As the us military rolled into Afghanistan and Iraq, with the influence of neo-conservatism at its peak after the 9/11 attacks, terms like ‘empire’ and ‘imperialism’ were sprinkled liberally throughout much of the literature on international politics. But this vocabulary has fallen out of fashion since Bush gave way to Obama and us drones began to replace boots on the ground. The Wall Street crash of 2008, in tandem with China’s seemingly inexorable rise, encouraged talk of a superpower in decline and the emergence of a ‘post-American world’. Leo Panitch and Sam Gindin take aim at this new orthodoxy in a bold and rigorous work, arguing that the American empire remains as potent as ever, along with the global capitalist order that it created and sustains.footnote1 The authors see global capitalism as a us project that has gradually unfolded since the beginning of the twentieth century. The goal has been to establish a framework that will allow capital (us or otherwise) to move freely across the planet in pursuit of accumulation. It has encountered several crises along the way—from the Great Depression of the 1930s to the downturn of the 1970s and the financial meltdown of 2008—only to emerge stronger every time.

Breaking with the usual focus on American military capacities, Panitch and Gindin make use of a historical materialist approach to delve into the economic foundations of the us empire, drawing on a vast range of sources to compose a lively narrative that runs from the early nineteenth century to the present, with an opening chapter on the ‘dna of American Capitalism’ and a final section on the ‘Global Capitalist Millennium’. Along the way, they reject three familiar arguments about Washington’s place in the world order: that there was a radical shift from isolationism to internationalism during the Second World War, that the crisis of the 1970s marked a decline of American global power, and that today’s economic turbulence is accelerating the final eclipse of us hegemony.

The authors dismiss any notion that the us was an isolationist country before the conflict with Germany and Japan. Ever since the late nineteenth century, American capital has been driven to accumulate worldwide, making it essential for the American state to project its power overseas. The Open Door policy of the 1890s codified this imperative, expanding upon the British model with its insistence, not merely on free trade, but also on free movement of capital. The template for us economic domination of both its fellow advanced industrial states and the underdeveloped periphery was already established by us relations with Canada and Mexico on the eve of the First World War. The first Roosevelt administration even postulated ‘the universality of American law and constitutional principles’, equating ‘the protection of American capital with the extraterritorial enforcement of property rights in general’. After the destruction in Europe, the dollar, now underpinned by the Federal Reserve system, would become ‘the major reserve currency in the world financial system, albeit still sharing the stage with sterling, and to a lesser extent with the franc. Moreover, the flow of private American capital to Europe after wwi was considerably greater than immediately after wwii.’

If the American state nonetheless failed to adopt a truly global role at this point, Panitch and Gindin argue, it was through lack of means, not lack of will. Confronted by the French and British empires, still dominant in their respective spheres, and by the cold reality that Washington was ‘in no position militarily to dictate to the rest of the capitalist world’, the us could only give free rein to imperial ambitions in its own hemisphere. Canada had already become ‘a rich dependency within the American empire’, for ‘Canadian banks were virtually unique internationally in utilizing the dollar as a reserve currency, and maintained large external balances in New York as a source of liquidity and to cover the massive flow of goods and capital across the border.’ This smooth incorporation anticipated ‘the type of relationship that would develop between the United States and so many other capitalist countries, including the most advanced, before the twentieth century had run its course’. With victory in World War ii, the us finally gained military supremacy over the Old World and set out to ‘Canadianize’ the continent, as Panitch and Gindin put it. After ensuring that doors were held open to American corporations, Washington proceeded to remake Europe in its own image by remoulding internal class forces, creating vested interests interpenetrated by us multi-nationals.

The same process of Americanization through outward investment could be seen in other parts of the world. Free movement of capital was facilitated by the Bretton Woods system, which—in contrast to the un, which ‘still bore significant traces of the old Great Power “spheres” of influence’—institutionalized ‘the American state’s predominant role in international monetary management as part and parcel of the general acceptance of the us dollar as the foundation currency of the international economy’. With a fixed exchange rate based on a pledge of one ounce of gold for $35, dollar-denominated assets—us Treasury bonds above all—became an ‘international secure store of value’; the dollar was the currency used in most international transactions and for the foreign-exchange reserves of the major capitalist states. On the domestic front, Keynesian social policy and Fordist business practice delivered high wage and consumption rates for the working class, ensuring labour peace and overcoming the manufacturing glut of the immediate post-war years. The stability and prosperity of the developed capitalist world in the 1950s and 60s rested on these foundations.

While acknowledging that the us experienced a major economic crisis as the post-war boom came to an end, Panitch and Gindin deny that this led to a permanent decline in American power, claiming instead that the us ruling class managed to tackle the crisis effectively and rejuvenate the material foundations of its empire. This turnaround led to the full realization of global capitalism in the last decade of the twentieth century. They argue that the fundamental contradictions that gave rise to the 1970s crisis stemmed from the dual responsibilities of the American state: to manage its own social formation and to ensure the health of the world system. In the 1960s, rising labour militancy and the pressure of the civil-rights movement prompted Johnson to launch his Great Society programme. The combination of a large hike in social expenditure with the spiraling cost of America’s war in Vietnam resulted in a yawning fiscal deficit. In this context, Wall Street saw the reluctance of the Federal Reserve to tighten monetary policy as an attempt to subsidize government spending by keeping the interest rate on Treasury bonds low, and protested vigorously against the Fed’s supposed loss of independence and the inadequacy of its efforts to stabilize the dollar. Other capitalist powers also urged the us to show greater economic discipline as the fixed exchange rate led to us inflation spilling over into their economies. This confluence of internal class tensions and external pressure led to the collapse of the Bretton Woods system, which had become ‘more and more of a drag on the American state’s capacity to navigate between its domestic and imperial responsibilities’.

Contrary to the perception that Nixon abolished the gold standard amid chaotic conditions, Panitch and Gindin show that the process was closely managed by the leading capitalist powers under us stewardship, with many of the crucial meetings among them being held in the White House library. These regular gatherings to prepare for a system of floating exchange rates were in turn institutionalized in the G7 summits, which were ‘essentially a vehicle for providing support and endorsement for us-generated initiatives and ideas’. Due to the severity of the crisis of global capitalism, the dismantling of Bretton Woods did not bring immediate stability. The inflation-rate and fiscal maladies of the American state continued to worsen, and it would take ‘a whole decade to realign the balance of class forces both domestically and internationally so as to exit the crisis in a way that left the American-led globalizing dynamic of capitalism not only intact, but strengthened’. The stagflation of the 1970s in the us led to an outflow of capital and balance of payment deficits, but this only served to increase the dollar supply in the world economy and thus, ironically, ‘laid the basis for further dollar-based credit expansion and financial innovation both domestically and internationally’. Moreover: