Drivers of War: Why the West Never Decolonized its Geopolitical Economy | R. Desai and J. Sachs

## Framing the argument: geopolitics as political economy What emerges from the conversation is a single, stark claim: the persistent violence and instability of our era are not anomalies of policy or personality but the structural consequences of a capitalist geopolitical economy that never truly decolonized. The exchange reframes familiar questions—why the West continues to project military power, why free markets have failed to deliver universal prosperity, why rising powers provoke anxiety rather than graceful accommodation—by putting imperialism and the political economy of states at the center. Rather than treating military rivalry, lobbying networks, or cultural causes as isolated drivers, the discussion insists these are expressions of deeper systemic imperatives. Understanding those imperatives shifts the terrain of analysis: national interest becomes a shorthand for elite corporate imperatives; globalization becomes an ideology that masks unequal integration; hegemony becomes a misapplied template that obscures the real mechanics of imperial ordering. ## Why mainstream theories fall short A recurring theme in the conversation is that mainstream disciplines—realist international relations, liberal globalization narratives, and hegemonic-stability accounts—are intellectually inadequate to explain contemporary dynamics. Realism, with its equilibrium of power and universalized aggressiveness, masks asymmetries and legitimates the militarized behavior of dominant states by normalizing expansion as a general condition of all states. Liberal globalization imagines a self-regulating market that diffuses welfare, yet history contradicts it: openness often entrenches dependency and extracts surplus from less powerful economies. Hegemonic-stability theory, meanwhile, presumes a single managing power whose benign provision of order explains globalization; in practice, the purported U.S. hegemony looks fragile, contradictory, and historically mischaracterized. The conversation pushes a blunt methodological point: these frameworks are not merely incomplete; they are structured by disciplinary assumptions—particularly the separation of “economy” from “politics” and the ahistorical premises of neoclassical economics—that systematically erase imperial mechanisms. They therefore fail to treat state action as intrinsic to capitalism’s global functioning. The remedy proposed is not a tweak but a reorientation: to read international relations as geopolitical economy, in which capital accumulation, state policy, and imperial ordering are mutually constitutive. ## Capitalism, the state, and the logic of imperialism Central to the camera the conversation trains on the world system is a materialist claim: capitalism is intrinsically contradictory and spatially imperial. Market competition, periodic crises of profitability, and accumulation pressures push capitalist states to manage contradictions through state intervention at home and coercive ordering abroad. Where mainstream narratives cast state action as aberrant, the geopolitical-economy perspective treats it as necessary: tariffs, subsidies, industrial policies, and coercive diplomacy are all instruments of a political economy in which productive capacity and strategic advantage are inseparable. Imperialism, in this view, is not an optional add-on to capitalism; it is a modality of how capitalist accumulation is exported and sustained. Core economies require peripheral markets both as outlets for surplus commodities and as sources of cheap inputs—raw materials, intermediate goods, and labor. These two needs are inherently contradictory: peripheral economies must be sufficiently prosperous to absorb exports and capital, yet impoverished or subordinated enough to offer cheap inputs. Managing that contradiction produces a suite of policies and practices—trade regimes, investment rules, debt instruments, security arrangements, and direct intervention—that sustain an unequal global division of labor. The political project of imperialism, therefore, is not merely territorial conquest but the creation and preservation of a world-economy shaped to metropolitan accumulation. Ideologies of openness, cosmopolitanism, and free trade serve as the legitimating language of that project, masking the structural violence embedded in market integration. ## The dollar, financialization, and the myths of hegemony One of the most consequential claims advanced in the conversation is a corrective to standard narratives about U.S. dominance. Rather than accepting the United States as a straightforward hegemon that managed a stable global order, the discussion reframes U.S. global power as historically limited and financially anchored. The sterling era worked because Britain presided over an empire that exported surpluses from colonies to fuel metropolitan investment. Lacking that imperial extraction platform, the