economy down from 27.8% in 1951 to 21.4% in 20011. As Table 1 indicates, America’s annual GDP is now smaller than that of developing Asia:

Table 1:Selected Shares of World GDP, 2004

Developing Asia


United States


Euro Area




Middle East and North Africa


United Kingdom






Source: IMF (2005) Table A, p.198

We should note here that the use of GDP statistics in comparisons of economic performance has been widely questioned, particularly by proponents of ‘well-being’ or ‘quality of life’ indicators (Gadrey, 2004). Such indicators, however, tend to measure the consumption of wealth rather than its production, and cannot either confirm or deny suspicions that the American nation is living beyond her means. But neither, by itself, can GDP, which is only a snapshot of a nation’s total sales plus the cost of her public services in a given period of time (on a ‘value-added’ basis). GDP tells us nothing about the underlying sources of national prosperity, or about the relations within and between national economies. A more sophisticated understanding can be derived from Marx’s original conception of material production as the basis of economic life, a conception also underpinning Bukharin’s definition of the imperialist world economy as ‘a system of production relations’ (Bukharin, 1972: 26).

There are specific historical reasons why most Western Marxists have gradually abandoned this materialist conception as part of the more general turn away from political economy. In particular, the intellectual demotion of material production reflects the real shift towards service sectors in Western economies2. The dominance of these ‘post-material’ sectors – a symptom, as we will see, of imperialist decay - has fostered the illusion that they constitute independent engines of growth3. Thus, there has been no convincing Marxist critique of Daniel Bell’s (1999) and Joseph Nye’s (2002) argument that the IT revolution can bring about a new American century. Indeed, many left-leaning authors have expressed their own fascination with a Western-based capitalism that, instead of a material relation between people, appears as a collection of immaterial flows of information and dematerialised personal relationships (Lash, 2002).

Yet, in the case of the US, something very material has accompanied the creation of a ‘post-material’ economy where 83% of non-farm employees work in services4. Today, America can no longer produce enough goods to fund her own massive physical requirements, and, as a result, she is running an unprecedented trade deficit in merchandise. Growing from the 1970s, this deficit reached a record $665bn in 2004, almost 6% of GDP5. Vice-president Dick Cheney has famously declared that ‘deficits don’t matter’; but, if economic power is the power to produce, and not merely the power to consume, a merchandise deficit of this nature and magnitude is a clear symptom of hegemonic decline.

The merchandise deficit signals America’s turn from global producer to global consumer of commodities. It is, so to speak, a Marshall Plan in reverse, whereby US material requirements are increasingly provided for by the rest of the world. For example, 40% of the furniture sold in the US is now made in China (Hughes, 2005), while net imports from all countries now account for 60% of the household furniture market (Society of American Foresters, 2005). Accordingly, America’s domestic furniture industry is contracting sharply, with the number of workers in the non-upholstered wood sector decreasing from 112,000 in 2000 to 66,500 in March 2005, and the amount of hardwood lumber produced and processed in the US now falling in absolute terms (Society of American Foresters, 2005).

US primacy after WWII rested on a vast domestic industrial capacity6. It is the erosion of this capacity, and the growing dependence on the productive labour of others, that underlies the long-term structural decline of American power identified by Immanuel Wallerstein (2004). GDP figures, which include non-productive sectors of the economy, do not reflect the full extent of this decline, and actually conceal the mechanism whereby foreign production now underpins much of America’s domestic economic growth - as was once explained in Asia Times Online:

A $2 toy leaving a US-owned factory in China is a $3 shipment arriving at San Diego. By the time a US consumer buys it for $10 at Wal-Mart, the US economy registers $10 in final sales, less $3 import cost, for a $7 addition to the US GDP (quoted in Frank, 2005).

At present, only 14% of the US’s GDP is accounted for by manufacturing, compared to a world average of 16%7. But even if we isolated the manufacturing portion of GDP - Manufacturing Value Added - we could still be overestimating America’s real productive power in this sector, due to the role of offshoring. Usually understood as a transfer of jobs from high - to low-wage countries (Burke et al, 2004), offshoring transfers value from the latter to the former by exploiting the cost of production gap arising from cheaper labour, economies of scale, and technological advances.

In itself, this is not a new phenomenon. Marx notes how nineteenth-century capitals invested in foreign trade yielded super-profits

because, in the first place, they come in competition with commodities produced in other countries with lesser facilities of production, so that an advanced country is enabled to sell its goods above their value even when it sells them cheaper than the competing countries. To the extent that the labor of the advanced countries is here exploited as a labor of a higher specific weight, the rate of profit rises, because labor which has not been paid as being of a higher quality is sold as such (Marx, 1909: 278-279).

However, when Marx was writing, the most advanced production facilities were located in Western nations, whereas today they are increasingly sited in the industrialising economies of the developing world. Western capitals are still able to cream off a substantial part of the super-profits these economies create, but in a far more parasitic manner. A computer, sports shoe, or manufacturing component produced cheaply and efficiently in Eastern Europe, Asia or Latin America can be sold in the West above its original value, due to the difference in conditions of production alluded to above. The super-profit this generates is distributed, in varying proportions, between developing-nation producers, Western manufacturers who use such components in their own production processes, and unproductive entrepreneurs predominantly based in the West – brand marketeers, retailers, financiers, and other service capitalists. The real contribution of Western manufacturing to GDP is overstated in official statistics principally because of these transnational transfers of value through imports of components.

The predominant global value chain approach to understanding transnational economic networks obscures this process of global value transfer, because it either underestimates the difference between the production of value and its capture, or it simply assumes that value is actually added at every link of the chain (Gereffi, 2005). Other contributions misrepresent even more the nature of the new relations of production between the West and ‘the rest’. One example is an influential paper by Peter Hill (1999), which declares the concepts of productive and unproductive labour obsolete. Hill classifies the West Coast software and film industries as producers of intangible goods; while he labels goods assembly subcontractors as service providers. The reality is quite different, for the ‘post-material’ economy thrives by appropriating value physically produced elsewhere. Since, increasingly, such value production takes place in non-Western locations, while Western economies become oriented towards information and other service activities, Hill’s interpretation not only inverts the real material relations between producers and consumers; it also supports the claims of Western unproductive capital on the wealth created by the productive workers of the developing world.

