It is a perversity of capitalism that the unprecedented destruction of WWII—arguably the worst event in human history—laid the foundations in the postwar era for economic expansion and even rising working-class living standards, as well as inter-imperialist peace. The post-WWII period saw significant changes to the global order. Colonialism and protectionism receded as the United States emerged as the undisputed hegemon of a free-trade capitalist world. While the industrialized USSR established itself as a non-capitalist great power, the US enjoyed, within the capitalist world, a moment of unipolar dominance the likes of which had never been seen before, largely suppressing the tendency towards inter-imperialist rivalry. The Cold War tension between the US-led imperialist bloc and the USSR culminated in capitalist counterrevolutions in Eastern Europe and the Soviet Union between 1989 and 1991, leaving American unipolarity undisputed across the world. Paradoxically, however, the zenith of the “American peace” would quickly be followed by the beginning of its end.
In 1945, as the factories of Europe and Japan lay in ruins, the US accounted for more than half of global GDP, half of global manufacturing and one-third of total exports. American finance capital dominated foreign investment, while Washington sought to rebuild Western Europe as a bulwark against “Communist” expansion and as a market for American-made goods. In 1948, the US Congress adopted the Economic Recovery Act (aka Marshall Plan), which provided $13.3 billion in aid to Europe over a four-year period.
At the Bretton Woods Conference in 1944, the US and its imperialist allies established a framework for global capitalism in the coming postwar era. The system would be centered on the American economic juggernaut and a gold-backed US dollar as international reserve currency through fixed exchange rates and a free-trade regime regulated by the Washington-based International Monetary Fund (IMF) and World Bank. Following failed attempts to create an international trade organization, the General Agreement on Tariffs and Trade (GATT) was finally launched in 1948 (superseded by the World Trade Organization in 1995). The GATT ended the protectionist imperial preferences system of the British colonial empire and the “customs union” protectionism of the French empire, effectively opening up the colonies to US economic penetration. While all imperialist powers, including the US, maintained and even introduced tariffs, the overall tariff level decreased dramatically. In 1931, average tariff levels were 17 percent for Britain, 35 percent for the US, 38 percent for France, 40 percent for Germany and 48 percent for Italy. In 1952, the figure remained 17 percent for Britain but had fallen to 9 percent for the US, 19 percent for France, 16 percent for Germany and 24 percent for Italy (Chad P. Bown, Self-Enforcing Trade). Figure 1 shows the long-range trend for the average US tariff rate on dutiable imports (i.e., tariffs actually paid on imported goods) since the Great Depression.
Figure 1: US tariffs on dutiable imports, 1930–2008
According to Andrew G. Terborgh of the London School of Economics:
“The end of the Second World War marked the beginning of a new era for the world economy. Policymakers increasingly embraced international trade as essential for economic growth, shifting away from the isolationist policies of the inter-war period. Within this new framework of cooperation, international trade grew rapidly and consistently during the 1950s and 1960s.… Between 1948 and 1960, the total value of merchandise exports of noncommunist countries rose from $53 billion to $112.3 billion, at an average growth rate of more than six percent per year. Growth was even faster in the 1960s, when the average annual rate of export volumes increased to more than eight percent. These growth rates far exceeded the rate of expansion of world trade experienced in the half-century before 1914, the period that hosted the highly celebrated ’first globalisation’.”
—“The Post-War Rise of World Trade: Does the Bretton Woods System Deserve Credit?”, September 2003
British and French colonialism persisted in the immediate postwar period but quickly began to unravel across Asia under the pressure of independence movements (e.g., India) and the Stalinist-led peasant social revolutions that created deformed workers’ states modeled on the Soviet Union (e.g., China, Vietnam, North Korea). The Soviet Union itself bounced back from the utter devastation of the war to become an industrial and military superpower, expanding its influence with the creation of deformed workers’ states in Eastern Europe. Decolonization did not, of course, mean the end of imperialist exploitation, despite the fact that many post-colonial regimes in Africa and the Middle East attempted to develop their economies by asserting sovereignty over natural resources. What emerged was a neocolonial system in which nominally independent states would be forced by economic pressure, corruption and (when necessary) military violence to obey the commands of their imperialist masters. Even within this neocolonial framework, colonialist practices continued, especially within what became known as “Françafrique.”
