Is the world ushered in by United States President Donald Trump a post-hegemonic world? Is “hegemony” a fruitful word to make sense of what is happening consequent to Trump’s order? To begin with, some of the essentials of Pax Americana have been put wayside. In one strike, the so-called essentials to global capitalism are shown to be as not, and can be thrown out of the imperial lexicon if they are no longer of service to the purpose of the global expansion of the bourgeoisie. >
Thus, the ground of defending democracy and human rights, and advancing freedom has been outright vacated. With no such ideological interventions, global power relations are now being reorganised around territorial expansion and annexation, and what appears as never-ending trade wars.>
While trade wars occupy the elite commentators’ minds, these trade wars are intimately linked to wars of territorial conquest and war against migrants. Israel’s territorial conquests, French assertion of its military presence in Africa and desire to step in the Ukrainian battlefields, militarisation of the South China Sea, the incessant bombing of Yemen and Syria – all these constitute the backdrop to the US moves on Panama Canal, Greenland, Canada, Gaza, and now the mineral-rich Ukraine and imminent conflict in the South China Sea. >
Yet, the extreme nationalisation of the United States is not such a break with liberal American foreign policy, but a sudden, massive and violent extension of what seemed a long-standing calibrated use of trade, financial and military modes for expansion. With trade embargos, sanctions, massive violations at will of human rights in countries like Iraq, Afghanistan and Libya, the longstanding US doctrine of exceptionalism appears now in a larger frame. Tariffs and trade wars will reorganise the boundaries of the world market and the global spaces of the economy. The risk of inflation and financial turmoil is small in comparison to the alluring prospect of new territories of rich minerals and control of vital logistical routes of global supply. >
Probe into new ways of combining industrial, financial and commercial capital is on as liberal-capitalist countries still grapple with the meaning of these violent recalibrations of policies. However, as indicated earlier, while elite commentaries in international financial journals harp on discontinuities, the continuities must not escape our eyes. >
It is still a “local,” kind of a violent tremor in a limited world called America’s Atlantic Lake (with exception of China embroiled in the “global” trade war) than a real topsy-turvy world war. In 2017, 20% of China’s exports went to the US; In 2023, 12.8% of China’s exports went to the US. With Japan, the figure came down from 5.96 % to 4.95%. In contrast, with India, all the hiccups took the figure from 2.85 % to 3.65%, while similarly, with Vietnam, it increased from 2.52 % to 3.94 %. >
Sanctions had already rejigged parts of the globe for more than a decade, for after all, what is new in this trade war as far as Russia, Iran and North Korea are concerned? When the Ukraine War broke out, western liberals cried that a new world war was imminent, and so is the situation today. A trade war against Canada and Europe is deemed as a war against all – a moment of denouement – but how much does, for instance, Senegal export to the United States? For the BRICS countries, again, the impact will be different. >
The reorganisations of the world market and political boundaries precipitated by Russia’s war on Ukraine extend beyond the two countries directly involved, yet they have proved to have a local and differential impact. The “rest” is not always following the “West.” It is thus more of a European convulsion than a global convulsion. On the other hand, these convulsions dp not even undermine Europe as a unified political and economic actor; its “strategic autonomy” is nothing but a rearmament plan, building a new military-industrial complex without any political vision, mirroring in ways the US agenda of increasing national military capacity, and that of fortifying borders and blocking migrants. >
The question of hegemony does not mean much in this context. Rather, one finds striking similarities between the situation of the late nineteenth century and the first few decades of the twenty-first century – when war, territorial conquest, scramble for raw material and inter-imperial rivalry, not the hegemony of a single imperial power, characterised the world. Not world system theorists, with Arrighi being the most sophisticated, but Lenin and Rosa Luxemburg will be the guides in these clumsy wars.>
In this sense, the war in Ukraine is an aberration for the order of Trump – an unnecessary conflict that does not suit the territorial grand plan of an empire that has to rejig its priorities, and hence needs to be buried. However, the Middle East is not Ukraine. Conflict in the Middle East is more complex and Gaza clearly is a central piece in this restructuring of global imperial policies, for persistent resistance in Gaza makes the US plan of appropriation of land, expulsions of populations, and transformation of the land strip into a great logistical place for business in Asia an imperative. >