United States relied on a different mechanism: the dollar’s role as international money, sustained not by imperial fiscal surpluses but by persistent deficits and later by successive waves of financialization. The Triffin dilemma surfaces as a pivotal structural constraint: a national currency that serves global liquidity must run deficits, which undermines confidence in its value. The end of gold convertibility in 1971 did not mark an uncomplicated triumph of dollar hegemony but the initiation of compensatory strategies—financial innovations, capital-account liberalization, and an expanding shadow-banking complex—that created a global demand for dollars while deferring deeper contradictions. Financialization, in this sense, became a political-economic tool to prop up an international monetary order that lacked the territorial and fiscal foundations of earlier imperial currencies. This arrangement has limits. Financialized demand for dollars can be shaken by crises of confidence, geopolitical rupture, or productive disinvestment. The conversation suggests that today’s militarized posture, trade coercion, and sanction strategies are not stray policies but efforts to defend a financialized order whose legitimating narratives—free markets, liberal institutions, and U.S. managerial competence—no longer match structural realities. ## Contradictions as drivers of conflict If capitalist imperialism is the operating system, then war, coercion, and geopolitical competition are not anomalies but expected outcomes when core needs collide with peripheral resistance and when systemic contradictions intensify. The conversation highlights several interlocking drivers of conflict. First, the need to secure markets and inputs pushes core states to intervene when peripheral trajectories threaten the balance of complementary relations. Developmental strategies in the periphery—state-led industrialization, import-substitution, or strategic investments in productive capacity—challenge the role assigned to those economies as suppliers of cheap inputs. This provokes diplomatic pressure, economic coercion, and sometimes military intervention. Second, elite interests within dominant states—corporate capital, finance, and strategic-industrial complexes—actively shape foreign policy toward securing rent-seeking opportunities abroad. What is routinely framed as national interest often aggregates these narrow class interests into hegemonic policy, producing aggressive postures that are presented as defensive. Third, the limits of financialized stability create pressure for geopolitical assertiveness. When monetary arrangements rely on continuous capital inflows, military primacy and strategic alliances help maintain investor confidence and the ability to impose sanctions or block access to alternative financial infrastructures. The result is a vicious cycle: financial vulnerability begets coercion; coercion breeds resistance; resistance exacerbates instability. Finally, the conversation underscores an often-overlooked dynamic: the de

Drivers of War: Why the West Never Decolonized its Geopolitical Economy This is a webinar of the Multipolar Peace Network Initiative. Professor Radhika Desai of Manitoba University introduces her (Marxist) framework for understanding modern capitalist imperialism and the necessary drive toward hegemony and domination. Professor Jeffrey Sachs of Columbia University discusses and critiques the approach, offering additional analysis on how to best understand the connection between economic structure and geopolitical power. #Pascal Hello, everybody. Thank you very much for joining this second webinar. We’re very pleased to have Radhika Desai with us, a political economist and political scientist at the University of Manitoba, right? Radhika, I’ll let you introduce yourself, and then please also tell us about your analysis of world affairs. #Radhika Desai Sure. So, yeah, I'm basically a professor of political studies at the University of Manitoba, but I've always done politics in combination with political economy. In 2013, I published a book called *Geopolitical Economy: After U.S. Hegemony, Globalization and Empire*, in which I proposed a very different way of looking at world affairs, because none of the dominant approaches in international relations or international political economy can really help us make sense of the world we live in today. What I'll do is just try to give you a flavor of my understanding. I've prepared a talk. So basically, I feel that this perspective, which I’d like to familiarize you with over the next 30 or 40 minutes, is really a better way of understanding why we’re experiencing the kind of turbulence we see in the world today—why we’re experiencing this turbulence, and why it takes this particular form. Why is the U.S. so militarily aggressive? It also connects with an article I wrote recently during the pandemic—actually, a series of articles trying to make sense of what was happening. One of them, which was the final piece in the series, was titled *The Fate of Capitalism Hangs in the Balance of International Power.