One of the tendencies of the modern world system is the rise and relative decline of hegemonic core nations. A hegemonic nation has a clear advantage over other core nations in terms of economic productivity, levels of technology and capital, and military strength. But as hegemonic nations acquire the highest wages and levels of consumption, their efficiency and productivity is undermined, placing them at a competitive disadvantage relative to other core nations, and their position tends be further eroded by excessive military spending. These factors enable other core nations to close the gap, and there thus occurs a relative decline of the hegemonic nation (Shannon 1996:136-40).
Wallerstein considers the United States to be the third hegemonic core nation in the history of the world-system, and he believes that its relative decline began in the period of 1968 to 1973. Thus, coinciding with the deep structural crisis of the world-system (1973-present), the United States has experienced an economic and financial decline, relative to other core nations (Wallerstein 2000).
During the 1970s, the spectacular ascent of the United States that had begun in the eighteenth century came to an end. The decade was characterized by a lower level of economic growth, higher unemployment, high inflation, increasing government debt, high corporate debt, high consumer debt, and balance of payments deficits. The deterioration of US hegemony is evident in key economic indicators: in 1950, the US economy accounted for 20% of world commerce and 40% of world Gross Domestic Product, whereas in 1980 it accounted for 11% of world commerce and 21.5% of the world GDP. During this time, the economies of the European Union and Japan were dynamic, and they were able to close considerably the gap between themselves and the United States. In addition, the United States lost control of the international monetary system, when President Nixon was obligated to suspend unilaterally the backing of the US dollar with gold reserves (Cobarrubia 2006:187-89).
In the context of the relative decline of the United States during the 1970s, and taking advantage of the general “malaise” and the feeling of losing control among the people of the United States as well as the taking of hostages at the US embassy in Iran in 1979, Ronald Reagan was able to win the presidential elections of 1980 with an ultra-conservative discourse. Barry Goldwater had offered a similar right-wing message as the Republican Party presidential candidate in 1964, but he was defeated by Lyndon Johnson in one of the most lopsided presidential elections in US history. But the ultra-conservative message had more appeal in 1980, given that the nation had entered into a spiral of decline.
The turn to the Right provided a clearer sense of national direction and purpose, but the measures adopted under the revitalized conservative movement functioned to accelerate the national decline and to deepen the global crisis. The ultra-conservative response did not address the structural causes of the decline, and it strengthened some of the tendencies that were factors in weakening the US position, such as high military expenditures and high levels of government and consumer debt.
We will examine the impact of the turn to the Right on imperialist policies in subsequent posts.
Cobarrubia, Gómez, Faustino. 2006. “Economía de los Estados Unidos: Una retrospectiva de las últimas cuatro décadas” in Libre Comercio y subdesarrollo. La Habana: Editorial de Ciencias Sociales.
Shannon, Thomas Richard. 1996. An Introduction to the World-System Perspective, 2nd ed. Boulder: Westview Press.
Wallerstein, Immanuel. 2000. “The Three Instances of Hegemony in the History of the Capitalist World-Economy” in Immanuel Wallerstein, The Essential Wallerstein (New York: The New Press), Pp. 253-63.[Originally published in International Journal of Comparative Sociology XXIV:1-2 (January-April 1983), Pp. 100-8).
Key words: Third World, revolution, colonialism, neocolonialism, imperialism, democracy, national liberation, sovereignty, self-determination, socialism, Marxism, Leninism, Cuba, Latin America, world-system, world-economy, development, underdevelopment, colonial, neocolonial, blog Third World perspective, cycles of hegemony, the Right, American decline