00:00 Gilbert Achcar: I prepared this to show you just a few figures, and to get a more concrete understanding of this issue that we are discussing, which is US hegemony, global imperialism — so as to go beyond general ideological types of discussion. Let's have one which is at least informed by some concrete facts, and then
00:32 we can discuss beyond them. So I would point to a few of them here and introduce a discussion on this, since this would be my focus. I won't deal much, and would allude rather briefly, to the Middle East [?], the issue of Syria and all that, but I guess this would come in the discussion, because Terry just raised that. Okay, so now —
01:04 there has been a long, deep history of debate on the US decline, so this is nothing really new as a theme of discussion. It was already very much here, actually, from the late 60s, when you had the crisis of the international monetary system, combined with the
01:34 Vietnam War, which actually contributed to this crisis. And the 70s: the United States, after the defeat in Vietnam and the economic problems that it faced, went into what they called — the United States itself — a declinist phase, which carried on in the 80s, to the point that one major bestseller of
02:04 that date is actually Paul Kennedy's book on the rise and fall of empires, which was focused in its conclusion on the decline of the US empire. That marked the spirit of the time. Now, he got it completely wrong at that time, because he saw in the Reagan increase in military spending what he called an overstretch
02:35 of the empire, which would lead to its downfall or precipitate its decline. And what happened was the contrary. In a way he didn't understand the role that the military budget plays in the American economy, as the key tool through which the US state injects funds into industry, into research and development, and so on. And the fact
03:08 is that the Reagan years saw the longest peacetime expansion in American economic history, and that was followed with the longest expansion period under Clinton later, and the massive comeback of the United States. And then now again we have a new wave of discussion about the decline, which is again connected with the global crisis, the Great
03:38 Recession as it has been called, the conjunction of that with the defeat in Iraq and with the rise of ISIS [?]. So you have a similar conjunction of factors leading to the same kind of new wave of discussion about decline. So let us first check a few figures and compare the present crisis to that of the 70s and 80s, to know what we are talking about. So first, if we look at
04:10 defence spending: you can see that in constant dollars the United States has been spending over the last few years — since the Bush years — more than at any previous time in history, if you put aside the Second World War of course, which is a completely different category. So you've had a real peak in
04:41 defence spending. But the key point, if you are discussing for instance the sustainability of something like this, is what does it represent compared to the GDP of the United States — the gross domestic product, that is, the power of the American economy. From that angle you can see that we are in a rather low point of the defence
05:14 spending compared to the GDP, and that shows you that the United States is far from exhausting its capability of spending for its military. Now of course the defence spending should be put in the broader picture of the federal budget and the US economy in general, and from that angle indeed this actually looks more
05:48 alarming than military expenditure per se, because you had this huge peak in the federal deficit of the United States. Just to give you an example: it reached ten per cent, with the bailout for the economic crisis in 2008. If you compare that to the Maastricht criteria, where the threshold is three per cent, we can see
06:19 how the United States would not be able to join the eurozone, if ever it wished. So that was indeed a big peak, and of course this was exceptional. But nevertheless this is quite important: even at the level of four per cent of GDP this is a huge deficit, given what type of economy it is. But again this is not something
06:50 that is beyond sustainability for the United States, especially if we look at what it is composed of. You can see here — this is the exceptional, here in blue, the recovery measures and all that due to the crisis, so this is temporary, not something structural. And the permanent: here you have in light yellow. So the military is
07:21 part of this deficit, but it's not that big. The biggest thing is actually neoliberalism, in the sense that it is the Bush-era tax cuts: if you cut taxes you create deficits. So again this shows you that the US is not anywhere near exhausting its resources. So we have to keep all these issues in mind. Indeed we have the worst federal debt since the
07:54 Second World War, and that was reached because of the accumulation of this yearly deficit. And here again, if you look at the Maastricht criteria, which put the limit at sixty per cent — the US is far, far beyond that. This is another way of showing that. So the
08:24 national debt of the United States has been increasing steadily and it's just enormous. It's 17 trillion dollars, that is one full year of American GDP, that is seventeen thousand billion dollars — an absolutely crazy kind of figure. And the issue here is this: this is a sign of weakness, in the sense that such huge debt
08:55 is never positive; but it's also a sign of strength, because no other state on earth could afford anything comparable to this. And that's because of the centrality of the US state and economy in the global system that something like this is possible. And where does the money come from —
09:26 to whom does the United States owe money? Here you can see that the majority are US domestic creditors, and you have also some important foreign. Here you can see — where is it — this is Japan, this is China, while all other foreign
09:58 nations. So these are the foreign creditors of the United States. Now that means that the United States owes money to these countries, and especially China and Japan. If you look at who are among the main funders of the US Treasury: here of course these are the foreign holders, there are others, as I
10:28 showed you, domestic holders. But among the foreign holders China and Japan are very important. Now this would be interpreted superficially by saying, ah, the United States depends on China and Japan. If you look at it in a different way you have what I would call the paradox of the big debtor. It's well
10:59 known that if you're a small debtor your bank controls you; if you are a big debtor you control your bank. And that's very well known in economics and business and all that. That means that actually the fact that these countries have so much invested in Treasury securities means that they are actually dependent on the US economy. For instance they have absolutely no interest in trying to wreck the US economy, because they would wreck themselves — in the same way that a big bank would never try to
11:31 wreck its big debtor, because that would wreck itself. So this also points to the importance of the US economy. Not the trade — the trade deficit, which has been very important and stayed very volatile, increasingly important, is something that is a structural weakness, has been known for a few decades, of the US economy, and here I'm going to get
