U.S. News


Distraction Capitalism 101. The Basic Engine of U.S. Foreign Policy

It seems that even the most astute U.S. commentators and analysts are somewhat out of date in their attitude towards the American policy of provoking China and a possible anti-Chinese international alliance whilst working on many visible levels to demonstrate overwhelming power through NATO.

The position of the liberals seems to be that any such policy is in breach of good common sense, especially because it is dangerously rhetorical and possibly ephemeral given the parlous present state of the U.S. economy. This is well-represented in a recent paper by Joseph Stiglitz.

Part of this is of course very true but mundane, for the American economy has been a woeful, if a major component of the world system since 2008, and possibly since the early 1970s. Certainly, from 2014 to 2019 the annual growth rate of the world economy was 3.4%, but the U.S. economy grew at 2.4%. The American trading pattern is at best moribund. It is the only major capitalist economy whose major trading partners are its next-door neighbors, Canada and Mexico.

Referring back to Stiglitz, if the U.S. economy were indeed stable, growing, and favoring the increased prosperity of the great majority of its 330 million people, then the present bellicosity would not arise so readily. Indeed, it might split the nation and throw out presidents.

The failure of productivity growth at the heart of the real economy combined with the enormous direction of capital and property towards speculative land, property, and resource investments has led to gigantism in financial flows in close association with tragically low real economic growth and increasing income and wealth maldistribution. But here we are concerned with the immediate global political impact of this, which is the development of the now ingrained policy of universal political distraction – wherein civil society is waylaid and directed to the populist, nationalist, and very immediate and emotional arena of foreign policy.

Where the latter might have more traditionally been an outcome of professional diplomacy geared to problems of international power and status over the long-term, it has now increasingly passed into the hands of opportunist political leaders and their advisors, who take every favorable chance to get the measure of modern ‘political man’ by aiming the attention of all people to the problems caused by the recalcitrant foreigners. The latter no longer need be carefully demarcated as ideological, territorial, or commercial antagonists.

Given the emergency condition of the economy, enmity on economic grounds (obviously China, previously Japan) might even be forgiven. But that is not the argument here. In contrast, to say the rhetoric against Japan in the 1980s and 1990s, centered on trade and investment, the present anti-Eastern moves are far more inchoate. This is because a cloudy vagueness is all the better for disguising what is happening. U.S. civil society is being distracted from the central problems of internal socioeconomic disarray and directed towards a focus on the problems caused by ‘the others.’ In this regard, the Ukraine war is a welcome addition to the global stance.

Of course, the U.S. is not alone – nations of particular foreign aggression such as the UK and France share the same internal problems on a smaller scale – long years of low productivity growth fostering failures in real manufacturing, agriculture, and basic services and infrastructures, whilst increasing the enormous prosperity of a small number of main capitalist players whose power lies not in astute innovativeness but in its opposite – in the shelter provided by highly complex financial instruments. The result is a communal capitalist failure of low productivity, growth, and welfare. Thus, GDP per annum in the euro area has grown by only 1.9% between 2014 and 2019, and its position overall in the global Economic Freedom Index has fallen to 69.2 compared to that of Japan at 74.1. It was not so long ago that Western Europeans were contrasting Japan’s high economic growth with its low degrees of social choice and political freedom.

If we have good reason to think that change is needed, then some recognition of the very simple process that we are now living under deserves more attention. Historically, in most capitalist nations, foreign policy has supposedly resulted as an outcome of international games and strategies. Now we are seeing foreign policy formed on domestic issues, not in order to address them but to direct attention from them. Of course, rational international strategies have often been upset by real threats arising outside this reasoning, normally from within regimes where rational considerations have been overwhelmed by emotional certainties, often along borders that simply get out of hand. But this is not the present global situation in the main.

Large capitalist nations are causing problems on a host of levels, but global opinion is generally under their control. There is no conspiracy. It appears to be a mechanism of this phase of global democratic capitalism, the leadership of which is comprehensively shy of anything but the most turgid policy possibilities inside their overall political economies. The U.S. case is simply the most obvious and the most important – its military capability alone is staggering in any comparative context; its natural resource base remains unbelievably rich and beneficent. It also has the power to influence the course of action of many other nations, including those of NATO but by no means bounded by any formal organization.

We might add a note of amelioration. Compared to many democratic capitalist nations, American governments of whatever political persuasion do face intransigent institutional problems in developing any radical socioeconomic policy package. Very rarely has any White House had a commanding majority in the U.S. Congress, so any important legislation can be blocked at a variety of interstices. Seemingly progressive regimes, perhaps daring enough to go beyond the neoliberal consensus, such as those of Clinton and Obama (and indeed Tony Blair in Britain, Lionel Jospin in France, or Felipe González in Spain), have time and again turned their backs on any new deal packages for basic reform yet failed to evolve alternative policies of either economic growth or social welfare that might have founded sustained progressive changes for civil society.

This is not simply a story of absolute power corrupting absolutely. It is a matter of choices within highly constrained policy regimes. Where a combination of central political institutions and much-vaunted constitutional regulations continue to permit power to adhere to oil and agricultural interests, defense contractors and the military, and financial oligopolies, then decisive innovation beyond the box in either polity or economy becomes crippled.

As long as distraction is cheaper than reform it will remain favored within the power elites of populist democracy. Where distraction in the direction of the ‘foreign other’ is established, it surely will become increasingly difficult to shift. When future presidential and other electoral contests are based on the question of who looks the hardest of warriors, then ‘checks and balances’ will move from being one annoying arena of distraction to being obsolete.