Almost a century ago, Lenin (1968) showed that, in the imperialist epoch, capitalist growth shifts the geography of production away from the established powers, which become over-ripe to the point of decomposition. In the process, some peripheral areas become new productive centres and rise to more prominent positions in the international order8. David Harvey’s (2003b) concept of the ‘spatio-temporal fix’, which Arrighi (2005) also adopts, appears to refer to the economic aspects of this process. However, Harvey’s Lefebvrian characterisation of this fix as the ‘production of new space’ obscures the new material relations being formed between people across the world. What we are witnessing today is not the production of new space, but the creation of vast new spaces of production. This rephrasing allows us to specify who exactly is producing what for whom - the emerging industrial workforces of the developing world are producing an increasing proportion of the immense material wealth consumed and accumulated in the West. Thus, the post-industrialism of America and other Western economies is an effect of the simultaneous acceleration and redistribution of global productive forces.

This development corresponds to Lenin’s (1968) notion of imperialism as both the most advanced and the most decayed stage of capitalism, a stage characterized by increasingly parasitic economic relations. But a new feature of imperialism since Lenin’s time is that the United States, which was then the world’s paramount space of production, and remained so for several decades, is now rapidly becoming the globe’s most parasitic nation.

America ’s economic parasitism is essentially a material relation between people. It is founded on the appropriation by American capitalism of large part of the surplus-value created in the world’s new centres of production. But this parasitism manifests itself in a variety of economic forms, some of which conceal to a large extent this relation. We have already touched on a few of these forms – the predominance of unproductive sectors in America’s domestic economy, the transnationalisation of its remaining productive operations, and the scale of the merchandise deficit. To this list we can add America ’s transformation into the world’s largest borrower. Currently, the US needs to borrow about $6bn each working day in order to fund its deficits plus its foreign investments (Bergsten, 2005). Arrighi believes that such high levels of debt signal ‘a blockage in the mechanisms that, in the past, facilitated the absorption of surplus capital in spatial fixes of increasing scale and scope’ (Arrighi, 2005: 47). But what they actually signal is the rapid shrinking of America’s productive capital. It is the surpluses created by Asian and other productive capitals that are supporting America’s increasingly unproductive economy. As Andre Gunder Frank writes, it was this Asian capital, ‘and not some "new economy" non-existent productivity rise that created the American prosperity of the Clinton 1990s’ (Frank, 2004). We should add that behind the influx of Asian capital into the US has stood the rise of Asian production.

Since relations of production between countries underpin their financial and political relations, it is no surprise that the Chinese government has become one of America’s largest foreign creditors. Chinese lending to America is not a purely financial phenomenon; rather, it is the financial expression of the relation between producer and consumer. China lends so that America can buy Chinese and other Asian products; China then amasses dollar-denominated surpluses, which the Chinese central bank lends back to America by purchasing US Treasury bills. This allows the cycle of production, consumption, accumulation and lending to start over. But there is an apparent mystery about this operation. As America’s trade deficit widens, the dollar falls, wiping off much of the value of the dollars and Treasury bills held by China. The dollar’s decline in the last few years already amounts to massive debt default, as Arrighi (2005) points out9. As and when the renminbi revalues relative to the dollar, China effectively writes off a sizeable portion of this debt. The mystery is - why do the Chinese authorities carry on funding America’s deficits, knowing that the dollar-denominated assets they buy are worth less than their face value, and are likely to devalue even further?

Michael Hudson (2003) believes the answer lies in America’s ‘monetary imperialism’. For him, ‘foreign nations have simply capitulated to the dollar’s free lunch at their own expense’ ( Hudson, 2003: xii), fearing worldwide financial collapse if debts are called in. Undoubtedly, this fear is real and well-founded. Yet, there is no such thing as a free lunch, particularly when the bill is for billions. The reasons why China collaborates in this arrangement become less mysterious once material production is placed at the centre of economic life. China’s paper losses are also real physical gains – the construction of one the world’s most powerful industrial infrastructures10. Thus, America’s irrecoverable debt to China is actually a form of Chinese industrial dumping, promoted by American capitalism’s own decay. It is the price China pays for the enlargement of her own productive base and the deterioration of her main rival’s. America, while benefiting from this arrangement in the short term, is likely to be the long-term loser. For the moment, the relative weight of her domestic market means she can receive virtually for free a vast amount of Asian-produced wealth. But as China builds a stronger domestic economy of her own, at the centre of the world’s most affluent continent, America will no longer be able to exact this right of seigniorage.

So far in this article, we have discussed how surplus-value created in newly industrialising nations is transferred to de-industrialising ones through transnational production networks, foreign trade, and international finance. But this global transfer of value, a central feature of today’s world economy, also has important political implications. Most importantly, the fact that different capitals benefit from it does not preclude conflicts between them. On the contrary, says Bukharin, ‘the more vigorous the expansion of the productive forces of world capitalism, the more intensive the growth of foreign trade, the sharper is the competitive struggle’ (Bukharin, 1972: 84). In this struggle over the appropriation of surplus-value, the economic advantage will naturally be with capitals in those nations where the forces of production are being developed in the most dynamic way. But, since such nations tend to occupy a secondary place in the current international order, competition between old and new producers will inevitably be expressed in ideological, political and military terms too. Thus, far from flattening the world, as Thomas Friedman (2005) believes, globalisation is introducing new and sharper global conflicts of interest.

Hegemony, Decline and Inter-Imperialist Rivalry

Instead of exploring these effects of the changing worldwide relations of production, many recent radical analyses have echoed the characterisation of today’s international capitalism offered by capitalism’s own ideologues. The concept of ‘neo-liberalism’ has focused criticism, but it has also become a barrier to investigation. Quite clearly, just because nations claim to champion free trade, it does not mean they practise it; in fact, under imperialism, the economic role of the state is greater than at earlier stages of capitalist development. Today, official agencies routinely manipulate the economic climate through monetary management; use diplomacy, foreign aid and war to pursue economic ends; and intervene in day-to-day domestic economic life through education, regulation, subsidies, tax incentives, procurement, provision of public transport and infrastructure, and a host of other policies. High levels of government spending everywhere show how far today’s capitalist societies are from embracing the free market.