12:04 to that. But at the same time this trade deficit is what allows the global system to work, because the deficit of the United States is the surplus of countries like Japan, Germany or China. So the United States economy has been playing the role of a buyer of last resort, if you want, in the global economy, and this makes it the indispensable nation, as Madeleine Albright put it some years ago. So
12:38 again you have these ambiguities: you can point to these figures, some of them, as weaknesses, but at the same time they are weaknesses revealing the strength of the system. So this is, if you want, a very dialectical situation, and it's not at all the simplistic view of the United States being some kind of wrecked economy. If you look at the importance of China in the trade
13:11 deficit of the United States, this is a good illustration of what we're saying: the United States imports a lot from China, but in this relation it's obvious that it's much more China which depends on the US market than the United States depending on Chinese production — all the more if you take into account the fact that a lot of what is produced in China is produced by US companies, US firms outsourcing,
13:44 working in China. So this is an indication of the importance of the US market for China. You can see — this was in 2006 — at that time the exports of China to the United States were almost ten per cent of the Chinese GDP, that is the equivalent of ten per cent of the Chinese GDP. That was the
14:15 importance of the US market for China. And one US company alone, Walmart, imported the equivalent of one per cent of the Chinese GDP. This is again absolutely huge. We have to keep these relations in mind and not look at it one-sidedly, as some do, and get into what I would call very superficial, impressionistic conclusions
14:48 about all that. Now of course, by the sheer size of what it is — China's absolutely huge population, several times that of the United States — it is poised to become the first economy by size, in absolute figures: that is, the size of the Chinese GDP is supposed to become the largest on earth. But this would
15:20 of course make of China already a huge economic powerhouse, and this will increase as long as the Chinese economy keeps going. However, this in itself doesn't mean that China, because its GDP will become the largest on earth, will be the most important economic force or whatever on earth.
15:51 There is no equivalence here, because we have to relativise this GDP by the population. And even if you look — of course the GDP per capita of China is much lower, incomparably lower, than that of the United States. And you can take something like this also, showing you the difference in the richness, if you want, and even the technological
16:22 performance of these countries. You look at the motor vehicle density and you see how China here is very, very far from the United States, or countries like the UK and all that. If you take the number of passenger cars, here for instance, per 1,000 people — which also tells you that if China had the same rate as the United States the sky would be a different colour now. And that's a very strong ecological
16:53 argument, because that shows how unsustainable is the level of consumption that we have here in Western countries at least, without any technological, ecological change. So, and finally of course — China, although it has been increasing its military budget by double digits over the last few years, and even if we put aside the recent cut in the Chinese
17:26 armed forces announced recently by the Chinese President for the first time — even if you forget this, there is a far cry between what China represents militarily and what the United States represents militarily. All the more that again these figures have to be taken also in the context of a very large army, much larger than that of the United States, which means that a lot of this budget is salaries to soldiers, and
17:57 in modern warfare soldiers are not that crucial. It's much more the technology, and the Chinese military technology is very much second-rate. China depends on Russia for whatever kind of sophisticated weaponry it has, and it is very low. They just for instance bought an aircraft carrier, but it's a
18:27 recycled, very old Russian one. So that just tells you that there's no comparison here. So all this shows us that the United States remains, and is poised to remain for quite a long time, the most important power on earth. And therefore from that point of view — from the point of view of its economic importance and its military, and they're connected very much — it's not
19:02 anytime soon that we will see the United States moving to the second rank or whatever. Now where's the weak point? The key is here. The United States — it's not, again, the economic power, in the sense that even if you have a big problem, if the crisis for instance rebounds in the United States, this is not a crisis
19:32 affecting the United States alone, it will affect everybody including China. So in that sense it's not a weakness. If there are weaknesses, they are weaknesses of the system, not of the United States alone; it can't go down alone without taking the whole system, everybody, with it. So it's not there, and it's not militarily, because in terms of firepower, of destructive power, they are and will remain dominant for a long
20:05 time. The weakness is actually what they used to call — although they don't use this term any longer, but it's still very much there — the Vietnam syndrome, if you want. That is, this inability of the United States to re-establish the draft and to deploy the same kind of numbers that it deployed at the peak of
20:35 the Vietnam War. And this is the reason — the reluctance of the US public to military adventures, which for a while, under the impact of 9/11, receded, came back with a vengeance, one could say, with the disaster in Iraq, and it's still there. This is the weakest aspect of the United States: this inability to send troops, to occupy for long, and to get into
21:08 wars anything resembling even a pale copy of the Vietnam War. And that's the key reason for the failure in Iraq. The defeat in Iraq was due to that: they went into Iraq in the belief that they could control that country with limited troops, and that their soft power combined with their hard power would do miracles. They faced a total defeat. Iraq is — one can argue, and I would
21:40 argue — the most important disaster in US imperial history, more important than Vietnam, because of what is at stake, because of the much more important strategic role of the region in which Iraq is, and of Iraq itself also as a country, a major holder of oil reserves. So that's where the key is. And if there
22:13 is really a decline of the United States, it is in this respect there is a decline. US hegemony is in decline in the Middle East in a very clear way. It's not because of the economy, it's not because of the military budget, it's because of the inability to project troops — which boils down to a political inability, which comes down also to the fact that the United States is, of course, a country where you have an electoral democracy, and
22:44 therefore where the government [cannot do] anything that pleases them. There is something —
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