Can America Lead the World to a Brighter Climate Future?

 

As the world might embark on a crusade to salvage human civilization from the ravages of runaway climate change, the question is are we up to it? It won't be easy and it will require sacrifices, some of them potentially very costly.  To the high priests of perpetual exponential growth who worship at the altar of GDP, it could be like the noon day sun to a vampire. Oh dear.

In Glasgow, Joe Biden seems to be leading the charge for radical change. But is America up to such a Herculean chore? Not if you believe Richard Wolff's take on America's fragility. The professor of Marxian economics claims that the US is no longer the "can do" nation. He argues that the leader of the free world is circling the drain.

Flash back to the election of Ronald Reagan. The America Reagan inherited from his predecessor, Jimmy Carter, was the largest creditor nation in the world. The US held almost every other countries' markers. Eight years later when Reagan left office America had become the world's largest debtor nation, it's middle class under attack.  But this was America. Surely such things hardly mattered.

Levels of debt—government, corporate, and household—are all at or near historical records and rising. Feeding and thereby supporting the rising debts is the Federal Reserve with its years of quantitative easing. Officials at the highest levels are now discussing the possible issuance of a trillion-dollar platinum coin to have the Fed give that sum in new credit to the U.S. Treasury to enable more U.S. government spending. The purpose goes far beyond political squabbling over the cap on the national debt. The goal is nothing less than freeing the government to inject still more massive amounts of new money into the capitalist system to sustain it in times of unprecedented difficulty. The Fed learned that today’s capitalism needs such quanta of monetary stimulus thanks to the three recent crashes (2000, 2008, and 2020) witnessed by the capitalist system. A desperate empire approaches a version of the Modern Monetary Theory that empire leaders mocked and rejected not very long ago.

Fires, floods, hurricanes, droughts: the signs of climate catastrophe—not to mention its fast-climbing costs—add to the sense of impending doom provoked by all the other signs of empire decline. Here too, the tiny minority of fossil fuel industry leaders has succeeded in blocking or delaying the social action needed to cope with the problem. Empires decline when their long habits of serving minority elites blind them to those moments when the system’s survival requires overriding those elites’ needs, at least for a while.

A House Divided

Extreme inequality, already a distinguishing feature of the United States, worsened during the pandemic. This inequality fuels rising poverty and rising social divisions among the haves, the have-nots, and the increasingly anxious think-they-haves. Attempts by employers to recoup the profits lost to the pandemic and to the capitalist crash during 2020 and 2021 have led many to impose additional squeezes on employees. This has led to official and unofficial strikes that continue amid a reawakening labor movement. On an individual level, the rate of workers who have been quitting their jobs has been hitting record highs.

The Shadow Economy

When empires decline, they can slip into self-reinforcing downward spirals. This downward spiral occurs when the rich and powerful respond by using their social positions to offload the costs of decline onto the mass of the population. That only worsens the inequalities and divisions that provoked the decline in the first place.

The recently released Pandora Papers offer a useful glimpse into the elaborate world of vast wealth hidden from tax-collecting governments and from public knowledge. Such hiding is partly driven by the effort to insulate the wealth of the rich from that decline. That partly explains why the 2016 exposure of the Panama Papers did nothing to stop the hiding.

Enter the Rival

For the first time in over a century, the United States has a real, serious, ascending global competitor. The British, German, Russian, and Japanese systems never reached that status. The People’s Republic of China now has. No settled U.S. policy vis-à-vis China has proven feasible because of internal U.S. divisions and China’s spectacular growth.

The problem for the U.S. empire grows, and the United States remains stuck in divisions that preclude any significant change except perhaps armed conflict and an unthinkable nuclear war.

When empires decline, they can slip into self-reinforcing downward spirals. This downward spiral occurs when the rich and powerful respond by using their social positions to offload the costs of decline onto the mass of the population. That only worsens the inequalities and divisions that provoked the decline in the first place.

The history of civilizational collapse shows that, when this happens, it occurs quickly and when that civilization is at its zenith. Historically it's been a local or regional phenomenon. Now we have a global economy where if the giant sinks it will take smaller players lashed to it.