Classical Marxist theory maintains that a global free market cannot exist under imperialism, because the world capitalist economy is divided up into competing spheres of influence (Bukharin, 1972; Lenin, 1968). Therefore, what every nation and empire aspires to is to nurture their own economy where necessary, while opening up everyone else’s as much as possible. This is no laissez faire, but a system of monopolistic competition. Obviously, the most materially productive nations are the least in need of tariff protection; but only in so far as they have already secured a monopoly in production. A historical counter-example to this would be British free trade policy, which held until the 1930s in spite of acute industrial decay; but Britain’s economy was protected in other ways, most notably through the international monopoly of credit. In the end, the erosion of this monopoly provoked the switch from free trade to a system of imperial preferences.

Significantly, in today’s international forums, developing countries are some of the most vocal advocates of free trade, though only in those sectors where it benefits them. We saw this at the failed WTO meeting in Cancún in September 2003, when the G20+ group, including China, India, Brazil, and South Africa, called on the North to reduce their agricultural trade barriers. Such episodes indicate that certain developing nations are becoming economic powers in their own right, increasingly able to stand for their own interests against those of their more advanced, and therefore more decayed, rivals.

Thus, in the epoch of imperialism, liberalisation in some areas and at certain times goes hand in hand with protection in others; both policies can be tools of monopolistic competition. In the American case, alongside the liberalising policies of successive governments, protectionist tendencies re-asserted themselves powerfully from the 1970s, when de-industrialisation began to speed up. Today, American protectionism flares up aggressively in particular branches of the economy, as illustrated by the steel tariffs set up in 2002, and by recent disputes with China over textiles and intellectual property rights. Tellingly, the Bush administration’s move towards regional and bi-lateral deals with small countries – a policy it accurately terms ‘competitive liberalisation’ -, is often a reaction to Chinese initiatives (Zoellick, 2004) . Protectionist impulses are also strong in the EU, which has recently launched a new industrial policy (Bowley, 2005). China, with her advantageous position in export manufacturing, has been opening up her borders to foreign trade. This of course is a mechanism for enhancing the competitiveness of Chinese industry, while the Chinese state promotes and nurtures Chinese enterprise in a thousand other ways. All these examples illustrate the monopolistic combination of economic and political interests described by the classical Marxist theory of imperialism (Lenin, 1968).

Evidently, the severe loss of productive capacity, and the rise of strong economic rivals, have not, by themselves, put an end to American hegemony. Hegemonic decline is an irregular and decades-long process, in which the reduction of productive power precedes - because it causes - the final political and military downfall. Here the study of British history is both instructive and necessary, for it provides the only other example of hegemonic decline in the imperialist era. Britain lost its status as the workshop of the world around the 1880s, but kept the trappings of empire much longer. Indeed, British imperialism – as distinguished from empire - was a consequence of productive decay. The following passage, which I quote at length, elucidates this connection between British industrial decline and imperialist tendencies at the end of the nineteenth century, while evoking interesting parallels and contrasts with America’s present condition:

The period during which Britain can be described as the workshop of the world is open to a variety of definitions. In this book it is taken to lie roughly between the financial crisis of 1825 and the onset of what is known as the Great Depression in 1873, or in round figures, between 1820 and 1880. That is not to imply that by the last quarter of the century British economic supremacy was at an end; on the contrary, in some important respects it grew to a new peak of grandeur. It rested on the world-wide services Britain provided through her shipping and credit agencies and the mutually advantageous relations she had establis hed with her dependent empire. By these means she was able to meet the gap between her exports and the imports which poured into her free market and thus to provide funds for the lubrication of the wheels of the world’s commerce; but she no longer held a virtual monopoly of the supply of manufactured goods, and two vital components of her export trade consisted of raw materials: the products of her coal mines and the re-exported products of Australian ranches. Britain as the pioneer of the world industrial revolution had given place to Britain the world’s banker, trader, and collier, and a competitor with other industrial giants whom she herself had materially assisted to adult stature (Chambers, 1968: 1).

In spite of this erosion of industrial competitiveness, Britain emerged out of WWI victorious and in command of an expanded empire. In the 1930s, with the US in the grip of her Great Depression and in apparent isolationist mood, few would have predicted the imminent collapse of British hegemony. This, however, is exactly what happened. WWII quickly confirmed the US, with most of the capitalist world’s productive capacity, as the new hegemon - although arguably the British ruling class did not feel the full impact of this global power shift until the 1956 Suez crisis. Even today, the formal remnants of the British Empire - organisations such as the Commonwealth - still exist, and Britain remains an imperialist power, albeit a secondary one.

Like Britain a hundred years ago, America at the dawn of the twenty-first century still feels and acts as the world’s ‘lone superpower’. Her transformation into the globe’s greatest economic parasite has undermined, but not yet overturned, her leading political position. If the British example is anything to go by, American hegemony will only truly cease to be when a new industrial superpower is able to demonstrate far superior economic, political and military strength. The ultimate demonstration of this superiority is a major war. For, as Lenin asks, ‘once the relation of [economic] forces is changed, what other solution of the contradictions can be found under capitalism than that of force?’ (Lenin, 1968: 238).

Unfortunately, while recent radical analyses have increasingly recognised that America’s power is becoming economically unsustainable, they have not seriously discussed the threat of inter-imperialist war. Indeed, many of them consign imperialist rivalries to the distant past, supplanting them with notions such as that of a ‘transnational capitalist class’ (Robinson, 2004). Others expect that American hegemony can be maintained by financial, military and institutional power alone, or hope that political dialogue can somehow bring about a multipolar world, where market shares are peacefully renegotiated by a ‘collective imperialism’ (Amin, 2003).

