Some commentators, basing themselves on the fact that the USA has renewed its intervention into other countries as an aggressive response to September 11, and on America's unchallenged military might, hold the view that we are on the threshold of a new era of American supremacy. In this article we will start by analysing the crisis of the world economy that is behind America's attempt to redesign the world order in a more violent fashion; and then discuss whether it is possible for the US to succeed or whether this new course will accelerate its decline and open a new stage of world "disorder".

The character of the current world economic crisis

One of the features of the current crisis is the existence of great deflationary pressures (a fall in the prices of commodities) in the context of a strong disequilibrium of the world economy. The current gap between countries with surpluses in their current accounts like continental Europe and Asia (included Japan) and those in deficit (mainly the United States) is permanent, and is potentially a destabilizing factor in the global economy. (Table 1) This gap has reached 2.5% of the world gross product. Inequalities in trade have grown to levels not seen in the industrialised world in the post war era.

The deflationary pressure is due to the combination of two structural factors. The first one is the immense over-accumulation of capital in most sectors of the economy - from the car industry to steel production and particularly in the communication and high tech sectors - the most dynamics sectors in the last economic cycle. The slowdown of the American economy - which has acted in the last instance as a consumer and as the locomotive of the world economy from 1995 onwards 1 - has increased the overproduction of goods at a world level.

The second factor is the increase in the internationalisation of the economy. This tendency is expressed in a growth in trade bigger than the growth in production, the existence of a global financial market, the wave of mergers and acquisitions in the metropolitan countries and the re-location of capital to some peripheral areas (Mexico and NAFTA, Southeast Asia and China, the enlargement of the European Union into Eastern Europe, some North African countries and Turkey). This process, which has accelerated since the 1970's as a way to counterbalance the tendency of the rate of profit to fall, was acquiring a greater importance in the world economy. This new division of labour, imposed by the productive strategy of the big corporations, has meant a growing importance of the law of value throughout the world. The increasing influence of the transnationals - especially in the production of commodities but more and more in other areas of the valorisation of capital - tends to the formation of world prices in more areas of the economy.

Table 1. Current account balances in major regions

* Estimated

Source: 72nd Annual Report, Bank for International Settlements, page 29.

In this context what is very noticeable is the growing importance of China as a production centre for the world, as a consequence of its huge reserve army of unemployed peasants. Cheap exports from China, either of goods made by foreign multinationals based there or by Chinese companies themselves, are a significant factor in driving down world prices not only in the light industry (textile and toys) sector but also more and more in the hi-tech sector as well. This makes China the 4th biggest industrial producer in the world after the USA, Germany and Japan. Due to the low costs of production China assembles more than 50% of cameras, 30% of air conditioning units and TVs, 25% of washing machines and nearly 20% of fridges produced in the world. China is the third largest world producer in the hi-tech sector after the USA and Japan.

The intense competitive pressure in the export sector of the economy, such as manufacturing industry, is the main reason for the deflationary pressures affecting the economies of the metropolitan countries. However, for the first time the service sectors of the economy are not immune to these pressures, as a consequence of the greater integration of the world economy and developments that have taken place in information technology. This makes the danger of deflation even greater. Although this process is only in its infancy (compared with successive adjustments in the industrial sector), we can already see its consequences in the fall of profits in branches that deal with the distribution of merchandise, as is the case in the ports on the west coast of the United Sates.

The combination of these two forces - the over-accumulation of capital and a major internationalisation of the economy - gives the current world economic crisis a different character to the various capitalist crises that have affected the world since the post-war period, creating the biggest risk of a slump since the 1930's. 2

The dollar and the issuing of money as the main destabilising factor of world capitalist accumulation

The roots of the current crisis must be looked for in the crisis of capitalist accumulation that started in the 70's and in the American response to it. The end of the post-war boom signalled the beginning of the historic decline of the United States. The revival of Japan and Germany as emergent powers put an end to the overwhelming American economic superiority, creating a division of the world among three more or less equal imperialist powers.

As Ernest Mandel says "… for the first time in history the law of uneven development has turned against American imperialism. The other imperialist powers, which started from a lower level of productivity than the United States, have modernised their industry much faster and they have also achieved important advantages in productivity. Many of their commodities are currently of similar or even better quality than those manufactured in America, but above all, they are cheaper than American goods: Japanese ships, small European and Japanese cars, German machine-tools …"

This relative slowdown of the US led to the end of Breton Woods system3. Since then the United States has used the new regime of flexible exchange rates and the continuity of the dollar as a reserve currency and as a means of payment throughout the world as a way of dealing with the crisis, manipulating to its benefit this privilege reserved for the hegemonic power. This enormous economic benefit has allowed the US to live beyond its means - something that has been expressed in over-consumption and in massive trade deficits. By exporting its inflation4, the United States has increased the instability and inequalities in the world economy - as demonstrated by the succession of monetary, financial and stock exchange crises over the last two decades - generating huge deflationary pressures in the long term that today are dragging down the economy. In other words, during this period, the US has acted more and more as the main destabilising force of the world capitalist accumulation.

The current account deficits in the US (and the subsequent rise in the liquidity of the dollar at a world level) have been responsible for the global increase of speculative "hot money". For three decades, this huge volume of money has been directed into speculative channels, creating booms and depressions all over the world. It has also been the essential fuel for the American system of credit.

