By Daniel Simpson
LONDON – Plus ça change in Washington, plus c’est la même chose, sort of.
The Bush/Cheney “War on Terror” is now Obama’s “Overseas Contingency Operation”. The Surge has hopped east to Afghanistan, and military spending is up, despite media claims it’s been “gutted“. Pakistan remains the nightmare-in-waiting, and China’s rise continues unimpeded. The only real shift is in expectations. Clinton-era fantasies about “full spectrum dominance” are as distant as Bush Jr’s vision of forces “strong enough to dissuade potential adversaries from pursuing a military build-up in hopes of surpassing, or equaling, the power of the United States.” Instead, there’s greater realism, albeit tempered by Imperial delusions. The New World Order might be multi-polar after all, but the Pentagon still spends as much as every foreign force combined. The irony is how little influence this buys, despite hundreds of bases in two thirds of the countries on Earth. In which case, why bother having them?
The U.S. was “Number One in Relative Decline” a generation ago, when Paul Kennedy wrote his classic Rise and Fall of the Great Powers. Now it’s like a heavyweight pinned to the ropes, at least when it comes to dictating outcomes. Iran seems to have won the Iraq war, while in the tribal badlands rechristened “Af-Pak”, turbaned men with beards look as resistant as ever to superpower arsenals, which more often than not blow away civilians. Elsewhere, China’s dropping hints about dropping the dollar. And for all the talk of a G2 axis with Beijing, Washington seems to be trying to hang onto influence via the G20, or any new clubs that might still do some of its bidding. Meanwhile, its economy’s unravelling. Never mind the debts and deficits that worried Kennedy, it will be tough to divert an ever-increasing share of shrinking output to the military-industrial complex, however many jobs it might provide. This all adds up to a clamp-down on spending, provided a lobby-hobbled Congress plays ball.
Nonetheless, the omens are confusing. “It has been a common dilemma facing previous ‘number-one’ countries,” Kennedy observed, “that even as their relative economic strength is ebbing, the growing foreign challenges to their position have compelled them to allocate more and more of their resources into the military sector, which in turn squeezes out productive investment and, over time, leads to the downward spiral of slower growth, heavier taxes, deepening domestic splits over spending priorities, and a weakening capacity to bear the burdens of defence.” Hence Britain’s bankruptcy east of Suez, or any number of earlier precedents, and the impossibility of a 1,000-year Reich, even under Uncle Sam’s soft power. However, Kennedy concluded, “there is no obvious ’successor state’ which can take over America’s global burdens in the way that the United States assumed Britain’s.” These amount to playing Caesar and keeping highways open; or at any rate shipping lanes for oil. Upon rising to pre-eminence in 1945, U.S. planners said Middle Eastern crude was “a stupendous source of strategic power, and one of the greatest material prizes in world history.” Ensuring its safe passage has been an axiom of policy ever since.
For all the bluster about Chinese naval expansion, Beijing seems happy to let America do this work for the time being. Instead, it’s focused on buying influence, trading no-strings aid for mineral rights in Africa, Arabia and beyond. For now, the plan’s not backed with boots on the ground, or even the capacity to deliver them. But will long-term competition start an arms race, proxy skirmishes or full-blown conflict? None is inevitable, though Paul Kennedy stresses that “those who assume that mankind would not be so foolish as to become in another ruinously expensive Great Power war perhaps need reminding that that belief was also widely held for much of the nineteenth century.” It’s also worth recalling what ended the Great Depression, and precipitated U.S. hegemony. To quote the columnist Paul Krugman: “what saved the economy, and the New Deal, was the enormous public works project known as World War II, which finally provided a fiscal stimulus adequate to the economy’s needs.”
For the first time since the Nazi era, planners say “the primary near-term security concern of the United States is the global economic crisis and its geopolitical implications,” as Admiral Dennis Blair, the Director of National Intelligence, put it in February. Furthermore, he said, “all of us recall the dramatic political consequences wrought by the economic turmoil of the 1920s and 1930s in Europe, the instability, and high levels of violent extremism.” America’s next Hitler is unlikely to be moustachioed, a mullah, or a Communist. Instead, the enemy is general lawlessness, requiring plans “to protect our way of life” from random malcontents, to quote the Navy’s use of a favourite U.S. euphemism for securing resources. Expect more showdowns with pirates, and militiamen no one’s heard of. The future, as seen by the geographer Edwin Brooks, resembles a “crowded, glowering planet of massive inequalities of wealth, buttressed by stark force yet endlessly threatened by desperate people.”
