The Bush administration has the wind in its sails with the conquest of Iraq. It thinks it can do what it wants and will probably act on this belief for the foreseeable future. It is understandable that Pentagon hawks, who have long preached that militarism would pay off, now feel they have clear proof for their thesis. It is equally natural that opponents of American imperialism should feel demoralized by the apparent us success. I will argue that both assessments miss the mark and fail to grasp what is really happening in the geopolitical arena. In what follows I will construct my analysis around three periods: the postwar apogee of us hegemony, from 1945 to 1967–73; the late summer glow, stretching from 1967–73 until 2001; and the stage that stretches ahead of us, from 2001 until 2025 or 2050: one of anarchy which the us cannot control. I shall distinguish three axes within each period: the internal competitive struggles of the major loci of accumulation of the capitalist world-economy; the ‘North–South’ struggle; and the battle to determine the future world-system, between two groups that I shall metaphorically label the camps of Davos and of Porto Alegre.

During the period from 1945 until 1967–73, the United States was unquestionably the hegemonic power in the world-system, possessing a combination of economic, military, political and cultural advantage over any and all other states. At the end of the Second World War, it was the only industrial power to have escaped wartime destruction and had significantly increased its productive capacities beyond their considerable pre-war levels. American firms could produce goods so much more efficiently than their competitors that they could, at first, penetrate the others’ home markets. Indeed, the situation was so uneven that the us had to engage in the economic reconstruction of Western Europe and Japan in order to have a reasonable world customer base.

This overwhelming economic advantage was combined with a military edge. After 1945 American public opinion did, admittedly, insist on an immediate downsizing of the armed forces, to ‘get the boys home’. But the us possessed the atomic bomb and an air force capable of dropping it anywhere. The only other military force of any serious consequence was the Soviet Union which, by 1949, also had nuclear weapons. The us had no option but to make a deal. Though the Yalta accords were only a small part of much wider arrangements, the bargain struck between the great powers has been known by that name ever since. It contained three central clauses: retention of the status quo in Europe along the lines where the us and Soviet troops stood in 1945; the economic cloistering of the two world zones; and the freedom to use mutually denunciatory rhetoric.

These three points were more or less respected up to 1980, and even, to a large extent, up to the collapse of the Soviet Union. The status quo was tested by the Berlin Blockade in 1949, but it was reaffirmed by the outcome of the crisis. Subsequently, the us rigorously abstained from assisting any uprisings in the Soviet zone, other than rhetorically. The ussr had no troops stationed in either Yugoslavia or Albania, the two breakaways from its bloc. However, rather than becoming part of the us sphere, these states were allowed to remain ‘neutral’ by both sides in the Cold War. Whether the Yalta agreement was meant to apply to Korea was initially unclear. The result of the Korean War—an armed truce at the line of departure—placed the peninsula squarely inside its framework. Economic cloistering also persisted through the first decades of the postwar period, though it began to unravel after 1973. It was only the strident rhetoric of the so-called Cold War that gave the impression that a serious struggle was under way. Of course, many do still believe this was the case; but viewed from a distance, it could equally well be seen as a choreographed conflict in which nothing ever really happened.

Politically, the Yalta arrangements allowed both sides to line up a series of faithful allies. It has been customary to refer to those of the Soviet Union as satellite countries; but us clients—in Europe, the nato countries; in East Asia, Japan, South Korea and Taiwan—were hardly less subservient. New York became the world centre of high art and mass culture became increasingly ‘Americanized’. Finally, in terms of ideological domination, the concept of the ‘free world’ did at least as well as the notion of the ‘socialist camp’.