The export of inflation by the US has been the principal engine for the over-financing of industries that produce export goods. Whether in Japan at the end of the 80's, Southeast Asia during the 90's or today in China, the atrophied financial sector of the United States has been, directly or indirectly, the original source of the main part of the available global financing. The overabundant American financial capacity is responsible for the over-investment in the manufacturing sector, pushing down the prices of goods. In other words, China could be "exporting deflation" today, but the ultimate cause is the export of inflation by the United States.

The result of this has been a decline in the dynamism of the world economy, in spite of the American mini-boom in the second half of the 90's (Table 2). As Robert Brenner points out: "The underlying weakness of the system as a whole and its American component is manifested in the fact that, during the course of the business cycle in the 90's, the economic performance of the advanced capitalist economies taken as a whole was, for all average measures - growth of the GDP, income per capita, productivity of labour and real salaries, as well as the level of unemployment - no better than during the 80's. This in itself was lower than in the 70's, which of course doesn't get close to the 60's or the 50's." (Robert Brenner, "The economy after the boom: a diagnosis", in Against the Current, May/June 2002)

The dog that chases its own tail

In the middle of the 1920's Trotsky noticed the shifting of the axis of the world economy away from a declining Europe (England in particular) towards the ascendant United States, warning at the same time about of the consequences that the subjugation of the old continent would have in America itself. "In military art there is a saying that whoever moves into the enemy's rear in order to cut off, is often cut off himself. In economy something analogous takes place: the more the United States puts the whole world under its dependence, all the more does it become dependent upon the whole world, with all its contradictions and threatening upheavals." (Europe and America, LT delivered this speech on February 15, 1926, in Two Speeches on Imperialism, Merit Pamphlet pp59-60)

Although this quote refers to the emergence of the US as a hegemonic power, it can also be applied to the present period of historic decline. Precisely the new element of the current crisis is that the American policy of diverting its own difficulties to the rest of the world is beginning to manifest itself in strong deflationary pressures throughout the world that are today affecting the economy of the United States as well, limiting its capacity to recover from the crisis using the same mechanism that it had used in the past.

Table 2. Declining economic dynamism (percentage variation of yearly average)

Source: Robert Brenner, The Boom and the Bubble, Verso, 2000.

If we take the broadest measure of prices in the economy, it is proved that they have grown by less than 1% over the lasts twelve months5, the lowest increase in 50 years. Furthermore, except for some items that represent less than 7% of the total, the rest of the components of the price indices have experienced a fall that has reached 21 % annually in the case of personal computers. In other words, deflation is already a reality and is getting worse in the US. In addition to this and according to statistics provided by the Department of Trade, corporate profits are falling.

On the other hand, record levels of domestic debt, on the part of corporations as well as consumers (credit cards, mortgages, etc.) are a heavy burden on the economy. Fraud, default and bankruptcy are on the increase. Company bankruptcies are rising as a result of debts. The last significant case is that of United Airlines, the second largest commercial airline in the world, which is unable to pay debts of 900 million dollars. The State of California, the fifth largest economy of the world, is on the edge of fiscal bankruptcy after an incredible fall in its income compared with the income it made during the years of a boom in the IT industry.

Had it not been for the very low interest rates set by the Federal Reserve, the abrupt shift from a surplus towards a rising fiscal deficit, and an increase in the money supply and credit, the American economy would have fallen into recession during 2002. However, in spite of the rise in liquidity, the manufacturing sector is still in retreat, showing that the depression in manufacturing is not of a cyclical character but is a structural one.

In this context, a recovery in world growth set in motion by the US would only aggravate its already massive current account deficit, the financing of which during the last decades has resulted in an external debt equivalent to 25% of its GDP (increasing the dangerous instability of the world economy and increasing the ever-present risk of an abrupt fall of the dollar). In other words, for the world economy this alternative would signify the same pattern of events as took place in 2002, a continuation of the weak and uneven recovery, against the background of an increasingly unsustainable position in the long term.

Although in the short term this scenario remains the most likely, in the context of deflationary pressures and its increasing external indebtedness, it is becoming more likely that the US will attempt to monetarise its debts. Alan Greenspan, the president of the Federal Reserve, said recently that the American government will certainly use all the resources at its disposal to avoid deflation reaching the United States. As one of his Federal Reserves colleagues said more explicitly: "the government of the United States has a technology to 'print money' (or its electronic equivalent) that allows to print as many dollars as it desires, essentially without any cost. By increasing the amount of dollars in circulation, or even threatening to do it, the US government can reduce the value of the dollar in terms of goods and services, which is equivalent to raising the price in dollars of those goods and services. We conclude that, under a system of paper money, a determined government can always stimulate major expenditure and therefore generate positive inflation … If we get deflation … we can be sure that the logic of printing money will impose itself, and that sufficient injections of money are always going to reverse deflation in the end." (Ben Bernanke, "Deflation: Making Sure 'It' Doesn't Happen Here', speech made on November 21 in Washington.)

In the context of strong recessionary tendencies that affect the world economy, a measure like this would be extremely deflationary for the rest of the world, generating the possibility of a poisoning of inter-imperialist trading relation. Recently, the Japanese vice-minister of international relations, Haruhiko Kuroda, boosted about the necessity of a devaluation of the yen.6 The mere suggestion of these reflation policies through currency depreciation on both sides of the Pacific, show the risks of a cycle of competitive devaluations, that could open a highly traumatic scenario for the international economy and for the world financial markets. We must not forget that the succession of competitive devaluations in the 1930s led to the virtual fracture of international trade and the formation of hostile economic blocs. This situation is favourable for the politicisation of trade disputes, the search for scapegoats and an outbreak of xenophobia, with Chinese imports and the "yellow peril" as the probable adversary. All these, altogether with the increasing geopolitical tensions can represent the most important test for the increasing internationalisation of the economy. In other words, that the acute contradiction between the latter and the continued existence of nation states would acquire a more open and pronounced character.