Such a world is impossible in the epoch of imperialism. The notion that capitalist elites can transcend structural economic conflicts through peaceful political means contradicts both materialist logic and the historical evidence. The British experience shows that hegemonic decline unleashes the most violent disputes between rival powers. This is because, as Bukharin and Lenin insist, inter-imperialist war is not a mere policy option, but the necessary expression of a deeper, irreconcilable clash of economic interests. Today, this classical critique of Kautskyan ultra-imperialism needs to be urgently re-issued, if past mistakes are not to be repeated. Those who thought that the interpenetration of world capitalism would prevent WWI were wrong; those who then argued that WWI would teach imperialists that global war was too costly and destabilising, and could even lead to socialist revolution, were disproved by WWII.

The temporary conditions that shaped Pax Americana are coming to an end. Such periods of hegemonic or inter-imperialist peace should be understood, as Lenin (1968: 255) suggests, as truces between major wars, phases of fast and relatively unimpeded capitalist development, never completely peaceful, that prepare the ground for new and more extensive confrontations. Hence, we should fully expect that, as America’s productive supremacy wanes, other economic powers will assert themselves, leading to increased political rivalry and eventually to major military conflicts. In these circumstances, critiques of American policy that call on her powerful rivals to become more ‘independent’ are bound to feed anti-American nationalism and militarism in Europe and Asia. Imperialism is an intensification of capitalist competition. It cannot be reduced to an abstract ‘Empire’ (Hardt and Negri, 2000), nor to one American empire (Boron, 2005); instead, it is a dynamic relation between several specific and competing empires (Lenin, 1968: 235).

The current wars in Iraq and Afghanistan have already punctured the illusion of a transatlantic alliance and undermined the EU project, revealing new antagonisms between former ‘allies’. They have also heightened tensions between these older powers and new ones such as Iran, Russia and China. Thus, wars can exacerbate and bring to the surface underlying trends, transforming old dynamics into new ones. For example, WWI was mainly a war over European supremacy, but it exposed and intensified the weakness of all European powers vis-à-vis a newcomer – the United States of America. WWII started as a resumption of European hostilities, but full American and Japanese involvement turned it into a very different war, more reflective of the real balance of global economic forces. Its outcome was America’s triumph over both the old European and the nascent German and Japanese empires.

This American leapfrogging over old European rivalries in the first half of the twentieth century might help us anticipate the conflicts of the twenty-first. The disagreements between the US and Europe - particularly, at present, France and Germany - could become sharper. The coming together of European nations, if it happens, will not bring about a Kantian ‘perpetual peace’, as some expect, but a more aggressive alliance against outsiders11. Of course, divisions within Europe could well scupper such plans; but oft-heard dismissals of Europe as a military weakling underestimate the fluidity of the present situation. If, for example, Russia were to join the EU, or to make a separate alliance with Germany and/or France, a European military superpower would be instantly created12.

But while this rivalry between the US and Europe (and also Japan) is a central element of contemporary world politics, it is a rivalry between old, relatively declining empires. Europe’s challenge to American power is limited by demographic and economic decay, which integration and expansion will not necessarily reverse. Hence, we need to also consider whether any new emerging powers can leapfrog over these old rivalries, just like the US leapfrogged over German-British rivalry fifty years ago. Here China and India come immediately to mind. As these countries turn into great industrial powers, the size of their populations - 1.3 billion in China and 1.1bn in India, compared with under 300 million in the US - places them in a league of their own. The age structure of these populations is significant too, since the greying of Europe, Japan and America will not only undermine their productive bases, but also limit their capacity to sustain fit and healthy ground forces.

And even as we turn our attention to these two rising powers, we must not neglect others. Could a pan-Islamic bloc or caliphate, containing also about 1.3 billion people, and including the ‘new tiger’ economies of Indonesia and Malaysia, plus Pakistan’s, and perhaps Iran’s, nuclear weapons, eventually rival Russia, China and India13? Could a resurgent Latin America be galvanised around Brazil, Mexico or Venezuela? What new alliances are such emerging powers entering into, and with what consequences?

In a rapidly changing world, we need to ask such improbable questions, abandon the automatic assumption that China, India, Brazil, etc represent the impoverished and oppressed Third World, and start considering them as imperial powers in the making. History shows how quickly economic growth can create such powers. Compared to Britain, Germany had been, in the words of Lenin, a ‘miserable, insignificant country’ fifty years before WWI (Lenin, 1968: 255). The speed of Japan’s transformation from a feudal society into a leading imperialist nation was more astonishing still. And, of course, the United States was once a collection of English colonies, supplying raw materials to an industrial metropolis. Through policies such as Roosevelt’s Corollary to the Monroe Doctrine, America made good rhetorical use of her anti-colonial past for her new imperialist purposes. Today’s emerging Third World empires can quite easily do the same.

The Rise of China

Without a doubt, the most important of these emerging empires today is China. Harvey has already drawn attention to the country’s internal transformation and ‘huge modernization program’ ( Harvey, 2003a: 80). In addition, as is now widely recognised, China’s rise is revolutionising the entire world economy.

China accounts for a substantial and growing proportion of the globe’s material production. Since 1996, she has been the world’s largest producer of steel, a basic material for industry (Lardy, 2005: 124). Oded Shenkar claims that the Chinese already produce ’70 percent of the world’s toys, 60 percent of its bicycles, half its shoes, and one-third of its luggage’, as well as ‘half of the world’s microwave ovens, one-third of its television sets and air conditioners, a quarter of its washers, and one-fifth of its refrigerators’ (Shenkar, 2005: 2-3). Another author writes that

China has more than 160 cities with a population of 1 million or more. You can go to towns on the east coast of China today that you have never heard of and discover that this one town manufactures most of the eyeglass frames in the world, while the town next door manufactures most of the portable cigarette lighters in the world, and the one next to that is doing most of the computer screens for Dell, and another is specializing in mobile phones. Kenichi Ohmae, the Japanese business consultant, estimates in his book The United States of China that in the Zhu Jiang Delta area alone, north of Hong Kong, there are fifty thousand Chinese electronics components suppliers (Friedman, 2005: 117).

What appears, from a Western viewpoint, as a global dispersion of production networks, is, at the same time, a concentration of productive capacities in developing countries such as China. Offshoring on a global scale combines operations previously scattered throughout many countries into vast new production clusters, as the following extract shows:

Today, there are about 30,000 textile exporters in China. Foreign-invested and private Chinese enterprises now account for roughly four-fifths of textile exports. China’s one-stop-shopping approach, in which integrated factories with ready availability of raw materials handle spinning, weaving, dyeing, cutting, and sewing operations, is hard to beat. Plus, these factories have the additional benefit of access to efficient transport networks (Hughes, 2005).

Moreover, warns Shenkar, Chinese manufacturing is rapidly moving up the value chain, so that China is ‘fast becoming a player in capital-intensive products, such as motor vehicles, as well as in technology-intensive lines, some of which, like flat-screen TV, have conceivable strategic use’ (Shenkar, 2005: 17). Clyde Prestowitz notes that ‘ China has more semiconductor plants under construction or about to go into operation than America has’ (Prestowitz, 2005: 19). But it is perhaps the employment statistics that provide the most stunning measure of Chinese industrial capacity. A recent report estimated China’s manufacturing workforce in 2002 at 109 million, compared with 53 million for all of the G7 countries put together (Banister, 2005: 24)14.

Perhaps the most obvious global effect of China’s manufacturing pre-eminence is a radical change in patterns of foreign trade. With most of her production oriented towards export markets, China has become the world’s third largest trading nation, after the United States and Germany. But her foreign trade is growing much faster than her competitors’. Lardy observes that, between 2000 and 2003, US foreign trade grew by $17bn, while China’s grew by $377bn (Lardy, 2005: 123); and the OECD expects China to take the lead in global trade as soon as 2010 (OECD, 2005). Admittedly, it is likely that Chinese production will, as time goes by, re-orient itself more towards domestic markets. As Glyn (2005) points out, there is much room for internal growth in a country that is still relatively poor on a per capita basis. But the construction of a powerful home economy will not necessarily erode China’s exporting might. On the contrary, it will probably boost it further, developing her productive forces even more, and creating tighter and stronger monopolies. Shenkar provides an example of the monopolistic advantages China already derives from the size of her domestic market:

The lure of its domestic market enables China to require technology transfer as a condition for foreign investor entry, wringing unprecedented concessions. In the automotive industry, foreign firms such as General Motors agreed to establish research and development centers at a scope never before contemplated in a developing market. Not only did these manufacturers agree to transfer technology that is arguably close to their core capabilities, but they consented to do so in an environment with virtually no protection of intellectual property rights (IPR) and in parallel alliances never before seen: China is the only country in the world where domestic automotive makers maintain equity ventures with competing foreign partners, which makes it possible to learn “best practices” from both and end up with potentially more knowledge than either foreign party (Shenkar, 2005: 3-4).

Beyond her huge domestic market, China also benefits from strong economic and political synergies with other Asian nations. Expressed in the language of historical materialism, this amounts to the creation of a China-centred regional empire, founded on the cross-border combination of economic activities. In particular, China is becoming the hub of a vast Asian-wide production network , with especially close links to Hong Kong, Taiwan, Korea and Japan. Lardy states that ‘China has become a leading location for the assembly of a broad range of manufactured goods, mostly by foreign firms that have relocated their assembly activities to China from other sites in Asia. The parts and components that constitute these goods are purchased mainly from other Asian countries’ (Lardy, 2005: 126). Consequently, China runs trade deficits with many of her Asian partners, whose own domestic industries are increasingly dependent on the development of Chinese productive capacities. For instance, Chinese demand for Japanese ‘machinery and electrical machinery, metals, and precision instruments … has been so strong that it stimulated a revival of investment activity in these sectors in Japan’ (Lardy, 2005: 123); some even maintain that Chinese growth has single-handedly pulled Japan out of her long recession. In addition, ‘firms based in Hong Kong, Taiwan, Korea, and Japan … account for about two-thirds of China’s inward FDI’ (Lardy, 2005: 128) – and China has now overtaken the US to become the world’s largest FDI recipient (Long, 2005)15. Thus, the growth of Chinese-based production integrates and develops Asian capitalism as a whole, stimulating many kinds of commercial, financial, political and military linkages throughout the continent; in turn, China’s rise rides on and amplifies previous waves of Asian growth, concentrating and centralising capital and political power in the region.

China ’s growing diplomatic influence in Asia is illustrated by her Taiwan and North Korea policies, both of which have the potential to ignite dangerous confrontations with the US. Less high-profile, but just as significant, is the formalisation of this influence through a series of treaties with other Asian countries. For example, an agreement signed in 2002 with ASEAN means that China will share a free trade area with Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand by 2010, and with Cambodia, Laos, Myanmar and Vietnam by 2015. ASEAN is already China’s fourth-largest trading partner. A similar arrangement in North East Asia, linking China, Korea and Japan, is currently being discussed. And, following the 1997 financial crisis, many Asian governments have expressed renewed interest in the formation of an economic bloc for the whole of East Asia, a plan much disliked by a US weary of China’s growing power. In Central Asia, China is the leading member of the Shanghai Co-operation Organisation (SCO), an alliance set up in 2001 with Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. China has already used her influence in this forum to press for the closing of American airbases in the region, apparently succeeding in Uzbekistan (Boot, 2005a). Covering economic, energy and security issues, the SCO could soon be expanded to include India, Iran, Mongolia, and Pakistan.

None of this means that China’s rise will be uniformly welcome across Asia. On the contrary, the same processes of fast-paced development that are boosting Chinese economic and political power are also likely to generate intra-regional rivalries. For the moment, China is trying to forestall these by carefully cultivating relations with other major Asian powers, especially India and Russia – for example, in 2004 she settled a long-standing border dispute with Russia, on reputedly generous terms (Sieff, 2004). Nevertheless, the growth of Asian rivalries is to be expected, as are attempts by China’s rivals to foster and exploit them - just as China exploits EU-US differences, as we have seen, for instance, with the recent dispute over arms sales.

