The news that Kerry has conceded defeat has just come through. We will publish a full analysis of the US election results tomorrow. In the meantime we are publishing this article which looks at the state of the US economy and traces its long term decline. Whether Bush or Kerry had won it would not have made a fundamental difference. They both defend US imperialism. They could not come out with fundamentally different policies for they are tied to the same basic economic interests. In fact the extreme similarity between the two explains why Kerry could not defeat Bush. Any policy based on the US economy as it is today means one thing: an attack on the living standards of American workers. To defeat Bush something else is needed – a party of the American working class.

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By the time you read this, you will know who won the US presidential election. For the average American household it will make little difference to their well-being whether it is Bush or Kerry. And for that matter, despite the widespread hostility to the re-election of Bush among most of the people (and many governments) of Europe, the Middle East, Africa, Asia and Latin America, it will make little difference to the way the US operates if it is under a Kerry or Bush presidency.

That’s because of the reality of two things. First, the US government and US society is not controlled by one man (or woman) or even by the politicians operating in the White House or in the Capitol. American foreign policy is driven by the same forces that drive its domestic policy. And that is what ensures the best for US capitalist corporations and the whole system of production for profit and for the desires of the owners of capital.

That is why only the very rich can even stand for president and stand a chance of winning or even getting on the ballot. Hundreds of millions of dollars are needed for the campaigns, for the TV adverts, for the events etc. That means calling on the treasuries of the big corporations. And the likes of WalMart, Microsoft, BankAmerica, IBM, General Motors or Merck are not going to have a candidate that does not stand four-square behind the capitalist system. Through the tentacles of the corporate lobby system, the federal and state congress representatives act as political agents of American big business, making sure that the interests of capitalism dominate the minds and actions of the president and legislature.

And second, what is much more important than who the president will be, is the relative strength of US imperialism in the world economy and political and military control of the world.

The poverty of the abilities of either Bush or Kerry as a potential leader of the so-called free world (namely world capitalism) is manifest. Bush has presided over four years of conflict, violence, terrorism, torture and military aggression. At the end of it, US imperialism is in a weaker position, both economically and politically, than it has been for over 50 years.

But Kerry offers no alternative: he stands for more of the same in military occupation of Iraq, in threatening Iran and North Korea with action unless they tow the line on nuclear armament; and above all, with preserving the right of US corporations to continue to make profits at home or abroad with the minimum hindrance.

History of exploitation

And here is the key point. US capitalism has been around for over 200 years. It became fully fledged after the defeat of the slaveholders of the south in a bloody civil war of the 1860s. It was a resurgent capitalist power for the rest of the 19th century. In the late 1890s, it began to develop its own overseas empire (if you discount the annexation of Texas from the Mexicans after the Alamo in the 1830s). The US invaded the Spanish Caribbean and started its infamous rule of Cuba and most of Latin America as its backyard. It extended its Pacific influence by taking over in the Philippines in a cruel war.

US imperialism then gained a foothold in Europe by joining the war against Germany in 1917, once the European powers had finally weakened themselves irrevocably in fighting each other. The inter-war period saw the battle for world supremacy between the old imperial powers led by Britain and the new rising powers of Japan and the US and the embittered and defeated Germany. The sun was setting over the great British Empire that had lasted 200 years. The Second World War clinched that and established the US as the new imperialist leader, bigger and more powerful than any before.

The one fly in the ointment for the US imperialists was that the war had also made the Soviet Union a significant obstacle to Pax Americana. The last 50 years saw the strengthening of US military power in the arms race and eventually the collapse of the Stalinist regimes of eastern Europe, with these countries returning to capitalism and falling under the political and military control of that arm of US imperialism, NATO.

But the irony of the fall of the Stalinist powers at the end of the 1980s is that this final victory of US imperialism over all opposing powers heralds the nexus of US imperialism and the beginning of its decline and fall.

Can I justify that claim? Back in the 1970s and 1980s, in Europe we all used to argue that US economic performance was weakening in relation to Europe and Japan. Whereas, US manufacturing claimed over 30% of world trade in 1950, by 1990 that had fallen to 15%. Japan’s share had risen from 2% to 10% and Germany’s from 2% to 12%.