Although it had supported Jewish immigration into Palestine, Britain eventually came into conflict with Zionist extremists, who launched a revolt between 1944 and 1948. Failing to put down the uprising, Britain renounced its claims and turned the mandate over to the control of the newly founded United Nations headquartered in New York. In 1948, the state of Israel was born, immediately expelled more than 700,000 Palestinians and launched a regional war to expand its territory. France fought a brutal and ultimately losing war against Algerian independence (1954–62), though “the French government had quietly negotiated the autonomy and (1956) independence of the two other North African protectorates” of Tunisia and Morocco (Eric Hobsbawm, The Age of Extremes). “In the same year,” Hobsbawm recalls, “the British quietly let go of the Sudan, which had become untenable when they lost control over Egypt.” Indeed, the final nail in the coffin for the British empire was the failed attempt by British, French and Israeli forces to seize Egypt’s Suez Canal in 1956 without authorization from the US. Exerting financial and diplomatic pressure, Washington imposed a humiliating defeat on its diminished imperialist partners, cementing its role as the dominant imperialist power. The following year, the US adopted the Eisenhower Doctrine, which formally declared that American troops would intervene in the Middle East to counter Soviet influence and protect Western interests.
European, Japanese and Anglosphere capitalists prospered under the postwar arrangement, which effectively allowed them to operate as junior partners of US imperialism. The junior imperialist states maintained their independence, and there were moments of friction with Washington (particularly from France) as well as competition among corporations from different countries, but they served as privileged participants in the American-led order. The tendency towards the “internationalization of capitalist interests” increasingly trumped its counter-tendency.
There was an incredible intertwining of finance capital across national lines, with the United States at the gravitational center. In the language of bourgeois economics, “institutional investors” are large entities that pool capital for profitable investment, and they include banks, hedge funds and other examples of financial capital. Looking at the ownership profile of domestic stock market values, i.e., the “home” country of institutional investors, provides a window into the integration of the junior imperialists into American finance capital. Even well into the present period of US decline, American finance capital’s role in the economies of other imperialist countries remains significant:
“Globally, US-domiciled institutional investors have a dominant position with respect to the total value of equity holdings. For each jurisdiction included, [Figure 2] shows the portion of shares held by institutional investors. It also illustrates the distribution of institutional holdings between domestic institutions, US-domiciled institutions and non-US institutions. In the United States, institutional investors hold around 72% of the domestic stock market value. About 61% of these holdings are held by US institutions, while foreign institutions account for slightly more than 11%. In addition, US-domiciled institutional investors have significant holdings in most other stock markets. For example, US-domiciled institutions hold 22% and 17% of the public equity in the United Kingdom and in Canada, respectively.”
—A. De La Cruz, A. Medina and Y. Tang (2019), “Owners of the World’s Listed Companies”
Figure 2: Domestic and non-domestic ownership of total market capitalization
Reproduced from De La Cruz et al (2019)
Parallel to the postwar economic integration of imperialist competitors into the American empire was their military integration via the North Atlantic Treaty Organization (NATO), which was created by Washington to bolster Western military forces against the Soviet Union. Japan was essentially left demilitarized, and the antipodean imperialists were integrated into the US military system via the Australia, New Zealand, United States Security Treaty (ANZUS). Washington built a vast network of hundreds of military bases across the world, including installations on the territories of its imperialist partners. This massive intrusion of American military might into sovereign imperialist countries was justified both politically and in the strategic calculations of host countries by the need to defend against the USSR and contain the spread of “Communism.” If it was a devil’s bargain, America’s junior partners preferred it to the alternative of social revolution. Moreover, the insertion of US state power in Europe helped to nullify the historic antagonism between France and Germany, and the Franco–German bloc gradually, with the blessing of Washington, enlarged itself into what would become the European Union.
