One major difference between the U.S. today and the ailing U.S.S.R. is that it was structurally unable to take advantage of the internationalization of the productive process (globalization) that American capital exploited to the hilt to smash our unions, lower wages, and increase profits by moving production/assembly offshore. The U.S.S.R. was boxed in economically and became uncompetitive because it had to choose between guns and butter, so to speak.

America is in a radically different situation, and yes, there will be moves to replace the dollar as the world’s single reserve currency. I don’t think the central weakness of U.S. imperialism is/will be unsustainable arms spending, I think it’s the internal economic and political contradictions within the U.S. The U.S. is not able to pass a single law or reform that would even slightly impinge on the interests of any sectors of the capitalist class. In many ways it’s reminiscent of the Polish Diet of the 17th century. Financial reform did nothing to reform the financial system in even a pro-capitalist way; immigration reform is stalled at the federal level and has been for years, creating the space for racist laws to be passed on the local/state level which undermine the interests of local farms, hotels, restaurants, and other sectors that rely on cheap undocumented labor; health care reform created a captive market of 30 million+ government-mandated customers for the murderous, greedy insurance companies; education reform is lining the pockets of corporations via privatization meanwhile growing numbers of Americans are functionally illiterate (the majority of Detroit’s population does not even read at a high school level). Contrast this to China, where the state owns/controls roughly 80% of the economy. Their education system is not locked in permanent crisis and neither is their economy nor their political system. The standard of living for their working and middle classes only has one direction to go: up. Ditto for their military power.

America’s power is being undermined from within by its own insoluble contradictions, not by unsustainable military spending. Either way, your conclusions about the U.S.-Canada relationship and the increasingly independent leanings of your ruling class are sound.

In any case — the key point is not this or that prediction (always a difficult thing with something as complex as the world economy). The key point is the emergence of a multi-polar world, and the way in which this changes the gravitational pulls on the Canadian economy. Canada used to orbit around one star — the United States. But now it is feeling the attraction of other stars — still smaller than the U.S., but much more visible than they were even ten years ago.

Those are my thoughts. Thanks for your thoughtful response to this analysis.

Kellogg: “Another indicator is in terms of the share of manufacturing. After World War II, the U.S. share of world manufacturing was over 50% — now it is less than 20% (according to figures from the United Nations).”

This is true but highly misleading. All of Europe and Asia was reduced to rubble at that point. The U.S. share of world manufacturing was bound to decline relative to where it was right after it had physically wiped its rivals off the map.

In my view, most of those who argue that U.S. imperialism’s power has declined overstate the case. The dollar remains the world’s reserve currency; every dip in the world economy causes investors to flee to U.S. Treasuries; the debt/deleveraging crisis in Europe is even worse than it is for the U.S. because the Euro is a currency without a state (or rather, it’s a currency with a multitude of states). The American, European, and Chinese economies all have major underlying problems that will cause recessions in the near future; it’s a race to see whose unsustainable recovery/expansion collapses first, in a sense. And when one of them runs into big trouble, they will probably drag their rivals down with them.

The U.S. position is sustainable so long as our side isn’t able to stop them at home. The ruling class is getting ready to gut Social Security, something that was unthinkable a decade ago even for the most psychotic Reaganite neanderthal politician.

Yes, Canada want’s to diversify its trade, but it is also true that “Canada and the United States have the world’s largest trading relationship” see WikiPedia at http://en.wikipedia.org/wiki/Canada_%E2%80%93_United_States_relations#Trade