Economics/Class Relations

Cold War II: The U.S. is losing its economic advantage in a new era of global conflict

By Michael Lind, Tablet

Can a second cold war be avoided? The brutal proxy war in Ukraine between Russia and the U.S. and its allies, combined with deepening trade and military rivalries between the U.S. and its allies and China, has made the question anachronistic. We are in Cold War II now.

A cold war is a conflict among rival powers that is waged by means short of direct combat between their forces and direct attacks on their homelands. A quick survey of the methods and means that characterize such a conflict shows they are already in effect. Proxy war? Check. Arms races? Check. Trade embargoes and financial sanctions? Check. Sabotage? Somebody blew up Russia’s Nord Stream pipelines in the Baltic Seas. Propaganda wars? Check.

Russia, China, and Iran claim they stand for a multipolar world no longer oppressed by U.S. imperial hegemony. Liberal internationalists in America and Europe claim that we are in a Manichean struggle between freedom and democracy on the one hand and reactionary autocracy, symbolized by the otherwise quite different Russian, Chinese, and Iranian regimes. In both camps, critics of regime policy are smeared as apologists for the enemy, regardless of whether that enemy is NATO or Putin’s Russia.

But while high-flown ideological battles between Putinism and Western liberalism have often taken center stage, the outcome of the new global conflict rests largely on economic competition. In the last cold war, the American economic system proved stronger and more robust than the Soviet-style command economy. Yet, in a strange turn, since the end of the last cold war America has rapidly pivoted away from the industrial model that proved so successful in the 20th century. The U.S. elite have wagered on transforming the country into an information and services-based economy. China, meanwhile, has adopted the older U.S. model of state-private sector cooperation, in the process becoming the world’s manufacturing base.


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