Culturally, American capitalism exported itself to the world in the form of movies and popular music. European and other global elites developed a high degree of interpersonal connection through common attendance at prestigious educational institutions and participation in multilateral conferences. Whatever else they revealed about the proclivities of some members of the US-centered “global elite,” the Epstein Files have shown the breadth and depth of capitalist connections across national lines. The Epstein nexus included billionaire investors, bankers, industrialists, Big Tech oligarchs, royals, government officials, academics and artists from the US, Britain, Europe, Israel, the Gulf States and beyond. These elites all speak English (particularly its American variant) and enjoy each other’s company on private jets and at luxury accommodations in New York and other world cities, as well as on Caribbean islands. These connections are indicative of the high degree of integration of ruling classes across the imperialist world in the post-WWII era, an integration that persists to the present day. Although on a much larger and wider scale, it is reminiscent of the royal families of Europe, where the respective kings of belligerents England and Germany during WWI were first cousins.
So were Lenin and Bukharin wrong about the inherently antagonistic character of imperialism? They had posited great-power rivalry as endemic to capitalism in its monopoly stage of development, and they had argued that the default preference for finance capital was protectionism and colonialism. Yet following WWII, inter-imperialist tensions were subdued and colonial empires and protectionist tariffs came tumbling down as a growing free-trade regime administered jointly by Washington and its imperialist partners took hold. Was this the realization, a generation later, of Kautsky’s vision of ultra-imperialism? Lenin had acknowledged that “a general alliance embracing all the imperialist powers” was possible, but he considered such a situation to be “inevitably nothing more than a ’truce’ in periods between wars.” There has been no war between the US and its junior partners for more than 80 years. This is more than a simple “truce” or interwar period—it covers a whole lifetime.
The “American peace” lasted so long, the integration of different finance capitals and military-intelligence apparatuses became so deep, that there emerged even among ostensible Leninists the notion that “imperialism,” “the imperialists” and “US imperialism” were essentially interchangeable terms. Even today there are self-described Leninist organizations that view imperialism as equivalent to the American empire or reject the view that inter-imperialist rivalry is a fundamental feature of imperialism. In other words, many “Leninists” have quietly accepted Kautsky’s perspective, though they do not admit it either to their followers or themselves.
The theory of ultra-imperialism is fundamentally flawed in that it sees the contradictions of imperialism as soluble. In contrast, Lenin’s theory insists that inter-imperialist rivalry, even if it assumes a “peaceful” form for a period of time, can never be suppressed, and that Bukharin’s “nationalization of capitalist interests” will inevitably reassert itself over the “internationalization of capitalist interests” in the context of uneven development. Lenin did not envision imperialism lasting as long as it did, nor could he have predicted the pressures that would be placed on world capitalism by the degenerated and deformed workers’ states, and he therefore did not anticipate such a lengthy period of inter-imperialist peace. But the conditions for that peace are well known. It was made possible due to a combination of factors coming out of WWII: the military defeat and American occupation of Germany and Japan; the destruction of much of Europe’s physical infrastructure and industry during the war; the overwhelming economic, financial and military supremacy of the US; and the external threats posed by decolonization movements. Above all, it was due to the existence of the Soviet Union and the post-war advent of deformed workers’ states created in its image, a threat both material and ideological that the imperialists united to contain. According to Lenin’s theory, but not to Kautsky’s, the eventual disappearance of these conditions would produce conflict among the imperialists.
Even within the first two decades of the post-WWII order, the contradictions of the imperialist system began to reassert themselves. A crisis was already developing within the hegemonic order the US had constructed, formed of three parts: the decline of the US manufacturing base, the relative rise of its allies and the costs of the anti-Soviet containment policy.
