Imperialism makes workers’ lives worse

Illiberal imperialism is that aspect of US foreign economic policy most directly connected to US foreign military action, both threatened and actual. What are the economic channels through which this type of imperialism affects workers? Using the framework of Eqs. (1)–(6) (reproduced above) and as we describe in more detail below, the main hypothesised channels are the following: on the ‘positive side’ (from the material perspective of US workers), US military might protects the availability of raw materials, and especially oil, thereby improving the terms of trade (ρ); US military power also helps to underpin the reserve currency role of the US dollar, and, as a related matter, strengthens the political security of US financial markets; it thereby helps the United States run a large current account deficit (CAD); military expenditure for domestic use and export also expands aggregate demand, and through Eq. (6), it may increase employment and capacity utilisation (though some have argued that it makes production less labour intensive). On the negative side, for US workers, military spending costs tax money; therefore, either the taxes that workers must pay are raised (reducing tf in Eq. [5]), expenditures on public services of use to workers reduced (reduce ps in Eq. [5]) or both.6 Velvet glove (neoliberal) imperialism The impacts of illiberal imperialism are difficult to measure, and the ‘imperial accounting’ for neoliberal imperialism may be even more Did US workers gain? 177 difficult.7 On the possible benefits side, neoliberalism plausibly leads to more exports for US firms, thereby increasing aggregate demand and leading to more employment (a lower CAD); neoliberal imperialism, by increasing the supply of inexpensive imports for the United States, might improve the US terms of trade.8 On the negative side, making the world safe for US foreign investment might increase outsourcing, jobs costing foreign investment and threat effects;9 this might reduce the wage rate, employment rate and, therefore, labour share accruing to workers. Moreover, there are additional expenditures in terms of military spending, diplomacy and foreign aid tied to the neoliberal project. These add costs to workers to the extent that they lead to higher taxes or cut-backs in social spending.