The imperial counter offensive: contradictions, challenges and opportunities.

Journal of Contemporary Asia. Manila: 2002. Vol. 32, Iss. 3.

James Petras

The general thesis of this article is that the U.S. attack on Afghanistan is an effort to reverse the relative decline of U.S. empire and to re-establish its domination in conflictual regions. The war in Afghanistan is only part of a general imperial counter-offensive which has several components (1) to re-establish the subordination of Europe to Washington (2) to reassert its total control in the mid-East and Gulf region (3) to deepen and extend military penetration in Latin America and Asia (4) to increase military warfare in Colombia and project power throughout the rest of the continent (5) to restrict and repress protest and opposition against the multi-national corporations (MNCs) and international financial institutions (IFI) like the World Bank, the International Monetary Fund and World Trade Organization by replacing democratic rights with dictatorial powers (6) to use state spending on weapons and subsidies for near bankrupt MNCs (airlines, insurance, tourist agencies) and regressive tax reductions to halt a deepening recession, which would undermine public support for the empire-building project.

The second thesis is that the preparations for the imperial counter-offensive followed a planned three part sequence:

Phase 1: Sept. 11-Oct. 6 - A massive propaganda effort which magnified and distorted the nature of the attack on the World Trade Center and the Pentagon in order to secure world political support. The anti-terrorism campaign created the appearance of a "world consensus" in favor of Washington.

Phase 2: Oct. 7-to the present - A massive military attack was launched, actively supported by the hard core of U.S. supporters (England, Turkey, Pakistan, France, Italy, Japan, Spain, etc.). Political, psychological and legal barriers to involvement in the war were demolished in the U.S., Japan and Germany. This set the stage for new military interventions, heightened domestic repression and increased profiteering, under the pretext of "permanent war" conditions.

Phase 3: Involves a general military offensive against real or potential adversaries and critics, using intimidation (the threat of massive bombing as in Afghanistan) and increased military presence to extend and deepen control in crises regions like Colombia. The third thesis is that there are three "international crises," (1) Military-Political rises: The open-ended war declared by Washington which seeks to unilaterally restore its power, by imposing new client states; (2) Economic Crises: The decline and challenge to Euro-American imperial power derived from the world recession (and possible depression) and the growing opposition movements in and out of the imperial states; (3) The Crises of the Left Opposition. The U.S. counter-offensive has forced a new set of issues before the popular movements: greater repression, increased militarization, a monolithic and massive propaganda effort and general fear/and anger.

The imperial new order creates many challenges, dangers and opportunities for resistance, if the Left can overcome its current disorientation. This triple international crises that affect both the empire and the opposition pose several possible outcomes which grow out of their respective contradictions.

The logic of this essay will proceed by first identifying the context for the imperial counter-offensive, namely the relative decline of U.S. power. We will then examine the imperial advantages of extended open-ended war (as a solution to political-economic crises) and its contradictions.

Finally we will look at the war as part of the crises and its impact on popular opposition as well as the potentialities for a new resurgence of popular power.

Relative Decline of Empire and "the Need for a New Imperialism"

The commonly heard expression, "After September 11, 2001 the world has changed," has been given many different meanings. The most frequent sense explicitly stated by Washington, echoed by the European Union, and amplified by the mass media is that as a result of September 11, a whole new era is ushered in, a new "historical period" in which a new set of priorities, alliance and political relations are "established."

Washington's perspective of periodicizing a new historical era from September 11, however reflects its own losses and vulnerabilities. From the perspective of the Third World (and perhaps beyond) the "new era" starts on October 7, 2001, the date of the massive U.S. intervention and carpet bombing of Afghanistan. October 7 is important because it signals the start of a major world wide offensive against adversaries of the U.S. under a very elastic and loose definitions of "terrorism," "terrorist havens," and "terrorist sympathizers." It clearly marks a new military offensive against opponents and competitors to U.S. imperial power, including domestic dissent.

It is important to understand the meaning of the term "new epoch" because, much of what is happening is not new but rather a continuation and deepening of ongoing imperial military aggression which precedes September 11, and October 7. Likewise the popular liberation struggles in many parts of the world continue unabated despite September 11 and October 7, despite some significant changes in context.

In brief while September 11 and October 7 are significant events, it is an open question whether the events following these dates mark a qualitatively new historical period.

