Costas Lapavitsas
SOAS
Imperialist ascendancy
The intensification of imperialism during the last two decades, with the USA in the lead, is beyond dispute. Aggressive use of commercial sanctions, targeted deployment of access to the dollar, freezing of dollar reserves, rising militarism, open threats, naked use of military force and war are constitutive elements of contemporary geopolitics. The USA no longer operates as the hegemon of a unipolar world, whose ability to control events relies greatly on consensus. It acts as the largest contestant for hegemony, faced with emerging challengers, most prominently China, and relying primarily on coercion.
Globalisation, far from producing peaceful economic competition and state cooperation, has given birth to new and virulent forms of imperialism. These forms do not rest on territorial control, but on the organisation of production across borders and the command of money and finance.
What is needed is a clear account of contemporary imperialism. For that it is crucial to draw on the classical Marxist analyses of Hilferding, Luxemburg, Bukharin, and Lenin, and therefore seek the foundations of imperialism in the transformation of the world economy, and more specifically in the conduct of the fundamental units of capitalist accumulation – productive enterprises, banks, financial enterprises, and so on. At the same time, it bears restating that imperialism is a far more complex phenomenon than mere economic relations. It also involves state power, national oppression, ideology, and a vast cultural apparatus in both the core and the periphery of the world economy. But what makes capitalist imperialism distinctive is its economic content.
Yet, the language used to describe this welter of events has become increasingly useless. “Polycrisis”, “geopolitical turmoil”, “multipolarity”, these are terms that register anxiety without producing understanding. “Polycrisis” tells us that several problems coexist, but not how they are connected or which mechanisms drive them. Even worse is “technofeudalism”, which mistakes intensified control by huge capitalist corporations and weak domestic accumulation for a transition beyond capitalism. Electronic platforms are capitalist firms that produce digital output and sell services, charging fees and extracting monopoly-like rents where they can. There is no feudal order but an extraordinarily aggressive capitalism.
In this light and drawing on recent work, the current phase of capitalism rests on two structural foundations. [1] First, productive capital has been reorganised globally through multinational production chains, while financial capital has become globally active through both commercial banks and shadow banks. Second, this global system is held together by a hierarchically organised monetary order centred on the US dollar. Imperial power lies in the ability to shape global accumulation through that pairing and to discipline states, firms and workers through money, finance and ownership of capital.
Contemporary imperialism differs from its classical form at the end of the nineteenth and the beginning of the twentieth century. It does not rest on direct colonial rule or routine territorial conquest but relies on control through production networks, capital markets, legal jurisdiction, monetary hierarchy and, in the last instance, military force. Balance sheets are the regular means of disciplining others, but discipline ultimately relies on naval, air, and land forces.
The reorganisation of production and finance
The starting point is production. Over the past four decades multinational corporations have reorganised manufacturing on a world scale. Production has been fragmented across borders, with labour-intensive and lower-value segments shifted to cheaper locations, while design, system control, intellectual property, branding and finance remained concentrated largely in the core economies. The result is geographical dispersion but concentrated command.
The rise of China has been the decisive event in this rebalancing of productive capacity across the world economy. It now accounts for close to 30 percent of world manufacturing output, while the United States has seen its share fall from roughly half of global manufacturing value added in 1945 to a little over 10 percent today. This is a historic redistribution of where commodities are produced. But it is a mistake to interpret it as an irreversible decline of US power. US multinationals are the leading players in the global production chains, US banks and financial firms are the dominant actors in global finance, and the US dollar is the money of world accounting for just under 60 percent of allocated global foreign exchange reserves.
The central contradiction of the current imperial order is precisely this: the national productive primacy of the US has declined but the pre-eminence of its multinationals remains and its command over money and finance is enormous. All that is backed by overwhelming military might.
This reorganisation of the world economy has been driven by profitability, not by policy error or accidental drift. Lead multinationals in production chains boost returns by outsourcing labour-intensive stages of production, squeezing suppliers, cutting costs and turning cheap imports into a support for consumption in the core economies. This process that strengthened multinational enterprises also weakened the domestic productive base of the leading imperial power. US investment has been weak, manufacturing employment has shrunk, and productivity growth has been poor for decades. The United States has run persistent current account deficits, typically around 3 to 4 percent of GDP over the last decade, financing external imbalance by issuing financial claims held by others rather than by producing more.
