April 19, 2009

The Crash and the Future


America’s economic and geopolitical position has certainly become precarious in recent years, and there’s no reason to believe the empire can be sustained in the long run. However, it’s striking how the financial crisis, extending into general economic crisis, has temporarily strengthened imperial America’s relative position.
Let’s look at the situation a year ago. Oil price was surging, while supply was tightening, with almost no spare capacity. This created lots of space for geopolitical disruption or blackmail. Petrostates could have strong domestic spending and assertive foreign policies. In the parlance, they could have both guns and butter. Russia and OPEC were feeling strong. Venezuela was talking tough about replacing the dollar as reserve currency. The dollar was weak, and yet the trade deficit was huge.
Meanwhile in the domestic campaign, where the electorate was clear on the absolute failure of Bush, corporatism, and neoconservatism, all the talk was of the new space for progressive ideas and progressive policy. “Yes we can!” was the watchword.
And today? Oil is in a price doldrum, with ample spare capacity. There’s little geopolitical space for anti-globalism for the time being. The trade deficit has been dampened. The dollar has become relatively stronger, and its status as reserve currency temporarily reaffirmed. Russia and OPEC have been chastened by the plunging oil price, Venezuela is domestically scrambling, Europe and China are in disarray.
In America, although a nominally progressive president was elected, his agenda shifted immediately to “continuity” and appeasement. Obama’s main goal has been to continue the two quintessential corporatist policies: an imperial neocon foreign policy, branded the Global War on Terror (though they want to change the brand name); domestically, class war from above, intensified and accelerated wealth redistribution upwards through the Bailouts. In terms of general politics, Obama’s project has been to appease the Republicans and give them the breathing space they need to try to regroup. That they’ve been inept at this so far is not for lack of Obama giving them an opportunity.
(Why is Obama doing this? Like Clinton, he believes “it’s the economy stupid”, and he is basically a right-of-center corporatist. Therefore he sees the real foe as being not Republicans but true progressives. If you’re interested in 20th century European history, compare it to post-WWI Germany, where the new republic under a Majority Socialist government made an alliance with the hard core reactionaries against the real socialists (the Independent Socialists and Spartacists). Though here today the Right is currently in disarray, and there’s little to no coordination among true progressives, the political fundamentals are similar.)   
What has changed? The crash and the crisis: by generating demand destruction and letting off steam from the oil market, this has temporarily alleviated Peak Oil pressures and reduced the intensity of America’s basic position as oil addict in a world of surging prices and constricting supplies. America is in a vice, but the pressure has been ratcheted down a bit. Meanwhile the producing regimes who were riding high, throwing their weight around internationally and justifying themselves domestically by trickling some of the oil wealth downward, are having to retrench on every front.
Whose positions have been shored up? America’s in general (I refer to the “America” of the power elite, not Main Street), in particular that of the Republicans, the neocons, the FIRE trust, who are being coddled, appeased, bailed out, and in general given time to regroup for the intensified struggle ahead.
Who has been weakened? In a word, everyone else. America’s disaster has become the world’s disaster. Everyone is confounded in the economic turmoil. Meanwhile oil’s death grip has been temporarily weakened. While this has somewhat alleviated the stresses for the American consumer, it’s not enough to offset the disaster befalling him as jobs, investments, pensions, social programs, social contracts, hope for the future in general, are vaporized.
(Always remember that “demand destruction”, like “adaptation” in climate crisis policy, may look like a kind of solution on paper, but its real life meaning is tremendous hardship and misery for the non-rich, and especially the global poor. These are always political fig leaves for the Western power structure and its attempt to prop up the consumption/car/sprawl dystopia. They are always tools of disaster capitalism.)
The main effect of the crash has been to buy some time and political space for the elite to prepare for the post-Peak resource hunt. This will mean a fully corporatized economy and an authoritarian society. It means a more overtly Social Darwinist civilization. The carrot will be aggrofuels, tar sands syncrude, and whatever other “alternative” fuels can be wrested through ever-intensifying environmental and political violence. This will be meant to let the American consumer keep his precious car and McMansion sprawl as long as possible. For dissenters, the sticks will be many and severe.
So when we look at the plan for America over the next twenty, thirty, fifty years, however long the zombie system can be propped up before energy descent definitively kicks in (however long it will be until “peak empire”, “peak zombification”), we should perhaps look to China as a model. There the goal of society has been to keep the Communist Party in power and enrich the coastal elite. The social stability necessary for this comes from trickling some crumbs downward to the peasantry in the form of factory jobs. Dissent, meanwhile, is ferociously suppressed.
China’s ruling elite has of course for a long time now been communist only in name. Rather, seeing how world communism had become a dead end, in the 80s the Chinese elite made the decision to shift to a corporatist globalization model. Similarly, America has for decades been shifting from capitalism to corporatism. Since unlike China America didn’t commence this shift as a de jure authoritarian society, the transition has taken longer and had less central planning. But in the end, from these different directions, America and China are ending up in the same place.
So like China America will have a “fortress system”, dedicated to keeping the elite in power and the rich in their riches. The main detail which is different is that while China seeks to trickle down enough factory jobs to satisfy the peasantry, America will try to prop up a nominal suburban middle class: commuting, McMansion-dwelling, lawn-mowing, flat-screen TV-watching. Since this middle class has no economic basis for existence, the system will try to zombify it through new debt bubbles. It will exist in a state of ever greater financial tension, as its wages and social protections become ever more attenuated. Every middle class family will be existentially closer and closer to being one lost paycheck away from literally living in a box. This will dovetail nicely with a more overtly fascist and authoritarian political system. Such will be the socioeconomic balance of terror which props up the elite’s power foundation.
But evidently, for the American consumer, it’s all worth it for the sake of low prices at Walmart.     
While all this doesn’t mean the crash was consciously premeditated (since exponential debt always had disaster “priced into it”, it’s more likely the power elite were always ready to shift opportunistically into disaster capitalist mode at any time), it does mean the suffering of Americans and of people around the world is being used and intensified for the advantage of America’s rich.


  1. Great Post, Fortress America was brilliantly described in a collection of novellas by Norman Spinrad called Other Americas I read years ago. Highly recommended, and unfortunately quite prescient I’m afraid.

    Comment by Brian — April 20, 2009 @ 10:31 am

  2. Thanks, Brian. I’ve heard of Spinrad but haven’t read him.

    Comment by Russ — April 22, 2009 @ 8:24 am

  3. The industrial nation state, as an institution of industrial civilization, collapses. No one gets to dodge the Post-Peak Oil bullet. It is time for the Peal Oil Movement to embrace the States’ Rights Movement. FYI:

    North American Secessionist Congress, October 2010

    Comment by Sebastian Ronin — May 10, 2009 @ 4:02 pm

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