We have already noted the decline in the profitability of US industry following the war:
“In his seminal book Invisible Leviathan, which includes a detailed empirical study of the US economy seen through the lens of Marxist value-theoretical categories, Murray E.G. Smith calculates an overall after-tax rate of profit. The trend from the 1950s to the 1980s shows a secular (long-term) decline from around 14 percent in 1950 to a low of around 5 percent in 1986. An after-tax non-financial rate of profit shows a slightly more pronounced drop from almost 15 percent in 1950 to a low of about 3.9 percent in 1982. The decline in the rate of profit, which was expressed throughout the 1970s in an acute crisis of profitability, correlates closely to a rise in the ’organic composition of capital’ (the ratio of capital investments in technology and other ’dead’ factors to surplus value and the ’variable capital’ of productive workers’ wages).”
—“Whither America?” 1917 No.43
Having overcome the immediate consequences of the war through the massive influx of American capital, the United States’ allies found themselves with far more competitive manufacturing sectors than that of the US itself. In the US, manufacturers had been expanding their role in world production continuously since the recovery from the Great Depression, inheriting all of the capital stock built up over the 1930s and wartime expansion. Elsewhere, however, the war had wiped the slate clean for renewed development, and the capital stock was far younger. German and Japanese capital, which the US had nurtured for economic and geopolitical reasons during the early Cold War, had rebounded by the end of the 1960s to become important economic competitors. The US had also supported the creation of manufacturing economies in other countries along the frontier with the Eastern Bloc, from Taiwan to the Middle East, though for the most part these remained thoroughly dependent on US military support or retained significant US ownership of industry.
Under Charles de Gaulle, France’s neocolonial interests and desire for military independence reached a point of crisis by the mid 1960s, even resulting in attempts by Paris to soften relations with the Soviet Union. While remaining a member of NATO, France withdrew from the alliance’s integrated military command in 1966. Valéry Giscard d’Estaing, the finance minister and future president of France, complained of America’s “exorbitant privilege” whereby the status of the US dollar, as the global reserve currency, permitted the US to pay for imports in its own currency and finance its debt more cheaply. The premises of this arrangement were Washington’s capacity for global military projection and the overwhelming economic preponderance of the US. So long as this was seen as sustainable and necessary as a counterbalance to the Soviet Union, US-aligned capitalist interests were willing to overlook the obvious unfairness and dependency the Bretton Woods system was creating. But increasingly, this was no longer the case, and the risk that other countries would follow the French example was very real.
The US policy of containment—encircling the Soviet Union and its allies with a network of bases, allies and puppet regimes, ready to crush any hint of expansion—not only relied on enormous military spending, but also repeatedly threatened to produce unpopular and possibly devastating global conflicts. The Korean War had led to an international coalition losing thousands of soldiers to defend the American puppet regime in the South, also bringing China into a direct military conflict. The narrowly avoided prospect of a (likely nuclear) US intervention in the First and Second Taiwan Strait Crises had alienated Washington from many of its more powerful allies. The latter largely refused to follow the US into its intervention in Vietnam, a war in a region seen to be of relative geopolitical unimportance that would ultimately kill millions of people, including more than 58,000 US soldiers.
The costly quagmires caused by the containment policy made the situation even worse for US capitalism. The deaths of thousands of conscript soldiers had deepened the domestic political crisis in the United States itself, already put to the test by the escalating struggle for Black liberation. Washington attempted to paper over the crisis with massive social spending alongside the huge military budget—President Johnson’s “Guns and Butter” policy—but such spending was unsustainable. The Bretton Woods system remained credible only as long as foreign governments and central banks believed that the United States could redeem their dollar reserves for gold at the official rate. But spending on overseas military interventions and bases deepened the consistent net outflow of dollars, and the “Great Society” costs of domestic welfare outstripped the growth of America’s productive capacity, leading to inflation. The result was an accumulation of dollars in foreign banks, while in the US itself spending could only be supported by eating into the gold reserve. If foreign banks began to question the sustainability of the system and demand the gold their dollars theoretically entitled them to, the result would be a wholesale collapse in confidence in the US-led order.
