THE BALKAN WAR AND US GLOBAL POWER
by Giovanni Arrighi
It will take time before anyone will be in a position to draw a minimally reliable balance sheet of the Balkan War that has just ended. From the point of view of the humanitarian objectives for which it was ostensibly fought, all we can do for now is to join Pope John Paul II in declaring its outcome an unmitigated "defeat of humanity." Beyond that, any kind of balance sheet requires a preliminary identification of the real objectives of the war.
Noam Chomsky and many others have already shown much better than I ever could how suspect were the humanitarian motivations of the war. On this, I will limit myself to pointing out that throughout the conflict the humanitarian issue has been bound up in the declarations of the US and British instigators of the war with what they referred to as a "credibility" issue. The United States and its NATO allies had to demonstrate that their threat to use force was credible in the sense that it would actually be carried out if NATO did not get its way and, if carried out, it would result in NATO getting its way. If the war made one thing absolutely clear, it is that this issue of credibility (which is nothing but a straightforward issue of power) had absolute precedence over whatever humanitarian objectives, if any, were actually pursued by NATO. The most striking thing about the war was indeed the callousness and self-righteous determination with which the NATO command threatened to continue indefinitely an ever more destructive air campaign unless Milosevic (or better still anyone who might have succeeded in ousting him from power) bowed to NATO power and acceded to its dictates unconditionally.
If additional proof was needed of the absolute priority of US and NATO credibility over humanitarian objectives, it came with President Clinton's "victory" speech on June 10. To him, victory meant first and foremost that Yugoslavia had more or less unconditionally capitulated to NATO demands. The human sufferings inflicted on the Yugoslav population, both Serbian and ethnic-Albanian, in the pursuit of unconditional capitulation were hardly mentioned, except for a new intimation to the Serbs that they would not get any help in reconstructing their devastated country unless they got rid of Milosevic. As it should have been clear from the start, the demonstration of US and NATO power was the true objective of the war. Appeals to human sentiments were mere means, camouflaged as ends to mobilize support at home and abroad for a disproportionate use of violence in a patent breach of international law.
But why, we may well ask at this point, was it so important for the United States and NATO to demonstrate their credibility? Was credibility important in the pursuit of some broader objective? And if this was the case, how successful has the war been in attaining that broader objective? In seeking answers to these questions, it is helpful to see this latest US military exploit, not as an isolated event, but as a link in a chain of events capable of telling us something about the trajectory of US global power. Our questions can then be reformulated as follows: Is the need to demonstrate the credibility of the US/NATO military apparatus the sign of a long- term decline in the global power of the United States and the instrument of a US attempt to slow down that decline? Or is it the sign and the instrument of a new great leap forward of that global power? Can the Balkan war be expected to have been successful in slowing down the decline of US global power, or in propelling it to new heights, as the case might be?
The Trajectory of US Global Power since 1968
Let me begin with a sketch of the most basic facts of US global power over the past thirty years. Broadly speaking, over this period US global power seems to have followed a U-shaped trajectory, with each decade showing a different tendency: a precipitous decline in the 1970's, a bottoming out in the 1980's, a spectacular come-back in the 1990's. Let us briefly look at the forces that shaped this trajectory in each decade.
The precipitous decline of US global power in the 1970's was thoroughly shaped by the two key, world-historical events of 1968-73: the defeat of the United States in Vietnam and the simultaneous collapse of the Bretton Woods system through which the United States had governed world monetary relations. Although in these same years the successful landing of US men on the moon showed that the United States could easily catch up with and surpass its Soviet rival in the armament race, the US defeat in Vietnam showed how powerless the high-tech and highly capital intensive US military apparatus was in enforcing US commands against the determined resistence of one of the poorest peoples on earth. Massive US spending at home and abroad had thus resulted in a major fiscal crisis of the US warfare-welfare state. Equally devastating was the loss of credibility in the capacity of the US military apparatus to do anything other than reproduce at ever more costly and risky levels the balance of terror with the USSR. US global power fell precipitously, reaching its nadir at the end of the 1970's with the Iranian Revolution, a new hike in oil prices, the Soviet invasion of Afghanistan, and a new serious crisis of confidence in the US dollar.
