Speculators, Lumpen-Intellectuals, & the End of U.S. Hegemony

James Petras

THE BASIC FACTS about the Iranian arms sale are not at all out of the ordinary, whichever version of the account one accepts-whether it was the negotiation to ex­ change arms for hostages or to develop ties with pro-Western groups. The reason that these rather banal transactions developed into momentous issues had more to do with the overall strategic policy which had been elaborated by the Reagan Administration and which had bipartisan approval.

From 1979 to the present, Washington’s policy was to massively build up the military in order to unilaterally impose policies at both the global and regional level. The crime of the Reagan Administration in negotiating with Iran was a tacit admission that the policy was a failure — that force did not work, that negotiations were necessary, that compromises with adversaries in critical areas were essential.

Reagan’s Iran negotiations were recognition of the limits of U.S. power-a lesson brought home earlier during the brief but disastrous U.S. intervention in Lebanon. A similar process of “backsliding” took place at the Icelandic summit: the near arms accord reflected the recognition among some members of the Reagan Administration that the Soviets could not be spent into bankruptcy (that indeed the reverse was more likely, given U.S. debts and deficits).

As with the Iranian case, concessions and compromises in Iceland were denounced – bipartisanly — as they implied a reversal of the historical direction of U.S. policy, with negative implications for an important configuration of interests in the U.S. and abroad.

The criticisms by politicians and the press of the Iran arms exchange and the Icelandic summit are almost all in the direction of reinforcing the reactionary doctrine of military confrontation, state terror, and nuclear escalation. This has become the unquestioning dogma and foundation of foreign policy for both parties, the mass media, and the educated public in the 1980s.

The Reagan Administration is a captive of its very success in selling the military confrontation policy: the ideological cage (and perhaps the jail in which some of his advisors may end up) resulted from slavish adherence to the peace-through-strength doctrine which eliminated any flexibility in pursuing diplomatic options. The Manichean world of Good and Evil empires which the neoconservatives have firmly established as the basis for politics has led them to choices between bluster through impotence, or backdoor deals through adventurers.

The ease with which Reagan’s military doctrine gained ascendancy and its permeation of political discourse stemmed from the fact that it was harnessed to the notion that it could reverse the deep structural weaknesses that affect the U.S. economy. The resurgence of militarism in the late 1970s emerged as Western policymakers became concerned with the declining fortunes of capitalism throughout the Third World.

Revolutions in Indochina, Angola, Ethiopia, Nicaragua, and particularly Iran were seen as major challenges to the elaborate network of client states designed to contain regional revolutionary development. The unraveling of the regional client networks was matched by the declining position of the U.S. in the world economy and of its state machinery for military intervention.

One catch word summed up the complex confluence of political, economic, and military changes: weakness. And in the language of the rising neoconservative ideologues, what was necessary was a “will to power.” In neoconservative manifestos, voluntarism and ideology fused in an explosive offensive militaristic policy. The emphasis of policy shifted decisively toward the subjective capacity to concentrate resources on power, and power was defined almost exclusively in military terms.

A spate of articles promoting alliances with dictators, new missile programs, and larger military budgets were published in neoconservative and ex-liberal journals. Peace through strength-to act with military power was emblematic of the whole Reagan regime-as domestic politics were subordinated to the reassertion of global dominance. Nothing less than the “world system” was the target and prize of what passed as neoconservative politico-military strategy.

The policy of projecting military power on a world scale has had very mixed results. Jeanne Kirkpatrick’s benign “authoritarian” rulers were in decline even while the Reaganites were blessing them; but the Reaganites have been able to reassert influence through civilia-military cohabitors. Intervention in Lebanon led to a disastrous defeat, while the invasion of Grenada produced a U.S. client regime. Washington has escalated large-scale armed terrorist activities in Central America, Africa, and South Asia, but the results are inconclusive militarily and unpopular politically.

At the global level, Washington has escalated arms spending and reversed previous arms accords (SALT I and II). It now threatens a space war and rejects any limits on nuclear testing. But the Soviets have shown little propensity to be cowed or outspent. On the contrary, they have gained the diplomatic high ground with a number of disarmament proposals more reasonable than those of the Reaganites.

More basically, neoconservative voluntaristic extremism has not reversed the slide of the U.S. economy or the decline in its global position. On the contrary the burgeoning budget deficits and shrinking market shares expose the enormous cost of projecting military power without examining the economic costs.

It is in this context of the proven inadequacies of the strategic doctrine to reverse the continued relative weakness of the U.S. that the Reagan Administration attempted to introduce tactical modifications: to selectively employ negotiations in place of force, demonstrating thereby Washington’s incapacity to impose a solution. And it is this tacit admission that has led to Reagan being hoisted by his own petard.