Under these pressures, the Bretton Woods system could not continue. As we recalled last year, “in August 1971 President Richard Nixon imposed wage and price controls, levied a 10 percent tariff on imports and ’temporarily’ ended the convertibility of the greenback, effectively uprooting the Bretton Woods system” (“The Empire Lashes Out,” 1917 No.49).
The so-called Nixon Shock did not spell the end of American hegemony, but it was a recognition that Washington would need to adapt its hegemony to the changing conditions of profitability in the United States. First among these changes was the geopolitical master stroke that was Nixon and Secretary of State Henry Kissinger’s rapprochement with China. In the 1950s, a US nuclear attack on China from its bases surrounding the country was repeatedly considered, and Chiang Kai-Shek’s blockade of mainland ports was given full support. Nixon’s need to cut the cost of military expenditure coincided with Mao’s need for new foreign industrial backers after his break with the Soviet bureaucracy in the decade following 1956. Relations with China were gradually normalized, while Taiwan was slowly iced out of Washington’s diplomatic and military networks as the US gained a new ally on the USSR’s southern border.
At home, labor costs had to be driven down without depressing living standards too much, leading to the slow but persistent decline in workers’ wages that continues into the present day. This could only be maintained if consumer goods remained consistently cheap, and so the barriers that many “developmentalist” neocolonial countries had erected in the late 1950s and 1960s to protect domestic industry and ensure sovereignty over natural resources would have to be battered down, opening up new fields of investment.
The sum of these changes was a reconfiguration of the world system in the decades following 1971. As we noted last year:
“By the end of the 1970s and the beginning of the 1980s, a new ’neoliberal’ era of floating exchange rates, government austerity, privatization, financialization, the rise of mass public and private debt and turbocharged globalization of production was ushered in, first by the US and British states, and shortly after by other imperialist powers following suit to varying degrees.
“Social counterrevolution in Central and Eastern Europe and finally the Soviet Union in 1991, along with the open pillage of poor countries—often via ’structural adjustment programs’ imposed by the IMF—gave a temporary boost to the fortunes of the imperialist ruling classes.”
—“The Empire Lashes Out”
To maintain the “exorbitant privilege” of the American economy in a post Bretton Woods era, the US dollar’s value was maintained by simply forcing countries around the world to conduct major transactions in US dollars.
The first real test of the new order came with a crisis in America’s energy supplies, which threatened to undermine Washington’s reconfiguration of the domestic economy and throw the country back into the social turmoil of the previous decade. While the US had become the dominant imperialist power in the Middle East, American control of the region was far from total. Following the Suez Crisis of 1956, France became Israel’s main imperialist sponsor, but this changed in 1967 when Paris downgraded its relationship with Israel and opted to develop closer ties to the Arab rulers of the region. When the Israel Defense Forces crushed the Soviet-backed armies of Egypt, Jordan and Syria in the Six-Day War that same year, Washington established a strategic relationship with Israel, which would henceforth receive billions of dollars of aid and serve as America’s beachhead in the region. In 1973–74, the Arab member states of the Organization of the Petroleum Exporting Countries (OPEC) cut oil supplies to the US, Britain, Japan and other imperialist countries to protest their support for Israel during the Yom Kippur War of 1973, in which Egypt and Syria launched a losing conflict against the Zionist state.