Competition over infrastructural space for development, such as roads and new corridors, takes shape amidst violent conflicts. To remember again, is not the long colonial history of the modern world replete with simultaneous instances of mass killings, infrastructural developments and conquest of territories? The age of railways, telegraph poles and wires was also the age of colonial massacres. Think of India from 1850-1880s or Kenya, where the railway history began in the closing years of the nineteenth century with the construction of the Uganda Railway, which became the East African Railways and Harbours Corporation (EAR&H) after World War I, managing railways in Uganda, Kenya, and Tanganyika until 1977, and which coincided with rebellious peasant unrests culminating in Mau Mau uprising in the decade of 1950s.>
Trade war is, of course, complicated as it comes in the wake of the long reign of WTO, the global forum for “fair” trade management, and the relentless pressure from China for a nearly free trade regime with connectivity and free flows as the universal goal – a condition in which China with its low cost, advanced technology, and mass outputs will be the beneficiary while countries with high-cost production factors and trade deficit will be on the losing side. Yet there are no clear two sides in this war. >
The EU mimics the US in many ways. It has to pay the price to survive as a capitalist, and yet wants free trade relations with many other countries and regions. Things are even more complicated. Apple manufactures phones in India, but must send back in a hurry shipments of manufactured phones to the United States to beat the dates of imposition of new import duty rates. More often than not, movements of goods along the supply chains are out of sync with planned phases of the supply to the next points in the production process. The tariff war complicates the scenario beyond calculation. >
Historians speak of “polycrisis.” Statesmen repeat the phrase. Multiple shocks in the aftermath of Covid-19 have brought back the word. Adam Tooze has said, “The key things for me are economics, politics, geopolitics, and then the natural environment blowing back at us. And those four things, they do not reduce to a single common denominator. They do not reduce to a single factor. The polycrisis term has a real utility descriptively, because it is arm-waving. It is going, ‘Look, there’s a lot of stuff happening here all at once.’ And that precisely is what we’re trying to wrap our minds around.”>
Marxists, of course, thought long ago along this line. Marxists have argued that one crisis is not enough; it is combustible when it emerges in a situation of conjuncture; it spins around, meets with other unsettled phenomena and infects others only to be more delirious in turn – and there you have a situation of multiple crises, a conjuncture, whose outcome can go either way. Marxists like Lenin argued that war could be met with revolution, or at any rate with resistance, precisely at a point where the effects of the conjuncture are most severe, and hence resistance most acute and unpredictable. >
Hence, that world destiny doesn’t need to depend on how the US will respond – the “polycrisis” will set off activities in more ways than we can imagine. So, it will also depend on how others will respond. What we are witnessing now is only the initial, very first signs of a critical age with the typical outbreak of a trade crisis, which was, of course, expected by people like Tooze more than a decade ago. Far too long, the world kept on feeding the American economy, and even when the system appears dysfunctional, the Northern bourgeoisie minus the Trump order still wants the old way to continue by fleecing poorer countries and American labour, reinforcing the dollar, while the American capital will be incapable of producing goods and capital, except in a few areas.>
So, are we witnessing a grand depression setting in over this unhappy world or as suggested by many, the end of a hegemonic order? >
Let’s recall Giovanni Arrighi’s reference to the 1873-1896 downturn while discussing The Social and Political Economy of Global Turbulence (NLR, 20, March-April 2003). Arrighi pointed out that the economic system was in reality not “running down,” and production and investment grew so much so that a historian could declare the Great Depression of 1873–96 as nothing but a “myth”. Yet the deflation was not a myth because while production, trade and world economy at large continued to expand, it did so “too rapidly for profits to be maintained at what was considered a ‘reasonable’ rate.” >
Miraculously, painting what could be the picture 22 years later, 15 years after his death, Arrighi said that an increasing number of business enterprises, from an increasing number of locations across the UK-centred world economy got in one another’s way in the procurement of inputs and disposal of outputs, destroyed one another’s previous controls over respective market niches. This shift from monopoly to competition, Arrighi pointed out, was probably the most important single factor in setting the mood for the European economy. “Economic growth was now also economic struggle.” >