It was in this context that in the closing year of the Carter Administration, and then with greater determination under Reagan, a drastic change of US policies laid the ground for the subsequent recovery of US global power. Militarily, the US government began avoiding carefully (as witnessed by the flight from Lebanon) the kind of confrontation on the ground that had led to defeat in Vietnam, in favor either of war by proxy (as in Nicaragua and Afghanistan), or of confrontations of merely symbolic value against insignificant enemies (as in Grenada and Panama), or of confrontations from the air where the US high-tech apparatus had an absolute advantage (as with Libya). At the same time, the US initiated an escalation of the armament race with the USSR--primarily, though not exclusively, through the Strategic Defense Initiative-- pushing its costs well beyond what the USSR could afford economically. The USSR thus found itself caught into a double confrontation neither of which it could win and would eventually lose: the one in Afghanistan, where its high-tech military apparatus found itself in the same difficulties that had led to the defeat of the United States in Vietnam, and the one in the armament race, where the United States could mobilize financial resources that were wholly beyond the Soviet reach.
This change of US military policies eventually resulted in the collapse of the USSR and the beginning of the great come-back of US global power of the 1990's. Nevertheless, it cannot be emphasized strongly enough that the change in US policies that was most decisive in bringing about the great turnaround in US global power occurred in the financial rather than in the military sphere. Indeed, without this other change in US policies, it would have been impossible to escalate the armament race beyond the financial reach of the USSR.
The policy changes--a drastic contraction in money supply, higher interest rates, lower taxes for the wealthy, and virtually unrestricted freedom of action for capitalist enterprise--constituted the liquidation of the legacy of the New Deal. Through these policies the United States began to compete aggressively for capital world-wide provoking a major reversal in the direction of its global flow. From being the main source of world liquidity and of direct investment in the 1950's and 1960's, by the 1980's the United States had become the main debtor nation and a major recipient of direct investment. The other side of the coin was the debt crisis that ravaged poor and middle income countries, most of which did not have a chance of successfully competing with the US giant in world financial markets. Latin America and, above all, African economies were devastated. But the crisis made itself felt in Eastern Europe as well, further reducing the capacity of the USSR to compete in the armament race with the United States, and contributing decisively to the tensions that eventually led to the break-up of Yugoslavia and the escalation of ethnic conflicts. Thus, while the United States came to enjoy practically unlimited credit in world financial markets, the Second and Third Worlds were brought to their knees by a sudden exhaustion of their credit in those same markets. What US military might could not achieve, US power in world financial markets did.
There was nonetheless a problem with this victory. Japan and the overseas Chinese operating out of Taiwan, Hong Kong, Singapore and the main commercial centers of Southeast Asia, emerged as the world's leading creditor nations and the organizers and financiers of a region-wide industrial expansion that for speed and extent had few parallels in capitalist history. Indeed throughout the 1980's, the East Asian region seemed to be the main beneficiary of the intensifying interstate competition for mobile capital and the new escalation of the Cold War. While world trade and production stagnated, the economic expansion of the East Asian region gained momentum, capturing a growing share of world liquidity. Japanese banks came to dominate international asset rankings and Japanese institutional investors set the pace in the US treasuries market. Earlier prognostications of an "emerging Japanese superstate" or of "Japan as number one" seemed to be right on mark. The United States might have recovered from the depth of the crisis of the 1970's by putting its great military rival and the entire Third World on the defensive. But if money rather than guns had become the primary source of world power--as the very recovery of US fortunes seemed to indicate--did not Japanese economic power constitute a new and more insidious challenge to US global supremacy?
