Capitalist Empire and the Nation State

Against the Current, No. 106, September/October 2003

Ellen Meiksins Wood

BEFORE THE LATEST war in Iraq, anyone who accused the United States of imperialism was likely to meet the objection that the U.S. doesn’t occupy any colonial territories anywhere in the world. Now that it is very visibly in occupation of Iraq, everything seems to have changed overnight.

You might want to say that the occupation of Iraq represents a major departure from U.S. foreign policy since World War II—and lots of critics have said just that. The United States certainly does appear, on the face of it, to be reverting to an older kind of direct colonial domination. It certainly does seem to be breaking with the pattern of avoiding colonial entanglements which it has generally preferred.

Even if we take into account all the more overt displays of imperialism by the United States in the past half-century, all the local wars in which it’s been involved in the third world, all its clandestine, and not so clandestine, efforts at regime-change in Latin America and elsewhere, it’s true, on the whole, that the U.S. mode of imperialism hasn’t been of the old colonial type; and what Bush is doing right now certainly does look like a dramatic break with the postwar past.

But I’m not at all sure about that. I certainly don’t want to deny that Bush and Co. have taken things to insane extremes, which are likely to be self-defeating, especially since Bush is undermining one of U.S. imperialism’s strengths, the hold it has over its allies.

The right-wing extremists of the Bush regime are certainly deploying U.S. military power in new and excessive ways, which are already proving to be unsustainable. But I’m not sure that Bush represents such a big break, for two major reasons.

One reason is that I think even Bush, and maybe even the ideologically driven right-wing fanatics who surround him, would prefer to stay out of colonial entanglements and to return to a non-colonial imperialism. I say this not because I think these guys have a spark of decency or some residual commitment to democracy—the very idea is ludicrous.

The point is simply that non-colonial imperialism is far less risky and costly, and far more profitable. If the United States can use its massive economic power, backed up by the threat of its overwhelming military superiority, to command the world economy, why would it want to get bogged down in colonial rule?

What’s been happening in Iraq may even go to prove the point. The mess the United States has been making of its occupation may simply confirm that long-term occupation isn’t really what they had in mind.

As lots of people have been saying, the Bush administration was hoping they could just decapitate the regime and leave the Iraqi state basically intact, but with a more compliant and less awkward leadership, and with U.S. companies well entrenched in the economy. That’s surely the preferred strategy, even if imperialist ventures like this have a way of going wrong and creating their own imperatives.

My second reason for rejecting the idea that the Bush regime represents a major break with earlier U.S. foreign policy is that there’s no way of making sense of what he’s doing, except against the background of what went before. The most obvious point is that Bush couldn’t do what he’s doing if the United States hadn’t been building up its massive military power for decades, with the explicit intention of becoming the most powerful military force in the world, by far.

It’s certainly true that the Bush administration has been remarkably open about its intention to exercise an unchallenged global hegemony. It has even produced documents saying it in so many words, in particular, the Security Strategy document published in September 2002. That document makes it unambiguously clear that the object is to have a military power so superior to all others that no other state, enemy or friend, would dream of challenging the United States as a global or even regional power.

But how different is this from what went before? Other administrations may not have been so unambiguously clear about this. But the Bush project would be pie in the sky if the United States hadn’t already created a military force which by some measures is bigger and more powerful than all others put together.

This force is not just bigger and more powerful than any single conceivable enemy, or even all enemies combined, but—and this may be even more important—bigger and more powerful than all its friendly competitors, singly or together. The point is that this massive military force hasn’t been built up in a fit of absent-mindedness, and Bush isn’t deploying U.S. military power just because it’s there. This is a matter of policy and has been for a long time.

Bush’s policies are certainly extreme and reckless, but we can surely see their roots in what preceded them. We can surely see their connection with the pattern of U.S. policy for at least half a century, ever since the United States embarked on its two-pronged project of global hegemony at the end of World War II, when the Bretton Woods system effectively established its economic hegemony, and its military supremacy was displayed with the atom bombs in Hiroshima and Nagasaki.

I should say straight away that I don’t think it’s enough to attribute all this to U.S. relations with the Soviet Union. I don’t think it’s enough to say that the United States built up its military power simply to contain the Soviet Union and maintain its position in the bipolar world that developed in the aftermath of WWII.

