In the meantime a different kind of popular movement began emerging from the Right. The New Right snatched many of its tactics and even former activists from the dispirited New Left. This turn to the right marked the end of the long period dominated by class politics with its familiar symbols, tactics, and well-rehearsed rituals of bargaining. The political reaction flew the colors of identity, which introduced into politics a nastily passionate charge because matters of identity tend to be uncompromising and nonnegotiable. The New Right came in two varieties, though often meshing in practice: ethnopatriotic or religious-patriotic fundamentalism and libertarian market fundamentalism. Both called for the militant defense of fundamental matters of faith—or whatever was claimed to be the founding identities in their societies. Notice that both fundamentalisms directed their ire at state bureaucracies, blaming them for being too secular, removed, devious and taxing. It tells us something important about Christian, Muslim, Jewish, Buddhist, Hindu and other contemporary fundamentalisms that their suspicions and phobias virtually everywhere went hand-in-hand with extolling the virtues of small business, small town life, and the patriarchal family.
The Left was precipitously declining across the board, leaving its place in the popular imagination to be filled with either apathy or fundamentalist anger. This reversal in mass politics opened the window of opportunity for conservative factions among the Western capitalist elites. Neoliberalism, yet another misnomer, in fact grows from the old ideological belief of modern capitalists that everyone would eventually benefit from letting them do whatever they deem necessary in the pursuit and disposal of profits. World progress, the purported laws of human nature, and supreme rationality are but the nineteenth-century intellectual supports to this faith. The fundamentalist character of the neoliberal movement is revealed in its adamant refusal to recognize as capitalism anything except the purest unregulated markets—just as religious fundamentalists recognize only their own radical brand of faith as true religion. History, however, shows that the ideal type of free markets cannot be observed in any empirical situation; it is an ideological fantasy. Following in the footsteps of Fernand Braudel and Joseph Schumpeter, we argue that sustained profits always require a degree of state protection and market monopoly. Hegemonic monopoly is what in fact propelled the renewed surge of American power and finance at the turn of the twenty-first century. At the time Michael Mann and Immanuel Wallerstein publicly opposed the project for an American world empire, and both presented analytical arguments questioning its viability.[1] There is now enough hard evidence to see how these predictions squared with reality.
The forty-year period now ending falls into roughly equal parts. The decades of the 1970s and the 1980s were marked by the crisis and collapse of the twentieth-century Left projects along with the political and economic structures of state-led national developmentalism. In the following twenty years, bracketed by the symbolic dates of 1989 and 2008, the American power found itself freed from the external pressures of the Cold War and the internal constraints of social compromises. The booming enterprise of neoconservative commentaries propagated a bullish belief in the return to capitalist normalcy while presenting it as the new, endless epoch of globalization. The post-1989 triumphalism referred in fact to the kind of normalcy experienced before the year 1914 (not the 1950s, which, although often conservative, were shaped by increasingly strong states). Back in the epoch of fledgling leftist movements and conquered non-Western peoples, capitalists could pursue their goals largely unconstrained by the demands of national governments, the considerations of social policy, and, for the first time, in a truly global arena that was unified by new transportation technologies and secured by military and political structures of colonial domination.
The prospects of twenty-first century globalization appeared to its advocates even brighter. American hegemony now kept firmly in check the imperialist rivalries of the kind that had finished off the previous globalization in 1914. The outsourcing of labor-intensive production from the core of the world economy to cheaper “emergent” locales in the periphery subverted national labor and environmental regulations and pressed governments and their citizenries to become “globally competitive.” The dismantling of government regulations allowed the leading capitalist groups to focus on reaping superprofits from the devilishly complex games of global finance. Even popular revolutions, in a paradoxical return to nineteenth-century liberalism, turned from the nemesis of capitalism into its democratic promoters in previously closed countries. The capitalist-compliant democratizations were facilitated by a spate of nongovernmental organizations enthusiastically assuming the role of latter-day global missionaries. The politically and financially cumbersome colonialism of yesteryear was replaced in the newest era of globalization by the indirect controls of powerful institutions of debt and the global network of American military bases, as well as the softer power of international advising, global mass media, and shared norms inculcated in the younger peripheral elites by acquiring prestigious diplomas in business and government administration from American universities. To this list of novel disciplining institutions, we should add illicit opportunities for money laundering through the global archipelago of microjurisdictions functioning as tax havens. The few remaining noncompliant and intransigent “rogue states” could be relegated to the Axis of Evil and serve a useful ideological function as the atrocious other.
These splendid designs ran into the structural realities of the world-system that had been profoundly transformed during the twentieth century. There could be no return to the pre-1914 imperial normalcy. Even the unprecedented concentration of military force in a single superpower in the modern age could not deliver on its geopolitical goals. In our own day the cruel coercive practices of past empires were bound to backfire. Perhaps the American jailers at the Abu Ghraib prison in Iraq stayed short of the methods of the Gestapo or, for that matter, Saddam’s own torturers. Nevertheless, these shameful images when publicized produced a storm of nationalist indignation across the Middle East and revulsion in the West. Such episodes, along with the post-1968 aversion of Western societies to casualties among their own military, put political constraints on the use of violence. Add here the sheer material costs of logistical overstretch that have not declined in the era of military high technology but have even increased; in effect, American campaigns of foreign policing became exceedingly costly and politically impossible to win.
Immanuel Wallerstein identified a different kind of constraint to American hegemony and its neoconservative globalization. Despite the persistent rhetoric of tax cuts and downsizing the government, the actual levels of taxation have remained roughly at the same historically high levels virtually everywhere. But wait, what about the stories of budget crises, cuts in public employment, shrinking pensions, and woefully underfunded education and social services? Behind this paradox we discover the reality of the continued redistribution of surpluses through state channels, official or not. Redistribution was now running in the upward direction, to people located in more powerful states and overwhelmingly to elites making political and financial decisions. The result was a huge accumulation of wealth in the hands of those who effectively became the oligarchs of our times. It is fairly simple to see how they did it. The cuts in social redistribution (in a broad sense, including policies of industrial growth and employment) freed the money still flowing through the gigantic state machineries and channeled it to the financial oligarchies. This could take the scandalous form of bailouts extended to corporations ostensibly too big to fail, yet in the main it was the endless generation of credit which in recent decades had been extensively used to cover the budget shortfalls of states and individual families.
1
Michael Mann,