Moreover, since China is becoming the workshop of the world , her emerging empire necessarily reaches beyond Asia to the entire globe . For example , the need to feed a vast and growing productive capacity compels Chinese capital to source raw materials all over the world. On the basis of information from the Asian Development Bank, Lardy observes that ‘China is now the world’s largest consumer of copper, tin, zinc, platinum, steel, and iron ore; the second largest consumer of aluminum, petroleum, and lead; the third largest consumer of nickel; and the fourth largest user of gold’ (Lardy, 2005: 124). As Lester Brown notes, this explosive growth of Chinese productive consumption has worldwide geopolitical implications:

The new industrial giant’s need for access to raw materials and energy is shaping its foreign policy and security planning. Strategic relationships with resource-rich countries such as Brazil, Kazakhstan, Russia, Indonesia and Australia are built around long-term supply contracts for products such as oil, natural gas, iron ore, bauxite and timber. These strategic ties it is forming are welcomed in countries like Brazil as a counterweight to US influence (Brown, 2005: 42-43).

Thus, while the rapid development of Chinese manufacturing is boosting the productive capacity of global capitalism, and hence the worldwide demand for raw materials, it is also sharpening national competition over those materials, even where there is no immediate demand for them. For, under imperialism, the great powers are under constant pressure to secure access to supplies, if only to prevent their competitors from doing so first. This, at least in part, is what lies behind the recent price hikes in oil, and behind the cut-throat economic disputes and political and military turmoil in Central Asia, Africa, Latin America, and the Middle East .

At the micro-economic level, too, evidence of China’s entry into the great power game can be found in the budding overseas operations of Chinese firms, encouraged by the Chinese Ministry of Commerce’s ‘Go Out’ strategy. According to one commentator, ‘the Chinese government has been preparing the top 100 to 150 companies to go overseas and expand … The government wants to use this as a testing ground, to see how well the companies stand up to international competition’ (Barboza, 2005). Recent high-profile cases include Lenovo’s $1.75bn takeover of IBM’s home computer business; TCL’s acquisition of Thomson’s television business; and CNOOC’s bid for Unocal, later withdrawn. This international projection is, admittedly, still a fairly new development for Chinese corporations; but, as they build up larger operations, their capacity to engage in such activities, and their need to do so, is sure to increase.

The logic of imperialist competition is that China, on course to become the world’s largest economy, will strive for political and military hegemony. In many ways, her pursuit of global power is already under way (see Kurlantzick, 2005). But this does not imply the existence of some sinister plan drawn up by the Chinese leadership; it is simply a manifestation of the same impulse that drives every firm, every industry and every nation to do whatever it takes to win in the competitive struggle with others in the imperialist epoch. And in this struggle, the new Chinese bourgeoisie, like all other bourgeoisies in the history of imperialism, is certain to exploit the full might of the state, including military force.

Already, China has the world’s largest armed forces in terms of manpower. Although much of its weaponry is outdated, Chinese economic success gives the People’s Liberation Army plenty of scope for re-tooling and modernising. As one would expect, China’s leaders have declared their foreign policy peaceful and harmonious; but Chinese military power has already been publicly identified as a major threat by the Pentagon (US Department of Defense, 2005). The threat, however, does not come from Chinese military power per se, or from hostile attitudes inside the Pentagon; it derives from the fact that, under the conditions of imperialism, a declining hegemon and an emerging one cannot come to terms with each other through peaceful means.

Capitalism, a system based on private property of the means of production, inevitably creates violent social conflicts and wars; imperialism sharpens those conflicts, rendering wars much more brutal, extensive and frequent. In this epoch, the most destructive of those wars are fought between the most advanced and richest nations, for the re-division of the world. Today, the Chinese state is concentrating into its hands much of the political power of Asian capital, the most productive in the world. The classical Marxist theory of imperialism suggests that such a disruption of the global balance of forces will eventually set off major wars. David Harvey is surely right to doubt that the US can simply accept a new era of Asian hegemony; as he puts it, ‘it is unlikely that the US will go quietly and peacefully into that goodnight’ (Harvey, 2003b: 77). Even the possibility of a direct military confrontation between the US and China, ostensibly over Taiwan or North Korea, is now being publicly discussed in establishment circles (Brzezinski and Mearsheimer, 2005; Huntington, 1998: 313-316; Kaplan, 2005; Lieberthal 2005); the rest of us cannot afford to ignore it.

Imperial Decay and the Nation-State

We are now in a better position to address the issue that preoccupies Panitch and Gindin (2003) – the role of the nation-state. The logic of my argument so far is that this issue also needs to be investigated from the perspective of political economy, and not in an abstract way that is divorced from the specific material conditions of our time. A historical materialist theory of the state should be able to explain how specific political forms arise out of the development of contemporary capitalism.

Since capitalism is disorganised, uneven, and founded on social divisions, it cannot do away with borders, armies or national currencies, no matter how globalised it becomes. What capitalist development does do, however, is to replace one particular configuration of national forces with another, redrawing some national boundaries and destabilising, or strengthening, some state apparatuses at certain points in time. Hence it brings about not the demise of the nation-state, but the demise of some specific nation-states, simultaneously with the strengthening of others, and the creation of new ones.

Material development speeds up under imperialism. A fast-changing global economic environment, in conditions of generalised and ever sharper competition, compels many players to break away from previous political arrangements, and to combine with others for strength. Bukharin (1972) shows how the rapid development of productive forces in the period leading up to WWI caused both the internationalisation of the economy, and the formation of stronger, expanded imperialist nation-states. Today, almost 100 years later, the specific interplay of globalising and nationalising tendencies is necessarily different; but the tendencies themselves are still with us.

In addition to shaping the international role of the state, imperialism also affects its domestic functions. Lenin’s concept of imperialist decay, which we have already discussed, should help us understand why16. Decay, as we have seen, allows advanced de-industrialising economies to live off the productive labour of newly industrialising ones. This necessarily alters the relations between domestic capital and labour. In the more advanced and decayed nations, we observe the dissolution of working class communities (Kirk, 2003) and, as noted by Arrighi (2005), the devastation and obsolescence of many human habitats; the parallel increase in white-collar, public sector and service employment; the bribing of large sections of these workforces through the super-exploitation of immigrants and of labourers in overseas territories; and the growth of a class of rentiers or ‘coupon-clippers’, whose speculative activities fund idle, leisurely lifestyles. Politically, argues Lenin, these trends generate reaction, chauvinism and racism amongst the population; while, simultaneously, they bring about discontent, alienation, economic crisis, corruption, authoritarian government and war – tendencies that can potentially sharpen and politicise underlying class conflicts (Lenin, 1968).