Despite the Arab rulers’ displeasure with American support to Israel during the war and their willingness to punish Washington, the Arab OPEC states ultimately preferred to make a deal with the imperialists. Kissinger successfully negotiated the United States–Saudi Arabian Joint Commission on Economic Cooperation in June 1974. In order to secure energy supplies for a US still partly dependent on Middle Eastern oil, the agreement offered industrial and military aid in exchange for promises to increase production for US markets. The increasingly wealthy OPEC states came to depend on their ability to “recycle” oil surpluses into US Treasury bonds, financial assets, arms purchases and development contracts. While oil markets had always been priced in US dollars, it was this practice of “recycling” that became known as the “petrodollar system,” a core foundation of world financial markets for the next five decades. But the system was never codified, and could be fragile:
“No formal treaty legally binds OPEC countries to use the dollar—it’s more convention than law. In recent years, some producers—including Saudi Arabia and Russia—have accepted yuan, euros, or other currencies in bilateral deals. The dollar remains dominant largely because of habit, liquidity, switching costs, and the depth of U.S. financial markets.
“Even today, roughly 80% of global oil transactions are denominated in dollars. The currency’s integration with the global banking system—particularly the SWIFT payments network—reinforces that dominance.”
—Independent Institute, “Unpacking The ’Petrodollar War Theory’,” 27 February 2026
Notably, one of the threats to the petrodollar system was the 1979 Islamic Revolution in Iran, in which a popular movement uniting the working class with Islamists based in the petty-bourgeois “bazaar class” toppled the Shah and established the Islamic Republic. The immediate result of the Islamic Revolution, which poisoned relations between Iran and the US, was another oil crisis:
“The Iranian revolution sparked the world’s second oil shock in five years. Strikes began in Iran’s oil fields in the autumn 1978 and by January 1979, crude oil production declined by 4.8 million barrels per day, or about 7 percent of world production at the time. Other producers were able to make up some of the volume, resulting in a net loss of supply of about 4 to 5 percent. Nevertheless, oil prices climbed rapidly, rising from $13 per barrel in mid-1979 to $34 per barrel in mid-1980.”
—Brookings Institution, “What Iran’s 1979 revolution meant for US and global oil markets,” 5 March 2019
The US economy of the 1970s was marked by sluggish economic growth, high unemployment and rising inflation—the infamous “stagflation” that was ended only by painful and unprecedented hikes in interest rates in the early 1980s that devastated working-class communities.
Neoliberalism represented an attempt to make workers pay the costs of shoring up the position of US corporations on the global stage. And despite periodic recessions, the US profit rate did recover, though the new “prosperity” of the late 1980s and 1990s was exaggerated due to the rising share of fictitious financial profits. Industry in the US and other imperialist countries was, to varying degrees, offshored to cheap labor zones in the Global South (and especially China) in a process dubbed “globalization,” so that the super-exploitation of foreign workers also undergirded the system. In Europe, neoliberalism was bound up with a continental unification project that attained its highest form in the EU and euro, which provided cover for austerity programs in the imperialist centers and created a framework in which especially German capital could penetrate into the former “Communist” states to the east throughout the 1990s.
Although it restabilized its dominant global position by the end of the 1980s, the US was on a course that could only intensify the internal contradictions of its capitalist economy and lead to attempts to secure more resources and fields of investment through economic pressure and military force. As the economic engines of Europe and Japan slowed down, the stage was being set for growing divisions within the US-led bloc. It would be America’s greatest peacetime “victory” that initiated the unravelling of the empire.
A pivotal moment in world history was the victory of capitalist counterrevolution in the Soviet Union in 1991 (see The Revolution Overthrown). The end of the Cold War was greeted with delirium by imperialist ideologues, who announced a “new world order” under American unipolar global dominance. Wasting no time, Washington moved to secure the Middle East:
“American imperialism’s first target was oil-rich Iraq, governed by erstwhile ally Saddam Hussein. Under the pretext of opposing Baghdad’s invasion of Kuwait—a military operation that the Baathist dictator believed had Washington’s blessing—the US and its allies launched the Gulf War of 1991 (aka ’Operation Desert Storm’), openly regarded by both Republican and Democrat politicians as among the ’first tests’ in a post-Soviet New World Order in which ’there is no substitute for American leadership,’ according to then-President George Bush Sr.”
