On Wallerstein’s The Decline of American Power


The Decline of American Power may strike some readers as odd. Only two chapters deal directly with the question of the strength of American power, and neither of those produces many facts about its ostensible decline. Other chapters address such topics as the durability of racism, the relationship of the Islamic world to the Western world, the role intellectuals should play, and strategies for the left. The framework these topics are embedded in is not so much the decline of the US as the decline of the ‘modern world system’, said to have been born five hundred years ago with the rapid expansion of European colonialism. That is because this is a new book from sociologist Immanuel Wallerstein, who pioneered the analysis of the modern world system thirty years ago.

According to Wallerstein, the proper way to understand capitalism was not to study it on a country-by-country basis, as was widespread at the time (he also rejects the notion, popular lately, that one should understand ‘globalization’ as something new and dramatically different about the last ten years). Instead, capitalism was an international project from its outset at the beginning of the sixteenth century, one defined by a ‘core’ (of wealthy states), a ‘periphery’ (of impoverished states), and a ‘semi-periphery’ (wealthier than the periphery but subservient to the core). Most of what has changed in the last five hundred years is a result of the expansion of the system to include the entire world. In the decade following his publication of The Modern World System, Wallerstein’s work was attacked from a number of perspectives. Marxists said that Wallerstein’s theorization of class struggle was inadequate. Others said he lacked clarity about the dynamics of states. Or that his schema failed to capture the various nuances that characterized the entrance of different parts of the world into the capitalist world system and their resistance to it.

For the most part, Wallerstein has not bothered to address his critics in much detail. The project of writing a history of the world system that fully incorporates these perspectives is left to his followers. Instead, he has tried to call attention to what he clearly believes is a central point, and one which for the most part his critics ignored: that the world system, having expanded to include the entire globe, is now at its terminus. Influenced by chaos theory, Wallerstein argues that we are at a bifurcation point, where individual actions can have considerable impact. We may produce a world better or worse than the waning modern world system, but we will surely produce something different. Perhaps as a result of his belief in the potentialities of the moment, Wallerstein has focused more and more on cultural questions, the role of the intellectuals, and strategies of the left. In the new book, the context framing these questions is the decline of American power.

The claim that US power is declining flies in the face of conventional wisdom. After all, the Soviet Union has collapsed, Japan appears to have faded as an economic threat, and if the US wants to invade Iraq, even if the whole world disagrees, it invades Iraq. The far left agrees with the New York Times: the US is the lone superpower (Tariq Ali recently commented in Counterpunch that perhaps our grandchildren will witness its decline). Nevertheless, Wallerstein begs to differ. In his highly original view, the Soviet Union actually propped up American power during its heyday, its ‘hegemony’ (1945-1970). It did this in several ways. First, its military power scared Western Europe into the US camp. Secondly, the standoff with the Soviets relieved the pressure on the US to offer aid to all the allies following World War II. Finally, the Soviets entered into a de facto agreement to police both its own empire and control its supporters worldwide, facilitating a stable world order. The one place where this system broke down was in East Asia, where first the Chinese and then the Vietnamese successfully resisted advice from Moscow to cool things down. The US wound up bogged down in a colonial war in Vietnam. Furthermore, expenditures on this war led to a loss of control of the world money supply. This coincided with both a worldwide revolt against the timidity of the established left (the ‘world revolution of 1968’ against dominant communists, nationalists, and social democrats) and the narrowing of the economic gap by Germany and Japan. Thus, for Wallerstein, the foundations of US hegemony were shattered by the early seventies, and the period since then has basically been one of slow decline.

Two events punctuate this period. First, the demise of the Soviet Empire eliminated a key prop of the US world order, facilitating direct challenges to this order, epitomized by Iraq’s invasion of Kuwait, and a drift away from the US by Europe. Secondly, there were the attacks of September 11. These attacks greatly strengthened the hand of the militaristic hawks in the US. The hawks had always been present, arguing that US losses in China, Vietnam, etc could have been prevented with a sufficiently massive show of force. But they had long been held at bay by liberal internationalists, who prioritized the alliance with Europe. With the US population terrified and disoriented, the hawks seized on the moment after September 11 to demonstrate that US decline could be reversed by a dramatic show of force. Hence the invasion of Iraq, which Wallerstein attributes much more to the need to demonstrate US power than to the need to control oil. Wallerstein is confident that the hawks strategy will result in the acceleration of US decline rather than its reversal, which he regards as impossible. Among other things, this strategy is facilitating the creation of an alliance between France, Germany and Russia, the geopolitical alignment dreaded at the end of WWII by US strategists. Meanwhile the Japanese build the world’s largest computer, “(embodying) the oldest story in the history of hegemonic powers. The dominant power concentrates (to its detriment) on the military; the candidate for successor concentrates on the economy” (actually the Japanese computer is devoted to analyzing climatic change, which isn’t exactly the economy, but the point holds). Later in the book he argues that the ability of capitalists to appropriate so much of the wealth of enterprises based in the US (celebrated in US media as ‘reformed’, ‘streamlined’ etc) will be a weakness in the next period compared to Japanese or European corporations.