The other latent risk is that a strong devaluation of the dollar could spark a flight of capital from the US, undermining the role of the American currency as the pillar of the international monetary system. The necessity of an offensive policy against deflation is consistent with the domestic interests of the world's largest debtor, but not of its external creditors. As Paul Kasriel, commentator of North Trust explains; "The global investors thought that they were using their advance funds in a way that would increase the likelihood of their receiving payment of the principal, interest, and dividends in "honest dollars", while the actions indicated by the Fed to defeat inflation would precisely generate the opposite result. With performances adjusted to inflation in the overseas financial markets already higher than those in the US - using the 1 ½ million dollars per day advanced to us by the rest of the world as "non-productive" and being the world's largest debtor, it is not very wise to have the functionaries of the central bank saying openly that they are ready to put into motion the machine to print money." 7

Thus, a significant depreciation of the dollar carried out without international coordination could have non-intentional traumatic consequences for the US. Since a reflationary policy is more convenient for all economic blocs, the possibilities of doing it in a coordinated way are few. In this context, if the US attempts to impose its hegemony and to apply a unilateral solution, the result would sooner or later become serious. That is, although the US can attempt once more to face its crisis transferring it onto the rest of the world, there are more possibilities for this crisis to undermine one of the pillars of its own power during the last decades: the dollar. This reality is one of the main factors that explain Bush's turn towards the use of political and military power to sustain his economic position in the world.

Historic decline and mutation in the form of dominance (The American power in the last three decades)

The historic decline of the US that started at the beginning of 1970, meant a mutation in their form of dominance, compare it with the zenith of their hegemony. Due to this transformations the US were able to manage, with certain success, the decline of their hegemony. However, as it was manifested in a brutal way by the attack to the Twin Towers and the Pentagon, the mechanisms of dominance that the US have utilised during the last decades are clashing with unavoidable limits, forcing the imperialist policy to take a new turn.

- The American hegemony in the post-war

At the end of the Second World War, the American power was characterised, in a schematic way, by a combination of the following features:

Deployment of an unprecedented military force, with semi-permanent military bases in a large number of countries 8, added to a series of politico-military alliances, such as the NATO, the North American-Japanese Security Pact, ensuring a politico-military support for the rest of the capitalist powers at the orders to the US; the agreement with the USSR that divided the world in "zones of influence" during the Cold War, known as the Yalta Order, and according to which while maintaining competence between two opposite social regimes (cold war) the Stalinist bureaucracy committed itself to maintain the status quo through the world; the generalisation of the "Americanism" in the main imperialist power and in important parts of the semi colonial world that accompanied the deployment and expansion of north American capitals all over the world allowing capitalist reconstruction and recuperation of Europe and Japan.

This period has been defined as "benevolent hegemony". The key for such behaviour was based in the US necessity for containing the advance of communist influence in Europe as well as in Japan, both devastated by the war. The American imperialist state acted as a guarantee for "free enterprise", promoting, as a basis for the political consolidation of its hegemony, the economic success of its allies and competitors, recreating at the same time the expansion of multinational companies abroad. Thus, while the US ensured themselves that their companies took the "lion's share" of the world capitalist accumulation, allowed and promoted the incredible growth that Germany and Japan - both defeated in the Second World War - had during the boom.9

During this period, by trying to ensure their hegemonic reproduction, the US were not only carrying out their own interests at the expense of their rivals but they were also ensuring general conditions for capitalist expansion, in which they also were interested.

-The onset of the historical decline of the US

The crisis of capitalist accumulation from the early '70s, the emergence of rival powers and the 1968-81 people's and labor upsurge, both in the imperialist countries and more sharply in those of the periphery, undermined the relative stability of the US-hegemonized Yalta Order, shattering its foundations in the process.

The US army ended up trapped in the Vietnamese quagmire, and this was a turn-about fueling in turn a whole series of changes in the mechanisms of the US's rule as from the Nixon administration. Henry Kissinger, in his book The Diplomacy, stated that 'For Nixon, the anguishing process of pulling the US out of Vietnam had been, at the end of the day, an attempt at preserving the position of the country in the world. Even without that ordeal, a major reinstatement of the US foreign policy would have been needed, because the epoch of the unchallenged domination of the US on the world arena was coming to a close. The nuclear superiority of the US was in decline all the time, and its economic supremacy was already being challenged by the dynamic growth displayed by both Europe and Japan, which had been rejuvenated with American resources and also protected by security safeguards provided by the US. Vietnam was finally to prove that the time had come for a reappraisal of the US's role in the developing world, and also find a solid ground standing in between the retreat and an excessive expansion.'