I would argue that it is more useful to analyze the inter-relationship between events and historical processes before October 7 and after, in order to separate what is new and significant from what is ephemeral or established.

Several significant factors establish the parameters and content for our discussion. The first is the relative decline in U.S. political and economic power throughout the 1990s in key areas of the world, particularly in the mid-East/Gulf region, Latin America, Asia, and Europe accompanied by an increase in U.S. influence in the less important Balkan states of Kosova, Macedonia and Serbia.

The second factor is the vast expansion of U.S. economic interests via its multinational corporations and banks into the Third World and the gradual weakening of the client regimes supporting that expansion. Clearly the international financial institutions (IF) like the World Bank (WB) and the International Monetary Fund (IMF) had so drained the wealth of local economies via their structural adjustment policies (SAP), free trade doctrines and privatization directives that the client states were fragmenting and weakening and rife with corruption as private sector elites and politicians pillaged the treasury. The weakening of the imperial "control structure" meant that the traditional almost exclusive dependence on the IFIs for surplus extraction was becoming inadequate. The decline of "indirect" imperial control over the impoverished and-,devastated Third World states required a "new imperialism," according to Financial Times journalist Martin Wolf (FT, Oct. 10, 2001, p. 13). In laconic terms bombs and marines supplemented IMF functionaries and SAP in "restructuring" economies and ensuring the subordination of Third World States. As Wolf argues "To tackle the challenge of the failed [pillaged and depleted] state what is needed is not pious aspirations but an honest and organized coercive force." In other words imperial wars, like in Afghanistan, Yugoslavia etc., must be accompanied by new imperialist conquests - recolonization is the "new imperialism," a process already underway in Latin American air, land and sea space.

From the end of the Gulf War and the Bush (Senior) Presidency to October 7, 2001, the U.S. won military conflicts in the Balkans and Central America (peripheral regions) and suffered a serious loss of influence in strategic regions. Similarly the U.S. economy went through a miniature speculative boomlet between 1995-1999 and then suffered a deepening recession entering the new Millenium. The combined peripheral victories and speculative bubble hid the deepening structural weakness.

The losses in U.S. influence can be briefly summarized. In the Middle East, the U.S. strategy of overthrowing or isolating the Iranian government and the Iraqi regime of Saddam Hussein was a total failure. The regimes not only survived but effectively broke the U.S. boycott. U.S. sanctions against Iran were, de facto, broken by most of U.S. "allies" including Japan, EU, the Arab states etc. Iran was accepted among the revitalized OPEC countries and signed nuclear power agreements with Russia, oil contracts with Japan. Iran signed investment and trade agreements with every major country except the U.S. and even there U.S. MNCs, working through third parties became involved in Iranian trade.

Iraq was reintegrated into OPEC, was accepted as a member at meetings of the Gulf States, at Arab summits and international Islamic conferences. Iraq sold million of "clandestine" barrels of oil via "contrabandists" through Turkey and Syria, clearly with the foreknowledge of the "transit regimes" and the Western European consumers.

The Palestinian uprising and the unanimous support it received from Arab regimes (including U.S. clients) isolated the U.S. which remained closely tied to the Israeli state. In North Africa, Libya developed strong economic ties with EU and their oil companies, particularly with Italy and diplomatic relations with many NATO countries.

Thus three strategic oil producing countries labeled as prime targets of U.S. policy, increased their influence and ties with the rest of the world, thus weakening the U.S. stranglehold in the region immediately following the Gulf War. Clearly Bush Senior's "New World Order" was in shambles, reduced to mini-fiefdoms, in the backward, mafia infested Albanian provinces in the Balkans.

Another major sign of declining U.S. power was found in the massive growth of trade surpluses accumulated in Asia and the EU at U.S. expense. In the year 2000 the U.S. ran up a $430 billion trade deficit. Western Europe's 350 million consumers increasingly purchased European-made goods - over 2/3 of EU trade was inter-European. In Latin America, European MNCs, particularly, the Spanish outbid U.S. competitors in buying up lucrative privatized enterprises.

Politically, especially in Latin America, the U.S. dominance was being severely tested particularly by the formidable guerrilla movements in Colombia, by Venezuela's President Chavez and the mass movements in Ecuador, Brazil and elsewhere. The collapse of the Argentine economy, the general economic crises in the rest of the Continent and the significant loss of legitimacy of U.S. client regimes were other indicators of a weakening of U.S. power in its neo-colonized provinces.

