Crisis within the modern imperial system

November 27, 2023
Image: 'Philadelphia Press' 1898 cartoon 'Ten Thousand Miles from Tip to Tip'. Wikipedia (Public domain).

Marxist economist Claudio Katz is the author of various books on contemporary capitalism and imperialism. Green Left’s Federico Fuentes spoke to him about the changing dynamics within global imperialism. This is the second in a two-part series. Read Part 1 here.

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In general terms, how would you understand the current dynamics within the imperial system?

The US remains the head of the imperial system. This means we must constantly examine the leading power when studying modern imperialism.

Assessing the state of the US can tell us, in large part, where the imperial system is heading. The main lingering enigma continues to be the scale of the country’s economic decline.

It is clear that the US finds itself mired in a serious and long-term structural economic downturn. The evidence for this is clear. It can be seen in the loss of its companies’ competitiveness and the certain degree of de-dollarisation occurring globally.

China is making important progress in its challenge for global domination, but the US is a long way from being defeated. For the moment, it has no answers to Beijing’s challenge.

I agree with those who distance themselves from predictions of the US economy’s inexorable decline. Its productive apparatus undergoes periodic recompositions, which while not restoring US supremacy counteract the idea of an irreversible decline.

More importantly, we should not view this global dispute as simply an economic fight. The US has engaged in large-scale military actions to influence the outcome of this struggle. That is why the imperial system is an indispensable concept when it comes to formulating accurate diagnoses.

The leading power’s main strategy is offsetting its economic decline through use of its military force across the globe. It resorts to this to try to rebuild its leadership, in the process raising the risk of war and, with it, the prominence of the military-industrial complex.

The military-industrial complex remains the main driver of technological innovation. The Pentagon has been crucial to the US-led information revolution. Innovations developed in the military arena are transferred to the civilian sphere to guarantee competitiveness.

But in trying to halt its economic decline through military action, the US has fallen into the trap of military hypertrophy. This only makes matters worse and undermines efforts to fix its struggling economy.

With productivity suffering, disputes between military and civilian sectors emerge, exacerbating unproductive spending. Contractors’ interests clash with those of corporations seeking profits.

Disagreements within the ruling class increase in regards to priorities; for example, over whether to blindly back Israel’s expansionist ambitions or seek to maintain Saudi backing for the US dollar’s global dominance.

Military gigantism magnifies economic decline and reproduces the tensions eroding US society.

The main issue lies in the qualitative difference between the current modern imperial system and its 20th century model. In the latter half of the 20th century, the US led a system that had a solid economic base. Today, the US is still in control, but it no longer has that same economic dominance. It seeks to compensate with increasing hostile actions.

What can you tell us about the role of China and Russia?

Let’s start with Russia. The traumatic period following the collapse of the Soviet Union is over, and capitalism now reigns supreme. This means Russia meets the first requirement for imperial status: a capitalist economy.

However, its economy is still weak and dependent on raw materials exports. It faces many challenges in terms of productivity and there is still a significant technological gap between its military and industrial sectors.

Russia’s status is influenced by the unique duality of being an oppressed and oppressor state. Russia is oppressed while also engaging in its own external interventions.

It faces a contradictory situation. On the one hand, the US, via NATO, aggressively harasses Moscow. Washington relentlessly pursues its aim of dismembering the former adversary.

The US has an aggressive obsession with Russia for an obvious reason: it is very hard to command the imperial system when confronted with an enemy with such a large arsenal of nuclear weapons.

But Russia is not just a victim of the imperial system. It is also a very active power, especially in its periphery, where it exercises a policy of domination and protection of shared interests with Moscow-allied elites.

Kazakhstan was an example of this. There, the Kremlin dispatched troops to protect business interests that it shared in common with its local partners.

Russia’s status needs to take into consideration its dual role as aggressor and victim.

To me, its current status is that of a non-hegemonic empire in gestation. Non-hegemonic because it operates outside the imperial system and in gestation due to the embryonic character of its new status.

The Ukraine war will, most likely, determine whether it consolidates its imperial status or faces a premature decline.

The concept of non-hegemonic empire in gestation allows us to differentiate Russia from other imperialist powers. It diverges from those placing Russia on the same level as the US. It also challenges the opposite notion that Russia is nothing more than a target of US aggression.

While NATO missiles encircle Russia, Russia continues to deploy troops to Syria and export mercenaries to Africa. Outside the imperial system and occupying a subordinate economic position, Russia seeks to assert its position within the global order through the use of force. This adds a layer of complexity when it comes to defining Russia’s status.

Characterising China is easier. Like Russia, China is outside the imperial system and a target of US aggression. But, unlike Russia, capitalism has not been completely restored in China.

Although capitalism is present, it does not control the Chinese economy or society. This unique quality explains the country’s exceptional development in recent years.

China succeeded in merging its old socialist foundations with market mechanisms and capitalist parameters. This combination enabled China to retain its surplus via a different system to neoliberalism and financialisation. China could not have achieved its remarkable development if it was just another capitalist country.

The main difference between China and Russia (and other Eastern European countries) lies in the political realm and has to do with the restrictions placed on the capitalist class. This sector undoubtedly exists and has an important weight, but it does not control the state or hold political power.

In China, we have a mode of production partly anchored in old socialist traditions and a bureaucracy that manages the state along very different lines to capitalists.

China’s foreign policy shares none of the characteristics of imperialist powers. It refrains from sending troops overseas, steers clear of military conflicts and exercises great geopolitical caution.

Beijing adopts a defensive approach, favours the weakening of its US rival, and prioritises pressure on Taiwan as a means to reaffirm the legitimate status of “One China”.

Characterising this new power in imperial terms is therefore incorrect.

This does not mean I agree with those who view China as part of the Global South. Beijing profits from the periphery, absorbs surplus value from the most backward economies and often establishes relations of economic domination with most of Asia, Africa and Latin America.

How do you view the status of smaller nations, such as Turkey and Saudi Arabia, that are now flexing military power beyond their borders?

There are some nations that have become increasingly important on the global stage. These regional players have had an unexpected impact.

There are two useful concepts that help explain the status of these countries.

The first is the notion of semi-peripheral economies introduced by Immanuel Wallerstein to denote that within the global division of labour there is more than just a few core economies with everyone else in the category of periphery.

There is also a group of countries in the middle. Unable to ascend to the top level, they do not face the same levels of powerlessness and dependency as more backward economies.

The other helpful concept is Ruy Mauro Marini’s notion of sub-imperialism. This refers to developing economies that are able to resort to force in order to challenge for regional dominance. The most recent example of such a conflict is the tripartite competition for economic dominance in the Middle Eastern between Turkey, Saudi Arabia and Iran.

A lot of diversity exists among these intermediate countries. Within the same group we have dependent economies (such as Argentina), and others (such as South Korea) capable of competing globally within certain industries but have little political influence.

There are also emerging economies that have a significant geopolitical presence but a weak economic base (such as Turkey), and countries that have an important influence on both terrains (such as India). It is a complex and unfolding situation that requires carefully, fine-tuned interpretations.

[Read an extensive version of this interview at]

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