Overwhelming military supremacy has been, and remains, central to U.S. foreign policy for more general reasons, with or without the Soviet Union. So we do still have to ask what it’s all for.

At first glance, you might think that this is what any imperial power would try to do. Isn’t it self-evident that any imperialist state would try to achieve military superiority over all potential rivals?

Well, yes, it would be fairly self-evident if we were still in the age of classical imperialism, with its colonies and its characteristic inter-imperialist rivalries. After all, when the object is to gain direct control of colonial territories and subject peoples, at the expense of other imperial powers, when the object is conquest of colonies and defeat of rival imperial states, there’s no mystery about the object of military superiority.

But that’s just the point: it hasn’t been, and I still don’t think it is, the objective of U.S. military power to make territorial gains in the classic imperialist way. I think the U.S. empire is the first in history to succeed, more or less, in imposing its hegemony by economic means—in other words, the first truly capitalist empire.

This obviously doesn’t mean it’s the first capitalist power in possession of an empire. That dubious honor belongs to the British. Britain, or rather England, did experiment as early as the late 16th or 17th century with new forms of empire, notably in Ireland, where it tried to create a new kind of economic dependency not only by colonial expropriation but also by transforming Irish social property relations.

But the British Empire never really succeeded in imposing its rule mainly by subjecting the world to the imperatives of its capitalist economy. You only need to look at India, where Britain’s commercial empire gave way to direct colonial rule, more like ancient tribute-extracting empires than a new form of economic hegemony.

So I view the United States as the first, and so far the only, truly capitalist empire, relying on its economic hegemony and generally averse to direct colonial rule. Yet it’s also the most powerful military force the world has ever seen. So, what, exactly, is the connection between its economic hegemony and its military power?

This may seem a silly question, until we consider how difficult it is to identify the objectives of any U.S. military adventure. In fact, what’s most striking about U.S. military doctrine, now more than ever, is the absence of any clear objectives.

I’ll have more to say about this later. But for now, it’s enough just to ask what an imperial military force is for, if not to capture colonies and defeat imperial rivals. More particularly, why does a non-colonial imperialist power need such a disproportionately huge military force, especially an imperialist power that’s unlikely in the foreseeable future to go to war with its competitors?

To answer that question, we obviously have to know something about the specific nature of capitalist power. We know, first of all, how it operates at the level of class exploitation. Capital can exploit labor without directly wielding what Marx called extra-economic force—for instance, the kind of military, political and judicial powers that constituted the exploitative economic power of feudal lords.

In capitalism, it’s economic imperatives, the compulsions of propertylessness, that force workers to sell their labor power for a wage and make it possible for capital to exercise power over them. The capitalist mode of exploitation operates not by means of direct coercive power but through the economic medium of the market.

Obviously there’s a lot of coercion in the workplace, but the distinctive characteristic of capitalist domination is power exercised not directly by masters but by markets; and what makes it possible is the market dependence of direct producers.

So that’s the specific nature of class domination in capitalism, which differentiates it from other forms. And there’s an analogous difference between capitalist imperialism and precapitalist forms. Precapitalist imperialism, to put it simply, was the direct exercise of coercive force to capture territory, to extract labor or resources from subject peoples, or to gain control of trade routes.

The Roman Empire was a fairly straightforward land-grabbing operation, mainly in the interests of the landed oligarchy. The Spanish empire created a new oligarchy of conquerors in South America which exploited indigenous labor, while the economy at home in Spain increasingly depended on gold and silver extracted from the colonies. Commercial empires like the Muslim Arab empire, the Venetian and the Dutch empires, used their power to control trade routes or to impose trade monopolies. And so on.

I’m certainly not suggesting that capitalist powers weren’t deeply involved in that kind of imperialism. The British Empire did all the things I’ve just outlined, and more. The point, though, is that capitalism has created its own distinctive form of imperial hegemony, which had never been possible before.

Like capitalist class exploitation, this capitalist form of imperialism relies not so much on direct coercion as on the market dependence of economic actors and the capacity of imperial power to manipulate markets.