There’s even less prospect of America policing this chaos than there was in Rwanda or Congo in the 1990s, but it’s likely to defend against threats to its economic interests. This already includes action to protect oil supplies from Nigeria, and the militarisation of energy policy could turn West Africa into “the Next Gulf”, with multiple brushfire conflicts fanned by climate change and competition for depleting resources, from water to oil and gas. Then there’s Central Asia, and the narco-states of Latin America, which other regions could come to resemble in dysfunctionality. The collapse of Colombia, Kazakhstan or Mexico would seriously harm the U.S., Admiral Blair warned senators, while in numerous other countries, threats to state power could drive demand for counter-insurgency skills and equipment, the new U.S. speciality. Add a Cold-War-style proxy clash to the death of Yugoslavia crossed with Darfur, and even an end to the Age of Empires could give arms companies a boost.
YOU SAY CUTBACK?
After a lull in the 1990s, military spending is back to where it was at the height of the Soviet arms race. At more than half a trillion dollars, the basic Pentagon budget is five times China’s, though once you factor in the cost of ongoing wars and related expenses, the figure’s more like double that. Though the proportion spent on defence was higher under Eisenhower and Kennedy, America’s share of the world’s wealth was much greater then. While the Obama administration’s promising retrenchment, it’s not about to dismantle the Empire. Instead it wants to preserve it as much as it can, ideally consensually. “The people who are now in charge are realists,” says Jim Lobe, a veteran Pentagon-watcher. “They believe in American decline and making compromises.” Two important caveats: the aim is to stretch the decline over several decades, and the new administration’s far from averse to conflict. Obama was one of the first to call for escalation inside Pakistan, which he’s delivered, to questionable effect. Whatever he might personally prefer (and this is doubtful: “As we understand it,” Morgan Stanley said after his election, “Obama has been advised and agrees that there is no peace dividend”), America’s embroiled all over the world, and unwinding its myriad commitments will take time. For now, the focus is on the easiest targets.
Obama’s first budget aims to scrap expensive projects like the supersonic F-22, designed for Cold War dogfights, and the portentous sounding Future Combat System tank series. But it’s more about strategic change than cutbacks; it outlines a four percent spending increase, with an emphasis on counter-insurgency. This shift has been in the offing for decades, since that’s the kind of war Americans fight, when they’re not bombing people back to the Stone Age in the name of saving them. But it’s been banished from military doctrine since the 70s, after the U.S. humiliation in Indochina. “The ghosts of Vietnam are everywhere,” says Michael Klare, a professor of peace and world security studies at Hampshire College. That means updating John F. Kennedy’s counter-insurgency policy to 21st century resource wars and low-intensity regional conflicts. The plan is to spend more on Predator drones, sensor-equipped turboprop planes, conventional helicopters, coastal combat ships and more special forces, while also training and equipping foreigners for “expeditionary warfare”.
The trouble, says Klare, is that by focusing on this strategy, the administration “risks inculcating a predisposition to engage in more wars of this type.” Meanwhile, media fixation on the economic implications of scrapping fancy weapons systems obscures another major development. Efforts to recruit more soldiers are bearing fruit, with applications for officer training up sharply. The likeliest implication of tighter budget scrutiny is the reversal of one of the past decade-and-a-half’s biggest trends. In the 1991 Gulf War, barely a fifth of those the U.S. deployed were contractors. The second time around, they were a majority, especially in support services. Much of the menial work in Iraq – cooking, cleaning and the like – is done by foreigners in the pay of companies such as Halliburton, who’ve filled the vacuum in an army starved of conscripts. To compensate for this, and the systematic overbilling of the Pentagon by contractors, the military is trying to swell its professional ranks.
