A long-term analisys of the history of capitalism, a reading of the global system as a combination of economics and state power: this is the perspective that Beverly Silver, professor of sociology at Johns Hopkins University, where she directs the Arrighi Center for Global Studies, brought to Italy, a month-long guest of the Ciampi Institute. This perspective helps us understand contemporary times and what is happening in and around the world’s leading power.
“A transformation of US global power is what I would call the shift from a regime of “legitimate protection” of allies in the decades following the Second World War to a sort of “protection racket” between the late 20th and early 21st centuries. This applies to NATO and Europe, where the stance on military spending has been protection in exchange for spending on US weapons, as well as to tariffs, where the first step is threats, not attempts to persuade. Today we look at Trump and his methods—those of a New York real estate developer—which lead to blatant forms of pressure in power relations with Western allies. This is, as we have also seen with Iran, a method that does not seek hegemony (based on coercion and consensus, force and soft power) but rather muscularly imposes its will. This is not new, it had begun in less sensational and explicit ways well before. Neither Biden nor his predecessors had been able to abandon the idea of the United States as a world leader, even when the cracks in the US leadership has become evident: in the absence of a hegemonic project, both domestic and international, capable of building consensus, one ends up exercising coercion.
In your work, he discusses a world order in crisis, pointing out that this is not something recent. Let’s start with the post-World War II international system.
The post-World War II world order was a response to the mass movements that challenged capitalism in the first half of the 20th century. These were decades of growing trade union movements in advanced countries, national liberation movements in the colonial world, and socialist movements everywhere. After the wars, fascism, and the Great Depression, there was a sense of a broad and profound challenge to capitalism as it had been established since the 19th century, and attempts were made to provide a reformist solution to the revolutionary impulses. It was a way to save capitalism, to give it a more solid social basis, after it had lost legitimacy. The attempt was to reestablish a sort of hegemonic bloc based on consensus. There is a virtuous circle between economic growth, expanding employment, rising wages, and increased consumption. In the Third World, the era of formal colonialism ended, and dozens of independent states emerged. This reformist solution also served as a tool for ideological competition between the United States and the USSR.
The problem is that the classes to whom the promise of rising living standards had been made took it seriously; waves of strikes and mobilizations (such as the Italian “Autunno caldo” of 1969) demanded that it be kept. But that hegemonic model could not be realized because its promise was destined to create a crisis for profits, rising labor costs, and the tax burden needed to finance social protection and welfare.
The 1970s were a watershed.
It was a decade of transition in which it was unclear what direction capitalism would take. The answer came with the election of Thatcher and Reagan, when it became clear that the postwar social pact was being abandoned. It was shocking at the time: in 1981, Reagan fired 11,000 air traffic controllers for calling a strike. It signaled that it was now legal to repress unions. Since 1980, the postwar pact no longer applies—it doesn’t happen all at once, but the path is clear.
How did we move from the postwar expansion of production to a new phase?
The answer to the squeeze on profits of the 1970s was financialization. This was the key turning point, because capital accumulation in the US and the “center” countries of the global system occurred while leaving labor out.
The 2008 crisis signaled that financialization had gone too far, yet finance continued to dominate the economy. But inequality increased, and the social block that held everything together collapsed. As a result of these transformations, the far right is growing, and over time it has established international relations and developed radical programs such as the Heritage Foundation’s Project 2025, the program that Trump is essentially putting into practice. Practical. For decades, the US has had a right-wing party that refuses to accept change but has no new pact to offer. Therefore, it tends to propose authoritarian solutions, examples of which we are seeing today include the executive branch’s attempt to accumulate more power, anti-immigrant raids conducted by masked officers that violate regulations, and the mooted idea of abolishing habeas corpus. The billionaires who supported Trump are thinking about going to Mars or building bunkers; they don’t envision solutions to the systemic crisis. Liberals, for their part, are faced with the problem that their old model is falling apart and they don’t know which direction to take, because there is no way out that keeps things as they are.
What are the consequences of the power of finance?
After the crisis of US hegemony in the 1970s, financial expansion made Wall Street the center of global finance. Capital flows in from all over the world to buy stocks, but also Treasury bonds that finance the deficit. The United States continues to need this influx of financial resources. US debt has been downgraded by Moody’s and is set to increase exponentially due to the renewed tax cuts. Refinancing it is becoming more difficult: China has significantly reduced its debt, as has Japan. Trump’s pursuit of a privileged relationship with Saudi Arabia, the Emirates, and Qatar is related to this need for resources to finance the debt.
What is the objective of Trump’s introduction of trade tariffs?
The feeling is that there is no plan. Trump has described the tariffs as a tool to reindustrialize America. But if the tariffs were truly tied to a reindustrialization project, the resources would be used for specific sectors. Instead, the proceeds will likely be used to contain the explosion in the deficit generated by the tax cuts under discussion in Congress or to pay subsidies to sectors damaged by trade conflicts; in Trump’s first term, farmers affected by the loss of access to the Chinese market were compensated in this way.
Is the international order moving toward Chinese hegemony?
When we published “Chaos and World Governance,” the question was: how can we avoid the chaos looming on the horizon? The West would need to adapt to a more equitable distribution of power and wealth globally, and certain groups or forces in new centers of material expansion—starting with China—would need to imagine solutions capable of addressing epochal problems. The path the world has taken, however, is a long period of systemic chaos: an international system without hegemony, marked by instability and uncertainty.
China has a different history from the United States; over the centuries, Chinese economic development has focused on conserving resources and absorbing labor, in contrast to the US model of wasteful natural resources, high capital intensity, and labor-saving. The latest example comes from Deep Seek: Chinese artificial intelligence was developed with infinitesimal resources compared to those used for similar US systems. China’s international reach is growing: at times it implements infrastructure projects that contribute to economic development, at other times it pursues “extractive” policies that resemble those of colonial powers. What is the balance between these conflicting forces? It seems to me, however, that China is facing the challenge of seeking long-term solutions.