It’s certainly true that subordinate economies have to be made market dependent, just as direct producers had to be made market dependent by expropriation in order to produce a capitalist working class. And the transformation into market dependence has often been a very bloody business—though nowadays, we have something called “structural adjustment.”

But once the transformation is accomplished, a lot of the work of imperialism can be done by the operations of the market, through control of financial systems, debt, and so on. And on balance, any capitalist economy dominant enough to do its imperial work in that way will prefer this economic mode of imperial domination—as the United States has generally done—instead of the costly and dangerous practice of direct colonial rule.

It’s true that it has taken a very long time to perfect this kind of empire. The British never quite managed it. But the United States has pretty much done it, at least since World War II. But here we come to a problem.

Capitalism creates a peculiar kind of relation between political and economic power. There’s a sense in which capitalism is the only system that can even be said to have economic power, distinct and separate from political or military.

This obviously doesn’t mean that other social forms aren’t shaped decisively by their material conditions of existence and social reproduction. What I mean is that capitalism is the only system that can be said to have a distinct “economic” sphere, the only system in which there are purely economic imperatives, the imperatives of the market, the imperatives of competition and profit-maximization, and so on.

This also means that capitalism is the only social form that can systematically allow the power of exploitation and accumulation to reach far beyond the scope of direct political or military domination. In non-capitalist forms, no matter how much surplus is produced by the direct producers, the capacity of exploiting classes to appropriate that surplus can’t reach beyond their extra-economic powers, i.e. their political, judicial and military powers. Capitalist class power isn’t limited in that way, and the same goes for capitalist imperialism.

Yet capitalism can’t do without the support of extra-economic power, even if that power is wielded at one remove from capital itself. The capacity of capital to impose its economic power on such a wide-ranging scale depends on its ability to detach itself from the limitations of political and military domination. But it still needs the help of political and military powers, to maintain social order and create conditions of capital accumulation.

In fact, capitalism more than any other social form needs an elaborate, stable and predictable legal, political and administrative order. The fact that capital thrives by detaching itself from extra-economic power means that it has to rely on political and military powers external to itself to provide that order. Above all, it has to rely on a separate state power.

To put it another way, the very characteristics that enable capital to extend its economic power are the same characteristics that make it dependent on something like the modern state.

Now we’re regularly told these days that so-called “globalization” is making the nation-state irrelevant. There’s also quite a lot of talk about so-called “global governance.” The assumption seems to be that the relation between the economy and the state is a very simple and mechanical relation between base and superstructure: a global economy necessarily means global governance, if not a global state.

Of course, these theories recognize that political forms have been very slow to keep up with the global economy. But the argument seems to be that, at the very least, there’s an inverse relation between the geographic reach of economic power and the importance of the nation-state or any kind of territorial state.

This isn’t just a claim made by conventional globalization theorists. It’s also at the root of the currently most fashionable theory of “empire,” the book of that name by Michael Hardt and Antonio Negri. Their whole argument is based on the premise that the expansion of global capital means the development of a new kind of sovereignty.

“Our basic hypothesis,” Hardt and Negri say in their book, “is that sovereignty has taken a new form, composed of a series of national and supranational organisms united under a single logic of rule. This new global form of sovereignty is what we call Empire.” (Empire, xii)

Its primary symptom is “[t]he declining sovereignty of nation-states and their increasing inability to regulate economic and cultural exchanges . . .” And here’s the important bit: “In this smooth space of Empire, there is no “place” of power—it is both everywhere and nowhere. Empire is an ou-topia, or really a non-place.” (190)

I’ll come back a bit later to the political implications of that argument. For now, I just want to insist that this notion of the relation between conomic and political power in global capitalism is just plain wrong.

Capital is no less dependent on territorial states than it ever was. In some ways, it’s even more dependent, and certainly the world is more than ever before a world of nation states. Capitalism didn’t create the nation state, but it’s no accident, as they say, that the period which has seen the spread of capitalist imperatives to encompass the globe has also been the period in which the nation state has become the more or less universal political form.

What I’m saying here is that legal, political and administrative order that capital needs simply can’t match the scope of capital’s economic power, and I can’t imagine a time when it ever will.