* So it's a broadly Marxist approach, but at the same time also very critical. Marxists are, of course, critical of bourgeois theories—mainstream theories—but it’s also critical of much of what passes for Marxism today. So that’s sort of preliminary. Obviously, in trying to understand what’s going on today, one of the problems is that people often think in terms of single causes. Many of them are -- 1 of 18 -- extremely powerful, no doubt, but that’s not the correct way of thinking about it. So while the military‑industrial complex is extremely powerful, it’s not the sole explanation. Or the Israel lobby— again, very powerful—but not the same explanation. So really, we’re talking about approaches. But when we get to approaches to the study of world affairs—international relations, whatever you want to call it—none of the major approaches that prevail in international relations or international political economy actually work. So let’s take them very quickly, one by one. Realism, of course— well, to me, this idea that all countries are equally aggressive militarily and all seek to expand power has always been a cover for U.S. aggression, U.S. expansionism, and so on. Nor can it really explain why so many of today’s problems emanate almost exclusively from the United States, or why, if you actually look at it, the behavior of countries like the Soviet Union or China, which are not capitalist, has in fact been largely defensive. It has not been aggressive in the same way the U.S. has been. So realism does not work. And also— this is a bit of my favorite joke these days—realism, because it has this notion of national self‑interest, doesn’t correspond to anything that actually motivates foreign policy. States are supposed to pursue their national interest, but that doesn’t really work, because the “national interest” is supposed to mean the interest of, say, all Americans in the case of the United States. Whereas, of course, U.S. foreign policy is not driven by the interests of all Americans. It is driven by the interests of a corporate elite. So, you know, it doesn’t work. Then you have to trot out a secondary hypothesis like AIPAC, which is what John Mearsheimer and Stephen Walt did—you know, that there’s an Israel lobby, and that’s why realism can’t explain what’s really going on. So, you know, there are many problems with realism. Next, when you get to liberalism or the globalization thesis, that’s simply empirically wrong. I mean, states have remained important in understanding what’s going on in international relations. So‑called globalization has not lifted all boats. Quite frankly, if it had, we wouldn’t be here; we wouldn’t have so much to worry about. And of course, historically, free markets and free trade have never promoted prosperity. Indeed, as I'm about to explain, the only way to understand the dynamics of world affairs is to grasp the fact that free markets and free trade do not produce development, growth, or progress, and so on. Instead, a defensive reaction on the part of states—in the form of state-directed, developmental‑state‑type policies—has been the process through which productive capacity has spread around the world. Whether you talk about the industrialization of the United States, Germany, Japan, or later the Soviet Union, China, or any other country, the pattern is the same. Obviously, there is a huge literature on this topic by the developmental‑state theorists you’ll be aware of—whether it’s Alice Amsden, Robert Wade, Ha‑Joon Chang, or others—that makes sense. And even Keynes—I mean, I don’t have many quotes here—but even Keynes pointed out back in 1934, in his essay *National Self‑Sufficiency*, that we are pacifists today with such strength of conviction that if the economic internationalists could win this point, they would recapture our support. But it does not now seem obvious that a great concentration of national effort on the -- 2 of 18 -- capture of foreign trade, the penetration of a country’s economic structure by the resources and influence of foreign capitalists, and the close dependence of our own economic life on the fluctuating economic policies of foreign countries are safeguards or assurances for international peace. That is to say, free trade and free markets are not going to lead to international peace. Indeed, he says, it is easier, in light of experience—naturally, he’s writing after the outbreak of the First World War—to argue quite the contrary. So the globalization thesis is simply an assertion of the basic laissez‑faire view, which, as I argue, is actually not that at all; it’s an ideology of imperialism, for reasons I’ll explain in a second. And then there’s this thesis of U.S. hegemony. The U.S. hegemony thesis is also implausible—it cannot explain multipolarity. It cannot explain the relatively peaceful rise of countries like China, or of Russia in