Such reinstatement took on a defensive shape during the successive administrations of Nixon, Ford and Carter in the '70s, and it switched to a more offensive line with Reagan in the '80s, unfolding with the administration of George Bush and Clinton in the '90s after the demise of the USSR. It proceeded along the following lines:

-A more cautious interventionist agenda, and also military operations by the US army abroad of a more restricted scope -a sequel of the so-called 'Vietnam syndrome'. The support to authoritarian regimes -a steady pattern of the US foreign agenda during the Cold War- was replaced by undercover operations of irregular forces, such as the Nicaraguan contra or the Afghan mujahedin. This went hand in hand with the promotion of human rights and democratic transitions everywhere, as a bulwark preventing revolutionary outbursts in the periphery that would force it to go for a direct intervention and an increased exposure. 10 In the '90s, the 'humanitarian wars' became the main wrapping of an increasing imperialist interventionism, like the Kosovo war.

-The turn in the US's foreign policy, from a policy of containment to the détente of the former Soviet Union, along with the diplomatic rapprochement to China to counter Moscow's influence, enabled the US to open negotiations with the Kremlin to get a whole series of concessions on the nuclear terrain, and also in those 'hot sports' of the semi-colonial world which the Stalinist bureaucracy still influenced to some extent. Later on, during the '80s, Reagan used the renewed arms race and the rampant promotion of a human rights agenda -as the mainstays of his foreign policy-, as a weapon to make Gorbachev cave in to the dictates of the imperialist agenda.

-The creation of ad hoc bodies, such as the G7 among others, empowered the US to bargain (and set back) the rise of rival imperialist powers, wrestling economic advantages and accords for common action, such as the 1985 Plaza Accord, which laid the basis for a steady devaluation of the dollar, in the face of the sharp decline of the US's manufacture and economy. This happened at a time when the continuous existence of the USSR -never mind how weakened- cemented the political and ideological unity of the imperialist powers, until its demise in 1991.

All these changes nurtured a relative rejuvenation of the US hegemony, if we compare it with the turmoil of the '70s. This was predicated upon the derailment of the 1968-81 upsurge in the imperialist countries, and the bloody defeats inflicted in the semi-colonial countries.

-The neoliberal onslaught

Once this shift in the balance of forces against the masses was brought about, the neoliberal onslaught set in through the early '80s. It allowed a recovery of the capitalist profits, although it failed to reverse the slow down of capitalist accumulation that has been hampering the world economy for the past 30 years.

This boosted a skyrocketing growth of the finance system, which went hand with the economic growth of the '80s (when the rate of investment was rather low), and also that of the '90s, at a time when the regained prosperity in the US was underpinned by a massive expansion of the financial markets and instruments.

In the last few decades, capital was able to smash significant conquests of labor (all the more so in the Anglo-Saxon countries, Britain and the US) without resorting to direct counterrevolutionary methods, like those of the '30s. Besides this, it was in a position to exact new draconian terms in its relations with the periphery, significantly narrowing the room for maneuver of the bourgeoisie in the semicolonial world, undoing the leverage that these had right up to the '70s -reflected, e.g., in the hike in the prices of raw materials, specially oil prices.

The semicolonial countries witnessed a strengthening of imperialist oppression altogether, via the chains of the pay-off of the external debts, and the unfavorable exchange of lowering raw materials, which led to the impoverishment of whole regions in the semicolonial world.

In the advanced capitalist countries, the neoliberal onslaught resulted in increased exploitation and the deterioration of the living standards of the workers, smashing the 'Fordist-styled' pact that tied labor up to capital during the postwar boom.

However, the rise of collective investment funds and the emergence of an 'investment culture' nourished a view among whole swathes of the middle class and well-off layers of labor that they would be better off by tying themselves up to the fate of finance capital, thus laying the basis for the hegemony of 'neoliberalism'.11 The so-called 'Washington consensus' reflected how widespread that hegemony was, reaching out to the semicolonial countries, although its impact there was confined to the elite and the top tiers of the well-to-do classes -as opposed to the wider basis that the neoliberal policies gained in the imperialist countries. This drive was deepened in the wake of 1989, with the inroads of capitalist restoration, both in Eastern Europe and the former USSR, which came in the aftermath of the anti-Stalinist aborted revolutions -particularly in China after the Tian-an-Men square massacre.

-The unstable equilibrium of the '90s

In this way, the bases for the unstable equilibrium of the '90s were laid. During this period, the US achieved a relative stability with regards to its rivals, which enabled it to successfully absorb the shock waves coming from the demise of the Yalta Order, preventing them from undermining its hegemony. This went hand in hand with the retreat of Japan as an international player, and -to a lesser extent- also that of the European Community. The latter was suffering the stagnation of its economy during the decade, and the European Community, in turn, was busy trying to stave off the instability coming from the East -annexation of Eastern Germany by Western Germany, the civil war raging the Balkans, the Albanian revolution, etc. It was also trying to find a solution for the contradictions bearing upon the building of a single community. In turn, the defeat of Iraq in the early 1991, propped the maintenance of a relative stability in the periphery, reflected in the rise of the 'emerging markets' there.

However, as time went by, a number of contradiction piled up and antagonistic forces came to the fore in the closing years of the last century. These were the slump in Southeast Asia and the sinking of the so-called 'emerging markets', the emergence of an anti-capitalist movement in the advanced countries, the outbreak of a second Intifada in Palestine, the increasing anti-US mood in the Middle East and the resistance to neoliberalism in Latin America. To these we should add the rejection of the Bush administration agenda by other powers, and the recession of the US economy that dragged the whole world economy with it. The September 11 attacks were a catalyst accelerating the denouement of all those contradictions at work in the world situation, highlighting the disruption of the unstable equilibrium achieved in the last decade.