It’s certainly true that nation states are having to respond to the demands of global capital. And it’s certainly true that certain social, legal and administrative principles have become internationalized in order to facilitate the movements of capital across national boundaries.

It’s also true that there are certain international organizations that do the work of global capital. If that’s what people mean when they talk about the “internationalization” of the state, I have no objection. But let’s face it: The main instruments of global governance are still, above all, nation states.

So we need to be very clear about the continuing and critical importance of territorial states to the capitalist system. Even if we weren’t living in a world of uneven development, it’s hard—in fact impossible—to imagine anything remotely like a global organization of the finely tuned order that capital needs.

But, of course, we do live in a world of uneven development. And here’s another reason for the coexistence of a global economy with a fragmented system of local states: We’re routinely told that so-called globalization means an integrated economy, but it just isn’t so.

I don’t deny that there’s significant interdependence among national economies, and that movements of capital have repercussions around the world. But there’s nothing like the kind of economic unity created by a truly integrated market, in which all economic actors are subject to the same imperatives, and to the same competitive pressures. If there were that kind of integration, we wouldn’t see such huge disparities in wages, prices and conditions of labor throughout the world.

The point here, though, is not that globalization is still incomplete. The point is that globalization as we know it—globalization as a form of imperialism—needs that kind of fragmentation of economies. It encourages and thrives on the differentiation of the global economy.

Among other things, this differentiation makes it possible for capital to exploit low-cost labor regimes. So one of the useful functions of the territorial state is that it hems in unevenly developed economies, controls the movements of labor, and so on.

The basic point is that global capital benefits from what we call globalization, but it doesn’t and can’t organize globalization. Some researchers have even demonstrated that global corporations can’t organize their own international operations, let alone the global economy. Anyway, they need states to organize the world for them, and the more global the economy has become, the more economic circuits have been organized by states and inter-state relations. It’s states, not international organizations like the IMF or the WTO, which are indispensable to global capital.

What this all means is that the relation between economic and political power in capitalism, between capital and the state, isn’t just a simple mechanical relation of superstructure reflecting base. It’s a relation of contradiction. And we’re only now beginning to see the implications of that contradiction.

As long as there was a more or less clear connection between national economies and national states, that contradiction, or potential contradiction, was more or less manageable. But now the disconnection is becoming very visible.

Again, the point is not that capital has escaped the limits of the nation state and made the state irrelevant. If it were really true that global capital creates a compulsion for a corresponding global state, we wouldn’t be talking here about contradictions. But if global capital really does need territorial states–as I insist it does–then there really is a problem.

What I’m saying here is that the new imperialism, the imperialism of the United States today, is a complicated and contradictory business. Its essence is a global economic order, administered by a system of multiple local states. And it doesn’t take much imagination to see that this can be the source of severe instabilities and dangers to the rule of global capital.

We shouldn’t be surprised that today’s imperial hegemon feels compelled to confront the contradiction by trying to control the system of multiple states. Nor should we be surprised that military force will play a major part in that effort.

But this is where serious problems in that imperial strategy start to emerge. In the days of classic imperialism, it used to be reasonably clear what military force was for. After all, there’s nothing mysterious about the function of war in the conquest of colonies or in inter-imperialist rivalries over colonial territory.

But what, precisely, is military force meant to do in the new imperialism? What exactly is its function in maintaining the hegemony of global capital?

The most elementary problem is that even so powerful a military force as the United States can’t be active everywhere, all the time; and, in any case, the social disorder occasioned by constant war on various fronts is hardly conducive to capital accumulation.

An even more basic problem is that the object of military force isn’t anything so clear and well-defined as capturing some identifiable territory or defeating a particular rival. What’s the function of military force in controlling a system of multiple states which are supposed to be keeping order in the global economy? How do you keep those states in line without denying them the capacity to do their job for global capital?

In fact, the situation is even more complicated. Capitalist competition is a rather more complicated business than straightforward zero-sum rivalry over colonial territory. Major capitalist powers today are very unlikely to go to war with each other, if only because, however much their economies may be damaged by competition, they need each other as markets and sources of capital.

So imperial hegemony in the world of global capital depends on controlling competitors without going to war with them.