These fears were put to rest at the very beginning of the 1990's by the collapse of the USSR and the almost simultaneous crash of the Tokyo stock exchange in 1990-92--two events that sent the trajectory of US global power soaring. The United States was left as the one and only military superpower with no prospect in the foreseeable future of any power to rival it. Moreover, the taming of the USSR cleared the ground for the US mobilization of the United Nations Security Council to endorse and legitimate its police actions throughout the world. Saddam Hussein's invasion of Kuwait immediately created an ideal opportunity for such a mobilization, which the US promptly seized, putting up a televised show of its high-tech firepower. Attempts to carry the experience one step further through the "humanitarian" mission in Somalia failed, because an ambush led to one televised snippet of a dead American pulled through the streets of Mogadishu. This revived the Vietnam syndrome at home and led to the immediate withdrawal of US troops. But subsequent safer "humanitarian" missions in Haiti and especially Bosnia were more successful. By and large, since the collapse of the USSR and the Gulf War, US military power has continued to remain unchallenged and, on its own terrain, unchallengeable.
The Gulf War also demonstrated that Japan, for all its financial and economic power, was wholly incapable of taking an independent stand in world politics, once again falling in behind the United States. But even its financial and economic power were questioned, as the Japanese economy was incapable of recovering fully from the crash of 1990-92--a situation that was made worse by the region-wide financial crisis of 1997-98, which turned the near-stagnation of the Japanese economy into contraction. In the meantime capital from all over the world, and especially East Asia, continued to flow to the United States, sustaining a long speculative boom on Wall Street and enabling the US economy to expand considerably faster than in the preceding twenty years, in spite of a large and growing trade deficit. As the new millennium approached, not only the US military, but also the US economy seemed to be unchallenged and unchallengeable.
In the light of this trajectory, it might seem that the most plausible answer to our questions is that the need to demonstrate the credibility of the US/NATO military apparatus in the Balkan War is more likely to be a sign of an ongoing great leap forward of US global power than of a decline. And since the United States and NATO have demonstrated in the Balkans that their threats to use force until they get their way are not empty or ineffectual, the war can be expected to add new momentum to that great leap forward. It is possible, even likely, that this is the way in which the US and British instigators of the war see the situation. But it is just as possible and likely that the situation is not at all what it appears from the perspective of the 1990's--that is, from the perspective of the rising portion of the U-shaped trajectory of US global power sketched earlier. It is also possible in my view that the Anglo-American misreading of the situation, far from adding new momentum to an imaginary great leap forward in US global power, may precipitate a complete breakdown of what is left of the US world order.
US Global Power in World Historical Perspective
This assessment is based on two studies that have sought clues to an understanding of present tendencies in earlier periods of capitalist history that in key respects resemble the present. The first study (Giovanni Arrighi, Il lungo XX secolo. Denaro, potere e le origini del nostro tempo, Il Saggiatore, Milano, 1996; edizione EST, 1999) focuses on the financial expansions that have characterized the closing phases of each and every stage of development of world capitalism from early modern times to the present. The second study (Giovanni Arrighi and Beverly Silver et al, Chaos and Governance in the Modern World System, University of Minnesota Press, Minneapolis and London, 1999) focuses instead on the analogies and differences between the present hegemonic transition (to a yet unknown destination) with two earlier transitions of world capitalism: from Dutch to British hegemony in the eighteenth century and from British to US hegemony in the late-nineteenth and early-twentieth centuries. Taken jointly, these two studies provide the following insights into the present dynamic of US global power.
First, to different degrees and in different ways, the U-shaped trajectory that has characterized US global power over the last thirty years has been typical also of the power of all previous leaders of world-scale processes of capital accumulation in the closing phases of their hegemony. In the past, as in the present, the recovery of the fortunes of the declining hegemonic state after an initial crisis was based on a capacity to turn to its own advantage the intense interstate competition for mobile capital that ensued from all major expansions of world trade and production. This capacity was and is based on the fact that the declining hegemonic state still occupies the center of the world economic system. Although its capacity to compete in the commodity markets is declining, its capacity to act as the central clearing house of the international financial system is greater than that of any other center, including the centers that are emerging as the most competitive in the commodity markets.