The reasons behind the reshaping of the US agenda
During the '90s, capital was able to spread its domination to new regions, which had hitherto been closed to its influence. At the same time, the US had an enhanced room for maneuver in the military field, and became increasingly confident in its military muscle after the demise of the USSR. In turn, this outcome boosted some underlying contradictions, which had been concealed during most of the '90s, but came violently to the surface towards the end of it -the increasing impact of the peripheral countries on the main advanced countries and the ever-increasing imperialist rivalry were both manifest in the September 11 attacks and the American backlash that followed. And this takes place amid an economic recession afflicting the whole world, which has undermined the hegemony of finance capital within the US itself and fueled a sharper challenge to the neoliberal model worldwide.

-The loss of hegemony of finance capital and the Anglo-Saxon model

The massive drop in the value of stocks and the corporate scandals such as Enron and World Com have jeopardized the ascendancy conquered by finance capital since the onset of the neoliberal onslaught in the '80s -which reached its climax with the speculative bubble of the last decade.

The loss of trust in the 'Anglo-Saxon' model, as a pattern for business and entrepreneurial organization, not only among the masses themselves but also among the elites of the different countries, stands in direct opposition to the rampant euphoria that followed the 'defeat of Communism', the main ideological prop accompanying the growth of the US in the last decade and also underpinning the expansion of capital into new regions -the so-called 'globalization'.

In the US itself, the wrath of wide layers of the population at the managers of the corporations and the main institutions of the finance system such as the consulting firms, the investment banks and the audit companies -which all covered up and benefited from the looting of the wealth of the workers in their own companies and even that of the share-holders- is threatening to challenge the rules of the game of capitalism itself, if it goes unchecked. 12 The loss of hegemony by finance capital, intertwined by thousands of threads with the US's political system, runs the risk of alienating its social base, which might nourish new political developments. Bush has seized upon the 'war on terrorism', in an attempt at profiting from the commotion created by September 11, to stave off the consequences of the decomposition of the political and social set-up in the US and target the anger at home on a foreign enemy.

-The increased inter-imperialist rivalry with Europe

The downfall of the USSR did away with the cement rallying the whole imperialist powers behind a US-led world order, for the sake of a common interest in facing up to the communist threat. Deprived of this cement, the American supremacy is no longer an automatic prerequisite for upholding the status quo worldwide. In the wake of the demise of the Yalta Order, the competition and the rivalry among the imperialist powers came into full light, with a sharpening that was unthinkable some decades ago. The sharpest conflict now has is that opposing the US to Europe, which has been exacerbated due to the US's aggressive drive against Iraq.

The American think-tank Stratfor puts it this way: 'The ultimate purpose of Europe is to become a superpower, a purpose that is as logical as the US's turn to prevent the emergence of any rival superpower. Casting aside the diplomatic nuisances, this dispute has shaped the relationships between the US and Europe since the end of the Cold War. This long-term strategic dispute is unlikely to become a military conflict: it will be fought for by means of an economic and diplomatic competence. The weapons used by Europe include its unification drive, its economy, the strength of the Euro set against the dollar and the political influence of Europe over the developing countries. It also encompasses a competition with the US for the markets abroad, the ability to bridge the increasing gap separating the developed nations and the developing countries, and the ability to thwart what many Europeans regard as an aggressive military drive of the US. The European resistance to Washington's agenda should be considered within the framework of this fight for global influence'. (Stratfor, 04-12-02)

-The instability of the periphery and its impact on the center

The increasing internationalization of the economy, the devastating effects wreaked by the neoliberal onslaught, the disintegration of the former USSR as a nation state and the demise of the Stalinist apparatus as a safeguard of the imperialist order, all altered the relation between the center and the periphery of the world, nourishing a increased vulnerability of the imperialist powers -they are now more exposed to the instability flowing from the 'hot spots' in the periphery.

The mass immigration for economic reasons, along with the existence of the largest contingent of refugees ever since the end of the World War II -itself the by-product of innumerable national, ethnic, or tribal conflicts or else civil wars raging in what used to be the USSR's sphere of influence (Bosnia, Kosovo, Chechnya, the Caucasus), and also in the heart of Africa (Rwanda)- are examples of that. On top of that we see the proliferation of weapons of mass destruction, ending the monopoly of the big powers on them; the spread of terrorism with an international operational scope beyond its local bases; the sharpening clashes in important regions of the periphery, rich in resources, such as Venezuela or the Middle East; all these are evidencing the dangers and the problems weighing upon the economy and even the internal security of the advanced countries today.

The worsening turmoil in the periphery is pushing the US and also other imperialist powers to increased politico-military interventionism. A Middle East specialist commented in Foreign Affairs, the main foreign policy journal of the American establishment: 'It is a cruel and unfair fact, but a certain one: the fight between the rulers and the insurrect Arabs is now an American concern. In 1970 and 1980, the political and economic edifice of the Arab world started to crack open. Explosive demographic tendencies outdid the structures built in the post-independence period and then a rabid Islamism blew like a mortal wind. It promised relief, appealed the youth and furnished the means and the language for rejection and resentment. For some time, the cracks opened in this world were confined within its own borders, but the migration and transnational terror altered all this. The fire that started in the Arab world spread to other places, with the US itself as the main target of a humiliated people that no longer believed that their own rulers could bring justice forth in their own land. It was September 11 and its overwhelming shock what tipped the scales against Iraq, switching from détente to a change of regime…'

