Iwould like to talk primarily about the United States, its place in the evolving world order, and the prospects for the future.footnote1 The record of prediction in human affairs is not exactly inspiring, but the task is hopeless without at least a fair grasp of what has happened, and is happening. It’s not transparent but it’s not impenetrable either.

To start with, I would stress that the focus on the United States is distorting, and we should compensate for it: the us is powerful but not all-powerful. It is the richest country in the world, it has unparalleled advantages and has had for several hundred years, but the global economy has been what is called tri-polar for almost thirty years, with intricate alliances and conflicts, and there are other power centres. So the United States, surely, is uneasy, at least, about the recent signs of rapprochement between Saudi Arabia and Iran, which are historic enemies, in a crucial area where there is plenty of trouble ahead—to mention only one example.

In 1945 the structure of world power was unusually clear by historical standards. A half-century before that, the United States had become by far the world’s greatest economic power, but it was a relatively small player on the world scene. By 1945 that had radically changed, for obvious reasons: the other industrial societies had been seriously damaged or destroyed, while the us economy had flourished through the war; the us had literally half the world’s wealth, incomparable military power and security, and it was in a position to organize much of the world, and did so with the assistance of its ‘junior partner’, as the British Foreign Office ruefully described the new reality of the time.

The general point was put accurately enough by a leading diplomatic historian, Gerald Haines, in a recent book (he is also the senior historian of the cia).footnote2 He observes that after World War ii the United States ‘assumed, out of self-interest, responsibility for the welfare of the world capitalist system’, which is a fair enough formula, but to understand it we have to carry out a few translations. The first is that the word ‘capitalist’ doesn’t mean capitalist. Rather, what it refers to is state-subsidized and protected private power centres—‘collectivist legal entities’, as they are called by legal historians—internally tyrannical, unaccountable to the public, granted extraordinary rights by us courts in radical violation of classical liberal ideals. That’s why the corporatization of America, as it’s called, early in this century was bitterly condemned by conservatives, a breed that, aside from the name, has since vanished. The corporatization was condemned as ‘a form of communism’, a return to ‘feudalistic’ structures, and not without reason. Progressive intellectuals, who generally supported the process, gave a rather similar assessment. One of the leading ones, Woodrow Wilson, wrote that ‘most men are servants of corporations’, which now account for the ‘greater part of the business of the country’. It is ‘a very different America from the old. . .no longer a scene of individual enterprise. . .individual opportunity and individual achievement’. In the new America, ‘small groups of men in control of great corporations wield a power and control over the wealth and business opportunities of the country’, becoming ‘rivals of the government itself’.footnote3

More accurately, these corporations were casting over society the shadow that we call politics, as John Dewey put it a little later, making obvious points about the extreme limits placed on democracy when ‘the life of the country’, the production and information systems and so on, are ruled by private tyrannies, in a system that he described as industrial ‘feudalism’—and this is the contemporaty system.footnote4

The corporatization process was largely a reaction to great market failures of the late nineteenth century, and it was a shift from something you might call proprietary capitalism to the administration of markets by collectivist legal entities—mergers, cartels, corporate alliances—in association with powerful states, and by now international bureaucracies, which regulate and support private power. The primary task of the states—and, bear in mind that, with all the talk about minimizing the state, in the oecd countries the state continues to grow relative to gnp, notably in the 1980s and 1990s—is essentially to socialize risk and cost, and to privatize power and profit. These are tendencies that have moved forward under Reaganite, Thatcherite and New Democrat doctrines.

Well, going back to Haines’s formula, it’s not false, but we have to understand ‘capitalism’ as referring to social arrangements that would have scandalized Adam Smith or David Ricardo or James Madison—or, for that matter, even the American Republican Party in the late nineteenth century. It’s hard to remember now, but at that time the Republican Party opposed even wage-labour, as being not very different from the chattel slavery that had just been overthrown in the Civil War. These ideas are deep in the American tradition, without the dubious benefit of radical intellectuals. We also have to understand the phrase ‘self-interest’ in Haines’s formula. It does not refer to the interest of the population, except by the remotest accident—that’s a truism as old as Adam Smith.