Second, in past hegemonic transitions, though not yet in the present, the resurgence of the power of the declining hegemonic state was the prelude to increasing world disorder and the eventual breakdown of the old hegemonic order. Three tendencies seem to have been particularly important in provoking this increasing disorder. One was the emergence of new military powers that the declining hegemonic state was incapable of keeping under control. Another was the emergence of states and social groups who demanded a share of the system's resources that surpassed what could be accommodated under the existing hegemonic order. And yet another was the tendency of the declining hegemonic state to use its residual (and resurgent) power to transform its hegemony (based on some measure of consent) into an exploitative domination (based primarily on coercion).
Third, in the present transition, in comparison with previous ones, there is virtually no sign of any power emerging that can even remotely challenge militarily the declining hegemonic state. Instead of observing the emergence of new military challengers, we have observed the collapse of the only credible challenger--the USSR. But if there are no signs of the emergence of new powers capable of challenging the United States militarily, there is plenty of evidence that the other two tendencies are stronger than they were in past transitions. Thus, the decline of US global power in the 1970's was due primarily to US difficulties in accommodating Third World demands for a greater share of the world's resources. And the subsequent resurgence of US global power was due primarily to the success of the Reagan global counterrevolution, not just in containing, but in rolling back those demands. The essence of this counterrevolution was precisely the transformation of US hegemony into an increasingly exploitative domination. US hegemony in the 1950's and 1960's rested not just on coercion but also on the consent elicited from Third World countries through the promise of a global New Deal, that is, wealth for all nations through "development." In the 1980's and 1990's, in contrast, Third and former Second World countries were asked rather unceremoniously to subordinate "development" to the imperatives of world financial markets that relentlessly redistributed wealth to the United States and other wealthy countries.
In spite of its apparent success, this transformation can be expected to be as unstable as analogous transformations have been in the past. Two contradictions seem particularly difficult to resolve. One is the continuing shift of the epicenter of global processes of capital accumulation to East Asia. Contrary to widespread opinion, the persistence of the economic crisis in Japan after the crash of 1990-92 and its transformation into a region-wide (East Asian) crisis in 1997- 98 in themselves do not support the contention that the shift has been reversed. As my co-authors and I show in Chaos and Governance in the Modern World System, in past transitions newly emerging centers of world-scale processes of capital accumulation became the epicenters of turbulence rather than expansion, before they acquired the capabilities to lead the world toward a new order. This was true of London and England in the late eighteenth century and even more of New York and the United States in the 1930's. To say that the Japanese and East Asian financial crises of the 1990's demonstrate that the epicenter of global processes of capital accumulation has not been shifting from the United States to East Asia, makes as little sense as saying that the Wall Street crash of 1929-31 and subsequent US economic crisis demonstrated that the epicenter of global processes of capital accumulation had not been shifting from the United Kingdom to the United States.
Moreover, the Japanese and East Asian crises have so far been associated with continuing economic expansion in greater China (that is, in the People's Republic of China, Hong Kong, Taiwan and Singapore). Given the demographic size and historical centrality of China in the region, this continuing expansion is far more significant for the East Asian economic renaissance than the slowdowns and contractions experienced elsewhere in the region. To be sure, in spite of its great advances, China is still a low-income country. Nor is there any guarantee that China's economic expansion will not itself be punctuated by crises. Indeed, the chances are that it will because, as just noted, crises are an integral aspect of emerging economic centers. Nevertheless, the fact that China with its huge population has managed to escape the financial strangulation that brought the Second and Third Worlds to their knees is in itself an achievement of historic proportions. If the inevitable future crises will be managed with a minimum of political intelligence, there is no reason why they cannot be turned into moments of emancipation from US domination, not just for China, but for East Asia and the world at large.