All these reasons are pushing the US in the direction of exerting a more direct imperial rule there -its main scheme being the coming war on Iraq and the American attempt at reshaping the political map in the Middle East, relying on the politico-military control of that key country. A military victory in Iraq would empower the US to exert a huge influence on this strategic region. This would strengthen its ally, the state of Israel, boosting a reactionary solution for the Palestinian masses, weakening the power of the Arab bourgeoisies to control the oil prices in the process, thus undermining the foundations of a number of regimes in the region. An imperialist breakthrough of such magnitude and scope would provoke a turn-about in the forms of domination of the periphery by the US. The latter muscled out its rival European powers by replacing the old-styled colonialism with a system of 'client' states and semicolonial forms -i.e., those countries achieved formal independence but were subjugated by stronger economic, political and military ties to imperialism. Such a shift precludes a comeback of the old colonial forms, as the conservative extreme-right wing would like it by putting in place a military administration 'a la MacArthur' on Iraq. Nonetheless, it will entail forms of rule underpinned by an increased American presence in the field.

The new attempt at reshaping the world: tactical fortitude and strategic weakness

The policy pursued by Bush seeks to rally a reactionary social base at home behind a belligerent and aggressive foreign policy in the periphery. This bears some neo-imperial features in some regions such as the Middle East, and the main thrust of it is unilateralism. Of course, it does not preclude the resort to a 'multilateral' cover-up, with the aim of wrestling significant geopolitical advantages of strategic scope from its main imperialist rivals.

Such unilateral drift first showed in the war on Afghanistan, waged without the approval of the UN, and with the NATO powers being unceremoniously cast aside -as opposed to the war in Kosovo. Another proof of this is the expansion of the American military forces to the states of Central Asia -six new bases were built there- and its spread in the direction of the Caucasus, the sphere of influence of the old Soviet Union. Finally, Bush's avowed intention of forcing a 'change of regime' in Iraq is the most offensive purpose being pursued now.

The new 'Bush doctrine' codifies that aggressive and militarist drive into a new strategy of national security. It signals the end of the military strategy of détente that prevailed through most of the postwar era. It heralds the official turn of the US towards a preemptive military policy, whose tenets might be summed up as follows: the military prowess of America should be strong enough so as to deter its potential adversaries from trying to challenge the US military supremacy. The US is free to undertake preemptive actions against those states deemed hostile. The US must uphold its nuclear superiority as a coercive weapon to prevent the proliferation of nuclear weapons, a measure deemed more effective than any treaty of non-proliferation of atomic weapons.

To sum up, in the last three decades, the US had capitalized on the advantages flowing from its hegemonic position to gain leverage on the trade and economic terrains, but today is trying to gain new leverage in the realm of geopolitics. This American attempt to pursue its national interest along such narrow and exclusive lines, seeking to gain strategic advantages to uphold its hegemony, is the main source of tensions within the international system of states. Thanks to a combination of insecurity, the fear of the population in the wake of September 11 and its unchallenged military might, the US is possibly going down the path of renewed imperialist adventurism.

In theory, if it succeeds in this enterprise, the US might secure immediate advantages for itself, but it must pay the price of weakening its strategic consolidation -in spite of its avowed intention. A steady unilateral course could undermine the foundations of those institutions upholding the world order since the postwar, whereas the contempt for the views and the interests of the other powers might turn the trust of these into an acrimonious hostility towards the US.

It has been harder every time to reach consensus within the UN, a development that threatens to turn it into a new version of the late League of Nations. The fact that NATO has been cast aside as a mainstay of the Atlantic Alliance, the rejection of the US to any kind of international treaty entailing an interference with its sovereignty and a generalization of the preemptive military policy in the realm of interstate relations might all fuel a colossal 'disorder' worldwide. For instance, the US's unilateral propaganda led the upper echelons in Russia, such as the former Minister of Nuclear Energy, to threaten 'to wipe Chechnya out of the map should the Chechens resort to a nuclear blackmail'. In turn, the Australian premier, Mr. John Howard, claimed that his country might undertake preemptive military actions against terrorist groups in other countries in the region, a statement that raised an outcry across South East Asia. If such initiative should materialize, it would be considered an 'act of war', said Mr. Mahathir, the Malaysian premier.

Carried to the very end, the American unilateralism might bring about a quantum leap in the rifts opposing the powers to one another, thus persuading other powers to coalesce against it, regarding the US not as a guarantor of the world order but rather as a threat posed against it. In the words of Stratfor, 'The future of the relationships between the US and Europe is also at stake here. Back in the '90s, Europe has a whole ceased to take the position of a 'junior' partner of the US, emerging instead as hybrid between a rival and an ally. The conflict on whether a war against Iraq should be launched at all might lead this development into a new phase: should Washington undertake unilateral actions against Baghdad, both sides might strictly become rivals.' (Stratfor, 04-12-02). Ultimately, a unilateral thrust might weaken the American interests in the long run, accelerating the disputes for world hegemony.

The inter-imperialist divisions and the class struggle

For Marxism, the level reached by inter-imperialist contradictions is a fundamental element to ponder the balance of forces between the classes worldwide. During the last few decades, in spite of an increasing economic and trade dispute, the main powers were essentially united in the field of politics and geopolitics -regardless of the stand-off that opposed at the time of the Balkans war. That was an essential element, alongside the impact of the defeat and the derailment of the 1970s upsurge, to deepen the capitalist onslaught and tip the scales against the masses.