The massive growth of the "anti-globalization movement" particularly its "anticapitalist" sectors throughout Western Europe, North America and elsewhere challenged the power of Washington to impose imperial friendly new investment and trading rules.

Faced with its declining influence in strategic regions, a growing economic crises at home, the end of the speculative (IT, biotech, fiber optic) bubble, Washington decided to begin militarizing its foreign policy (via Plan Colombia) and to aggressively pursue comparative advantages via unilateral state decisions: abrogating treaty agreements (ABM missile agreement with Russia, Kyoto Agreement, the International Human Rights Court, antibiological warfare and anti-personnel/mining agreements, etc). Unilateral action was seen as a way of reversing the relative decline, combining regional military action and economic pressure. To counter the decline of U.S. influence in Latin America and increase its control, Washington pushed the Latin American Free Trade Agreement (ALCA in Spanish) to limit European competition and increase U.S. dominance. However opposition was strong in four of the five key countries in the region; Brazil, Venezuela, Colombia and Argentina.

September 11, (following the bombing of the U.S. battleship Cole in Yemen, the attacks on the Embassies in Kenya and Tanzania and the previous attempt to bomb the World Trade Center) was another indication of the relative decline in U.S. power, this time of Washington's incapacity to defend the centers of financial and military power within the empire.

September 11 is and is not a significant date. It is not because it continued to mark the relative decline of U.S. influence. It is because it becomes the turning point for a major counter-offensive to reverse the decline and reconstruct a U.S. centered "New World Order."

The Counter Offensive: October 7

Washington's declaration of war against Afghanistan has two important phases: the engineering of a U.S. dominated broad alliance based on opposition to the terrorist attack on the World Trade Center and the Pentagon, and later the conversion of this anti-terrorist front into a political instrument to support the U.S. military intervention in Afghanistan and beyond. The clear intent of the Bush Administration was to launch a worldwide crusade against opponents of U.S. power, and in the process, reverse the decline in order to rebuild a new imperial order. From the onset, the massive bombing attacks and the invasion by hundreds of Special Forces, on kill and destroy missions, were intended to obliterate domestic objections to future ground wars and new military interventions. Equally important the massive slaughter and displacement of millions of civilians served the explicit purpose of political intimidation directed at forcing real or imagined state adversaries to accept U.S. dominance and control over their foreign and domestic policies, as well as to threaten social movements that the same violence could be directed against them.

In a word the declining effectiveness of the EFI as instruments of U.S. hegemony has led Washington to increasingly rely on raw military force and high intensity violence. The overt threat of a series of military assaults is explicitly contained in the Administration's referral to Afghanistan Invasion as phase one, with the clear implication that other imperial wars will follow. Most prominent is Washington's threat to launch another full scale military assault against Iraq, and other "safe-havens" for "terrorists."

The so-called "anti-terrorist alliance" has been melded into a War Alliance (including all the major NATO countries). All the major military and political decisions down to the tactical level are taken exclusively and without the least consultation by Washington. In other words, the War Alliance is a continuation of Washington's previous unilateralism, only now they have successfully re-asserted dominance over the EU countries. While Tony Blair's hyper-kinetic activity on behalf of Washington's war has elicited praise from the President and the U.S. mass media, it has not in the least led to any sharing of decision-making power.

At least in this first phase of the U.S. counter-offensive, Washington has reasserted its domination over Europe. Taking maximum advantage of its strongest card in the inter-state system, military power, Washington has sought to militarize political-economic realities. By making "anti-terrorism" the dominant theme in every international and regional forum (APEC, UN, OAS) Washington hopes to undermine horizontal divisions between rich and poor countries and classes and replace it with a vertical ideological-military polarization between those who support or resist U.S. defined "terrorist" adversaries and military intervention.

Many regimes have already seized upon this military definition of socio-economic realities to repress popular and left movements and liberation organizations in the Middle East, Latin American and Central Asia. The multiplication of "anti-terrorist" purges by several client regimes serves Washington's policy perfectly, as long as the newly labeled terrorist movements also oppose U.S. policy and as long as their authoritarian clients accept the New Imperial Order.

