Finance and American Empire

This essay tries to come to a deeper understanding, first, of the actual historical process that led to the realization by the end of the 20th century of a global financial order with New York as its operational centre, and with the American imperial state as its political carapace; and, second, of the way in which finance and empire reinforce each other today. We begin in Part I with the unique position of the American state at the time of the reconstruction of capitalism after World War II. We argue that this did not allow for the repression of finance, as many believe the Bretton Woods arrangements accomplished, but rather that the seeds planted at that time for a new liberal trading order both reflected and contributed to the influence and power of financial capital. Part II examines the two-decade long period of confusion and hesitation about whether, and if so how, the American state could manage the emerging global capitalist economy in the context of the inflationary pressures and class conflicts of the 1960s and 1970s. Part III addresses the central moment in the neoliberal reconstitution of the global capitalist order: the domestic economic discipline introduced by the US Federal Reserve under Paul Volcker (the 'Volcker shock') at the beginning of the 1980s--which built upon the privatization and internationalization of financial markets that had already occurred, and carried them further still. We show that at each of the turning points in the evolution of the international capitalist economy, the American state both registered and extended the power and depth of financial capital at home as well as abroad. Part IV analyzes not only the crises and contradictions but also the synergies involved in the relationship between finance, production and American empire today