This showed with all its force in the periphery. There, in spite of the disputes around the currencies or else that of capital markets, the main powers were all one in the looting of the semicolonial world -as it was reflected in the support given to the austerity measures pushed by the IMF and the businesses of the various strands of imperialism in China.

The depth of the recession and the new attempt at reshaping the world at the behest of the US, in pursue of geopolitical advantages, might jeopardize the relations between the powers still more. And this is a key issue when it comes to defining the possibility of a change in the balance of forces happening. Exacerbated inter-imperialist disputes, not only in the field of the economy but first and foremost in realm of politics and geopolitics, might open up major cracks at the top, nourishing the development of 'weak links' in the imperialist system worldwide. If the working class movement and the masses seize upon those rifts, they might be able to challenge the imperialist order as a whole.

The current policy pursued by Washington is already throwing its rule over its Latin American backyard into jeopardy, at least when compared with the inroads it made in the last decade. This can be seen in the increasing political and social turmoil sweeping through the region since the revolutionary upheavals in Argentina, the rise of Lula to power in Brazil and also that of reformist tendencies in some countries of the continent, to which we should add the open clash of revolution and counterrevolution in Venezuela. The US has been busy focusing on Iraq and trying to gain consensus for a war there, which prevented it from actively intervening in the latter -in particular, it refrained from giving support to a new coup, a move that his allies would strongly object to. This is one of the reasons accounting for Chávez continuation in office in spite of the shutdown of the vital oil industry.

From the standpoint of the superstructure, two key countries such as Germany and South Korea, in which there is a massive US military presence witnessed the victory of candidates that were not unconditionally allied to the US. In Germany, the social democratic candidate that was lagging behind in the polls eventually won the election out of an opposition stance to a war in Iraq. In South Korea, the candidate objecting to the automatic alignment with the US and advocating a dialogue with North Korea came out victorious. The most significant aspect of all this is that this took place right at a moment when North Korea, the Asian 'axis of evil', sparked off a nuclear crisis with the aim of forcing the US to negotiate, fully aware that the latte cannot afford to handle a war on two fronts.

These are no trifles in any way. Germany and South Korea were the two mainstays of the American order in the postwar -in the European continent and in Asia respectively. If these cases should spread, the US might end up in isolation. Its present turn to a neo-imperial agenda, far from inaugurating a new era of American hyper-power, might be perhaps heralding the first symptoms of disintegration of its imperialist rule.

The Iraqi test

Iraq enshrines all the challenges at stake for the US's rule in the new situation opened up by September 11. Not only vis-à-vis the masses, both in the advanced countries and in the periphery, but also in the relationship of the US with the subservient bourgeoisies in the semicolonial countries, as well as those in the big powers. Apart from the US itself, where Bush was able to reap a significant support at the latest elections, the bulk of the population in the rest of the advanced countries, especially Europe, is opposed to the war -a fact shown by the polls and the massive demonstration staged in Florence and London. In those countries of the periphery, in spite of the little sympathy inspired by Saddam Hussein, the war is regarded as an imperialist move seeking to lay its hands on a key resource -oil. This widespread perception, along with the support of the US to Israel against the Intifada and its hostility to the Muslim world in general, is boosting a tide of anti-American mood.

Anthony Zinni, former chief of the US Central Command and one of the first envoys to the Middle East, recently held: 'I'm astonished by those people claiming that 'the Arab street man' does not exist anymore, that they will not react in any way…the situation is an explosive one…it is the worst that I have seen in dozens of years of working in this region.' (Financial Times, 19-11-02)

In turn, the Iraqi conflict has provided the background for the dispute opposing the advocates of 'unilateralism' and the advocates of 'multilateralism' vis-à-vis the world order. Should Washington fail to gather the support of the UN for a war declaration, the costs and difficulties of it become much harder, thus putting a question mark on the likelihood of the war breaking out at all. In the words of Stratfor, 'In spite of the fact that Washington has stated on a number of occasions that will go for a unilateral action if need be, that is more easily said than done, even for only world superpower. Europe won the first round of the diplomatic battle when Washington acquiesced to getting a resolution from the Un Security Council against Iraq; never mind a unilateral attack remains a possible outcome, this has become now a harder option. Launching a campaign without the endorsement of the UN would leave the US isolated internationally. In spite of the fact that the die-hard war mongers in the Bush administration seem quite ready to run the risk, the doves such as the Secretary of State, Colin Powell and probably the inner circle around the former president George Bush are not -and it still remains to be seen who will win. At any rate, Europe would make the decision of going to war extremely difficult for Washington. The destiny of Iraq will be sorted out in all-out diplomatic battle between Washington and Europe.'

Given this situation, the best scenario for Washington, if it goes to war, will be one in which his Western allies do not oppose the war vigorously -regardless of whether they provide little or no help for the war.

Since the Afghan war, the US has put out a belligerent rhetoric, whereas his actions have been rather cautious. Although there are no doubts that its next target will be Iraq, there is an important debate going on around 'when' and 'how' to attack it. Since mid-2002, the Powell fraction seems to have won the upper hand, not on the war on Iraq itself but in terms of going for a more cautious and protracted strategy. While the accumulation of forces proceeds slowly, the narrow focus of the US has let two major international crises go unchecked -that of the Korean peninsula and Venezuela. The present situation is pushing the US to act right now. If it does not do it, his passivity might be regarded as a lack of authority, not in the Middle East, but worldwide.