In the new industrial powerhouses of the developing world, imperialism also transforms domestic class relations, but in a different way. There, the parasitic nature of today’s global economy creates even more severe difficulties for the population, who experience the uprooting of peasant communities; the formation of new super-exploited proletariats; and highly unequal patterns of development. But, at the same time, and as Lenin anticipated, imperialism has modernised many developing nations, raised their overall living standards, democratised their political systems, and generated a new sense of national mission.

Here we can contrast the recent anti-EU votes in France and Holland, and the difficulties in drumming up support for the Iraq war in Britain and the US, with the recent show of mass Chinese nationalist feeling against Japan, or with the passionate support for Islamic nationalism and identity in the Middle East and beyond. At a time of hegemonic conflict, such political differences between older and emerging powers can be decisive. Imperialist war requires massive popular support, of the kind that can convince millions of people to risk and sacrifice their lives. The post-industrial nation-states, with their ‘democratic deficits’ and decaying industrial infrastructures, are unlikely to sustain such levels of support for prolonged and difficult lengths of time.

Hence, for reasons that are at once military, political, economic, and demographic, decay compels the advanced imperialist nation-states to re-create themselves. This might involve policies to rebuild industrial sectors on a new basis, for example through the employment of cheap immigrant labour, or through the incorporation of lesser industrialising nations, or parts of them, into regional spheres of in fluence, and even into newly expanded national territories17. Alliances and mergers between advanced countries, whether economic, political, or military, are further mechanisms for imperial renewal. Such interplays of de- and re-industrialisation, of decay, expansion and rebirth, constitute national crises, processes whereby new nation-states grow out of old ones. If successful, this process can temporarily transform stagnating nations into larger and more dynamic entities. The EU provides the clearest current example of such a project, involving both the intermeshing of older, more advanced nations, and the expansion of their periphery18. Another example is America’s forging of closer relations with Canada and Mexico through NAFTA.

At the same time, however, these processes of imperial expansion and rebirth generate their own problems. Employing immigrants in the manufacturing sector and in menial service jobs, or using them to create a large reserve army of labour, polarises society and creates domestic unrest. Another difficulty is the possibility of revolt in any annexed or peripheral territories, which can lead to breakaway movements and the creation of new rival, independent nation-states. Yet another is the exacerbation of existing rivalries, as imperialist powers become stronger, and therefore more threatening to each other. The ultimate engine for re-industrialisation, inter-imperialist war on a global scale, also entails the risk of historic defeat and humiliation. For the winner, however, the rewards can be immense. As was the case with WWII, such a war can usher in a new era of accumulation based on novel types of industry, bringing wealth and glory to a new or reconstructed hegemon.

Given this link between imperial decay, re-industrialisation, the nation-state, and war, Harvey’s (2003b) suggestion that American capitalism re-directs its surpluses towards the rebuilding of industry is deeply flawed, even if American capitalism was actually producing those surpluses - it produces deficits instead. For, in the intensely competitive conditions of a global economy that is already divided up into spheres of influence, re-industrialisation can only take place through protectionism at home and expansion abroad, both policies guaranteed to exacerbate international conflict. Harvey’s call for a new ‘New Deal’ in Europe and America is similarly problematic. His argument that such a policy could provide an alternative to the ‘spatio-temporal fix’ echoes J. A. Hobson’s view, a century ago, that redistribution of wealth within Britain could absorb excess savings and rein in destructive imperialist tendencies abroad (Hobson, 1988). This argument is as incorrect today as it was a hundred years ago, because it overlooks the fact that the older imperialist nations are undergoing processes of acute economic decay. Such nations can hardly redistribute domestic income, when they are producing a diminishing portion of global wealth and competing over profits with younger and more dynamic economies. It is precisely for these reasons that attempts to ‘buy off’ their domestic populations, even to maintain existing living standards and meagre privileges, involve the intensification of their most rentier and parasitic tendencies - the super-exploitation of immigrant and peripheral productive labour through the mechanisms discussed above. Quite clearly, the consequences of such a New Deal would be division, reaction, and more, not less, war - just as they were with the original New Deal, aspects of which paved the way for WWII19.

The notion of decay also explains America’s recent shift towards a more direct and aggressive type of imperial rule. Some historians have wondered why, after 1945, America did not step into the role of colonial power she was forcing Britain and France to vacate. One answer might be that she did not need to, given her overwhelming productive primacy at the time. America’s formal mechanisms of global hegemony were initially imposed not so much on the colonies, as on her defeated rivals – dividing Germany, framing Japan’s constitution, keeping troops in both. This left the US relatively free to deal with the rest of the world on the basis of her economic weight, using proxies for global policing, and intervening militarily only when directly challenged by communism and/or Third World nationalism.

De-industrialisation and the rise of powerful new rivals have drawn to a close this era of confident and relaxed American domination. It is economic decay and political weakness – not, as has been argued, unchallenged ‘unipolar’ arrogance – that is driving the militarisation of US domestic and foreign policies. Thomas Friedman’s (1999) disturbing comment that ‘without America on duty, there will be no America Online’ reveals the practical relationship between America’s wars and her much-vaunted information economy, a relationship that has gone unnoticed by many radical political economists. Whoever happens to be sitting at the White House, isolationism and pacifism are not options for a declining America. On the contrary, her parasitic dependence on the world will drive America in a more belligerent direction, aimed at securing privileged access to the world’s new centres of production, and preventing the rise of a new hegemon. It is for this reason that the US is already positioning herself to confront China in the Pacific (Cody, 2005). The Iraq war proves that overwhelming military force by itself does not ensure victory; but force is one of the few strong cards still available to a declining US.

