Conventional definitions of American post-war ‘hegemony’ have focused on the sheer preponderance of economic and military power concerted through an atomic-military monopoly, monetary sovereignty, overseas investment, and historic differentials of productivity and mass consumption. Accordingly, from a baseline in the late 1940s when the conjunction of all these factors promoted the hubris of an ‘American Century’, it is possible to plot a relative decline of American hegemony as the coordinates of economic power have changed in favour of Western Europe and Japan. Despite the strategic importance of shifts in per capita gdp, trade balances, or manufacturing export shares, however, it remains a truism that statistics seldom speak for themselves, or in one voice. For example, it is not automatically clear which macro-trend is the more meaningful: the relative erosion of us economic supremacy or the tendential equalization of production and consumption norms among the three heartlands of advanced capitalism. Nor is there a unilateral determinancy between indices of economic competitiveness and the structures of political and military domination. In truth, a simple ‘balance of power’ approach frustratingly yields more dilemmas of this type than it provides clear-cut answers. A better methodology, in my opinion, is to define ‘hegemony’ not as a single, all-embracing power relation—radiating through various instances—but as a dynamic system which unifies accumulation, legitimation and repression on a world scale. In this sense, American hegemony is a historically specific form of adequation between the capitalist state system and the world economy.

Since, within this system, the relationship of the major capitalist economies has been simultaneously interdependent and hierarchic, there is no contradiction in asserting that the tendential convergence of incomes and production conditions has been both a powerful engine of growth and, latterly, a source of instability. Put differently, the relative shrinkage of the domestically generated us share of world industrial production, or the emergence of a secular trade deficit, is not logically incompatible with the maintenance of American dominance over the general conditions for the reproduction of world capitalism—including its strategic nuclear arsenals, price of money capital, supplies of oil and wheat, generation of new technology, and so on. The evolution of relative economic (or military) indicators only points to a systemic crisis of American hegemony to the extent that these denote a deterioration in the internal coherence of the system. There is no doubt that such a crisis now exists. But it may be of a radically different nature than is suggested by those analyses which have tried to adjudicate nuances of ‘decline’ or ‘fall’. Indeed, in the absence of a significant trend towards an alternative capitalist coherence in the Centre, and under the pressure of radical challenges at the Periphery, the paradox arises of the reinforcement of us military and political paramountcy, under the banner of a second Cold War, at the same moment when the traditional economic (and, to some extent, ideological) supports of this power are collapsing.

My aim here will be to explore one side of this paradox: the domestic realignment of American economic and political forces that has undermined the once triumphant model of ‘Fordism’, set in place after the Second World War, and substituted for it the radically distinct configuration whose current short-hand is ‘Reaganism’, in the period since the Vietnam War. The global trajectory of us power over the same time-span—the other side of the history of American hegemony as a whole—will be considered in a subsequent article, complementary in its focus to this. Here I will do no more than preface an exploration of the internal dynamics of that hegemony with a brief evocation of its external framework. I will then be looking at three of the main-springs of us economic growth since Potsdam: (1) the generalization of mass production and mass consumption (‘Fordism’); (2) the ‘deepening’ of domestic American capitalism through the expansion of increasingly qualified and ‘high-wage’ jobs; and (3) the ‘widening’ of the internal economic base through the industrialization of the traditional hinterland or periphery—i.e., the formation of the ‘Sunbelt’.

After considering the original coherence of these as structural supports or expressions of us hegemony, I will argue that the economic and political dynamics of American power no longer sustain a ‘virtuous circle’ of self-reinforcing growth. The ‘fit’ between the Fordist regime of accumulation and the structure of us hegemony has given way in the face of new internal barriers and contradictions. Of these, one will receive special emphasis below: namely, the breakdown of the ability of the us economy to supply high-wage, primary-labour-market jobs. Symptomatically, this is expressed not only in regional deindustrialization and an unprecedented post-war level of unemployment, but also in the proliferation of new low-wage jobs relative to, and often at the expense of, primary-sector employment. This reversal from an upgrading to a dequalifying pattern of job creation has, as we shall see, immense consequences for us domestic politics and the future shape of the world economy.

Finally, in the last section, I will examine the relationship between the rise of Reaganism and the exhaustion of Fordism. I will suggest that the combination, during most of the 1970s, of the demobilization of the us working class and the sustained insurgency of nouveau riche strata has shifted the coordinates of American politics sufficiently rightward to sponsor not just Reagan, but a new regime of accumulation based on ‘overconsumptionism’ and expanded low-wage employment. Just as economic crisis has recomposed both us capital and the us working class, so the realignment of effective electoral power (partially expressing these changes in class composition) has conversely helped to change the political economy of American capitalism. It is the development, in tandem, of these distinct economic and political dialectics which may ensure the survival of Reaganism beyond Reagan, even under the banner of Democratic ‘neo-liberalism’.