Historically, social theories have suggested that societies with highly unequal wealth distribution can maintain unity, as long as the overall wealth of the society is growing. This growth model allows even those with the smallest share of wealth to experience some form of increase, thereby promoting social cohesion. This thinking is reflected in the modern capitalist system’s prioritization of economic growth.
However, if a society’s population is more focused on moving towards less unequal shares, economic growth’s importance reduces. This is further amplified in a society that seriously considers climate change implications. If social movements supporting such priorities expand and form alliances, they could potentially change societal attitudes towards economic growth.
From 1820 to 1980, US capitalism encouraged a rise in total wealth, with both wages and capital shares growing. The US was able to maintain social cohesion, partly because of the increasing wealth that facilitated some income growth for almost everyone. However, the last four decades have seen a shift, with wealth growth slowing down and corporations and the wealthy taking larger shares. As a result, middle-income individuals and the poor have seen little to no growth in their wealth.
This slowdown in US wealth growth can be attributed to several factors, including the shift of industrial production from Western Europe, North America, and Japan to countries like China, India, and Brazil. This shift has led to increased competition, with China and its allies increasingly rivaling the US and its partners in production, technological innovation, and foreign trade.
As a result, the US has turned to protectionist measures such as imposing tariffs, instigating trade wars, and sanctions, attracting retaliation that further worsens its situation. This, coupled with the declining role of the US dollar in the global economy and shifts in geopolitical alliances, has undercut the US’s internal social cohesion.
Declining empires often see an acceleration in internal social divisions. The US is no exception, with political and cultural rifts becoming increasingly evident. White supremacy, regionalism, racism, and heightened struggles over issues of patriarchy, sexuality, and gender have intensified, further undermining the US’s global position.
In contrast, China’s economy has grown at a faster pace than the US for several decades. The Chinese leadership has capitalized on this rapid economic growth to bolster its internal social cohesion, lifting hundreds of millions from poverty to middle-income status.
The rise of China and its allies has created a major competitor for the US and the G7. This competition extends to securing cheap sources of food, raw materials, energy, access to markets, secure transport routes, supply chains, and friendly governments.
US policymakers view China’s global expansion as a threat to US capitalism, while Chinese policymakers see US efforts as attempts to hinder China’s economic development. This has fueled national security anxieties and predictions of potential military conflicts and even a world war.
Given the current geopolitical and ecological dangers, there is a strong case for a negotiated agreement on a multipolar world. Such an agreement could potentially end the concept of empires and usher in a new era of global cooperation and peace.
The author, Richard D Wolff, is an economics professor emeritus at the University of Massachusetts, Amherst. He is also a visiting professor in the Graduate Program in International Affairs of the New School University, in New York. His work, including his most recent book “Understanding Capitalism,” focuses on providing insights into economic systems. His weekly show, “Economic Update,” reaches millions via various platforms. Wolff’s work is produced by Economy for All, a project of the Independent Media Institute, and is republished with permission.