Washington's threat of indefinite and extended wars of imperial conquest has been predictably accompanied by repressive legislation which in effect confer dictatorial powers to the President. All Constitutional guarantees are suspended and all foreign born terrorist suspects become subject to military tribunals in the U.S. - no matter what their particular geographical location. There is a broad consensus that the war-making powers assumed by the Executive violate the letter and intent of the Constitution and the norms of a democratic regime. The argument by the defenders of authoritarianism that these clearly dictatorial measures are temporary is not convincing given the President's position that we are in for a long and extended period of warfare.

In other words, authoritarianism and engagement in aggressive imperialist wars go together, obliterating the democratic republican vision of the U.S. revolution.

History teaches us that imperial wars are always costly, the economic benefits are unequally distributed and the burdens are borne by the wage and salaried workers. The authoritarian measures serve to repress or intimidate, those who question the patriotic rhetoric: who begin to interpellate the war slogan United We Stand by adding Divided We Benefit.

The resurgence of empire building at a time of deepening economic recession is a problematic strategy. While the Administration slashes taxes for the rich, the war increases expenditures - putting deep strains on the budget and mass of taxpayers. Military Keynesianism may stimulate a few sectors of the economy but will not reverse the sharp decline in profits for the capitalist sector as a whole. Moreover, stretching the repressive apparatus of client regimes to secure their acquiescence with the global empire building project will not expand overseas markets for U.S. exports. In fact, overseas conflicts will shrink markets deepening the negative external accounts of the U.S. economy.

More significantly the current military approach to empire building in the post Afghan period (Phase 2) threatens to destabilize the economies of Europe, Japan and the U.S.'s mid-East states. A military attack and occupation of Iraq will certainly disrupt the flow of oil to Europe and Japan, destabilize domestic politics in Saudi Arabia and other Gulf and Middle-Eastern countries. Fear of the destabilizing effects of Phase 2 of empire building has already led to dissent even among Washington's most servile European followers in England. Nevertheless, given Washington's imperial vision, unilateral approach and its access to alternative sources of oil (Mexico, Venezuela, Ecuador, Alaska, Canada, etc.) a military attack on Iraq could serve two strategic objectives - weaken European competitors and eliminate Iraq as a potential regional rival. Bombing Iraq would damage EU economies and alienate its two major Arab clients (Saudi Arabia and Egypt) but Washington has demonstrated it can brush off European objections and still secure their acquiescence.

A new U.S. war however could create uncertainty among investors world-wide, and the weakening of Europe would repercute negatively against the U.S. economy at a time of negative growth. A war induced European decline might improve the relative position of the U.S., but its economy would decline in absolute terms.

In focusing exclusively on pursuing a handful of supposed terrorists, President Bush strains at gnats and swallows camels. The overall damage to both EU and the U.S. economies resulting from a new war far exceeds any possible losses resulting from terrorists. The imposition of the Bush Administration's military definition on the political-economic conflicts in the Third World resonates with the state terrorist policies of the Israel (against the Palestinians) Algeria (against the Berbers) and Turkey (against the Kurds) in the Middle East and North Africa and no one else.

The Ariel Sharons in Washington (advocates of permanent war for empire building) have given virtually no thought to the economic consequences of military intervention in the Middle East. The collapse of the financial architecture and energy supplies of imperial states can bring down an empire far more quickly and with greater certainty than any real or imagined terrorist network.

The Counter-Offensive: Latin America

The imperial counter-offensive is world-wide. In the hierarchy of regions to reconquer Latin America stands out as second, after the Middle East. It is the region that has provided the U.S. with its only favorable trade balances. Its ruling and affluent classes have drained hundreds of billions in illegal transfers to U.S. banks, and the U.S. economy has received almost a trillion dollars in profits, interest payments, royalties and other transfers over the last decade. Latin American's client regimes usually servilely follow U.S. positions in international forums and provide nominal military forces in its interventionary forays thus providing a fig leaf for what are in effect unilateral actions.

Washington identified the Colombian peasant based guerrilla movements (the FARC/ ELN), the most powerful challenge to its dominance in the Hemisphere as a "terrorist" group. Controlling or influential in over 50% of the country municipalities by the mid1990s, the advance of the FARC/ELN, together with the independent foreign policy of Chavez regime in Venezuela, and the revolutionary government in Cuba represent an alternative pole to the servile Peon Presidents of the Continent serving the empire.