The central issue behind all the Iran debates, the underlying obsession of pundits and politicians, is the notion of weakness. This debate has been clouded by the confusion of various levels of analysis by both mass media and the liberal/left commentators.

Varieties of Debilities in American Politics

There are three levels at which the idea of weakness should be analyzed: (1) regime; (2) market; and (3) world-historic. Regime weakness refers to the declining popularity of a party in government as measured by its capacity to win an impending election. Market weakness refers to the declining competitive position of an economy, its loss of market shares and hence its declining ability to manipulate the market and trade relations as instruments of power.

World-historic weakness refers to the historic longterm decline of the structure of production that undergirds global positions, the decline of state power and its permanent civil service, and the rise of a new class of ideological desperadoes — from the interstices of politics, academia, the military, and the underworld — to crucial decision-making positions in the international bureaucracy.

The ascent of this quasi-underworld to power is cause and consequence of the decline of empire. As the industrialist is replaced by the speculator (Rockefellers by Boeskys), so the statesperson is replaced by the military adventurer, the upwardly mobile broker between the State Department and the political gangsters.

Most of the media reportage has focused on the opportunism of the Reagan Administration-its attempt to free hostages to bolster its sagging electoral fortunes. The focus has been on regime weakness: illicit transactions have been analyzed as attempts to regain a domestic constituency. The liberal/left media focused on Reagan’s lies and the laws that were violated, elaborating on the deeper meaning and larger impact of illegality on political institutions and democratic politics.

Such an analysis does contribute to clarifying the degree to which the imperial-military strategy erodes democratic politics. But it fails to come to grips with the deeper structural imperatives to which that strategy responds. Paradoxically, the criticisms of Reagan’s Iran policy reaffirm the terror-military policy: he is being chastised for violating it.

The second level of analysis for examining U.S. weakness focuses on and recognizes the declining position of the U.S. in the world economy. Here certain neoconservatives both inside and outside the Reagan group have sought to infuse a measure of flexibility and realism into the notion of projecting military power.

The source of this need for a more nuanced policy is a growing sense of political isolation in world politics, particularly among new noncommunist and even anticommunist forces that have carved out political-economic space in crucial areas of the world economy. The Islamic forces in Iran are an example of this noncommunist anti-Americanism.

Neoconservatives who have remained awake to the significance of such developments realize that Israeli-style “counter-terror” is ineffective and counter-productive for gaining influence in the world’s market place. The U.S., unlike Israel, does not have a wealthy benefactor to subsidize its economic isolation and military adventures. Nor can a complex economy like the U.S. sustain itself as an underground gun-runner to unsavory regimes.

A sector of pragmatic conservatives want to move beyond the terror-bunker mentality of the dominant wing of the neoconservatives, infatuated with the Israeli strategy. They would like to develop new economic relations with now-hostile noncommunist regimes. But the main resources available to them are found in the only growth area undertaken by the Reaganites-military technology.

The major area of economic interest to the pragmatists is the Middle East, an area frequently cited by the neo-conservatives as crawling with terrorists. Having driven or attempted to drive the Europeans out of the region through the Anti-Terrorist campaign, the pragmatic conservatives see an excellent opportunity to re-enter, largely through the political levers of military supplies and technology.

Not possessing the capacity to impose effective boycotts on “terrorist” states, and no longer capable of enforcing “responsible” behavior among European allies, these conservatives felt no compunction about seizing the initiative to re-establish an insider position in a crucial market. They had visions of recreating the pro-U.S. regional network of the early 1970s: Israel-Iran-Saudi Arabia.

When the pragmatic conservatives persuaded the Reagan insiders to test these possibilities through the covert Iran arms operation, the more ideological neoconservatives, ironically backed up by opportunistically self-righteous neoliberals, played up the scandal. Much of the criticism of Reagan on this score, apart from that directed at the illegalities of the operation, came from a stance objectively to the doctrinaire right of the actual policy of the Administration. And it was often Democrats who spoke the loudest in voicing defense of hard-line anti-Iran militarism against the conciliationism of the conservative pragmatists in the White House basement.

This type of explanation is useful in focusing on the regional benefits and on the impasse of military strategy in solving economic problems. However, it fails to analyze the underlying structural changes in U.S. capital and does not focus on the particular psychosocial types who increasingly have come to staff the crucial decision-making positions in the state apparatus. In a word the analysis needs to be broader and narrower.

