Last Thursday was the deadline for countries to sign up as founding members of the China-backed Asia Infrastructure Investment Bank. More than 40 countries have now indicated they want to be part of the bank.

Major European powers including Britain, France and Germany, as well as Norway, Denmark and the Netherlands, are on board. Almost all countries in the South East Asian region, which count China as their major trading partner, have also signed up. India is also a signatory, together with Taiwan.

Read: European allies defy US, say they will join China-led bank

Britain, the US chief European ally announced its decision to join on March 12. It opened the floodgates for others to follow, including two key US allies in the Asia-Pacific — Australia and South Korea.

One of the chief objections of the Obama administration to the new bank was that it would undermine the International Monetary Fund and World Bank.

Also read: China denies seeking veto power in new bank

Together with the Bretton Woods Agreement of 1944, they constituted central pillars of the global economic order established after World War II by the United States, which played the central role in rebuilding world capitalism following the devastation of the 1920s and 1930s and the wars and revolutionary struggles it produced.

Of course, both of these institutions, together with the Marshall Plan for the restabilisation of war-torn Europe, operated to US’s economic and strategic benefits.

Also read: IMF welcomes Beijing-led Asian bank

But while America drew enormous gains from the post-war order, it was not narrowly conceived. The industrial and economic capacity of the United States was utilised to facilitate a new phase of global capitalist expansion.

What a contrast to the present situation! Now the American banks, investment houses and hedge funds scour the world for profitable

opportunities, engaged not in the production of new wealth, but in the appropriation of wealth produced elsewhere.

Also read: US caught off guard by success of new China-led bank

Washington seeks to forge exclusivist agreements aimed at protecting the monopoly position of US corporations.

America, Obama has stated, must write the global rules for trade and investment in the 21st century.

American democracy, once held up as a beacon for the rest of the world, is a withered caricature of its former self, no longer capable of concealing the dictatorship of the financial and corporate elites.

In the wake of the dissolution of the Soviet Union in 1991 and the removal from the scene of its global rival, the American ruling class was gripped by the idea that while its economic position had been severely weakened — the stock market crash of 1987 was a harbinger of things to come — American hegemony could nevertheless be maintained by military means.

Now the chickens are coming home to roost, as other capitalist powers, great and small, begin to conclude that hitching themselves to the American juggernaut is the surest road to failure. That is the historic significance of their decision to join the AIIB.

However there is another, and, in the final analysis, decisive, aspect to the economic decline of American power, marked so powerfully by the events of last Thursday.

For decades, the Americans felt that America’s ‘best days’ were always ahead. Reality is now coming home with ever-increasing force.Events are shattering the delusions of the past and will propel the American people to seek an alternative system.—Courtesy: WSWS

Published in Dawn, Economic & Business, April 6th, 2015

On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play