Review article: Frank Lee on Tariq Ali

Pessimism of the intellect, pessimism of the will


Frank Lee asks: has Tariq Ali gone soft on the USA or does he just overlook some key features of decline of Empire?


Tariq Ali’s new book The Extreme Centre* is an excellent description and analysis of the neo-liberal, neo-conservative counter-revolution of the 1970/80s that swept in from Wall Street and Washington ushering in a new world order. This much is known already, and although Ali’s writing is lucid and cogent he doesn’t really say much which is new. The extreme centre as outlined by Ali describes a universal, political configuration involving a centre-left/centre-right, political mish-mash which has imbibed and espoused essentially the same beliefs and values, and offers the same (usually failed) policies; this is now a ubiquitous feature of contemporary politics. The ideological consensus characteristic of the political, cultural and economic elite is disseminated and held together by a media which has effectively appropriated the role played by the church in days gone by.


One of the more contentious parts of the book, and the one I am focussing on, is Ali’s assessment of the United States Empire which he seems to regard as invincible. Although well aware of the rise and fall of empires, he appears unable to bring himself to recognition that this is precisely what is happening to the US Leviathan. He writes, ‘’until now, after many a setback the signs of impending collapse or irreversible decline are few.’’


Well no-one is talking about impending collapse right now, but the indicators of irreversible decline are palpable. First let’s look at the economics:
  • In 1950 the USA produced 50% of world output, and as late as 1983 it produced 33%. By 2015 the US figure has dropped to 22%.This decline is expected to keep falling since Chinese growth rates are three times that of the US. Additionally, China is now the biggest world economy (adjusted for purchasing power parity) and will even overtake the US in absolute GDP in the coming period if growth rates remain the same. China is also the main creditor of the US (the world’s greatest debtor nation) holding US$1.5 trillion in US Treasury bonds.
  • In absolute terms US GDP is US$17.5 trn, however its public debt is US$18.4 trn which means public debt is greater than national income, and moreover, the gap is getting wider.
  • Additional public (federal) debt, augmented by City, State, municipal, household, Financial and Business debt – comes to almost 370% of GDP. Roughly US$65 trn. Now add in government pension and health care commitments which are missing from official budget figures and total US debt rises to 400%, of GDP, in round figures this totals nearly US$95 trillion, more than seven timesthe published figure.
Ali, these are not just ‘setbacks’. They are manifest indicators of a secular and irreversible economic decline.


Dollar vulnerability

The global reserve status of the US$ has been one of the key strategic advantages facilitating US global dominance since 1945, the other being the US Marine Corps. In what amounts to a free lunch this ‘exorbitant privilege’ as the former French politician Giscard D’Estaing once called it, enables the US to tap into world savings and surpluses since the US can pay its debts in its own currency. It only costs a few cents for the US Bureau of Engraving and printing to produce a US$100 bill, but other countries have to pony up US$100 of actual goods and services in order to obtain one. This is known as ‘seignorage’ after the right of the medieval lord or seigneur, to coin money and keep for himself some of the precious metal from which it was made.


Thus the US has been living off its vassals in the global system with virtually no national savings of its own. This free lunch is described Samir Amin:


‘’The American super-power depends from day to day on the flow of capital that sustains the parasitism of its economy and society. The vulnerability of the US therefore represents a serious danger to Washington’s project.’’ (Beyond US Hegemony).


The global position of the dollar also means that the Federal Reserve Board (the US Central Bank) is in effect the world’s central bank, and including the financial power of Wall Street, the US has played a governing role in world finance and monetary system. This is reinforced by the de facto US control the IMF, WTO and World Bank. The rest of the world, particularly the developing world, is subject to the oscillations of a currency which they cannot print and over which they have no control. If the Fed decides to raise interest rates then there would be a huge outflow of dollars from the developing world back into the US. The consequences of this hardly need delineation.


It comes as no surprise, therefore, that those countries subject to this financial and economic asymmetry are becoming a little tired of this arrangement. The reserve status of the US dollar is now under attack and leading the charge are Russia and China. More than a year ago, the two nations made good on talks to move away from the dollar and have been using roubles and Renminbi to trade with each other since. More recently the second-largest economy on earth – China – and the third-largest economy on the planet – Japan – followed suit, striking a deal to promote the use of their own currencies when trading with each other. The deal will allow firms to convert Chinese and Japanese currencies into each other directly, instead of using US dollars as the intermediary as has been the requirement for years. China is now discussing a similar plan with South Korea.


Similarly, a new agreement among the BRICS nations (Brazil, Russia, India, China, and South Africa) promotes the use of their national currencies when trading, instead of using the US dollar. China is also pursuing bilateral trades with Malaysia using the Renminbi and ringgit. And Russia and Iran have agreed to use roubles as a means of currency in their trades.


Several major oil-producing nations have begun selling oil in currencies other than the dollar, and both the United Nations and the International Monetary Fund (IMF) have issued reports arguing for the need to create a new global reserve currency independent of the dollar. The more that international trade is conducted in local currencies and not the US$ the more the importance of the dollar declines, and with it, US power. Chinese strategy to dethrone the dollar operates on a twin track. First they will attempt to change the position of the US dollar from being the global reserve currency into one of a basket of currencies, which will include the Yuan/Renminbi, and which would play the role of global reserve currency – the new currency would be a new designation with an old name: Special Drawing Rights (SDRs). The other track involves China, along with the BRICS and other Asian nations including India, Pakistan and the central Asian ‘stans’ (members of the Shanghai Cooperation Organization) setting up a parallel world system with its own structures and institutions: The Asian Infrastructure Investment Bank (AIIB) and the New Development Bank. The Chinese rationale for this step is quite simple: they view existing multilateral organizations as being a tool of US economic and foreign policy, a view I for one would not argue with.


Suffice it to say that there has been an almost unseemly stampede of different nations wishing to enter these organizations, including virtually the whole of Western Europe (Natopolis) and with even the uber-Atlanticist United Kingdom joining the queue for membership.


Again this waxing and waning of fortunes is more than a mere ‘setback’. It is an historical realignment of global dimensions; and it would seem that the US is on the wrong side of history as measured by these ongoing trends.




 Thomas Cole: “the Destruction of Empire”


US Military invincibility

The US spends more on its military than the next 10 nations put together, at approx. $600 billion per annum. Its military arm, NATO, has a 4-1 advantage in manpower over Russia, and a combined GDP almost 20 times the size of Russia’s. Obama’s pivot to Asia is about the move most of the US military assets into the Pacific region, in particular around the East and South China Seas, in alliance with its Asian vassals, principally Japan, but also possibly Vietnam the Philippines and Taiwan.


If, as Ali implies this military preponderance would be victorious in any war against the Eurasian powers, then the question arises – why haven’t they gone to war already? After all this is how great powers usually settle irreconcilable differences when their interests are threatened.


The simple answer is firstly because they can’t, and secondly because their core interests are not being threatened. The US/NATO is not going to commit what would amount to nuclear suicide over the fate of Estonia, no more than Russia can, or even wants to, invade Europe. The brute fact of the matter is that nuclear weapons have levelled the playing field and any full scale conventional war would soon turn into a nuclear exchange. Additionally a US/NATO first strike option is based upon the rather dubious notion that this would wipe out most of Russia’s land-based ICBMs and any remaining ones would be dealt with by the anti-ballistic missile system the US has placed on Russia’s borders. Easy peasy right? This seems all to reminiscent of the plans for the battle of the Somme almost 100 years ago. An Anglo-French sustained artillery barrage was going to smash the German front line and our troops would simply walk in unopposed. In the event, British casualties on the first day were almost 60,000 with 20,000 dead. This battle dragged on decisively for months with no clear winner and total British, French and German casualties in excess of one million. Such is the way with those usual hare-brained military theories which tend to come to grief in the fog of battle.


The first-strike theory also makes no mention of submarine launched ballistic nuclear missiles that provide second strike capabilities. Both the Russians and Chinese have these nuclear armed submersibles. Secondly, those land based missiles may well be mobile carried by train or truck, or based in super-hardened silos ready for a retaliatory launch. As of July 2009, Russia’s strategic arsenal reportedly shrunk to 2,723 warheads, including: 367 ICBMs with 1,248 warheads, 13 SSBNs with 591 warheads and 76 bombers with 884 warheads. Doing some arithmetic let us suppose, for the sake of argument, US air defences destroy 95% of Russian warheads; this would still leave 28 nuclear warheads hitting the US, with probably most of the big cities on the east and west coasts wiped out. The devastation in Russia would probably be even greater, but then of course there would be the rather unprepossessing prospect of a nuclear winter which would descend like a bibilical nemesis on friend and foe alike. War could of course still happen by accident, but it is not a strategic option.


Moreover the much-vaunted and feared US-NATO conventional military juggernaut has only succeeded when it takes on weak states which cannot or will not put up a fight. When the opposition fights back as in Korea, Vietnam, Afghanistan the performance of the west’s unbeatable military machine has been less than impressive. The strategic error that US theorists make is that they think their enemy is going to fight on American terms in a symmetrical conflict. However, the US’s adversaries have not fallen into this trap, and they fight asymmetrical wars on their own terms.


Whilst The 11 carrier groups of the US Navy look impressive on paper, aircraft carriers and other ships have in recent times been extremely vulnerable to rocket attacks as the British discovered during the Falklands war. Prior to the Second World War Battleships were considered to be the capital ships in any navy. This view was comprehensively demolished at Pearl Harbour when the USS battleships Arizona and Oklahoma were sunk and a further 5 damaged. As if to rub in the point three days after Pearl Harbour two British battleships HMS Prince of Wales, and battle cruiser HMS Repulse were sunk by land-based bombers and torpedo bombers of the Imperial Japanese Navy off the East Coast of Malaya.


Military/Naval men seem to be habituated to preparing for future wars on the basis of past wars, with disastrous results.


It seems that the savants at New Left Review are somewhat awed by the ‘unassailable’ position of the US and tend to overstate its power of endurance, which is taken to be almost permanent. (Hence my paraphrase of Gramsci’s famous axiom at the beginning of this review.) This being the case we will, according to Comrade Ali, have to wait for change to come from within the belly of the beast, or possibly through change in Latin America. We might have a long wait. A more realistic assessment of US hegemonic ambitions, however, is that of the conservative realist, Professor John Gray of the London School of Economics.


“First, [Pax Americana] presupposes that the US has the economic strength to support the imperial role it entails. Second, it assumes that the US has the will to sustain it. Third, it requires that the rest of the world be ready to accept it. It is questionable whether any of these conditions can be met.” (see Al Qaeda and What It Means to Be Modern).


Regis Debray in Decline of the West (New Left Review 80) analyses this phenomenon identifying multiple causes including: ‘’Deep down, the West no longer has the morale of its morality, the valour of its values. Less, at least, than it either promises or proclaims. The arms have got bigger, the heart has shrunk. Phobia of physical confrontation; surreal ideal of a war with zero dead; replacement of the cult of the hero by the cult of the victim; the end of military service; consignment of the citizen-soldier to the museum, to be replaced by the professional army, composed as far as possible of helots and foreigners. Goliath has gone soft.’


The Anglo-Zionist empire is not going to collapse tomorrow or even the day after tomorrow. But the uni-polar moment of US triumphalism is passing and we are now – assuming the absence of a thermonuclear exchange – in a transition to a multipolar world. How long this transition will take and what it will be like is anyone’s guess.

The Extreme Centre, Tariq Ali. Verso £7.99











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