Until now, says Pratap Chatterjee, the author of Halliburton’s Army: How a well-connected company revolutionised the way America makes war, there’s been “a strong ideological belief that contractors are more efficient,” in part because they escaped Congressional oversight. “No one is minding the store,” agrees William Dupree of the Center for Public Integrity, which found that Pentagon investigators referred barely half as many fraud cases for prosecution during the Bush years, despite a doubling of contract outsourcing, and a string of corporate malfeasance scandals and human rights abuses. “Since they hire migrant workers and don’t pay long term benefits,” contractors should, Chatterjee says, “save the government more money than hiring soldiers. The problem is that the oversight has also been outsourced and is very haphazard.” Better control could help curb wastage, which is rife in military procurement. The Government Accountability Office calls it “staggering”, strengthening the case for centralisation, and the more manageable cost of larger armed forces payrolls.
A rethink of outsourcing is also needed more generally, unless Obama plans to reverse his commitment to “Af-Pak” escalation, or withdraw completely from Iraq, instead of retreating to long-term garrisons. Analysts expect the next Quadrennial Defense Review to bolster recruitment significantly. “A meaningful and realistic QDR would have added 86,000 troops to the Army,” Lawrence Korb of the Center for American Progress told Congress after the last one, in 2006. That would certainly be more in keeping with Defense Secretary Robert Gates’s talk of “strategic reshaping”. Although Gates concedes that “resources are not unlimited”, and insists that “now is the time for action,” the likeliest upshot is that savings on contractors and expensive programmes are redirected to conventional forces.
Ironically, despite ballooning budgets since September 11, 2001, the Rumsfeld-era fixation on “netcentric warfare” kit (robots, drones, communications satellites and space toys) has gobbled up money that might otherwise have bought basic kit for soldiers, like boots, helmets and flak jackets. Plus there’s all the ruined stuff to replace. As one defence industry trade magazine phrased recent appeals for more federal funding: “five years of war have left U.S. forces worse off than they have been in a generation, yes, since Vietnam, and restoring them will take budget-building unlike any in the past.”
Obama’s already pledged not to cut military spending while in office, sources say. For the next decade, it’s due to rise with inflation, at bare minimum, and lobbyists will continue to press for more, arguing that rivals will otherwise take advantage. Despite an 11th straight year of budget increases, which have almost doubled spending in current dollars, conservative pundits claim “the Taliban, North Koreans, Iranians, Russians and assorted bad guys must find it comforting that Obama plans to speak softly, but do without Teddy Roosevelt’s big stick.” And that’s without mentioning China, the next biggest spender… The only hint of a “peace dividend”, to reverse what Martin Luther King called the “perverted national priorities” that divert tax dollars from society’s most pressing needs, has been Obama’s talk of a world without nuclear weapons. “A great idea,” mused a curmudgeonly Czech journalist. “I merely have some practical objections.” As no doubt do all those who say they’ll give up nuclear “deterrents” after their enemies foreswear “weapons of mass destruction”.
WE SAY FIGHT BACK!
Adjusting for inflation, the Pentagon now gets more money than at any time since World War II. Officials (and arms companies) prefer different yardsticks, citing the higher proportion of GDP assigned to the military during the wars in Korea and Vietnam (14 and 9 percent respectively, as opposed to under 5 today). This not only ignores the argument that spending should be determined by threats, not economic output, it sidesteps another pressing issue: more than two out of five tax dollars go straight to “defence”, or covering the cost of previous wars. As a proportion of discretionary budget spending, the share is nearer three fifths.
Already, that’s hundreds of billions that can’t be spent on less destructive public goods. As recession bites, pressure from below to rethink will get more intense, especially as the middle classes feel more squeezed, and fret about retirement “entitlements”. Foreign bases will be obvious targets. After all, says Chalmers Johnson, a CIA analyst turned historian, there’s a limit to how long you can justify spending $100 billion a year on imperial outposts, just “for prestigious show of the American flag.” Those deemed essential could be moved to cheaper locations, a process already under way in south-Eastern Europe, where Romania and Bulgaria fell over each other to accommodate the Bush administration. These are the sorts of costs that are easily cut. Like crackdowns on procurement inefficiencies, they trim fat from the system without attacking its most bloated features. Tackling these is almost unthinkable, says Johnson, because of the military-industrial complex Eisenhower warned about 50 years ago.
