The world system after 1945

I have to start my story by outlining what I consider to be the context of your discussion. You say you want to look at “avant-gardes from the decline of modernism to the rise of globalization, 1956-1986”. It is not clear to me whether these dates were chosen because of turning points in the artworld or turning points in the world political arena – perhaps both.

Your background text lays emphasis on the large number of authoritarian regimes that existed in various parts of the world at the beginning of that period and presumably fewer towards the end. You talk about the rise of globalization, presumably towards the end of that period. The shift you want to discuss is very real, but let me offer you a slightly different set of temporal cutting-points to illuminate this story – 1945, 1956, 1968, 1979-1980, 1989-1991, 2001-2003, 2008-2010.

1945: This was of course the end of the Second World War. More important, it was the end of an intense 30-year-long struggle between the United States and Germany in their efforts, begun in the 1870s, to succeed Great Britain as the hegemonic power of the world-system.

The United States was the triumphant one. It was the only major industrial power to emerge in 1945 with its infrastructure unscathed. It had become the most efficient producer in the world-system and dominated the world market. All of Eurasia – not only the defeated Axis powers but the victors as well – were struggling to reconstruct themselves. The United States was able therefore to assert its hegemonic position and impose a new world order favourable to its interests.

Its only constraint was the remaining military strength of the Soviet Union, whose army was occupying virtually the whole of east-central Europe. To ratify its hegemonic position, the United States felt it necessary to enter into an arrangement with the Soviet Union, one we have come to designate metaphorically as Yalta. This arrangement had three parts.

First and most important, the world was divided into two spheres of influence – a Soviet zone (the third of the world running from the Oder-Neisse line in Germany to the 38th parallel in Korea) and an American zone (the other two-thirds of the world). Both sides agreed tacitly not to attempt to use force to change these boundaries. There were many tense moments in their relations during the following years, but the outcome of each dramatic uprising or quasi-confrontation was in each case a return to the status quo ante. This agreement remained in fact inviolate until 1989.

Second, each side agreed to remain largely insulated economically. The United States would help to reconstruct western Europe and Japan – both to ensure their role as faithful and subordinate allies and to provide markets for the hyper-efficient American industries. The Soviet zone would be on its own economically. This dual protectionism held up less long, lasting only to the late 1960s.

Third, the two sides were to engage in a very loud rhetorical war known as the “Cold War”. The mutual denunciations did not change, were not intended to change, the geopolitical division but rather served to permit each side to control politically its own zone and to ensure that fully-loyal governments remained or were installed in power. This was the structural underpinning to the pervasive reality of authoritarian regimes in eastern and southern Europe as well as in Latin America, Turkey, Iran, Taiwan, South Korea, and elsewhere. These regimes would run into trouble eventually, the consequence not of changed views by American and Soviet authorities but rather of shifts the two did not control in the wider geopolitical world.

The problem for both the United States and the Soviet Union was that their tacit deal served both of them well, but was a very conservative constraint on the changes so much of the rest of the world ardently wanted. With the death of Stalin, the ideological solidity of the Soviet bloc began to erode. The year 1956 marked two major turning-points.

There was first of all the famous XXth Congress of the Communist Party of the Soviet Union and the “secret” report Nikita Khrushchev delivered there. The report did not remain secret very long. Khrushchev, speaking essentially on behalf of the Soviet Nomenklatura, brought the endless purges to an end, thereby offering a more stable environment for the lives and the fortunes of this Nomenklatura. To do this, he had to expose the Stalinist mythology. Many of the faithful thought of this talk not as “famous” but as “infamous.”

The attack on Stalin, as the faithful feared, undermined, and eventually undid, the worldwide ideological control by the Soviet hierarchy over both the satellite countries and the satellite parties everywhere. One immediate consequence was the two uprisings in eastern Europe – in Hungary and Poland. While both were repressed, in the Hungarian case by the use of Soviet troops, the unstoppable process of de-satellization had now begun.