As noted earlier, for Wallerstein the decline of the US is embedded in the larger trend of the demise of the capitalist system. His grounds for the latter claim are threefold. Three ‘secular trends’ (extremely long term) are squeezing the ability of capitalists to accumulate profits. First, wages have been drifting upward. Capital’s traditional recourse is to pull workers from the rural world; they can be recompensed very inexpensively for a generation, after which they begin to form unions, and capital begins to drift elsewhere. But now the deruralization of the world is almost complete. Secondly, taxes have moved upward, squeezing profits. Third, capital’s traditional practice of externalizing costs-by simply dumping its garbage into every stream and strip-mining every mountain-is encountering ecological limits. There are no more streams and rivers to pollute without serious consequence. The impact of these trends is compounded by the crisis of the state; basically, people no longer believe the claim that things are slowly getting better through political initiatives oriented towards the state.

All of these claims undoubtedly sound odd to most readers. Haven’t we been experiencing a period of thorough reaction, in which wages and taxes have been driven down, and environmental regulation weakened? Wallerstein, however, insists on focusing on the very long term. Although the last couple of decades have been ones in which reactionary forces have seized on the crisis of the left and the collapse of the center, they have not been able to push wages, taxes, or environmental regulation back to anything like what they were a century ago. When the left regains its footing (and Wallerstein has little doubt it will), it will begin from a higher point than where it was, say, ninety years ago. This does not, however, mean that the march to world socialism will quickly resume. Instead, it means that the current structures of the world, the capitalist world system, can no longer function adequately. Thus there will be an intense struggle over what new sort of world will emerge. The new world may be substantially better in important respects than the one we live in now; or it may not. Agency-what we do or don’t do-becomes exceedingly important at such times.

Throughout the rest of the book, he brings this analysis to bear on a wide range of topics. Even when he is on familiar territory, his writing is studded with intriguing ideas. For example, Wallerstein argues that political Islam is the product of the demise of the nation-state as a compelling locus of change, and the neoliberal weakening of state-based forms of social integration. This is a familiar point made by most serious academic writers on this topic, as is noting the exacerbation of tensions between the Arab Islamic world and the West as a result of Israel and oil. More intriguing is his comment that “Another element that adds to choosing Islam as the demon is the fact that most of the core of the Islamic world was never truly colonized. In an important sense, the West feels somewhat confident in dealing with ex-colonies. After all, they had conquered these areas once militarily and governed them, and think they know their weaknesses. The noncolonized or only semicolonized zones retain an aura of mystery and therefore of danger.” But perhaps even more intriguing is his effort to find his political bearings in this context-“the real problem is that in the secularist and the fundamentalist camps in all parts of the world there are persons on both sides of what I anticipate will be the great politico-social struggle of the coming fifty years. I think myself that posing the issue as one of secularism versus fundamentalism is distracting us in a very major way from clarity of vision”. No glib lectures about the reactionary quality of religion; since Wallerstein identifies liberalism as the dominant ideology of the capitalist world, the question of the terrain on which to oppose it becomes more complicated.

Wallerstein devotes two chapters to grappling with left strategy. He has little sympathy for any efforts to revive Leninism. First, Leninism’s failure as a theory was too great. The vision of expanding the ‘socialist bloc’ state-by-state altogether failed to anticipate that the socialist bloc would shrink to an inconsequential size. This despite the ‘scientific’ claims of its analysts. Secondly, Leninism had a threefold failure of vision-it was excessively focused on the state; relatedly, it abandoned any focus on the international; and in response to the arguments of liberalism, trumpeted the importance of equality over liberty. “This was entirely the wrong answer. The correct answer is that there is no way whatsoever to separate liberty from equality. No one can be ‘free’ to choose, if his or her choices are constrained by an unequal position. And no one can be ‘equal’ if he or she does not have the degree of freedom that others have, that is, does not enjoy the same political rights and the same degree of participation in real decisions.” Wallerstein also bemoans the current state of the left, which he describes as uncertain, timid, and mildly depressed. While he welcomes the sense of uncertainty, which he considers more in touch with reality than ‘scientific’ proclamations about the direction of the class struggle, he believes the timid and depressed quality of the left is uncalled for.