The F-22 fighter which Obama wants to scrap has been around for more than two decades. It’s long been derided as an expensive irrelevance, but has survived thanks to relentless promotion by Lockheed Martin, and the dispersal of production across all but half a dozen of the United States. This is standard practice in the industry. “Lawmakers are always more concerned about how much money is being spent in their districts, rather than how well it is being spent,” says TIME magazine’s national security correspondent, Mark Thompson. This has made the F-22 “the most politically jerry-rigged defense program in history,” says Joe Lieberman’s former campaign adviser Dan Gerstein. It’s a prime example of what was known under Ronald Reagan as “military Keynesianism”: using spending on weapons to create jobs in the name of defence. The effect is to generate a permanent war economy, as authorised by successive presidents since the late 1940s, when Russia went nuclear, China’s Communists triumphed and the Iron Curtain fell over Easter Europe.
There was another rationale to this spurt in defence spending however. As outlined in a planning document called NSC-68, which President Truman signed in 1950: “One of the most significant lessons of our World War II experience was that the American economy, when it operates at a level approaching full efficiency, can provide enormous resources for purposes other than civilian consumption while simultaneously providing a high standard of living.” As such, “military spending is not driven by strategic interest much of the time,” says Anatol Lieven, a professor of war studies at Kings College, London. “It’s essentially a giant industrial support and job creation scheme.” The problem, notes Chalmers Johnson, is that “once you start creating jobs through the military, it’s not Keynesianism any more,” because “there’s no point at which you cut back on the spending and tax the beneficiaries.”
Anyway, says Dean Baker of the Center for Economic and Policy Research, “most economic models show that military spending diverts resources from productive uses, such as consumption and investment, and ultimately slows economic growth and reduces employment.” This hasn’t deterred defenders of “pork barrel” spending. Senator Saxby Chambliss is still trying to argue in favour of the stimulative impact of spending on the F-22 in Georgia, despite having opposed the stimulus plans which President Obama favours. This is far from the only daft argument being advanced. Noting that the military is “spending all kinds of money already,” the editor of the neoconservative Weekly Standard, Bill Kristol, suggests that “if you’re refurbishing two military bases, why not refurbish five?”
By contrast, when Congressman Barney Frank proposed a 25 percent cut in the Pentagon budget, saying “we don’t need all these fancy new weapons”, his suggestion was not only lambasted as “unconscionable” and “incredibly irresponsible”, Obama ignored him. Nonetheless, arms company executives are spooked. “It’s unrealistic to think there won’t be some measure of impact,” from the change in president, Boeing’s boss, Jim McNerney told staff. Michael Farage, who runs Sikorsky’s Air Force programmes, is more forthright. “With the economy in the proverbial pooper,” he said recently, defence budgets can only go down.
Perhaps, over time, but for now “no one in a senior position of the U.S. government has yet been willing to confront or even acknowledge the foreign policy implications of the economic crisis,” argues Andrew Bacevich, a professor of international relations and author of The Limits of Power: The End of American Exceptionalism. “For the moment, the old nostrums of ‘American global leadership’ remain intact.” Even if they didn’t, the military-industrial complex would attempt to ensure otherwise. “The culture of procurement teaches officers that there are two paths to personal survival,” James Fallows wrote a generation ago. “One is to bring home the bacon for the service as the manager of a programme that gets its full funding.” The other is the infamous revolving door, which now opens to newsrooms as well as the established sinecures that lure so may in middle age to big arms companies and their lobbyists. Between 1959 and 1969, the number of ex-officers working for contractors trebled. Since then, it’s become a well-trodden career path.
As a result, most analysts agree, there’s little prospect of radical shifts in defence policy, even if those in power wanted them, which they don’t appear to. “I think Gates and Obama are looking for a way to make relatively high levels of military spending sustainable for the longer term,” says Bill Hartung, a defence budget analyst at the New America Foundation. However unenamoured they might be of the “Long War” concept (the last incarnation of the “War on Terror” before its latest rebranding), the Afghan imbroglio seems unlikely to end any time soon. It’s “impossible” to say when the U.S. might withdraw, says Gates, and just as impossible to see what the cross-border war can achieve, beyond radicalising more Pakistanis and increasing the chances they topple their government. Even then, most doomsday visions miss the point. “The consequences of expanding this meaningless war will not be Taliban nuclear conquest of the world,” says William Pfaff, a veteran analyst of foreign policy, “but, as in the case of the Thirty Years’ War, involvement of one group or country after another for goals of their own, having nothing to do with the governments or the issues that started it all. The only thing that will stop this before it gets worse is simply to stop, or go bankrupt.”