Virtually at the same time, Israel, Great Britain, and France invaded Egypt, intending to punish Nasser for the links he was establishing with the Soviet Union. The United States was no more ready to tolerate this unilateral action on their part than the Soviet Union was ready to tolerate attempts by Poland and Hungary to engage in autonomous political activity. The United States was doubly dismayed – because its allies (and most particularly Great Britain) dared to act autonomously, and because these actions interfered with its own evolving policy of courting governments in the so-called Third World, particularly that of Nasser.

So the United States in effect ordered the three powers to withdraw their troops, which they did. All the main actors drew different conclusions from this confrontation. The outcome however was once again transforming. The United States would henceforth become an ever more direct actor in the Middle East, seeking to control everything and everyone, and in the long run discovering in this region the limits of the capacities of a hegemonic power.

The 1960s saw the onset of a creeping geopolitical decline for both the United States and its collusive partner, the Soviet Union. They both initially reacted by new kinds of repression. This would however not really work in the middle-run. The world-revolution of 1968 was one outcome, and turned out to be devastating for both of them.

The ideological decline of the Soviet Union was marked by an ever-escalating stretching of the interpretation of Marxism. In western Europe, the three most powerful Communist parties – in France, Italy and Spain – entered into a path of post-Stalinist redefinition, which would culminate a decade later in the concept of Eurocommunism. This path had the triple consequence of detaching these parties from Soviet control; “social-democratizing” their platforms; and despite both of these, or more likely because of both of these, declining real electoral strength.

Nor was this all. The 1960s was the moment of the emergence of cultural loosening of the Soviet system itself. The most visible aspect of this was the public emergence of Sakharov, Solzhenitsyn and ever more “dissidents”. More obscurely but quite importantly, an intra-Communist debate was launched in Hungary and western Europe on the concept of the “Asiatic mode of production” and this led eventually to making possible a return both to actually reading Marx and to a much wider discussion of Marx’s ideas less constrained by official doctrine.

The Chinese Communist Party used this moment to establish its total autonomy from the CPSU – not only politically but ideologically – and to establish itself as a new world pole of geopolitical power. The so-called “cultural revolution” not only created fundamental social upheaval within China itself but had an enormous impact on all left movements elsewhere in the world.

And, of course, the Czechoslovaks attempted to establish “socialism with a human face”. This led to the invasion by Soviet and other troops. The invasion was justified by the so-called Brezhnev doctrine, which did restore Soviet authority but turned out to be self-defeating. It both permitted the political stagnation of the Brezhnev years in the Soviet Union and it fed, rather than stifled, the thrust for de-satellization.

The political follies of the Soviet leadership at this time are widely discussed today. We tend to notice less the parallel follies of the US political leadership. In the 1960s, the solidity of anti-Communist ideology began to come into question in the zones that the United States controlled. A left-of-centre party was gaining strength in Greece. Falangism was no longer unquestioned in Franco’s Spain. Salazar’s death in Portugal reopened questions about the regime. In various Latin American countries, left or left-of-centre movements and parties seemed to be gaining strength as well.

America’s version of the Brezhnev doctrine came into play – the Colonel’s coup in Greece, Franco’s clamping-down of even moderate dissidents in his last days, military coups in Brazil and Chile, the intensification of the war in Vietnam, the ouster of Sihanouk in Cambodia. Just as Brezhnev’s repression worked in the short run but bred its own undoing, so did American repressive thrusts in the late 1960s and early 1970s.

Of course what hurt the United States the most was its inability to win its war in Vietnam. The Vietnam war not only led to enormous internal turmoil, but was draining – economically and geopolitically. It led to the moral and political fiasco of Watergate, Nixon’s fall from office, and let us not forget the exposure by the Church Committee of the US Senate of the nefarious doings of the CIA.

The key turning-point was the world-revolution of 1968, which pulled all these pieces together. First of all, it should be underlined that this was a world revolution, in the elementary sense that between 1966 and 1970, uprisings of various kinds occurred in all the three different geopolitical arenas then existing in the world-system – the pan-European world, the so-called socialist bloc, and the so-called Third World. Every national and local occurrence had to be sure its own particular story and explanation. But there were two underlying themes that were common to all the events in all three zones, and it is these commonalities that are relevant to our discussion here.