Beginning in the late Clinton's Presidency and deepening during the Bush Administration, the U.S. declared total war on the popular insurgency. Plan Colombia and later the Andean Initiative were essentially war strategies which preceded the Afghan War but served to highlight the new imperial counter-offensive. Washington allocated $1.5 billion in military aid to the Colombian military and its paramilitary surrogates. Hundreds of special Forces were sent to direct operations in the field. U.S. mercenary pilots were subcontracted from private firms to engage in chemical warfare in the poppy fields of Colombia. Paramilitary forces multiplied under the protection and promotion of the military command. Air space, sea coasts and river estuaries were colonized by U.S. armed forces. Military bases were established in El Salvador, Ecuador and Peru to provide logistical support. U.S. officials established a direct operational presence in the Defense Ministry in Bogota.

The world-wide counter-offensive of October 7 deepened the militarization process in Colombia. Under U.S. direction the Colombian air force violates the airspace over the demilitarized zone where the FARC and the Pastrana regime negotiate. Illegal cross border forays into the zone led to conflicts. The State Department labeling the FARC/ELN as "terrorists" puts them on the list of targets to be assaulted by the U.S. military machine. Under the Bush-Rumsfeld Doctrine, half of Colombia is a haven for terrorists and thus subject to total war.

The imperial war fever caused the State Department to send an official delegation to Venezuela to bludgeon the Chavez government to support the imperial offensive. According to officials in the Venezuela Foreign Ministry when Chavez condemned terrorism and the U.S. war, the State Department threatened the government with reprisals in the best traditions of Mafia Dons.

The key dimension of Washington's empire building project in Latin America is the proposed Latin America Free Trade Agreement. This proposal will give U.S. MNCs and banks unrestrained access to markets, raw materials and labor while limiting European and Japanese entry and protect U.S. markets. This neo-mercantilist imperialist system is another unilateral initiative, taken in agreement with the satellite regimes in the region, without any popular consultation. Given the high levels of discontent already in the region, under the neo-liberal regimes, the imposition of neo-mercantilist imperialism will likely lead to explosive social conditions and the re-emergence of nationalist and socialist alternatives. Washington's anti-terrorist military doctrine, with its threats of violent interventions and its active and direct military presence, serves as a useful ideological weapon to impose the neo-mercantilist empire.

Latin America is today half colonized: its bankers, politicians, generals and most of its bishops stand by and for the Empire. They want deeper "integration." The other half of Latin America, the vast majority of its workers, peasants, Indians, lower middle class public employees and above all its tens of millions of unemployed who are exploited by the empire reject and resist it. The imperial counter-offensive is directed at intervening, in order to sustain its colonial clients and to cower the other half of Latin America - that owns no property but represents the historical interests of the region.

We are entering a period of intensified warfare, constant military threats, savage bombings, wholesale massacres, and tens of millions of displaced persons. The sites of violent social conflict are no longer confined to the Third World, though that is where the people will pay the heaviest price. Will this period of war also be a period of revolutions - as in the past? Can the U.S. economy sustain a sequence of wars, without undermining its own economy? Can it survive by destabilizing its European and Japanese competitors but also its trading and investment partners?

Centrality of the Imperial State

There are clear indications that the economic bases of the U.S. empire are weakening for economic and political reasons. Economically the U.S. manufacturing sector has been in recession for 18 months and continuing into 2002. Hundreds of billions of dollars invested in information technology, fiber optics and biotech ventures have been lost. As revenues plummet thousands of firms go bankrupt. Both the "old" and "new" economies are in deep and prolonged crises. The financial and speculative stock market sectors are heavily dependent on volatile political-psychological circumstances in the U.S. and in the world economy. The vertical decline in the stock market following September 11, and the sharp recovery following October 7, reflect the volatility. More specifically, U.S. stock and bond markets depend heavily on overseas investors, as well as local speculators. These wealthy investors as well as their U.S. counterparts, invest in the U.S. as much for political as for economic reasons: they seek safe and stable havens for their private fortunes. September 11 shook their confidence, because it demonstrated that the very centers of economic and military power were vulnerable to attack and destruction. Hence the massive flight.

