US Imperial Hegemony Rests on Dollar and Finance, and Trump's Contradictory Aims Expose Its Fragility
Source: Costas Lapavitsas. "The Bases of US Empire Are Crumbling." November 8, 2026. jacobin.com
The Gist
The author says US global power no longer comes mainly from making things at home, but from controlling the dollar, global finance, and the rules that big multinationals operate under, all backed by the military. This setup enriched US corporations while gutting American industry, and Trump's attempt to bring back factories while protecting those same corporations is self-contradictory. That contradiction shows the system is under strain, and the Left should respond with a politics that breaks with it.
Conclusion
The foundations of US imperial power are weakening because US hegemony now depends on enforcing global rules of production, finance, and money (above all dollar supremacy backed by military power) rather than on domestic industrial strength. Trump's twin goals of reviving domestic industry and defending multinationals' privileges cannot be reconciled, so US capitalism is structurally strained and the Left needs a politics of class rupture.
Premises
- US manufacturing share of world output fell from about half in 1945 to about one-sixth today, with weak productivity, weak investment, and stagnant real wages, yet the dollar's share of official reserves remains near 60 percent. Productive preeminence has declined while monetary hierarchy has hardened.
- The material basis of US hegemony has therefore shifted from domestic industrial strength to the capacity to set and enforce the rules of global production, finance, and money. US multinationals and asset managers benefit enormously from this structure.
- Contemporary imperialism rests on a pairing of globalized productive capital and internationalized finance, held together by the dollar as world money. Global supply chains invoice and finance in dollars, so the Fed's policy reaches producers worldwide.
- The dollar hierarchy is enforced through crisis tools (Fed swap lines for 14 favored central banks, sanctions, freezing Russian reserves), and the map of monetary privilege coincides with the map of US military deployment. The dollar and the F-35 are two moments of one structure of domination.
- The US-led globalization of production that built this structure hollowed out domestic industry and produced the social damage that fuels Trump and the far right. This is why neither party has reversed industrial decline: tariffs led firms to move supply chains to Vietnam and Mexico rather than reshore, and Biden's subsidies left corporate global strategy untouched.
- Trump wants to restore domestic industry while protecting multinationals' privileges (for example, withdrawing from the OECD global minimum tax framework), but those multinationals' global strategy is what caused deindustrialization, so the two aims conflict.
- Financialization has shifted to asset managers (BlackRock, Vanguard, State Street) holding about 40 percent of equity in the world's billion-dollar listed companies. Their profits depend on rising asset prices and on state support, including growing public debt.
Assumptions
- Marxist/Leninist analysis of imperialism, updated for world money, is the right framework for understanding current US power.
- Persistence of dollar dominance in reserves and invoicing reflects structural power rather than inertia or lack of alternatives.
- Deindustrialization was caused primarily by multinational capital's global strategy rather than by other factors such as automation or trade policy.
- Reshoring is incompatible with multinationals' offshore profit structures and global supply chains.
- Strain on US imperial role (war, political turmoil) signals weakening foundations rather than mere adjustment or reassertion.
- The correct political response to these conditions is a class-rupture program rather than reform.