One was that everywhere the protestors were denouncing the misdeeds of US hegemony and the fact that the Soviet Union was in fact collusive in these misdeeds as a result of the unwritten Yalta accords. After 1968, neither the United States nor the Soviet Union would ever be able to regain the unquestioning fidelity of their presumed allies or the unquestioning belief in the bright futures each was guaranteeing to everyone.

The second commonality was, if anything, more important. The protestors everywhere called into question not merely the governing doctrines of the Cold War but the honesty, relevance, and real objectives of the traditional anti-systemic movements that had inspired and framed popular struggles for at least a century.

The three varieties of the Old Left – the Communist parties, the Social-Democratic parties, and the national liberation movements – were tarred by the protestors as failures. They had come to power in most states by that time, and they had not at all changed the world, as they had promised in their long trajectory since the late nineteenth century. The protestors proclaimed these movements to be not part of the solution but part of the problem. None of these movements would ever be able to recover from the political shock this caused. These movements ceased in fact to be movements and became merely parties. They lost the ability to mobilize the faithful who believed and were ready to sacrifice themselves for the certain glorious future the movements had promised.

These movements had been the movements of modernity. The modern was to have been the fulfilment of the struggle, the end of the process, the heaven on earth. At the end of this struggle, all problems would find resolution.

It is no accident that, as part of the world-revolution of 1968, the world saw the coming to the fore, the flourishing, of all the movements whose causes had been put aside as having to await the end of the process. These were the movements that asserted the rights of the “forgotten people” – the women, the ethno-racial “minorities”, the “indigenous” peoples, those whose sexual practices were other than the hitherto defined norm. They were also the movements of those who fought for a saner world ecology, those who struggled for peace, those who pressed the necessity of non-violent struggle.

All these groups were now rejecting the overwhelming primacy of the presumed prime historical actor put forward by the traditional social and nationalist movements, insisting on the co-equal primacy of all the oppressed groups. All these groups were rejecting the vertical structures of the anti-systemic movements that had always claimed to be the only legitimate movement within their state (present or prospective). They all championed instead a more horizontal alliance of multiple groups. And in the process, all these groups began to question the epistemological assumptions of “modernity” – seeing them as hidden, and not so hidden, legitimations of the dominance of a small segment of humanity, that which had dominated the traditional anti-systemic movements.

The end of modernity, the search for the “postmodern”, involved the rejection of the assumptions of “inevitable progress” as incarnated in Enlightenment thought. It meant not only a different way of thinking about the world, but also a different politics and a different geopolitics. It meant the liberation of the world “left” from the tacitly “centrist” presumptions of the traditional anti-systemic movements.

What, however, many of those involved in this attack coming essentially from the left on modernity and what I would call “centrist liberalism” is that it liberated the world Right as well from what had been its equally tacit acceptance of the ameliorative principles of this same “centrist liberalism”. Some of them, in their anxiety to assert the primacy of “culture” failed to realize that, as long as we live in a capitalist world-economy, neither the economic nor the political underpinnings of our lives simply cease to matter. The new post-1968 political scene would be one in which not only radicals but also conservatives came to feel liberated from the constraints of the formerly dominant centrist liberalism.

This double liberation was crucially important because the overall structure of the world-system was entering into a cyclical shift. The years 1967-1973 were the turning-point in two crucial ways. It marked not only the end of the period of unquestioned US hegemony in the world-system but also the end of the greatest expansion in the world-economy the system had ever known. What the French called “les trentes glorieuses” – a typical Kondratieff A-cycle except that it involved a far larger expansion of the world-economy than any previous one – reached its point of exhaustion. The quasi-monopolies that had sustained the expansion had been sufficiently undermined that the world-system entered into a Kondratieff B-cycle of stagnation, one that has been going on ever since.

What we call today the financial crisis of the world-economy is simply the culminating point of this long Kondratieff B-phase. The world Left passed the 1970s in search of new organizational forms that would replace those that the Old Left, the traditional anti-systemic movements (now in semi-disgrace), had institutionalized.