The October 7 attack, the massive world-wide counter-offensive of the Empire, and the destruction of Afghanistan, restored investor confidence and led to a significant influx of capital and the temporary recovery of the stock market. The total war strategy adopted by the Pentagon was as much to restore investor confidence about the invincibility and security of imperial power as it was for any political reason or even future oil pipeline. Stock market behavior, particularly large scale, long term foreign investors in the U.S. stock and bond market, seem to be influenced as much by "security and safety reasons as the actual performance of the U.S. economy. Hence the paradox of the inverse relation between the stock market and the real economy: while all the economic indicators of the real economy decline, toward negative growth, the stock market temporarily recovered its pre-September 11 levels.

There are limits however to this political bases of investment. Prolonged negative growth and declining profits (or increasing losses) will most certainly eventually end the recovery and produce a sharp decline in the stock market.

The theoretical point is that as the economic foundations of empire weaken, the role of the imperial state increases. The empire becomes even more dependent on state intervention, revealing the close ties between the imperial state and investors, including the MNCs. Equally significant the military components of the imperial state play an increasingly dominant role in re-establishing "investor confidence," by smashing and intimidating adversaries, buttressing faltering neo-colonial regimes, imposing favorable economic accords (LAFTA) for U.S. investors and prejudicial to Euro-Japanese competitors (by military action in the Gulf and Middle East).

The old imperialism of the 1980-90s that depended more on the IFI's (WB and IMF) is being supplanted and/or complemented by the new imperialism of military action: the Green Berets replace the bow tie functionaries of the IMF/WB.

Washington led NATO extends its dominion from the Baltic client states to the Balkan satellites, and beyond Turkey and Israel to the Central and Southern Asian (exSoviet) Republics. The missing link in this imperial chain is the strategically important Gulf states: Iran and Iraq. While this imperial chain is militarily significant it is more a cost to empire than a source of revenue: it borders great riches but does not produce them, at least as yet. This is clear to the Bush Administration which is more interested in destroying regional powers than in large scale investments in building colonial states, as is seen in the meager resources invested in the Balkans, Central Asia and is likely to be the case in Afghanistan.

The centrality of the imperial state in conquering and expanding U.S. power has refuted the assumptions of those leading theoreticians of the anti-globalization movement like Susan George, Tony Negri, Ignacio Ramonet, Robert Korten, etc. who think in terms of the "autonomy of global corporations." Their emphasis on the central role of the world market in creating poverty, dominance and inequality is in the present context an anachronism. As the Euro American imperial states send troops to conquer and occupy more countries, destroy, displace and impoverish millions, there is a great need to shift from anti-globalization to anti-imperialist movements, from the false assumptions of autonomous MNC dominated "superstates" to the reality of multinational corporations tied to imperial states.

The worldwide counteroffensive led and directed by the U.S. imperial state has as its goal the reconstruction of the failed "New World Order" of the post-Gulf War period. Today in the face of economic crisis and growing popular resistance, the multinationals do not have the will or resources to act "autonomously" via market forces. The new imperialism is based on military intervention (Afghanistan/Balkans), colonization (military bases), terror (Colombia). From the wars in Iraq, the Balkans, to Afghanistan, the imperial juggernaut advances, each more horrendous human catastrophe justified by an even greater barrage of propaganda of humanitarian missions.

The imperial offensive after October 7 is based on strategic and economic imperatives and has nothing to do with the "clash of civilizations." The U.S. empire includes Muslim states (Pakistan, Saudi Arabia, Egypt, Turkey, Morocco, Bosnia, Albania, etc.), Jewish states (Israel), as well as secular, nominally Christian, regimes. What defines the U.S. imperial offensive is not permanent allies (of one religion/civilization or another), but permanent interests. In the Balkans and earlier in Palestine and Afghanistan, Washington promoted fundamentalist Muslims and drug traffickers against secular nationalists and socialists. Yesterday's Muslim clients (Taliban) are, in some places, today's enemies. The thread that unifies these changing alliances is the need to defend imperial spheres of domination. The apparent "hypocrisy" or "double standard" of the imperial elites is only in the eyes of the beholder who mistakenly believed in the original propaganda of the empire and now feel "betrayed" by the switch in imperial clients.

The U.S. military advances in Afghanistan is preparing the way for new wars. The military alliance in Afghanistan is built around rival tribal warlords, who live off of contraband, drug trafficking and the pillaging of booty from local wars. Elsewhere severe structural contradictions and crises are looming on the horizon.