—“Inching towards WWIII,” 1917 No.47
Signs of strain within the US imperialist coalition could be seen in NATO’s 78-day bombing campaign against Serbia in 1999:
“In addition to subduing Serbia, policymakers in Washington were intent on maintaining America’s pivotal role in European affairs at the expense of their German, French and Italian rivals while seeking to extend US leverage within what was formerly a Soviet zone of influence. NATO’s Yugoslav mission was the first time that Germany had gone to war since the days of the Third Reich and thus represented something of a watershed moment for German imperialism. Berlin tended to view the Balkans as its sphere of influence and initially tried to block with France and Britain to handle Serbia rather than letting the Americans intervene. However, US Secretary of State Madeleine Albright successfully drove a wedge between Germany and its EU partners in the lead-up to the Rambouillet Agreement, which set the stage for the NATO bombing campaign. The day before the bombs began to fall on 24 March 1999, [US President Bill] Clinton let slip that cementing a strong US-European partnership ’is what this Kosovo thing is all about’ (cited in Masters of the Universe, ed. Tariq Ali, 2000).”
—Ibid.
Yet following the terrorist attacks of 11 September 2001, NATO members—including Britain, Canada, Germany, France and Italy—dutifully joined Washington’s “Operation Enduring Freedom” against Afghanistan. American imperialism already had plans to conquer Iraq, which the US invaded in March 2003. Speaking years later, Wesley Clark, NATO’s former Supreme Allied Commander Europe, revealed that Iraq was only one of many targets scheduled for US invasion. In 2007, he recounted a conversation he had with a general in the Pentagon about 10 days after 9/11 regarding a communication from the secretary of defense: “This is a memo that describes how we’re going to take out seven countries in five years, starting with Iraq, and then Syria, Lebanon, Libya, Somalia, Sudan and, finishing off, Iran” (Democracy Now!, 2 March 2007).
It was with the broader “war on terror” that the rift between the US and European (but not British) imperialists began to widen. From the standpoint of Germany and France, which relied more heavily on Middle Eastern oil than the US, Washington was engaged in a risky gambit that could potentially damage their economic interests. Iraq had requested that the United Nations, which managed the country’s food-for-oil program, allow it to conduct its petroleum exchanges in euros instead of dollars—setting a precedent that could form a threat to the petrodollar that was obviously received differently in Paris and Berlin than it was in Washington. It is perhaps not surprising that France and Germany chose not to participate in the perversely named “Operation Iraqi Freedom.” Washington’s reaction to that decision led to a deterioration of relations with Europe:
“Furious at European ’treachery’ over Iraq, one Pentagon insider told the Observer (16 February 2003) that an angry America would seek to ’harm the German economy.’ [US Secretary of Defense Donald] Rumsfeld famously dismissed France and Germany as ’old Europe’ while the Pentagon, under orders from [Deputy Secretary of Defense Paul] Wolfowitz, ’barred French, German and Russian companies from competing for $18.6 billion in contracts for the reconstruction of Iraq, saying it was acting to protect “the essential security interests of the United States”’ (New York Times, 10 December 2003).”
—“Inching towards WWIII,” 1917 No.47
The US pursued its “war on terror” throughout West Asia and North Africa, launching regime change operations in Syria and Libya. One of the consequences of these wars was a “migrant crisis” that strained an already shaky political and economic situation in Europe. By 2016, more than 5 million refugees and other migrants—the largest number of displaced persons since WWII—had fled the devastation of the Middle East and taken up residence in Europe. Washington’s imperial adventures had turned into costly and failing military operations that helped balloon US public debt and further call into question the continued viability of the dollar as the global reserve currency. The whole neoliberal house of cards of a highly financialized and increasingly fake American prosperity—the basis of the US “unipolar” order—came crashing down in the 2008 financial crisis (see “Pathologies of Capitalism,” 1917 No.34). Around the same time, new forces emerged on the global scene that would fundamentally change the system of international relations and help to usher in the era in which we now live.
Next: Part III: Return to Multipolarity & Inter-Imperialist Conflict