So what does he suggest? Wallerstein identifies seven elements:

(1) Expand the spirit of Porto Allegre (i.e. The World Social Forum) by combining intellectual clarity, militant action, and demands for long term change;

(2) Use defensive electoral strategies, essentially taking for granted the two coalition nature of contemporary elections worldwide and supporting the more left-leaning side (he applauds the American slogan ‘the Rainbow Coalition’, i.e. bringing a variety of racial and social movement categories together under one umbrella and the French slogan ‘A plural left’ i.e. bringing together a variety of old and new left tendencies);

but (3) vigorously criticize it once in power (what he calls pushing democratization unceasingly);

(4) Make the liberal center fulfill its promises (i.e. resist corporate bailouts on the grounds that free markets mean some capitalists will fail);

(5) Make antiracism the defining measure of democracy;

(6) Move toward decommodification; and

(7) always remember we are living in an age of transition.

The most novel of these ideas is his proposal for ‘decommodification’, which relates to his vision of a world beyond capitalism, a world composed of mid-size non-profit enterprises. Wallerstein notes that the present trend is quite the opposite, commodifying processes that were once thought outside the purview of the market (health care, education, etc). But, he argues, since the finest universities and hospitals operate as non-profit institutions, why not demand this as a general practice? Why not transform steel mills and other failing industries into non-profits? “This does not mean they should be ‘nationalized’-for the most part, simply another version of commodification. It means we should create structures, operating in the market, whose objective is performance and survival rather than profit.” Profit would not be a category on their balance sheet; instead, they would either turn over extra funds to the state or reinvest them. Transforming them into non-profits would address one of the classic weaknesses of traditional state socialism-its difficulty in upgrading technology. This has not been a problem with existing non-profit universities and hospitals. The transformation of industries into non-profits is also a demand that is simultaneously feasible in the short term (because particular failing industries can be immediately targeted) and thoroughly anti-capitalist. This is a particularly novel idea since most talk of anti-capitalism oscillates between the traditional vision of state socialism and utopian visions of myriad localized communities.

This is an exceptionally rich book, and one could write a very long review if the goal was to take issue with all the propositions and ideas floated in it. Here it would probably be more useful to suggest some questions that might push the analysis further along. First, there is a tension between Wallerstein’s confidence that US decline is inevitable and his argument that we are entering a phase in which the old rules are suspended. If the old rules are suspended, why would the US decline in the same way as earlier capitalist powers? Might the US drive to construct a global empire (in the conventional sense of this world) be one of the possible futures he refers to, of the more unequal sort? Secondly, there is a certain unwillingness to unmoor his analysis from the world of states, bureaucratic organizations, and conventional politics, despite his own declarations that this world is coming undone. Transnational and diasporic communities, direct action and localized knowledge all play only a small role in his analysis. Third, in his world of nonprofit enterprises, how would decisions about how to allocate resources among the enterprises be made? What exactly would ‘the market’ these nonprofit firms are embedded in look like? When a university upgrades its technology systems, it does not become more efficient in the sense of being able to educate more students faster (usually such upgrades simply enhance the communicating power of existing students, professors, and researchers). But this is the impact of technology upgrades at steel mills or shoe factories. Wouldn’t this force the nonprofit institutions into fierce competition which they all cannot possibly survive (a familiar left complaint about today’s private market economy)? Why has gender disappeared from his analysis? Although other works make clear that he believes the ideology of gender is a crucial structure of the modern world, does he believe it is inconsequential to efforts to map the transition, or even to understand the demise of the US? Again, because this text bristles with so many ideas, this list of questions could be almost indefinitely expanded. What should be emphasized in conclusion is the refusal of Wallerstein to adapt the sanguine know-it-all pessimism popular on the left and instead to set his sites on broad questions of historical transition and strategy. In the present context, this refusal is positively heroic.