I think what we’re seeing today in the Bush regime is a response to these contradictions. The Bush doctrine is a doctrine of open-ended war, war without specific objectives, and without limits in space or time. As I said before, I certainly wouldn’t deny that this administration is indeed crazy and reckless in its implementation of that doctrine, and probably in the end this will be self-defeating.

But even if we acknowledge that the Bush regime has taken U.S. military doctrine to new and unsustainable extremes, it’s hard to imagine a very different military doctrine which would suit the project of imperial hegemony in this kind of world. The current administration’s extremism may be undermining its own project; but the doctrine of war without end, in purpose or time, isn’t really new.

For that matter, it’s hard to imagine what other kind of military doctrine could sustain the hegemony of U.S. global capital, in a global economy administered by many local states. And administrations before Bush didn’t really come up with anything much different. Just think about the ways in which the more benign Clinton administration widened the horizons of war, with its notion of so-called “humanitarian” war.

Any project of imperial hegemony in a global system administered by multiple states will need military power to perform a variety of different functions, none of which are clear-cut and self-limiting. The tasks of military force in a project like this are likely to be open-ended, without specific objectives, end-game or exit strategy.

Sure, there are obvious objectives, like control of oil supplies, or regime change to install a compliant state power. But these relatively well-defined goals are, if you think about it, only a small part of what needs to be done to sustain this kind of global hegemony. For one thing, there are relatively few serious candidates for regime change by means of war.

I’m not just talking about the dangers to the United States and its allies of taking on a really risky adversary like North Korea, rather than a phony danger, like Iraq. I’m also talking about the problems of invading certain other countries which have, from the U.S. point of view, taken the wrong turn–not failed states or rogue states but what you might call more normal, mainstream states.

Take the case of Brazil, for example. Suppose that Lula, instead of following the advice of neoliberal economists, did what we hoped he would and set an example to oppositional forces throughout the world. The United States wouldn’t be very happy about that. But–though I could, of course, be proved embarrassingly wrong about this–it seems to me all but inconceivable that the United States would respond by invading Brazil.

So what other objectives of military action are there? The so-called “demonstration effect” is always, and increasingly, a major consideration, to show the world that U.S. military force can go anywhere, anytime. Precisely because the United States can’t be everywhere all the time and because it can’t establish a compliant system of states by means of constant war, it has to demonstrate its military supremacy with some regularity.

The demonstration effect can best be achieved by going to war against non-existent threats, against targets chosen precisely because they pose no real threat, can be defeated easily, and ideally in places where the United States doesn’t much care what happens to the adversary.

That, for instance, is what happened in Afghanistan. And you could say it’s in large part what happened in Iraq too. Sure, in Iraq there’s the question of oil, and also the consolidation of the U.S. military presence in the region, while getting out of Saudi Arabia. But I think it’s safe to say that, whatever other objectives the United States may have had, one of their main objectives was, in their own words, “shock and awe”–not just to shock and awe Saddam Hussein or even other recalcitrant regimes in the region, though that was certainly a major factor, especially in relation to Iran, but also to shock and awe the whole world, not least its own allies.

The Bush regime chose Iraq not because it represented a threat to the United States or its allies, but, on the contrary, because it represented no real threat at all, and the so-called coalition could “shock and awe” with little risk to itself.

The hardest task, though, is maintaining the right hegemonic relations with friendly competitors. This problem is more difficult for the United States than ever before, for two major reasons. For one thing, the disappearance of the Soviet Union has deprived the West of a common enemy and made it that much harder to keep U.S. allies in line.

Even after WWII, when the United States enjoyed pretty much unchallenged economic hegemony, it relied on U.S.-dominated alliances like NATO to maintain its domination over other capitalist powers. Today the situation is more complicated, because U.S. economic hegemony isn’t as unchallenged as it used to be.

This means that the United States is tending to rely more heavily than ever on its unchallenged military supremacy, but doing so at the very time when there aren’t any clear military objectives for it to pursue and when an obvious common enemy doesn’t exist. Of course, they’ve tried to reproduce the effects of the Cold War with the so-called “war on terror”; but that isn’t very convincing as a task for massive military force.