Of course, economic reality will eventually bite, making current budgets unsustainable, but that’s not going to happen for “a long, long time,” says Pratap Chatterjee. Anatol Lieven guesses it might take 10 or 20 years to see major cutbacks, and even then they’ll probably come “a system or two at a time, and take decades.” Since “the U.S. still outspends the rest of the world put together,” warns Chatterjee, “not much will change unless the economy collapses completely.” According to Paul Kennedy’s study of how Great Powers fall, those two processes are most likely to happen in tandem. “Until we are forced to dismantle our empire,” warns Chalmers Johnson, “and bring our military expenditures into line with those of the rest of the world, we are destined to go bankrupt in the name of national defence.”
CROUCHING GIANTS, HIDDEN POWERS?
For now, there’s still no serious challenger, even if the illusion of American hyperpower has been shattered. Depending on how you measure it, Chinese military spending is somewhere below an eighth of America’s. Measured per head of population, the fraction’s smaller still. Yet at the heart of the U.S. Empire lies a paradox: it couldn’t exist if China, and others, weren’t paying for it, by holding trillions in Treasury bonds to plug the deficit. The outlook is bleak, warns Benjamin Friedman, a Harvard economics professor. “Again and again it has always been the world’s leading lending country that has been the premier country in terms of political influence, diplomatic influence and cultural influence. It’s no accident that we took over that role from the British at the same time that we took over from them the job of being world’s leading lending country. Today we are no longer the world’s leading lending country. In fact we are now the world’s biggest debtor country, and we are continuing to wield influence on the basis of military prowess alone… the tides of world history do not speak well for that strategy.”
Nevertheless, says Michael Klare, the Hampshire College peace studies professor, “no other major power is capable of matching the United States when it comes to the global deployment of military power in the pursuit or protection of vital raw materials.” And none seems likely to for the foreseeable future. “Apart from the Chinese,” says Pratap Chatterjee, “no one actually has the size and budget for an arms race, and the Chinese aren’t that stupid.” Deng Xiaoping’s famous claim that China should “keep a low profile and never take the lead” may have given way to Jiang Zemin’s Great Power Diplomacy (of projecting greater power), but this has rarely asserted itself militarily. Under Hu Jintao, the emphasis has been on buying up foreign mineral rights, from Iraq to Latin America, as well as any other assets going cheap. In the past few weeks alone, China’s chequebook diplomacy has lent tens of billions to Venezuela, Argentina and Brazil, locking in oil supplies and other resources. “This is how the balance of power shifts quietly during times of crisis,” notes David Rothkopf, an official in the Clinton-era Commerce Department.
In Africa, Beijing has struck deals with the oil-producing governments of Algeria, Angola, Chad, Equatorial Guinea, Nigeria and Sudan, pursued copper in Zambia and Congo, chromium in Zimbabwe, and all manner of minerals in South Africa. In return, it’s offered development aid (minus Western hectoring), made low-interest loans, and built infrastructure to help transport goods, and curry favour. It’s now unpopular in some places for profiteering, but governments are generally happy, especially those, such as Sudan, who get Chinese weapons and instructors as part of their agreements. With the new U.S. Africa Command, and arms transfers to favoured states, which have been enlisted as “anti-terrorist” allies, there’s a risk of proxy conflict in years to come, quite apart from the resource wars that are likely as the continent heats up and water gets scarce. Darfur is an early example of what can happen when these crises converge, and future escalations could wind up pitting military advisers from America, Russia and China on opposing sides.