The world Right was much more practical. They launched a coherent program to transform the direction of the world-system and to push back against all the advances in social welfare that had been achieved during the 1945-1967/73 period. They were determined to reduce real wages worldwide, repel all the pressures on producers to internalize the costs of combating damage to the world’s ecology, and to reduce, even eliminate, the benefits of the welfare state. This program was called neo-liberalism.

These forces were able to come to power in the United States with the election of Ronald Reagan in 1980, and in the key ally of the United States, Great Britain, with the Conservative government headed by Margaret Thatcher as of 1979. They sought both legislative changes in their own countries and discourse changes throughout the world. They called for the rejection everywhere of “developmentalism”, which had been the dominating discourse of the post-1945 period. Developmentalism – promoted equally, albeit in slightly different verbiages, by the United States and its allies, the Soviet Union and its allies, and the leaders of Third World countries – had been based on the theories of inevitable progress and the role of the states in promoting modernity.

The answer to developmentalism, said the neo-liberals, was globalization – essentially embracing the opening of all frontiers to the free movement of capital and merchandise, but not labour. The key theme was the freedom of private firms to seek profit in any way they could. This was to be based on the moral undesirability of state interference in any way, and the political incapacity of the states to do so. It was Thatcher’s famous slogan – TINA, There is No Alternative. If globalization resulted in exaggerated inequalities, this was inevitable, and perhaps even desirable. Globalization as discourse was, is, rightwing anti-modernism. As such, it was much more politically successful in the period 1980-2000 than leftwing anti-modernism.

There was, however, a catch to the discourse on globalization. What it did not talk about was the fact that the 1970s was the beginning of an ordinary Kondratieff B-phase. Ordinary B-phases are the consequence of the fact that profits from productive enterprises have become very much reduced because of the decline in quasi-monopolies of leading products.

Serious attempts at accumulation have therefore to seek an alternative route. This alternative route is investing in the financial arena, that is, in speculating. As the years 1945-1970 were the largest expansion of productive enterprise and productive profits in the history of the modern world-system, so the years 1970-2010 have been the years of the largest expansion of speculative profits in the history of the modern world-system.

There are of course other features of a standard Kondratieff B-phase, such as significant increase in unemployment worldwide and relocation of productive enterprises to other zones of the world-system in search of less costly labour. This latter feature leads to the claim by the areas of industrial relocation that they are “developing” and indeed they are the locus of some shift in worldwide capital accumulation.

The crucial feature however of financialization, as it has come to be known, is that it requires indebtedness. And since debts have to be repaid at some point, the world runs through successive debtors, until it begins to exhaust the possibilities of finding them, which is our current situation.

One key set of debtors have been the states. In the 1970s, recycled oil rent was lent to governments of the Third World and also to the states in the socialist bloc. When they reached the point at which they couldn’t repay these debts, governments (and the movements linked to these governments) began to fall. The most dramatic of these falls was that of the Soviet Union and the CPSU.

Mikhail Gorbachev does not get a very good press these days, either inside or outside of Russia. It’s somewhat unfair, and history will revise this judgment. I believe his was a heroic, if flawed, attempt to come to terms with the changed world situation and salvage a reformed Soviet Union. The collapse of the Soviet Union and of the CPSU was hailed at the time, and still seen by many, as the victory of the United States in the Cold War.

In fact, this collapse was the defeat of the United States in the Cold War. The Cold War was not supposed to end but to continue indefinitely. The collapse created two enormous problems for the United States. The first was that it lost its ostensible enemy and therefore the last strong argument it had for why western Europe (and Japan) should remain tied to US “leadership” and not stray into playing an autonomous geopolitical role.

The second, and perhaps even more important, loss was that it lost the ability of the Soviet Union to constrain its friends and allies from “dangerous” actions that might in any way lead to a Soviet-American nuclear war. The most immediate consequence of the collapse of the Soviet Union was Saddam Hussein’s invasion of Kuwait in 1990 – something the Soviet Union in earlier days would have been able to stop. The United States responded in 1991 with the first Gulf War, which forced the withdrawal by the Iraqis from Kuwait.