Contradictions of Empire

The U.S. imperial offensive faces two types of contradictions which are conjunctural and structural. In the present context the Afghan War polarized the Muslim states between their pro-empire leaders and the mass of sympathizers for the Afghan people and Osama Bin Laden. This polarization has not yet produced any serious organizational challenge to the client rulers, though the key Saudi monarchy is most vulnerable. The military victory of the U.S. and its client "Northern Alliance" and the resultant Muslim coalition regime could dissipate the purely Muslim amorphous mass opposition. The opposition of the EU and Arab states will only be activated if Washington extends its war to Iraq and destabilizes the European oil suppliers. These and other secondary conjunctural contradictions will not undermine Washington's imperial drive, though it may isolate it diplomatically, particularly in some international venues.

The more profound long-term structural contradictions of the "New Imperialism" are found in the military expansion in a time of deepening economic recession, both locally and worldwide. Military Keynesianism - increased war spending - has not and will not reverse the recession, as few sectors of the economy are affected and the industries which may receive some stimulus -- aerospace are hard hit by the recession in the civilian airline market.

While the military machinery of the imperial state promotes and defends the interests of U.S. MNC's, it is not the most cost-efficient service provider. The multi-billion dollar overseas expenditures far exceed the immediate benefits to the MNC's and do not reverse the declining rate of profits nor open new markets, particularly in the regions of maximum military engagement. Military intervention expands the regions of colonization without increasing the returns to capital. The net result is that imperial wars, in their current form, undermine non-speculative capitalist investment, even as it symbolically assures overseas investors.

As in Central America, the Balkans and now in Afghanistan and Colombia, the U.S. is more interested in destroying adversaries and establishing client regimes than in large-scale, long-term investments in "reconstruction." After high military spending for conquest, budget priorities shift to subsidizing U.S. MNC's, and lowering taxes for the wealthy -- there are no more "Marshall Plans." Washington leaves it to Europe and Japan to "clean up the human wreckage" after U.S. military victories. Post-war reconstruction does not intimidate possible adversaries, B-52 carpet bombing does. The military victor in the present conjuncture leaves unsettled the consolidation of a pro-imperial client regime. Just as the U.S. financed and armed the fundamentalist victory over the secular nationalist Afghan regime in 1990 and then withdrew, leading to the ascendancy of the anti-western Taliban regime, today's victory and withdrawal is likely to have similar results within the next decade. The gap between the high war-making capacity of the imperial state and the weakness of its capacity to revitalize the economies of the conquered nations is a major contradiction.

An even more serious contradiction is found in the aggressive effort to impose neo-liberal regimes and policies especially when the export markets which they were designed to service are collapsing and external flows of capital are drying up.

The deepening recession in the U.S., Japan and the EU has severely damaged the most loyal and subservient neo-liberal client-states, particularly in Latin America. The prices of the "specialized" exports which drive the neo-liberal regimes have collapsed: exports of coffee, petrol, metals, sugar, as well as textiles, clothes and other manufactured goods elaborated in the "free trade zones" have suffered from sharp drops in prices and glutted markets. The imperial powers have responded by pressing for greater "liberalism" in the South while raising protective tariffs at home and increasing subsidies for exports. Tariffs in the imperial countries on imports from the Third World are four times higher than those on imports from other imperial countries, according to the World Bank (Global Economic Prospects and the Developing Countries 2002, www.worldbank.org). Support to agricultural MNC in the imperial countries was $245 billion in 2000 (F.T., Nov. 21, 2001, p. 13). As the World Bank Report points out, "the share of subsidized exports has even increased [over the past decade] for many products of export interest to developing countries."

The neo-liberal doctrine of the Old Imperialism is giving way to the neo-mercantile practice of the New Imperialism. State policies dictate and direct economic exchanges and limit the markets' role to a subsidiary role -- all to the benefit of the imperial economy.

The highly restrictive nature of neo-mercantilist policies in the past and in the present polarize the economy between local producers and the imperial state backed monopolies. The decline and collapse of overseas markets prejudice "neo-liberal" export sectors. The highly visible role of the imperial state in imposing the neo-mercantilist system politicizes the growing army of unemployed and poorly paid workers, peasants and public employees. The collapse of overseas markets means that less foreign exchange can be earned to pay foreign debts. Less exports sold, means less capacity to import essential foodstuffs and capital goods to sustain production. In Latin America the export strategy upon which the whole imperial edifice is built is crumbling. Unable to import, Latin America will be forced to produce locally or do without. However, the definitive rupture with the export strategy and subordination to empire will not come about because of internal contradictions -- it requires political intervention.

