Analysis

The Demise of the Western Empire

8 min read

What we call the demise of the Western Empire11The socio-economic system that unified large parts of Europe, North America, Australia (the core) and, through (neo-)colonialism and imperialism, parts of Latin America, Africa and Asia (the periphery). While leadership of this bloc shifted from the UK to the US in the course of the 20th century, it has been continually characterised by a capitalist economic and a liberal political order. is another side-effect of the neoliberal project. The elite at the centre of this project, the infamous 1%, are in fact mostly well-off pensioners with mortgage-free property and a fixed pension that depends on returns in financial markets. Therefore their governing interest is to secure high returns on their financial capital.

Two Waves of Capital Flight

To achieve this by lowering labour costs and increasing profits, industrial production moved from the core of the empire (the “West”) to the periphery (particularly Asia) throughout the 1980s and 90s, enabled by advances in logistics and computer technology. At the same time, economic ideology shifted towards maximising shareholder value, making sure that as much as possible of the profits would be paid out to shareholders instead of directly reinvesting them. This progressively de-industrialised high-income countries, particularly the UK and the US, leaving them reliant on the service and particularly financial sector to deliver further economic growth.22The nationalist economics that are part of the emerging hegemonic coalition aiming for re-industrialisation of the US can be seen as a potential countermeasure, but its implementation is uncertain as it is in tension with the interests of the financial elites and the libertarian broligarchy.

Size and global influence of the imperial economy peaked in 1999;33Heather and Rapley (2023) its share of global production has been decreasing ever since.44Statista (2025) This meant constantly lower growth rates and hence return on productive capital, providing a strong incentive to focus even more on returns from financial assets. This ultimately led to the financial crisis of 2008, and with it a wave of state intervention and debt growth – public deficits soared due to bailouts and “support packages” that ultimately ended up in the pockets of the elites.55Oxfam (2025)

To enable the increase in debt, interest rates were kept extremely low, forcing the 1% to look elsewhere to protect their returns. This turned out to be:

  • property, fuelling a price explosion that contributed not only to their wealth, but also to further depression of economic growth and the immiseration of parts of the population that then turned to right-wing populists;

  • investments in “emerging markets”, moving financial capital from the core to the periphery of the empire – a second exodus of capital.

State Retrenchment and Scapegoating Politics

As a result and through the twin neoliberal projects of large-scale tax avoidance and austerity, public budgets have become too small to successfully tackle structural challenges and maintain public infrastructure. This further amplifies the imperial core’s economic decline, effectively sacrificing social and economic health for the interests of the 1%.66This is a specific example for the pattern that Michael Hudson highlights throughout human history: Financial elites trying to capture the state which, if they are successful, at some point collapses under the weight of debt and inequality. See e.g. Hudson (2015). At the same time, economic risk is more and more unevenly distributed: While unemployment risk is re-individualised through reduction of benefits and tightening of means-testing, investors and banks get bailed out – their risk is socialised.

The combination of disenfranchisement and general economic decline has greatly contributed to the rise of the Right. In the absence of a strong labour movement that promotes solidarity, scapegoating politics have caught wind, in particular shifting the migration discourse towards exclusion and deportation. In combination with their greying demographics, the proposed migration policies would lead to a shortage of labour in Western economies, specifically in parts where labour is not easily replaced by machines: the care and service sectors on which public health and the current model of economic growth depend. This means these policies will further add to social and economic decline instead of relieving it, as claimed by their proponents.77Authoritarian policies like taking away abortion and birth-control rights to counter population decline, supported by an ideology of “pro-natalism”, aim to slow down or reverse decline. But if implemented, they would in turn increase social divisions and unrest. Fascism might stabilise power (and increase suffering) in the short term, but it doesn’t save empires. In the language of complex systems, it is only metastable, i.e. has to turn into another configuration after a while.

From Imperial Dominance to Multipolarity

At the same time, China has emerged as the core of a potential new global empire. It adopts a new brand of neo-colonialism that reaches far into what the US has been used to considering its “backyard,”88On the history of the concept, see Wikipedia, “America’s Backyard”; on China’s growing influence, Areddy at el. (2024). and a very pragmatic approach to economic systems and public investment: if it grows the economy, it’s good. Dominance in core technologies (broadband communication, PV, EVs) and increasingly in science,99See Textor (2024) for an overview, Wagner (2024) on scientific impact of universities, Brainard & Normile (2022) on scientific publications, and Ortiz-Ospina (2024) on patents. and a massive build-out of renewable energy reverse the roles of West and East in technological development. All this creates, despite the economic and social challenges China is facing, an economic dynamism unmatched by the West.

And finally, new technologies like drones and satellite networks enable smaller states at the periphery or outside of the empire, and even non-state actors, to exert levels of military power that seriously threaten imperial interests. An example was the Iran-Houthi collaboration to effectively erect a sea blockade between the Red Sea and the Gulf of Aden. This multipolarity makes it more costly for the empire to protect its interests in the periphery, putting further strain on already tight state resources. It also adds to the risk of regional military conflicts as competing imperialist forces will try to take over territory and redefine borders.1010The Russian invasion of Eastern Ukraine can be seen as an early example of this.

A Downward Spiral

The picture that emerges from these processes is that of a downward spiral of state retrenchment – further breaking away of periphery, prioritisation of elite interests, drain of capital, and inability to protect interests, leading to social and economic decline, breakdown of infrastructure, and ultimately economic, political, and potentially social collapse.

This dynamic is very similar to the fall of the Roman Empire1111See Heather and Rapley (2023) for a detailed account of this similarity. – with one important difference: Today’s elites are not tied to any nation, region, city or other location – they are untethered, globally mobile, without allegiance to any specific geographic unit. This allows them to escape the collapse they have brought about themselves. As Douglas Rushkoff says, they are

preparing for a digital future that ha[s] a whole lot less to do with making the world a better place than it [does] with transcending the human condition altogether and insulating themselves from a very real and present danger of climate change, rising sea levels, mass migrations, global pandemics, nativist panic, and resource depletion. For them, the future of technology is really about just one thing: escape.1212Rushkoff (2018). The untethered nature of the elites is reflected in their idea of forming “network states” (Srinivasan 2022).

For the rest of us, the depth of collapse is an important but open question: While there isn’t necessarily a new Dark Age with a complete civilisational reboot ahead, the downgrade from imperial core to poor society will come with a lack of basic provisions for an increasing number of people. Fascism will certainly feed on this, but it won’t stabilise society. It might delay, but will not halt social unrest and a reduction in societal complexity, which will make our existing models of production (markets) and coordination (nation states) at least maladaptive and potentially inapplicable.1313This process can happen at different speeds in different parts of the core: The US dollar as the global reserve currency might buffer the US from non-linear economic downfall much better than European countries, especially in a scenario where the US is ditching Europe as an important ally (see e.g. the developments around Greenland).

This is one of the reasons we argue for the importance of building alternative models of production, distribution, and coordination.

References

Stay Connected!

Get updates on new articles, workshops, and resources for building collective power in social movements.

Ready to Build Collective Power?

Get in touch to discuss how we can help you or your group navigate the complexity of movement building.

Drop us an email!