A Political Conclusion

Any materialist analysis of the world economy and its connection with political and military trends is necessarily provisional. After all, we are examining the changing, living reality of social history. Those of us who grew up in the Cold War years have seen historical change wipe from the slate trends and ideas that once seemed all-important. Like the Cold War, the passing of American hegemony is also a specific historical event, arising out of transitory circumstances. Hence, to understand this event, we need to know as much as possible about contemporary conditions.

But this does not require us to forget the historical record of imperialism or the political and theoretical achievements of anti-imperialists. The real-life experience of confronting a world war drove Bukharin and Lenin to develop an empirical understanding of global economic relations, and with it a theory of imperialism. Their valuable insights were lost under the global order imposed, through devastating force, by the winners of WWII. The people of Dresden, Hiroshima, Russia, Vietnam, the Middle East, and many other places, paid a heavy price.

That order, however, is now passing. Together, the end of the Cold War and of Pax Americana are bringing about, as Harvey (2003a: 83) suggests, an unexpected time of potential and hope. We have before us the chance to start afresh, to create a new global alternative to chauvinism and war, and to uphold the principles of human solidarity. If we are moving into an era of increased imperialist rivalry, as this article suggests, that will be the main challenge of the twenty-first century.


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1 Figures are derived from Maddison (2003). Like those on Table 1, they are calculated using purchasing power parity measures (PPPs). The advantages of this measuring method are briefly explained in Maddison (2005).

2 In this article, ‘services’ is used as a short-hand for ‘unproductive services’. A portion of what is commonly referred to as ‘services’ are productive activities in the Marxist sense, but this portion is quite small and has been set aside for the purposes of this article. The distinction between productive and unproductive capitalism is a contested one, even within Marxist circles (Mohun, 2002). However, this distinction plays a key role in Lenin’s analysis of imperialist parasitism and decay, a process that reduces the proportion of workers employed in basic industries, particularly in the most advanced nations (Lenin, 1968: 244-245). The rise of service capitalism can be broadly understood as a further development of this tendency.

3 ‘I was searching for software, brainpower, complex algorithms, knowledge workers, call centers, transmission protocols, breakthroughs in optical engineering – the sources of wealth in our day’ (Friedman, 2005: 4).

4 According to the US Bureau of Labor Statistics, of the total 133.5m non-farm employees in 2005, 111.3m worked in service-providing sectors. Table B-1 of the Employment Situation Release. Accessed online May 17, 2006.

5 Imports accounted for 21 percent of US domestic supply of goods in 2004; for manufactured goods, the percentage was 25.4 (Smith and Lum, 2005: 26).

6 ‘Sixty percent of the world’s manufacturing production was located in the US in 1950’, according to Harvey (2004).

7 Figures are for 2003, obtained from UNCTAD, Handbook of Statistics Online, Table 7.3, Accessed May 17, 2006.

8 ‘Capitalism is growing with the greatest rapidity in the colonies and in overseas countries. Among the latter, new imperialist powers are emerging (eg, Japan)’ (Lenin, 1968: 239).

9 On a trade-weighted basis, the dollar has fallen by 18% since February 2002, according to UNCTAD (2005a: III).

10 Karl Beitel (2005: 176) writes that ‘the explicitly stated goal of the Chinese government is the development of a nationally-owned, world-class car production complex over the next ten years. If this establishes the basis for the development of an advanced domestic capital-goods sector, it will mark the advent of China’s emerging as a leading global competitor to the US, the EU and Japan’. China is already the world’s third largest car market, and fourth largest producer of cars (Lum and Nanto, 2006: 29).

11 ‘Were all of Europe to unite, it would not yet signify “disarmament”. It would signify an unheard of rise of militarism because the problem to be solved would be a colossal struggle between Europe on the one hand, America and Asia on the other’ (Bukharin, 1972: 139-140). In the twenty-first century, an alliance of Europe and America against Asia, or of Europe and Asia against America, are more likely.

12 An alliance between Russia and Europe, or Greater Europe, was suggested by President Putin in a speech delivered to the German Bundestag (Putin, 2001).

13 Both the left and the right tend to underestimate the degree of development in the Islamic world. In his useful blog of comment on the Middle East, Juan Cole writes: ‘Max Boot, who thinks Middle Easterners are just Filipino peasant villagers circa 1902 - poor, illiterate, unconnected and politically naïve -exemplifies the basic Neocon fallacy … People can't be occupied so easily once they are urbanized, industrialized, literate, connected by modern communications, and politically aware. This is why Boot and Wolfowitz did not anticipate a long-term guerrilla war in Iraq, or how savvy and effective it would be. They really think they are Lord Curzon dealing with backward WOGs’ (Cole, 2005) . Samuel Huntington recognises that the Islamic Resurgence ‘was stimulated and fuelled by the oil boom of the 1970s, which greatly increased the wealth and power of many Muslim nations and enabled them to reverse the relations of domination and subordination that had existed with the West’ (Huntington, 1998: 116).

14 China also has, according to the International Labour Organisation, one quarter of the planet’s economically active population (reported in Francis et al, 2005: 15).

15 In 2004, China was host to 1,529 new greenfield FDI projects, compared with 578 for the US, according to UNCTAD (2005b, Table A.I.2, p.257).

16 Interestingly, this concept is absent from most contemporary definitions of imperialism. For example, Harvey sees imperialism as ‘a diffuse political-economic process in space and time in which command over and use of capital takes primacy’ ( Harvey, 2003b: 26) . But command over and use of capital ‘takes primacy’ in all epochs of capitalism; glaringly missing from Harvey’s definition is the notion of imperialism as a specific phase of capitalist development.

17 Recent neo-conservative proposals to extend American citizenship to any foreigners willing to fight in the US Army are a variation of this mechanism (Boot, 2005b).

18 EU peripheral expansion goes beyond formal membership. Mark Leonard talks of a Eurosphere, a ‘belt of eighty countries covering the former Soviet Union, the Western Balkans, the Middle East, North Africa, and Sub-Saharan Africa [which] accounts for 20 percent of the world’s population’ (Leonard, 2005: 54).

19 In turn, the New Deal entailed the continuation of some US WWI policies (Leuchtenberg, 1966).