Production chains are hierarchical structures of control. Lead firms dominate technology, patents, standards, logistics, pricing, legal contracts, credit access and market access. Smaller firms typically carry tighter margins, longer cash-conversion cycles and greater dependence on short-term finance. Control over invoicing is crucial to the hierarchy: Between 1999 and 2019, roughly three-quarters of exports in Asia-Pacific and virtually all exports in the Americas were invoiced in dollars. A supplier in Vietnam, Mexico or Bangladesh ships components and may wait sixty or ninety days to be paid, while wages, imported inputs and operating costs continue to fall due. The gap must be financed, and very often in dollars. That is not a free commercial choice but a structural condition of participation in the chain.
Access to finance and money on a global scale is thus a vital element for the operations of globally active productive capital. Internationally active commercial and shadow banks organise liquidity, maturity transformation of debts, and the availability of credit under an institutional and legal infrastructure that gives to financial capital far greater elasticity than that of productive capital. A hedge fund can manage one billion or one trillion of dollars from the same rooms of London’s Mayfair; a semiconductor plant in a global production chain cannot double its output without years of investment. The relation between the material requirements of financial services and the value extracted by financial intermediation is extraordinarily loose.
This distance gives to financial capital an autonomy that productive capital cannot match. Balance sheets can expand far faster than the productive base, granting finance a relative autonomy in setting the terms of accumulation. Liquidity premia, collateral hierarchies, payment conditions, and duration pricing arise from this autonomy. They are an inherent consequence of global finance’s position in the accumulation process. Global finance is necessary to capitalist accumulation and expansion, while being capable of imposing terms that diverge from the requirements of productive profitability.
The two forms of capital interlock inextricably in the world market. Financial capital conditions the liquidity of productive circuits while productive capital provides the material basis for profit generation. The interlock is structural rather than being either a merger, or an amalgam, and its significance lies in continually reshaping global accumulation. The profitability of internationalised production is inseparable from the global availability of finance, and both crucially rely on global liquidity regime shaped by the dollar as world money. The pairing of these capitals thus marks a novel configuration rather than a revival of Hilferding’s finance capital from the classical Marxist theory of imperialism. The rigidities of global production chains are mediated through an elastic financial system, while the interaction of the two is articulated through world money mechanisms anchored in the hegemonic state.
The results are directly visible in the corporate balance sheets of the largest multinationals. Among the world’s 500 largest manufacturing firms, around 32 percent are US companies. They issue more than half of all long-term debt in the group and hold nearly 39 percent of total cash, while relying comparatively little on short-term borrowing. Chinese firms account for more than 20 percent of the same sample, yet issue only 6.5 percent of long-term debt and carry much heavier short-term funding burdens. Large firms in India and Brazil show similar vulnerabilities. US-based firms operate with a currency that is both national money and world money. That means longer maturities, larger buffers and lower rollover risk. Firms elsewhere do not enjoy the same protection, even when they are large and globally integrated. The imperial hierarchy is written into the balance sheets of production.
The dollar as world money
This brings us to the second pillar of the system. The dollar functions as world money in a way no other currency does. It remains the main unit of account for trade, the principal means of international payment, the dominant reserve asset and the core denomination of global finance. Around 60 percent of official reserves are held in dollars; the euro has never risen above 25 percent; the renminbi remains below 3 percent. Roughly half of cross-border payments through the international bank clearing mechanism of SWIFT are settled in dollars, rising to around three-fifths if intra-euro-area payments are excluded. Around 55 percent of international and foreign-currency bank assets are dollar-denominated, and around 60 percent of liabilities.
This persistent dominance of the dollar certainly does not reflect US productive superiority but rather the institutional power of the US state and the depth of US financial markets. The Federal Reserve determines, in practice, which liabilities count as the safest and most liquid assets in the world economy, what collateral is acceptable for the provision of dollar liquidity in crisis, and which financial systems will be stabilised when markets break. The New York Fed’s standing repo facilities accept US Treasuries, federal agency debt and agency mortgage-backed securities, but not foreign sovereign bonds. These are not merely technical rules but rather deep expressions of imperial power in operational form.
The supporting architecture of the system is broader still. WTO rules and the TRIPS regime protect the cross-border claims of lead firms; bodies such as IOSCO and FATF shape the standards governing securities markets, payments and compliance; cross-border commercial and financial contracts overwhelmingly specify New York or English law, making those legal systems the practical courts of world capitalism. The global use of claims denominated in dollars depends not only on liquidity, but also on confidence that those claims can be enforced, restructured or seized within a legal order aligned with the hegemonic state.
