Skip to content

The beginning of the end of the US empire

Marxist Analysis · 2026-05-13

Core Argument

The article argues that the US empire, despite its apparent military and economic supremacy at the turn of the millennium, is entering the early stages of a terminal decline rooted in internal economic contradictions. The central thesis is that the collapse of the stock market bubble, the weakening of the dollar, and the underlying crisis of profitability in US capitalism are not temporary setbacks but structural symptoms of imperial overreach. The military adventurism of the Bush administration — particularly the Iraq War — is presented not as a sign of strength but as a compensatory reflex: the empire flexes its muscles precisely because its economic foundations are crumbling. The article draws a historical parallel with the decline of the Roman and British empires, arguing that the US will follow the same trajectory unless the working class intervenes to replace capitalism with a new social order.

Theoretical Grounding

The analysis is grounded in the Marxist theory of capitalist crisis, specifically the tendency of the rate of profit to fall. The article identifies the root cause of the 2000 stock market crash as a profitability crisis: US multinationals "could not get enough surplus value out of their workforce to compensate for the huge investment in the new technology they had made." This is a clear application of Marx's law that the drive to accumulate leads to overinvestment in constant capital relative to variable capital, squeezing the source of surplus value — living labour.

The article also deploys the concept of fictitious capital, arguing that the stock market bubble was sustained by investors' belief in future profits that never materialised. The "New Economy" myth is exposed as a cover for declining productivity growth relative to the post-war golden age.

Theoretically, the piece sits within the Marxist tradition that emphasises economic determinism in explaining imperial decline — a lineage that runs from Lenin's Imperialism, the Highest Stage of Capitalism through to contemporary Marxist economists like the author himself. The Roman empire analogy, while historically suggestive rather than rigorous, serves to illustrate the general Marxist principle that no ruling class can escape the contradictions of its mode of production indefinitely.

Conjunctural Relevance

The article was written in July 2005, at a specific conjuncture:

  • Stock market collapse: The dot-com crash had wiped out up to 60% of stock values over three years, with US households losing nearly 25% of their paper wealth.
  • Dollar decline: The dollar had fallen 15% against the euro in the preceding year, and had weakened even against the yen — despite Japan's economy having stagnated for 14 years.
  • Iraq War: The US had invaded Iraq in March 2003. The article estimates the war would cost $50–150 billion, but warns that prolonged occupation could push oil prices to $40/barrel and knock 1% off global GDP growth annually for five years.
  • Stagnant growth: The US economy was flat at the end of 2002; UK growth was just above 1%; Germany and Japan were stagnant.

The article's predictions were prescient in several respects. The Iraq occupation did drag on, oil prices did rise sharply (reaching $147/barrel by 2008), and the global financial crisis of 2007–2008 — rooted in the same overaccumulation and fictitious capital dynamics — vindicated the core argument. The piece also anticipates the "Axis of Evil" expansion, correctly noting that the logic of imperial overreach would push the US toward further confrontations.

Where the Argument Continues

The article leaves several threads open:

  • The precise mechanism of imperial decline: The Roman analogy is suggestive but underdeveloped. The argument would benefit from a more rigorous Marxist theory of how economic crisis translates into geopolitical retreat — a question taken up in later IDOM articles on the 2008 crash and the relative decline of US hegemony.
  • The role of China: The article mentions China only in passing as a dictatorship not targeted by the "Axis of Evil." The subsequent rise of China as a rival pole of accumulation is a major gap, addressed in later IDOM analyses of US-China rivalry.
  • The working class as alternative: The concluding claim that the working class can replace the empire is stated but not developed. This is a programmatic assertion that finds fuller treatment in IDOM articles on revolutionary strategy and the need for a Leninist party.

The argument continues in Michael Roberts' later work, including his blog The Next Recession and his book The Long Depression, which develops the profitability crisis thesis in greater empirical detail. Within the IDOM corpus, articles on the 2008 financial crisis, the eurozone crisis, and the COVID-19 recession extend the same analytical framework.

Connections

  • Lenin, Imperialism, the Highest Stage of Capitalism: The theoretical foundation for understanding imperialism as the highest stage of capitalism, driven by the export of capital and the division of the world among monopolies.
  • Marx, Capital Volume 3: The law of the tendency of the rate of profit to fall, which underpins the article's analysis of the profitability crisis.
  • Michael Roberts, The Long Depression: A book-length development of the argument that capitalism has been in a "long depression" since the 1970s, with periodic crises rooted in falling profitability.
  • IDOM articles on the 2008 crash: Directly continue the analysis of fictitious capital, overaccumulation, and the limits of imperial power.
  • Against the Stream episodes on US decline: Podcast episodes that update the argument for the Trump and Biden eras, focusing on the shift from unipolarity to multipolar rivalry.

Key Quotes

  1. "US corporate profitability began to fall as early as 1997 but the light bulb only went on for investors in early 2000. Profitability died because, despite the New Economy, US multinationals could not get enough surplus value out of their workforce to compensate for the huge investment in the new technology they had made."

  2. "It is no accident that just as the US economy begins to show its weakness, its emperors try to flex their muscles militarily. They must exert their military might to re-establish economic and political control both over the world's resources (oil) and convince a confused people who might begin to question the very nature of the Empire."

  3. "The Empire looks as though it might be overstretching itself just when it seems that it is all-powerful. The economic failure of the Roman empire brought political division and collapse. That could happen to the American empire in this early part of the 21st century, just as the British empire folded in the early 20th century."

  4. "Without profit, there will be no production. But profit cannot be created indefinitely and sufficiently to maintain investment because it arises by squeezing it out of the labour of others. There is no planning, but anarchy. There is no cooperation for maximum efficiency, but competition. The result is that boom is followed by slump."

  5. "The difference with the slave Roman empire is that there is a force in the world capable of replacing the American capitalist Empire with a new organisation for change – the working class. America's decline and eventual fall does not mean anarchy and barbarism if that class succeeds."