Growth could occur only by separating the strong from the weak, favouring some at the expense of others, and new at the cost of old. Wages in the UK declined. Ironically, and this reminds us of the US today, as the UK’s industrial supremacy waned, “its finance triumphed and its services as shipper, trader, insurance broker and intermediary in the world’s system of payments became more indispensable than ever.” But the rattling of arms and postures became too hot, it spun out of control and ushered in a crisis from which, when the economy emerged, the old UK-centred trade system would never return.>
While acknowledging that historical parallels have limits, we can think of one more. Younis Varoufakis has recently pointed out that the Nixon shock had preceded the Trump shock. The Nixon shock, though causing devastation to the economy, achieved its main long-term objective – American hegemony – through two novel phenomena: America’s trade deficit and government budget. The architects of the Nixon shock did not believe in the market as an impartial arbiter. The stiff and at the same time ever delicate act of balancing the requirements of a stable international system called for matching against them the desirability and capacity of retaining freedom of action for national policy. >
And then the succinct line from Varoufakis, “A controlled disintegration in the world economy (was) a legitimate objective for the Eighties.” Today, Europe is mourning over the possible disintegration of the products of that shock – neoliberalism, financialisation and globalisation. These, we must not be surprised, were products of a previous shock. >
The question was: how could America become hegemonic once it became a deficit country? Was there any alternative to restricting the economy that would entail a recession and reduce the US’s might? The only alternative for them, if the game were to continue, Varoufakis reminds us, “was to do the very opposite of belt-tightening: to boost the US trade deficit and make foreign capitalists pay for it.” Foreigners paid for the US deficits because of the circuits of capital by which foreign dollars could be repatriated and then recycled. Wall Street was thus freed of constraints under the New Deal and the Bretton Woods system. Bankers now found themselves with billions of foreign dollars to play with in a deregulated environment. US deficits necessitated financialisation and generated the necessary demand for imports from Europe and Asia, which in turn meant a greater volume of trade necessary to stabilise this purposely imbalanced globalised system. >
The Nixon shock ran out of steam, and so today, there is the Trump order: cryptos to be enlisted for its cause, oil prices to do again the trick, and tariffs to do what interest rates did for Nixon. These will inflict greater damage on capitalists of other countries than on the US. After all, as Varoufakis reminds us, Biden wholeheartedly embraced the China tariffs imposed by the previous Trump administration, and escalated the new Cold War his predecessor, like Obama, had started.>
So, games around tariffs and Fed rates are not mutually exclusive. Their goal is the same: to make the world pay for American prosperity. For more than a quarter of a century, the solutions worked. Growth returned. Inflation was controlled; recessions were short. Yet, this success was built on a massive expansion of credit, eventually meaning massive levels of private, corporate, and public debt. Marx had bluntly called this “fictitious capital”, and the pyramid of debt crashed in 2008. The crisis was “life-threatening.”>
Free trade thus has a troubled history in relations among nations. >
In all situations, as in the late twenties and early thirties of the last century, various national agendas take shape. This time, too, it is happening. Italy, Hungary, USA, India, Turkey – everywhere a search for the cure of neoliberal evils is on, for neoliberalism is not simply an international regime, it is a system replicated within each nation-state, exacerbating the problems concretely, differentially and at different speeds. Politically speaking, globalisation and neoliberalism abolished democratic will so that the neoliberal closure could be enforced domestically, on the nation. With old structures of liberal rule in shatters, “people” are coming forward in different ways – from the Left and the Right – holding the flag of national reconstruction. >
In these two types of populism, what will differ among the many markers is the stance with respect to immigration. Right populism, often sliding into downright fascism and authoritarianism, will oppose foreigners and add one more war to the trade war they have mounted. This is the war against the foreigners. Left-wing populism will also fight neoliberalism. It will also claim the national platform (much like in France today), but the migrants on this platform will be “friends of the people.”>
The year 2015 in Europe did not go in vain. It will once more be a journey into the historical experiences of the practices of friendship towards a just society.>
Ranabir Samaddar is Distinguished Chair, Calcutta Research Group.>