The hierarchy is enforced daily through settlement systems, correspondent banking networks, legal jurisdiction, collateral rules, and compliance procedures. Sanctions are also available to the USA, but they are merely the visible form of imperial power latent in the system. The freezing of around $300 billion of Russian central bank assets in 2022 showed that exclusion from world money is an active instrument of power. It revealed in concentrated form the coercion that is already built into the normal operations of global money.
The role of the Federal Reserve in crises makes imperial power even clearer. In 2007–09 and again in 2020, the Fed extended dollar swap lines to a select group of 14 central banks. Those countries gained rapid access to emergency dollar liquidity, while others, including major economies, did not, and so faced reserve losses, currency depreciation and harsher domestic adjustment. The swap-line network is anything but neutral. Those 14 countries account for roughly 55 percent of US imports and 60 percent of US exports, and they host the overwhelming bulk of US military personnel stationed abroad. Monetary privilege and military power are not separate systems but two sides of the same imperial structure.
Financialisation Mark II
Crucial to these developments has been the transformation of finance since the crisis of 2007–09. Before that crisis, financialisation was driven mainly by commercial banks expanding household credit, trading financial assets and extracting profits through interest margins and fees. This was Financialisation Mark I and it reached its limits in the crisis. Commercial bank profits in the United States, which had risen to close to 40 percent of total profits before 2007, never recovered their earlier position. Household debt fell relative to both GDP and disposable income.
What emerged was a different configuration, namely Financialisation Mark II. Its core institutions are not deposit-taking banks but shadow banks, that is, market-based financial actors, above all, asset managers. These institutions manage huge portfolios of securities on behalf of pension funds, insurers, sovereign funds and households. Their profitability depends less on lending spreads than on fees, dividends, interest receipts and, crucially, capital gains. In classical Marxist terms, this is closer to Hilferding’s founder’s profit deriving from the systematic difference between the rate of profit and the rate of interest than to ordinary banking income. Rising asset prices are a condition of business for these financial enterprises.
The scale soon became extraordinary. The combined holdings of BlackRock, Vanguard and State Street in S&P 500 firms rose from around 6 percent in 2008 to more than 20 percent by 2025. Current research, mentioned in footnote 1, that tracks 426 major asset managers between 2013 and 2025 found that the equity they controlled in billion-dollar listed firms worldwide rose from around $13 trillion to roughly $40–45 trillion. By mid-2025, asset managers controlled around 40 percent of the equity of all billion-dollar listed companies in the world. The Big Four, adding Fidelity to the Big Three, raised their share from about 9 percent in 2013 to around 15 percent by 2025. In every broad region outside North America, US asset managers are the single largest foreign investor group.
This shift changes the form of financial power. Commercial banks typically monitor particular borrowers and discipline firms through credit availability. Asset managers hold diversified portfolios across sectors, firms and countries. Their interest is not primarily in the success of one firm against another, but in the stability and profitability of markets as a whole. That pushes the management of productive capitals toward broad financial priorities, such as steady earnings, shareholder returns, low volatility and sustained valuations. Ownership becomes a transmission belt for the imperatives of finance across the corporate system.
This new phase of financialisation is absolutely dependent on the state. After 2007–09, public debt rose sharply and central banks intervened on a historic scale. US public debt rose from roughly 60 percent of GDP to over 100 percent by 2025. The Federal Reserve expanded its balance sheet massively, drove interest rates toward zero, and acted repeatedly to stabilise key financial markets. In effect, it became the dealer of last resort for a system now dominated by market-based finance.
This is why Financialisation Mark II could also be understood as state-based financialisation. Asset managers and capital markets are not floating above the state. They depend structurally on central-bank liquidity, public debt markets and crisis intervention. The ability of the contemporary capitalist state to create vast volumes of essentially fiat money lies at the heart of the extraordinary expansion of finance.
Subordinate financialisation
The international side of this order appears most sharply in the periphery of the world economy. Subordinate financialisation is a constitutive part of the system. Capital flows from the core, driven by Federal Reserve monetary policy and the portfolio allocation decisions of shadow banks and commercial banks, draw peripheral economies into the global order as dependent nodes. Domestic policy in the periphery is then shaped by the need to secure dollars, attract inflows and avoid financial punishment.