Whatever the form a likely imperialist intervention takes on, the decisive issue revolves ultimately around the proclaimed 'change of regime' in Baghdad -it will be this that will put both the ability and the imperial willpower of the US to the test.

Ever since its defeat in Vietnam, and in spite of the benefits reaped from the revolution in military affairs of the last few decades, the determination of the US has only been tested in interventions of a limited scope and a short duration. The take over of Iraq and its transformation will be a much harder test. The jingoistic mood fuelled in the wake of September 11 will thus be put to the test, and we shall see to what extent the Vietnam syndrome has been overcome. Regardless of the militaristic and belligerent bravados of today, we should bear in mind that, not long ago, the former National Security advisor to the Carter administration, Mr. Zbigniew Brzezinski, pointed out that the '…ever increasing difficulty to mobilize the necessary political consensus supporting a sustained, and sometimes onerous, leadership of the US abroad. The mass media have played a significant part in this sense, nourishing a strong rejection of any kind of selective use of force involving casualties, no matter how minimal they are.' (The Great World Board, 1997)

Therefore, the authoritarian turn at home accompanying the warmongering of the US abroad, is pointing to the limits that this militaristic offensive must overcome within the US itself.

The US is then at a crossroads, either will it deliver a whole series of reactionary blows enabling it to overcome the increasing challenges to its rule and the beleaguered foundations of both its economy and the dollar -which is getting into a more untenable position; or else the tendencies fuelling a disruption of capitalist equilibrium will prevail in the end, accelerating the historical decline of the US and ushering in a change in the balance of forces, a favorable one for the mass movement.

NOTES

1 During this period, USA was responsible for a increase of 40% of the world gross product measure in a parity exchange, while its economy only accounted for a 25% of it.

2 Among others, the consequence of a deflationary crisis would be: a) the perspective of fall in prices would imply postpone sales creating a deflationary spiral; b) that the current bankrupts hit the banks making them more reluctant to give loans; c) that the drop in prices imply an increase of interest rates, even if they are reduced to cero; d) that the drop in prices increase the real wait of the debt.

3 Bretton and Woods agreement, which were signed in 1944, established a fix rate system, and there were a free exchange (convertibility) of dollar in gold. On 15 August 1971, the then president of USA Richard Nixon, put an end to that system.

4 Since 1960, the offer of money has folded 25 times while the real gross product has folded only four times. Alongside to this, there is a consistent reduction of the requirement for loans. Banks, encouraged by the Federal Reserve, have expanded the credit for a series of reductions of the reserves required against its own deposits.

5 We have taken price rates of September and of the last quarter of the National Income.

6 "Time for a Switch to Global Reflation", Financial Times, 01/12/02

7 "World's largest Debtor (US) Pledges to Pay You Back in Cheap Dollars", 27/11/02

8 "The far and broad network of semi-permanent bases overseas, maintained by the US in the Cold War era ... Didn't have historic precedent; no other country had sent its own troops on sovereign territories of other countries in such a large quantity during such a long period of peace." (Giovanni Arrighi, Globalisation, state sovereignty and the endless accumulation of capital)

9 The consequences for the world order are very well expressed by Robert Brenner; "Due to the fact that the economic success of the US was strongly linked to the success of their rivals and allies, the international economic development of the post-war within the development capitalist world could, for a short period, manifested in a relatively high level of international cooperation - marked by high levels of financial help and economical-political help to their allies and competitors - though in spite of the dominance of American state and being shaped according to American interests. The US government, as well as their main capitalists, had the wiliness of tolerating high levels of state intervention, trade protection, sub valuated exchange rates, and financial restrictions of their rivals, because they had themselves a strong interest in the national economic development of their rivals - specially the development of their internal markets - and their political stability. As a consequence it was observed, at least for a while, a symbiosis, although highly conflictive and instable, of the leader and his followers, of the early and later developed, of the hegemon and those who are hegemonised." (Robert Brenner, The boom and the Bubble)

10 We called this policy a 'democratic counterrevolution'. See 'Transitions to Democracy. An Instrument of US Imperialism to off-set the Decline of its Hegemony', Estrategia Internacional N° 15.

11 'By transforming tens of millions of passive depositors into 'active' investors, the collective investment funds can enhance enormously the social base for such neoliberal macroeconomic policies and structures, thus creating a more powerful ideological weapon for the financial market than that provided by the free market orthodoxy itself. Since it yields obvious benefits and a willingness to participate is crucial for a truly hegemonic order, and in contributing to the naturalization and de-politization of these procedures, the new culture of mass investment is instrumental in reproducing neoliberalism along more consensual lines'. (Adam Harnes, 'The Culture of Collective Investment Funds', New Left Review N° 9)

12 The ever more rapacious nature of the American ruling class is evidenced in the decisive influence of the corporations and the most parasitic and speculative tiers of the finance sector, and even the widespread criminal practices in the main corporations. The Financial Times has shown that 'The CEOs and the directors of the 25 top private corporations that went bust since January 2001 stashed a fortune worth 3.3 billion dollars'. This massive distribution of wealth detrimental to labor and shareholders alike has led a commentator to conclude that: 'In 1992, the corporate CEOs possessed a 2% of all the shares issued by all the American corporations; today they possess as much as 12%! This has resulted in the most spectacular action of expropriation by the expropriators in the whole history of capitalism. Karl Marx himself would have been amazed.' (Robert Brenner, 'Enron Metastasized: Scandals and the Economy', Against the Current, September/October 2002)