The declining hegemony of the U.S. has been evident for over a decade, despite the rebuilding of Washington’s political and military foundation for projecting global power. The problem is that military means can have little effect on the forces undermining U.S. hegemony. The productive forces of capitalist allies such as Japan cannot be conjured away by new nuclear weapons systems. Nor are revolutionary governments easily toppled by terrorist surrogates.

Fiercer U.S. armies will change little, mainly because the loss of U.S. hegemony owes less to foreign enemies or competitors than it does to the internal hollowing out of American capitalism.

Industrial capital has been replaced by fictitious capital. The stock market has become more important than the stockyard. As productive industrial capital recedes as a proportion of global American wealth, and the sheer bulk of dollars drifts into government securities, money market funds, and stock speculation directed by brokers rather than by entrepreneurs who must produce a real product, the U.S. foreign policy establishment correspondingly is less in the hands of the overseers of corporate capital and more in the hands of a new breed which has not passed the muster of fashioning alliances and policies to facilitate industrial growth.

With the decline of productive capital, the reason for empire — domination of productive resources — hanges. The clandestine intelligence apparatuses, initiated as the instruments of capital, become more institutionally autonomous. The ascent of the repressive apparatus at a time of declining hegemony and increasing use of state-terror has created a new historical conjuncture, and evoked a new political type: the military adventurer as Presidential adviser; the ideologue and political thug as under-secretary of Latin-American affairs. North and Abrams embody the new political ethos, the lumpen-intellectuals. The more prominent of these lumpen-intellectuals include Fred Ikle, Richard Perle, Kenneth Adelman, Patrick Buchanan, Jeanne Kirkpatrick, Max Kampelman, Carl Gershman, and Vernon Walters.

The style of the lumpen is to throw together jerry-built arguments to justify ideological dogma; to substitute vitriol for reason; and to project demonological propaganda to justify illegal terrorist and militarist politics.

The ascent of speculator capital and the decline of productive capital in the economy is based on the same adventurer, illegal, clandestine, insider strategy and activities so characteristic of the lumpen-intellectuals who occupy the nether world between the White House and the Central American jungle airstrips of the narco-contras. The marriage of speculators and lumpen-intellectuals is not coincidental. There are not a few links that bind the two in terms of social background and ambitions, political amoralism and fanaticism.

The neoconservative ideology provides a thin intellectual gloss for the lust for power and wealth so common among the upwardly-mobile marginals. And in the minds of these marginals all means are acceptable to reach the top. Being at the top is its own justification. Ideas and values are counters to justify staying there. When the underworld becomes respectable, the respectable join the underworld.

The resentments and power lusts of the marginals-turned-policymakers — with their primitive Nietzchean contempt for the norms and legality of established laws-are fused into a belief system that transforms routine policy into the pursuit of personal power. The lumpen-intellectuals-turned-policymakers have compiled a long list of conventions and international norms which they flout. These are their credentials: hijacked planes over the Mediterranean; air bombing of civilians in Libya; sustained terrorist attacks on Nicaragua; promotion of the South African surrogate Savimbi in Angola; guns and financial aid to Pol Pot on the Kampuchean border; arms to Iranian fundamentalists; massive aid to the terrorist state apparatus in El Salvador; political and economic support for the Israeli devastation of Lebanon.

Islamic, Stalinist, Zionist, racist-terrorists all — have received neoconservative support over the past several years. For a group whose reputation is dogmatically right wing, we note their ideological eclecticism in selecting terrorist allies. The point is not ideology, but power.

As economic interests have weakened in defining policy, so too has real ideological criteria. The incapacity to choose “ideological” allies and the increasing necessity to depend upon terror reflects the end of U.S. hegemony and the deteriorating position of the U.S. as a politico­ military power capable of sustaining its international intervention.

The ascent of the modern Rasputins and the routinization of terror, the increasing tendency to submerge ideology to illicit transactions defines this critical juncture in the slide of U.S. power.

The Empire and Fictitious Capital

The decline of the U.S. as a global industrial power is influenced by the dramatic shift toward speculative activity. Today the stock market breaks 2,000 on the Dow Jones while factories are closing down everywhere, trade deficits soar to new records, and the U.S. becomes the world’s greatest debtor. Increasingly America’s links to the outside world are through the exchange of paper instead of goods: overseas financiers and local brokers and speculators buying and selling notes of credit.

United States foreign policy becomes increasingly militarized as its content becomes emptied of the economic interest it was designed to defend. In the past, overseas economic interests provided a logic and rationale for U.S. military policy. Allies were those who supported U.S. corporate interests. Enemies were those who sought to restrict corporate expansion. Allies were kept in line by diplomatic and economic pressure; enemies were destabilized by covert operations, with overt military interventions in the ultimate instance.