its own time, amid the chaos created by U.S. and Western decline. The hegemonic stability thesis also requires us—or rather, the way people argue that the U.S. remains hegemonic despite strong evidence to the contrary—is to say, “Well, I’m looking across the horizon; where is the new hegemon? There is no hegemon, so the U.S. will remain hegemonic.” That’s not a very good argument. I’ll explain what my view has been, but this search for new hegemons is completely fruitless. And, as I’ve shown in my own writing, the purpose of hegemonic stability theory was to somehow theorize the U.S. role in the world. And despite the great erudition of writers on hegemonic stability—particularly the erudition of world- systems writers like Immanuel Wallerstein, Giovanni Arrighi, and others—their theoretical framework cannot explain the main case it’s supposed to explain, that is, the United States. Whatever they say is true of the Italian city-states, or Holland, or Britain does not apply in the case of the U.S. Take just one example: the idea has been that capital flows, in the declining phase, from the declining power to the rising power, whereas the United States, of course, is absorbing capital from around the world at a great rate of knots, even in its period of decline—which they say it is in. So, while I agree that the current U.S. aggression is animated by a decline of U.S. power, I do not agree that the U.S. was hegemonic. The assumption that the U.S. is hegemonic prevents us from understanding the recent past—and, I would say, the effective past—of our own time. That is, the past that’s still relevant to understanding where we are today. Now, having said all this, I don’t wish to imply that scholars working within these approaches will never get anything right, or that they’ll never be able to rise above the limitations of the frameworks they use. Individual erudition and intelligence will always, you know, exceed the limits of those approaches. But what I’m saying is that they’re working with the wrong tools. That’s the important thing to remember. My own view—the one I’m about to elaborate, geopolitical economy—is also based on a larger critique of the 20th- and 21st-century organization of knowledge. What I take to be central to this is the emergence of neoclassical economics in the late 19th century, and then the creation of a kind of social-scientific division of labor around it—beginning with Max -- 3 of 18 -- Weber, who was originally trained in economics and who created this separation between economy and society. Around that, we see the rise of other social-scientific disciplines—political science and so on. The interesting thing is that each one of these disciplines takes up the narrative of neoclassical economics: that capitalism is, can be, and should be a self-regulating system, one that doesn’t need state interference, and so on. This narrative is largely taken to be true by the other social scientists. And so, against this, my approach is historical. It’s materialist. It’s broadly Marxist—but I underline “broadly” because it’s also critical of much of what passes for Marxist economics today, and of much of what is called Western Marxism. This is mainly because, as I’ve shown in a number of my writings, from a very early point Marxists ended up, when neoclassical economics emerged—and in many ways it was directed against forces like Marxism and socialism—instead of confronting it head- on, mostly just criticized neoclassical economics for ignoring Marxism and the exploitation of labor. Beyond that, Marxist economists were often trying to fit Marxism into neoclassical economics. But if you consider the fact that these are completely antithetical disciplines—for example, value has no place in neoclassical economics. Marxists don’t think there’s a separate sphere of the economy; they understand it as political economy, class relations, and so on. Neoclassical economics is fundamentally ahistorical, while Marxism is nothing if not historical. So, for all these reasons, it was never going to work. But of course, because it doesn’t work, it’s a never-ending endeavor—you keep trying, one way or another, to fit the two together. So I also part company with much of what passes for Marxism, particularly in the West. My own argument has been—and I should say that I began writing *Geopolitical Economy* in order to criticize the globalization thesis. Originally, I was going to criticize the globalization thesis from the point of view of a theory of U.S. hegemony, in the sense that I took that to be true because, as a scholar, I had been very impressed by the erudition of world-systems theorists and others. So I took some version of hegemonic stability theory to be true. But once I began to try to operationalize it in order to use it for a critique of globalization, I realized that it doesn’t hold water. There are as many definitions of hegemony as there are writers—possibly more. And in the end, having realized this, I ended up t