Far from being “the end of history” and a new world order dominated by the United States, the first Gulf War, ostensibly won by the United States, would lead, almost inevitably, to the self-destructive second invasion of Iraq by the United States a decade later.

The growing damage to the world’s peoples caused by the policies imposed on states in the era of neo-liberal globalization led in the 1990s to the beginning of the counter-trend. I trace the counter-movement to the uprising of the Zapatistas (EZLN) on Jan. 1, 1994 in Chiapas. They chose that date to make public their struggle because it was symbolic. It was the date on which the North American Free Trade Association (NAFTA) came into force. On the one hand it was the announcement of a struggle that was local – the demand of real autonomy for the indigenous peoples of Chiapas (and elsewhere). But at the same time the struggle was global – the struggle against US geopolitical dominance and its Mexican allies (the national government).

Chiapas in 1994 was followed notably by the demonstrations at Seattle in 1999 when the efforts of the World Trade Organization (WTO) to enact enforceable neoliberal constraints on the ability of governments to resist globalization was stopped in its tracks, and has never been able to resume.

And the success of the Seattle demonstrations started a process that led to the creation of the World Social Forum in Porto Alegre in 2001, which has emerged as the major political force (of an original and unusual kind) fighting for “another world that is possible” – an alterglobalization.

One last word on 2001. That year was also the coming to power in the United States of George W. Bush and his administration of “neo-conservatives”. It was also, as we are constantly reminded, the year of 9/11, the successful and startling attack by al-Qaeda on American soil.

We know what happened. The neo-cons used the attacks of 9/11 to launch their program of so-called “shock and awe” – the invasion of Iraq in 2003. This was a war for which they had been calling, publicly, since 1997. If we are to understand what has happened in the world, we must understand the reasoning of the neo-cons who dominated the Bush regime.

The neo-cons made the following analysis of the world-system. They believed that the United States had been declining as a hegemonic power since the 1970s – exactly my own analysis. Their explanation for this decline was however quite different. I have tried to show why hegemonic decline is structurally inevitable. The neo-cons insisted that it was the result of human error – the moral and political weakness of US presidents from Nixon to Clinton (including, be it noted, Ronald Reagan).

The neo-cons felt that the road to reassuming hegemonic dominance was for the United States to engage in unilateral macho militarism that would intimidate everyone – and first of all their presumed closest allies in western Europe – into following US policies without hesitation.

They chose Iraq as the demonstration field for this exercise. Why Iraq? Because it had humiliated the United States. How so? By the fact that Saddam Hussein had survived the first Gulf War and was still in power. And why was he still in power? Because the then president, George H.W. Bush, did not march on Baghdad and oust Saddam Hussein. And why did the first President Bush not do this? Because he believed that doing so would lead the United States into a quagmire, out of which it would not be able to extract itself.

So in 2001, the Bush administration decided to invade Iraq and it took two years to get ready and obtain some limited support from some other countries. The neo-cons expected that (1) the invasion would be militarily very easy and the Iraqi public would greet the Americans as liberators; (2) western Europe would promptly abandon all idea of geopolitical autonomy; (3) would-be nuclear proliferators (notably North Korea and Iran) would immediately cease these efforts; and (4) so-called moderate Arab states would be ready to settle once and for all the issue of Palestine more or less on Israeli terms.

In every one of these expectations, the neo-cons turned out to be wrong, catastrophically wrong. Iraqi resistance was long, effective, and still ongoing. France and Germany teamed up with Russia to give the United States a crushing defeat in the Security Council in March 2003. North Korea and Iran, far from abandoning efforts to become nuclear powers, speeded them up. And the Arab states became less willing than ever to accept Israeli dictation of terms concerning Palestine. The whole fiasco has led instead into the precipitate and definitive decline of the United States as a hegemonic power.

In 2008, the next-to-last speculative bubble burst. The world, and most especially the United States, entered into the so-called Great Recession, which is actually a world depression. And it will be sometime until we emerge even partially from the deflationary consequences.