The link to production chains matters greatly in this regard. Dollar invoicing, trade credit, hedging and imported technology produce currency mismatches throughout the Global South. Liabilities are often in dollars, while revenues are in local currency. When global liquidity tightens, refinancing costs rise, exchange rates come under pressure and firms cut investment and employment to defend their balance sheets. Governments then raise interest rates, run down reserves and compress spending to restore confidence. The costs of stability fall on domestic wages, jobs and public expenditure.
This is far from an abstract possibility. In October 2025, the average policy rate in Brazil, India, Indonesia, Mexico and South Africa stood around four percentage points above the Federal Reserve’s. That spread is not a technical differential but a tribute paid for access to global liquidity, and thus participation in the world market. High rates attract volatile inflows, support overvalued exchange rates, encourage imports and foreign-currency borrowing, and weaken domestic industry. Reserve accumulation then becomes a defensive necessity, tying up resources in low-yield foreign assets rather than domestic investment. Sterilisation expands domestic debt markets and tightens fiscal space. A bloc of domestic class interests forms around this pattern even as it undermines the long-run development of a peripheral country.
Subordinate financialisation therefore has a clear class and geopolitical content. It channels value from periphery to core and severely restrains the policy space of peripheral countries. Without this subordinated layer, the pairing of multinational production and market-based global finance at the centre could not operate as it does.
The paradox and its politics
All this analysis of contemporary imperialism converges on a single structural paradox. The United States as a national entity has lost productive and commercial primacy but has the largest multinationals and retains monetary, financial and military command. It still hosts the leading capital markets, issues the main reserve currency, supplies emergency liquidity through its central bank, and anchors the legal order of global finance. Yet its manufacturing base has been hollowed out by the very accumulation strategy that strengthened the international presence of its multinational corporations and its financial system.
That contradiction has now entered politics in raw form. Trump is not an aberration but the political expression of the system’s internal contradiction. The same economic conduct that enriched US multinationals, entrenched dollar power and globalised production and finance also degraded large parts of the US’s domestic economic and social structures through deindustrialisation, stagnant real wages, collapsing local economies, and crumbling infrastructure. Trump’s project tries to defend US multinational, financial, and dollar dominance through the coercive use of US imperial power, including tariffs, sanctions, and the naked use of military power, while also restoring domestic industrial strength. Those aims sit in tension with each other. Tariffs alone cannot reverse decades of offshoring while the United States remains committed to financial predominance and a strong dollar order. The power of Wall Street is an obstacle to the reindustrialisation of the USA.
Nor is there a ready replacement for the US as global hegemon. China is the world’s leading manufacturing power, but the renminbi still plays only a marginal international monetary role. A world money requires deep markets in safe public liabilities, wide legal trust from foreign claimants and substantial capital account openness. China has avoided precisely these features by tightly controlling its financial system because they would expose it to the disciplines of subordinate financialisation and threaten the state-led strategy that made its industrial rise possible. Its strength in production will not easily translate into the capacity to organise a rival monetary order.
The result is not systemic collapse, but constrained monopolarity together with growing coercion. Reserve seizures, sanctions, payment exclusions, technology controls, proxy wars and expanding arms expenditure are the political form taken by an imperial structure whose core contradiction is sharpening. The United States remains strong enough to enforce, but no longer strong enough to lead under its hegemonic aegis. It still commands the system, but it cannot stabilise it by affording space to others.
The present moment is one of imperial dominance without imperial stability; monetary command without productive primacy; enforcement without consent. The system persists, but increasingly through pressure, exclusion and conflict. That is why the world feels more violent, more brittle and more fragmented. The structure is still there, but it is losing its capacity to reproduce itself quietly.
References
Bua K, G. Dosi, C. Lapavitsas, and M.E. Virgillito, (2026), “Corporate financialization in the age of asset managers: Emerging traits of financial imperialism”
Lapavitsas C., 2026, “A Topography of the New Dollar Imperialism”, New Left Review, Jan-Feb, 157, pp. 107-135.
Lapavitsas C. and R. Hart, 2026, “Trump’s Chaotic Imperialism: Economic Warfare, Geopolitical Truculence, and Domestic Authoritarianism”, Socialist Register, forthcoming.
Lapavitsas C. and EReNSEP, 2023, The State of Capitalism: Economy, Society, and Hegemony, London: Verso.
[1] See particularly Lapavitsas (2026), Lapavitsas and Hart (2026), Lapavitsas and EReNSEP (2023), and Bua, Lapavitsas,