U.S. hegemony today

Monthly Review, July-August, 2003 by Peter Gowan

The central structure of postwar capitalist economies had been the national columns running from the state through a tightly brigaded financial system to the industrial structures. The Anglo-American return to a Morgan-Barings style financial capitalism placed the private financial pyramids at the heart of the system, the industrial structures taking their places alongside real estate, private housing finance, private health care and a host of other private services, with the state's role redefined as the protector and service-provider for this new structure.

The rise of the DWSR, assisted by the diplomatic efforts of Washington and London, opened the possibility of a vast new field of expansion outwards for American capitalism. Just as New York financial pyramids in the late nineteenth century acquired dominance over industrial capitalism further west by financing its development, so American financial pyramids at the end of the twentieth century could acquire dominance over industrial capitalists across the rest of the core. By sweeping away all restrictions on the centralization of American finance and by drawing Main Street under the sway of Wall Street, the American authorities gave American financial pyramids an overwhelming edge in international finance by the end of the 1980s. With the structural instability in exchange rates, industrial capitals in Europe and in East Asia could not securely expand their sales in the United States through export strategies. They had to expand their operations through mounting production operations in all three centers. And with overcapacity in most established industrial sectors, and the consequent need rapidly to seize international markets with new products, it could be hoped that the need to link up with American finance would be overwhelming.

Changes were also sought in the institutional structure of capitalism to ensure that industrial companies were dependent on securities markets and to ensure that hostile takeovers were permitted, with the intent that productive assets across the capitalist world would fall into American ownership and a vast transnational centralization of capital would be possible. And in conditions of generalized capitalist stagnation and crisis in much of the world, paradoxically governments and banks and industrial companies could be desperate for American finance to tide them over, giving American finance capitalism ever widening circles of control over international capitalism. International monetary instability greatly enhanced these possibilities.

The drive to transform capitalism across the capitalist world into a new private-finance-centered social system increasingly integrated into an international capitalism dominated by the DWSR has continued for twenty years. It is widely assumed that the entire capitalist core has accepted this drive and changed accordingly. The idea of a globalized economy governed by neoliberalism expresses this assumption. Yet in reality we have seen much more tension-ridden relations between capitalist centers, despite the fact that in all centers there has been a drive to shift soda] power from labor to capital. The concept of neoliberalism captures the generalized drive against the social power of labor. But it does not capture the parallel tension-ridden relations between the three main centers of capitalism.