It’s a similar story in Central Asia, where China and Russia work under the auspices of the Shanghai Cooperation Organisation to arm local governments in competition with the U.S. Russia’s weakness in the 1990s gave Washington an advantage, not least the bases which helped it invade Afghanistan. The last of these, in Kyrgyzstan, is due to close later this year as Russia reasserts itself in the “near abroad” of its former Soviet territories. Central Asia’s hydrocarbons are a highly strategic prize, and Russia looks to be winning the “Great Game” for control of pipeline-stans. Like China, it can draw on vast foreign exchange reserves to buy support. Even if recession and lower oil prices are cramping the Kremlin’s style, “these countries are in deeper holes than Russia,” notes Dmitry Trenin of the Carnegie Moscow Center. “The crisis,” he says, “is an opportunity to buy up a few.” Pro-U.S. leaders are likely to fall soon in Ukraine and Georgia, and NATO membership for either seems improbable.
There’s a consensus that “we’re back to Kissinger’s spheres of influence,” as one American intelligence analyst puts it. This is clear in visions of the future laid out by senior planners. Gone are the fantasies of dominance that animated the first Bush Jr administration. Instead, a National Intelligence Council report foresees the loss of U.S. pre-eminence, a world order in which regional powers hold sway and “a great arc of instability stretching from Sub-Saharan Africa through North Africa, into the Middle East, the Balkans, the Caucasus, and South and Central Asia, and parts of Southeast Asia,” which none of the so-called Great Powers will be able to pacify. The Obama administration is more pragmatic than its predecessors, says Jim Lobe. “They see the long-term trend is multi-polar and they think the best the U.S. can hope for is to be one world leader among many, so they’re trying to hang onto their influence for as long as possible by being less assertive and working with allies.”
There’ll be pressure from the usual quarters to match rises in Chinese military spending (a “modest” 14.9 percent this year), and suggestions that Russian arms sales (the second biggest after America’s, though much smaller) are a threat. But while there may be more regional run-ins like the recent spy ship scare, there’s little prospect of conflict (Chinareports a “steadily improving” security situation, and relations with Russia are on the up, despite public spats over missile defence), or of either power outpacing the U.S., whether in technology, spending or production – at least not unless its economy wilts. That could happen very quickly if the world abandoned the dollar as a reserve currency, or just the pricing mechanism for Middle Eastern oil sales. However, the Saudis and the Chinese have too much of a stake in American markets and consumption to make that likely just yet. This hasn’t stopped China from hinting it might switch its stash out of dollars, however, or at least into a new “super-sovereign reserve currency,” as its central bank governor mused.
“Crudely put,” warns Paul Kennedy, “the US possesses around one-fifth of the world’s GDP, but its own paper provides around 75 per cent of the world’s exchangeable currency reserves. To American triumphalists, this is evidence of their country’s power, its role as the linchpin of the globe. To more sober financial analysts, this is a worrying imbalance, especially when Washington is relying upon foreigners to cover its own enormous federal deficits. To historians of the longer term, there is the precedent of a not-so-Great Britain seeking to preserve the special role of the pound sterling even when its own share of world product was less than it had been a half-century earlier.” In other words buckle up for meltdown.
Steady on, others say. China hasn’t been caught short by the dollar’s loss of value of late, argues Dean Baker. Instead, it “chose to invest in dollars to prop up the dollar against the yuan. This made Chinese exports very cheap for people in the United Sates, thereby leading to the boom in U.S. imports.” Bearing in mind the recent rate of Chinese growth, Baker notes, “this was clearly an effective development path and it may justify any subsequent loss on [Beijing's] dollar holdings.” Moreover, were the Chinese to pull out their reserves, “and therefore let the yuan rise against the dollar,” he says, they would be doing “exactly what the US government has been demanding that China do,” and stop depressing the value of their currency. This might have been preferable before the last bubble inflated, but it would still help to erode the deficit and balance things out again, so it’s not necessarily the financial weapon of mass destruction it appears. In any case, China would need to find new buyers for all the products it’s shipped to American shopaholics. Put simply, both countries still depend on each other to find a way out of the crisis, and even if China’s destined to benefit, it’s unlikely to do something rash that would cost it a fortune.