The choice of policy reflected long-term calculations of profit or loss, including the heavy costs of military operations. Under lumpen leadership today, policy decision is made for looser reasons and justified after the fact by ideological dogma or vacuous abstractions.

The policymakers in Washington today unite a layer of upwardly mobile political adventurers with a permanent officialdom converted to a vision of a world defined by an open-ended politics of “wars without frontiers.” Their activities are self-consciously described as “covert” not because they are a secret but because this jargon asserts a fiction of legality. A good deal of what they initiate in this sphere follows the logic of personal power rather than the logic of clear economic interest. Illegal acts of violence are ordered in the name of the person or office exercising power. Their justification is that these officeholders embody the National Will.

What is striking about the Iran debate is the absence of much discussion about the underlying policy of terror. The media revelations and Congressional hearings are primarily concerned with issues of procedure and formal legality of the Administration’s actions. The Administration was not wrong to pursue a policy of mass terror in Nicaragua; only to have done so during a particular brief period when Congress had ordered direct U.S. aid to the terrorists suspended.

This narrow focus reveals the degree to which the terror ethos permeates the political culture. It is accepted in principle by both parties, by Congress and the Presidency, by media critics and ideologists of the regime. They differ over how the policy is executed. And to a great extent this kind of opposition serves the narrowest of electoral-partisan purposes.

The world-historical context in which these acts took place is not examined, the decline of U.S. global hegemony and the subsequent militarization of U.S. foreign policy. Hegemony rests on superior economic and political capacity supplemented by military power. The basis for such hegemony by the U.S. no longer exists.

Many countries are no longer dependent on U.S. economic expansion for their own growth and reproduction. The new economic logic of the world economy is based on establishing multiple centers of finance and a diversity of markets. This inevitably spells a continued erosion of U.S. positions.

Washington’s response to this turn in American fortunes in the late 1970s was to replace hegemonic politics with a politics of global military domination. Military domination was to compensate for the loss of economic influence. Under this conception the relationship between politics, diplomacy, economy, and the military would be inverted from that of the hegemonic period: force would create compliance, evoke negotiations, and the economic and political dimensions would fall into place as a supplement.

This conception defined relations at both the global and regional levels. A new arms race was launched to test the efficiency of the military policy in subordinating the Soviet Union to Washington’s will.

At the regional level Washington confronted the appearance of a wide range of revolutionary movements not linked to the Soviet Union and reflecting a gamut of ideologies and political styles. Washington’s response was to frame an all embracing ideology which would subsume these differences, justifying a military offensive against all of them at once. “Terrorism” joined communism as a rationale for military action, enveloping states and movements, nationalists, Islamic fundamentalists, and non-Soviet Marxists.

Military strategy in the Third World was not directed merely at defending existing client regimes through the supply of repressive equipment but to overthrow existing regimes through violent action: direct-immediate (Grenada, Libya), or long term (Nicaragua, Mozambique, Angola). The use of terror in these regional conflicts was not contested by corporate capital because it no longer had (or never had) an economic interest in these areas.

The voluntarism of the right was given license to engage in a kind of “free fire zone.” The establishment formulated no constraints on neoconservative state violence. Respectable business people acquiesced in the policies of terror. Permanent civil servants and foreign service officers cooperated and cohabited with the political underworld (mercenaries, adventurers, death-squad hitmen, narco-traffickers) recruited and financed by the neoconservative ideologues.

Rather than reverse the downward trend in its hegemonic position, the military conception and practice exacerbated it. But in the neoconservative world of ideological warfare, debts and deficits paled into insignificance before the opportunities to open a new terrorist front in Costa Rica, prolong the Afghan War, consolidate Savimbi’s military bases in Angola.

For the neoconservatives, this was the “real world.” The effectiveness of terror warfare was the only criteria by which to judge foreign policy successes. The “real” issues were locating funding and supplies, deepening the flow of weapons to the “resistance,” the “freedom fighters,” the riff-raff of the Third World.

Ultimately this alliance between the respectable corporate types and the lumpen-intellectuals, military adventurers, and upwardly mobile ideologues with their underworld of terrorists, murderers, and thugs, is an opportunist one. The adventurers and ideologues have a formidable power in the state apparatus. But they do not have any real base inside big business or even in the permanent government machinery. Their work with the underworld subjects them to the danger of public exposure.

When that happens their respectable allies can always evoke credible denial: the terror operation ran amok, it wasn’t officially approved. The terrorist operators are expendable.

March-April 1987, ATC 8