Opportunities and Challenges for the Left

In the short run ("conjuncture") the left faces the full thrust of Washington's imperial counter-offensive, with all that implies in terms of increased bellicosity, threats and greater subservience from ruling client elites. Nevertheless, while this new military-led imperialist effort at "re-conquest" is underway, it faces serious practical, ideological and political obstacles.

For one thing, the offensive takes place in the face of a major political resurgence of the left in various strategic countries and a serious decline in the neo-liberal economies. In Colombia, Brazil, Argentina, Ecuador and Bolivia, powerful socio-political movements have emerged and have consolidated influence over important popular constituencies, while the incumbent client regimes are deeply discredited, in many cases with single digit popularity ratings.

This situation presents dangers and opportunities. Dangers from the increasingly militarized and repressive response pushed by Washington and echoed by its Latin client regimes, as witnessed by the Ibero-American Conference Declaration in November 23, 2001 on Terrorism (La Jornada, Nov. 24, 2001). Opportunities from the fact that the resurgent left has not suffered a major defeat in this period (comparable to 1972-76) and is in a strong position to make the leap from protest to power. Neo-liberal regimes have failed to find overseas markets, in order to sustain domestic production or locate new flows of capital to compensate for the vast outflows in debt payments, profit remittances, etc. The prolonged depression in Argentina is emblematic of the direction in which all of Latin America is heading.

The current crisis is systemic, in that it not only affects workers and unemployed -- by increasing poverty, unemployment and inequalities -- but the very mechanisms of capital accumulation. What capital is accumulated in Latin America is stored in overseas accounts as "dead wealth." It is evident to any but the most willfully blind academics -- of which there are not a few -- that neo-liberalism is dead and that the new neo-mercantilist imperial system offers no room for "market choices."

In this perspective, what is essential for converting these objective opportunities into substantial structural changes is political power. The social movements have mobilized millions, they have realized innumerable changes at the local level, they have created a new and promising level of social consciousness and in some cases they control or influence local governments and have secured concessions via mass pressure from the dominant classes. However there are several as yet unresolved issues before these movements can be said to pre-figure a political alternative to state power.

First, politically the movements espouse a series of programmatic demands and alternatives -- which are positive and important -- but lack a theoretical understanding of the nature of the evolving imperial system, its contradictions and the nature of the crisis.

Secondly, there is disunity, uneven development between urban and rural movements, between the interior and the coast, and within some of the movements rivalries based on personalities, tactics, etc. The aggregate existing movements, if unified in a coherent single movement, would be significantly closer to challenging for state power.

Thirdly, many of the movements engage in militant tactics and articulate radical programs, but in practice engage in constant negotiation to secure very limited concessions, thus reducing their movements to pressure groups within the system rather than protagonists to overthrow the regime. The challenge is how to develop a transition program adapted to the immediate demands of the people but which put in the center of the struggle in the construction of a socialist alternative. The growing authoritarianism of the imperial directed client regimes requires the building of mass democratic and anti-imperialist movements.

The U.S. imperial strategy of militarization to impose a neo-mercantilist empire requires greater capacity for incorporating new allies and the need to prepare for diverse forms of struggle. The imperial strategists have selected Colombia as the testing ground for the "New Imperialism" because it is Colombia where they face their greatest politico-military challenge. All the reactionary forces in the hemisphere have been mobilized against the guerrilla armies as well as the growing mass movements. All the peon presidents of the hemisphere have signed onto the anti-terrorist crusade and the FARC/ELN are designated by the empire as terrorists. Military success in Colombia will accelerate and encourage the military conquest and colonization of Latin America, just as the U.S. directed military coup in Brazil (1964) was followed by invasions (Dominican Republic 1965) and subsequent military coups in Bolivia (1971), Uruguay (1972), Chile (1973) and Argentina (1976).

A victory or prolonged war by the guerrillas in Colombia will provide breathing room for the rest of the left. Thus it is essential that maximum support and solidarity be extended to the Colombian struggle. Internationalism is not only the solidarity network against the new imperial military offensive, in general, but in support of the Colombian peasants and workers organized in their "Peoples Army."

These are dangerous and hopeful times - dangers which cut both ways: for the Empire and for the left. The struggle continues.