Similarly, at the height of its economic power in the late 1960s, the US economy grew in size by an average of 4% a year. However, in the 1980s, it increased national output by only 2% a year compared to Japan’s 4%. And there’s profitability: US corporations consistently had lower profits per unit of investment compared to Germany or Japan throughout the 1970s and 1980s.

It all seemed to turn around in the 1990s after the fall of Stalinism and the start of the information technology revolution. US productivity growth picked up as American companies sacked their workforces, introduced new computer-based equipment and relocated much of their manufacturing base overseas in what was called the great globalisation. American companies became the biggest overseas investors.

So it seemed that American imperialism was set to have a new lease of life and leap forward again to lead the New World Order. However, all soon turned to dust. The hi-tech revolution went bust and companies went down in droves along with stock market prices. The US economy went into a mild recession and then along came 9/11.

The reality is that US imperialism had reached its zenith and is on its way down. US manufacturing is fast disappearing down the plughole, just as it has in the UK. The world leaders in manufacturing, whether it is the production of basic goods like chemicals or steel, or whether it is more sophisticated products like computers and other electronic goods, are now in Asia. China is fast becoming the world’s leading manufacturing nation. After 1945, US manufacturers produced 40% of world output with everybody else down around 10% or below. But now the US share is just 11%! The US is still the world’s largest manufacturer and second only to Germany in manufacturing exports, but China is fast closing the gap.

More and more American imperialism is becoming like the Roman empire of ancient times. It no longer provides the necessities of life for its citizens through its own producers. It must rely on production being imported from abroad. Increasingly, it does not pay for this by its own exports. Instead it pays with dollars that it just prints itself. Because the capitalist world depends for its survival on US military might and because other countries want to sell their goods, they’ve been prepared to take the yankee dollar even though it has steadily declined in value.

US imperialism is now in huge debt to the rest of the world. It owes more than 25% of its annual output to other capitalist nations in borrowing it has run up to buy the goods and services it needs and no longer makes itself.

At the same time as manufacturing of necessities has disappeared from the economic landscape of America, it has been replaced by a decadent economy, one based more and more on parasitic finance capital. The financial sector in a capitalist economy is necessary to oil the wheels of industry. It provides credit and enables capitalists through the money economy to move their capital around more efficiently and quickly. In return for these services, the finance capitalists can charge interest and fees.

Rise of finance

But now finance capital has become the dominant part of the US capitalist economy. Whereas in 1982, only 4% of the profits made by American corporations came from the finance sector, it is now 38%! All the profits of the labour of Americans are less and less appropriated by the productive sectors of American capitalism to invest in innovation, new products and machines and more and more are captured by the banks, investment houses, insurance companies and mortgage lenders, who speculate in the stock and bond markets and send their money abroad. American capitalism is now a casino economy of speculators, a rentier economy of bankers living off interest and a consumer economy importing from abroad.

The American empire is set to decline whoever wins the presidential election. A Kerry victory may mean a tactical turn towards trying to involve other capitalist nations in trying to control the world, while the Bush administration may continue with its ‘neo-conservative’ adventure that aims to go it alone against those states that oppose untrammelled US rule. But either way will not re-establish the New World Order as America wants. That’s because US imperialism has had its day.

The Roman Republic took two hundred years to establish its dominance of then known world to Western civilisations. Rome first had to defeat rival states in Italy. Then it had to smash other budding empires in the Mediterranean like that of Carthage. It did that brutally. Its superior peasant-based economy, supported by innovatory technology learnt from the Greeks, enabled it to gain economic and eventually military superiority over Europe and the Middle East.

But in its drive for imperial dominance, it gradually dropped its citizen farmer economy, which did not provide enough manpower and military personnel to rule the world. It adopted a slave economy using captured peoples from its military conquests and started to ‘globalise’ the world. As Republic became Empire and democracy became dictatorship, the Roman Empire started its long and slow decline into eventual collapse over the next 300 years. The Empire buckled as its weakening economic foundations crumbled.

So it will be with US imperialism. And it won’t take as long as Rome did to fall apart. Capitalist economies move much faster than slave or peasant economies and so do modern communications and war. The process of decline will be much quicker as a result. Bush or Kerry will preside over that decline.