Fascism and the Crisis of Pax Americana

Financialization and Militarization: An Empirical Investigation

“…Global economic transformation was an additional development that impaired this trend for the United States. Despite access to raw materials across the globe, the profitability of the US manufacturing sector fell by around 40 percent between 1965 and 1973 (Brenner 2006: 99; Meyerson and Roberto 2008: 165). Moreover, the economies of Japan and Europe, particularly Germany, substantially increased their share in manufacturing exports to become two major rivals to the United States.…”

“…The unique role of dollar is also closely linked to the US military power. As Andre Gunder Frank has succinctly argued, “Uncle Sam’s power rests on two pillars only, the paper dollar and Pentagon” (Frank 2005), although he also noted that “[e]ach supports the other, but the vulnerability of each is also an Achilles’ heel that threatens the viability of the other” (Frank 2005 cited in Meyerson and Roberto 2008: 174–75). Similarly, Magdoff argues that “[t]he positioning of US military bases should therefore be judged not as a purely military phenomenon, but as a mapping out of the US dominated imperial sphere and of its spearheads within the periphery” (Magdoff 1969: 50).…”

“…In fact, it is no secret that the United States has “a strategy of retaining its economic and political hegemony through military means,” as reported in the National Security Strategy of the United States in 2002 (Foster 2005: 1). Thus, the goal in Iraq went beyond simply controlling oil reserves to protect the dollar’s dominant role, as made clear by a member of Defense Secretary Donald Rumsfeld’s Office of Special Plans, “who noted that the invasion was undertaken in part to secure the dollar as Saddam Hussein and others were in the process of switching from the dollar to the Euro to price their oil” (Clark 2005, cited in Meyerson and Roberto 2008: 174).…”

“…Finally, some of those dollars circulate back to the US economy as other nations invest in the US stocks or treasury bonds. While in the short term, this financial system substantially benefited US businesses “because large dollar holdings in foreign hands helped to facilitate the sale of US exports” in the long run, the decline in profitability and the rise of Japan and West Germany led to “the end of the US role as a leading global exporter of industrial goods” (Brenner 2006: 125, cited in Meyerson and Roberto 2008: 166).…”

“…The hardship for the US economy in terms of the imbalance in the positions of the dollar (i.e., a drain in gold reserves) intensified with the US defeat in Vietnam as the flow of dollars abroad created a huge euro-dollar market (Clark 2005; Wallerstein 2003: 18, 49; Foster 2005; Meyerson and Roberto 2008). This led to the end of the dollar-gold regime when Nixon delinked the dollar from gold in 1971 de facto and in 1973 officially (D’Arista 2009).…”