The best the United States has been able to do—and the explicitly stated objective of the Bush Doctrine—is to make its military force so massive that no potential rival would even dream of challenging it or trying to match it as a global or even regional power.

Military supremacy can’t, in the end, be enough—especially when the dominant power can’t go to war against its main competitors. But massive military power does at least have a cautionary effect. So the United States has also done what it can to prevent its allies from developing independent military forces.

The allies have no doubt been happy to let the United States police the world for global capital. But all the talk we often hear about Europe’s failure to pull its weight in the alliance disguises the fact that the United States would prefer its allies to stay in their place, and has done everything possible to make sure that they do.

When the United States does encourage some kind of military reform in Europe, it’s designed to keep U.S. supremacy intact—for instance, the “modernization” of NATO, which would have the effect of making European forces even more dependent on U.S. technical and communication systems, so that outside the alliance they could operate only in a degraded mode. In the end, what possibility or incentive is there anyway for trying to match the ever-more-expensive military force of the United States?

That’s the bad news. I’m sure none of you need convincing that this imperial strategy represents a huge danger to the whole world. The U.S. project of global hegemony is impelling it constantly to revolutionize the instruments of war, and these instruments are useless if they aren’t tested and used.

But there’s good news here too. Let me put it this way. Suppose it were true that global economic hegemony means the increasing irrelevance of territorial states. Suppose, for instance, that Hardt and Negri are right about the emergence of a new kind of “sovereignty” which is displacing the state. What would be the political implications?

Well, Hardt and Negri themselves tell us quite clearly what those implications are—and I have to admit that on this point at least they’re right. Here’s what they say about the implications of a world in which there is, in their words, “no place of power,” a world in which Empire is a “non-place:”

“The idea of counter-power and the idea of resistance against modern sovereignty in general thus becomes less and less possible . . . . A new type of resistance would have to be found that would be adequate to the dimensions of the new sovereignty . . . . Today, too, we can see that traditional forms of resistance, such as the institutional workers’ organizations developed through the major part of the nineteenth and twentieth centuries have begun to lose their power. (308)

Think carefully about what this means. There is, they suggest, no identifiable concentration of capitalist power in today’s global Empire. That means that no counter-power is possible either. Above all, political struggles in general, and working-class parties in particular, are now an irrelevance.

Hardt and Negri are also very critical of oppositional forces that concentrate on local and national struggles, which they also regard as irrelevant. So, what kind of resistance is possible? I challenge anyone to plow through the whole of the Hardt/Negri book and find any convincing account of effective opposition.

What we get is some fairly mystical talk about how an Empire that’s everywhere and nowhere can be attacked at any point—largely by means of changing subjectivities. Lots of people have read this book as an optimistic manifesto for the anti-capitalist movement. But to me it’s far less convincing as a manifesto for a new anti-capitalist strategy than as a defeatist case for the impossibility of opposition.

My point here is that the very first premise of that defeatism is wrong. I agree that, if Empire really were a non-place, everywhere and nowhere, the game would be up for us socialists. But what I’m arguing here is that empire is as much a “place” as it ever was, that there are indeed visible concentrations of capitalist power, that the state is now more than ever a point of concentration of capitalist power, and that counter-power is not only possible but necessary.

The main place of capitalist power is, of course, the United States. But what I’ve been trying to suggest here is that this imperial power depends not only on its own domestic state but on the whole global system of multiple states. That means that every one of those states is an arena of struggle and a potential counter-power.

It hardly needs saying that struggles in the heartland of empire would have the most effect. But every state on which global capital depends is an important target for its own oppositional forces and for international solidarity. Protests against the World Trade Organization or G8 summits can certainly change the political climate. But in the end, they’re no substitute for politically organized opposition to the power of capital organized in nation states.

Organized political struggle may seem harder to achieve than the kind of symbolic opposition that doesn’t even claim to be a counter-power. But to deny the relevance, even the possibility, of that kind of political struggle seems to me a very pessimistic conclusion.

That conclusion effectively means that global capital offers no visible targets and no real possibilities of struggle. It means there isn’t much we can do except to give in to the reality of capitalism and, at best, refuse the system in our hearts. Well, I just don’t believe it.

ATC 106, September-October 2003