But whether they will or not, the continuing shift of the epicenter of world-scale processes of capital accumulation to East Asia undermines the capacity of the United States to hold the center of the global economy. Already in the 1990's, the good performance of the US economy and the underlying speculative boom on Wall Street have been thoroughly dependent on East Asian money and cheap commodities. While the money, in the form of investments and lending, has enabled the US economy to keep expanding in spite of a large and growing trade deficit, the cheap commodities have contributed to keeping inflationary pressures down in spite of economic expansion. It is not clear for how long a situation like this can be sustained, or how it can be remedied by the United States without bringing its own economic expansion to an end. What is clear is that, the longer it lasts, the more the present economic dependence of East Asia on the United States will be turned upside down.
The second contradiction of the resurgence of US power in the 1990's concerns its growing dependence on military means, not just politically, but economically as well. The US military-industrial complex has always been a major (if not the major) source of US leadership and eventual undisputed supremacy in high-technology production and activities--from small arms production in the nineteenth century that gave rise to the American system of mass production, to the space program launched in response to the Soviet Sputnik that gave rise to today's satellite-linked and computerized communication systems. This undisputed supremacy is today the one and only decisive advantage of US industry in global markets. More important, the interpenetration of US high-technology and US military production and activities has provided the US government with a powerful instrument with which to bend the rules of an allegedly "free" global market in favor of US business. The more competition at home and abroad has intensified, the more essential this not so invisible instrument of commercial advantage and self- protection has become.
But while the importance of the US military-industrial complex as an instrument of advancement of US economic interests has increased, its usefulness on strictly military grounds has fallen off dramatically with the collapse of the USSR and the end of the Cold War. As previously noted, the main usefulness of the US military-industrial complex lay in its capacity to reproduce a balance of terror with the USSR at ever more costly and risky levels. But as the US experience in Vietnam showed, and that of the USSR in Afghanistan confirmed, these high-tech military-industrial apparatuses were rather ineffectual instruments with which to police the world on the ground. Policing the world on the ground, required risking one's own citizens' lives in activities that made little sense to the citizens themselves. As a result, as soon as the escalation of the Cold War in the 1980's overshot its mark and brought about the collapse of the USSR, the high-tech, highly capital intensive US military apparatus lost most of its military value. With the loss of the one and only credible military rival, the US military-industrial complex lost its own credibility as a war-making apparatus.
This contradiction between the increasing importance of the US military-industrial complex as the primary source of US economic advantage on the one side, and its decreasing value on strictly military grounds on the other, has never been resolved. The latent, increasingly important economic function of the US military-industrial complex cannot be openly admitted without undermining completely the credibility of its ostensible function. Worse still, such an open admission would also disclose the fact that the US military-industrial complex has probably become the most important instrument for bending and breaking the rules of "free markets" that the US is so fervently preaching to the world. Therefore a strictly military function for the US military-industrial complex has to be found.
This has been the main purpose of the half a dozen hot "wars"--in fact, more military exercises than wars proper--fought by the United States since the end of the Cold War. In some instances, especially in the Gulf War and to a lesser extent in the Balkan War, these military exercises were also useful as highly publicized shows of US high-tech merchandise. But the overriding objective has been to find an alternative to the credible military function that the US military-industrial complex had lost with the collapse of the USSR. How successful has this series of wars been in attaining this objective?
It seems to me that they have not been very successful. What they have demonstrated above all is what everybody knew from the start: that the United States has the technological capabilities to bomb out of existence any country it chooses too. Indeed, if it chooses to, it has the technological means it needs to blow up the entire world. But in Somalia, Haiti, Bosnia and Kosovo, they have demonstrated also that the new ostensible function of US wars--the pursuit of carefully selected and highly discriminatory humanitarian objectives--is not worth a single American life. When all is said and done, it would seem that the Vietnam syndrome is well and alive, leaving the US military-industrial complex without a credible function.
In conclusion, the foundations of the present resurgence of US global power are not as solid as they seem. Attempts to use that power to consolidate the exploitative domination of a handful of wealthy countries over the rest of the world are the surest recipe for global disaster. Hopefully, the ruling groups of these wealthy countries will be wise enough to use their still considerable power to solve rather than aggravate the problems that plague the world. Unfortunately, as Abba Eban once said, "History teaches us that men and nations behave wisely once they have exhausted all other alternatives."