In an echo of Sun Tzu’s ancient prophecy (“when the army marches abroad, the treasury will be emptied at home”), Beijing’s latest defence white paper is a stark contrast to America’s National Security Strategy, claiming that “China will never seek hegemony or engage in military expansion now or in the future, no matter how developed it becomes.” We may actually be entering a new age, in which Michael Klare believes “the era of Empires is over for good,” with potentially explosive consequences. Great Powers have expanded in the past on a booming domestic economy. Only China could be said to enjoy this advantage, and it’s by no means secure in its position. What we’re likely to see as a consequence is “a new concert of powers, tied together by their fixation with national economic growth and the objective of discouraging others from causing instability that risks intervention,” says Jonathan Holslag at the Brussels Institute of Contemporary China Studies. “But this rising Beijing Consensus offers no guarantee of stability. A concert of powers is only as strong as its weakest pillar, and requires a great deal of self-discipline and restraint.”
Perhaps the most critical issue is how states respond to the twin threats of climate change and depleting oil supplies, depending on how soon they peak and how sharply demand disparity kicks in. In the U.S. and elsewhere, arms companies are already repositioning themselves as purveyors of alternative energy technology. If governments heed the warnings they’ve commissioned, large amounts of funding could be made available for transition in the coming years, offsetting the likely decline in defence spending. As American budgets retrench, it seems improbable that others will plug the hole; such is the dominance of the arms industry by U.S. firms, and the dependence of the industry on political patronage, and by extension domestic sales. Exports remain a priority for all the major manufacturers, but they’re still tied to political influence, whether in the form of aid-for-trade kickback loops, like the annual U.S. handout to Israel, or outright corruption, as Britain was alleged to specialise in with the Saudis, until the government quashed its own investigation for “national security” reasons. Attempts to crack foreign markets without support tend to flounder, as Airbus found when trying to win a Pentagon refuelling contract.
Russia, meanwhile, has been bumping up overseas sales, which hit $8.3 billion last year, focusing on strategic deals with the likes of Algeria and Venezuela. However, warn U.S. analysts at Stratfor: “the Russian defense industry will be hard-pressed to keep from becoming irrelevant” unless it modernises factories fast. To save money, and reconfigure priorities (now outright war with NATO seems implausible), the army is laying off half of its officers and abandoning mass-mobilisation in favour of a more specialised professional force. Even with massive investment in new technology, and a long-standing reputation for robustness, “the idea that Russia is a serious challenger for military hardware is rather silly,” argues Pratap Chatterjee. That won’t stop it making money in years to come, as the “global arms bazaar” expands. “The decline in empire may actually increase spending,” he says.
An era of instability seems inevitable, with sales of small arms likely to boom, along with the counter-insurgency skills and equipment on which wealthy and powerful minorities depend to keep the lid on threats to their security, whether in the Western world or further afield. No matter how aware they might be of the dangers of militarised fossil fuel dependency, this remains the focus of policy, sucking up funds that could be used to develop alternative energy. “It’s going to take forever” to shift priorities, says Jim Lobe, unless a more severe crisis provokes some kind of “what the hell are we playing at” moment, by which time it might be too late to do much about the worst of the consequences. Still, “Obama’s election coincides with a dramatic moment,” says Michael Klare, both in the economy and world history. “The U.S. can no longer fight wars in multiple places on the globe and address its problems at home.” But that doesn’t mean it’ll shut down the Empire right away.
Eventually, American decline will cut defence spending, but even those who want to see it yesterday can’t picture it happening inside a decade. Instead, the more things “change” under Obama, the more change it seems likely to cost. Some day, surely, those who finance the Empire will pull the plug. Obama seems powerless to do more than steady the ship as it sinks. Turning it round, or evacuating, would take radical shifts in priorities, of which there’ve been few signs. Instead of burning out in End Times, or fading away into autarky, he’s trudging a lonely path towards managed decline. History suggests it’s probably the least worst option, unless America’s suicide pact with militarism beats him to it. “We should take nothing for granted,” President Eisenhower warned in his farewell speech to the nation. “Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper.” Instead, warns Chuck Lewis of the Center for Public Integrity, the U.S. remains racked by “a constant struggle between capitalism and democracy,” and “the fundamental reality is that most of the government’s decisions today are substantially dictated by powerful corporate interests.”
