A historical analysis of the relationship between Europe and the US
Richard D. Wolff is an American Marxian economist known for his work on economic methodology and class analysis. He is a professor emeritus of economics at the University of Massachusetts Amherst and a visiting professor in the graduate program in international affairs at The New School This photo is in the public domain By the end of World War 2 in Europe, that continent’s extremely violent self-destruction had killed tens of millions and wrecked many economies. Its politically dominant employer classes had driven their national governments to a clash that had produced those results. By 1945 the war’s outcome had proved far worse than many in those classes had imagined or wanted before the war. Europeans had struggled after 1917/1918 to overcome their self-destruction in World War 1. In the short span between the end of the First and the beginning of the Second World Wars, Europe destabilized itself via its reparations program, Germany’s staggering inflation, and then global capitalism’s worst ever collapse in 1929. The consequences of those destabilizations ramified across Europe and undermined the League of Nations effort to prevent a second world war.
In 1945, for most Europeans, the greatest urgency attached to recovery from the war. For Europe’s employing classes, more urgent still were defenses against certain immediate threats. Russia’s army had been crucial to defeating the Nazis and to forging Russia’s post-war alliances with Eastern Europe. The mass of the USSR’s military forces, potentially supplemented by those of its new Eastern European allies, struck western Europe’s employer classes as existential threats. After 1945, western Europe’s employer classes smoothly and quickly refocused their hatred from a dead Hitler to the living Stalin and to their nations’ communist parties allied to Stalin.
Western Europe’s employer classes were threatened domestically by communist and socialist political parties whose militants had often led underground anti-fascist or anti-Nazi resistances. Thereby those militants often became broadly popular leaders. Across Europe national communist parties collaborated in various ways with one another (including the powerful Soviet party). Some post-war European heads of state such as France’s Charles de Gaulle included communist party leaders in their governments. In reaction to such developments, Europe’s employer classes quickly became obsessed with the great twin dangers of “communism at home and abroad.”
A parallel development had happened across the Atlantic in the US. There the Great Depression after 1929 had provoked a mass political shift leftward by the US public. Employees in unprecedented numbers had joined industrial unions allied in the Congress of Industrial Organizations (CIO). Tens of thousands joined two socialist parties and one communist party. Because the socialists and communists were often the militants in the CIO’s successful organizing drives across major industries, employers in the US were all the more alarmed by those successes in the 1930s and the 1940s. The CIO, socialist and communist parties also formed a far more powerful coalition within the Democratic Party than they had ever been before 1929.
The alliance between the Democratic Party under Franklin Roosevelt and the CIO-socialist-communist collaborations – the so-called “New Deal” coalition – terrified the employer class. The coalition’s key 1930s achievements included establishing the Social Security system, federal unemployment insurance, the nation’s first minimum wage, and a federal public jobs program that hired many millions of the then unemployed. What terrified the employer class even more was how the New Deal coalition paid for those achievements. It reformed the federal tax system in a sharply progressive direction. Because corporations and the rich were especially taxed, US wealth and income inequalities dropped sharply. Then in the 1940s, the same US government that took huge steps against economic inequality at home allied itself with the Communist Party leadership of the USSR (Stalin) to fight World War 2 against fascism.
By 1945, with the war over and Roosevelt dead, the US employer class had become, like its European counterpart, obsessed with the great twin dangers of “communism at home and abroad.” Parallel obsessions in western Europe and the US converged in a joint plan. Employers and their political supporters and dependents attacked Communist parties everywhere, depicting them as mere agents or dupes of a foreign power, namely the USSR. They demonized the USSR as the epitome of evil, a dark empire threatening democracy, freedom, Judeo-Christian values, religion per se, civil liberties, and so on. A Cold War was declared between the former allies, NATO emerged, and the Warsaw Pact followed as did arms races and geo-political confrontations. The US would lead NATO to “contain the Soviet threat.” The US organized alliances across other continents while locating hundreds of military bases across them. Beyond means of “containment,” the bases marked and enforced a new informal US global empire that replaced much of the old British, French, Dutch, Belgian, Japanese, and other expiring colonialisms.
“Anti-communism” ideologically unified the domestic and international strategies of the employer classes in Europe and the United States. Under that ideological banner, those employer classes mobilized their governments to collaborate with them to destroy national communist parties and the USSR. As global hegemon, the US went further. It demonized socialism and socialist parties by defining and treating them as nearly identical with their communist counterparts. It also used anti-communism as a major ideological weapon to replace formal European and Japanese colonialisms by the informal, US-dominated “rules based international order.”
The US-western Europe connection helped employer classes in both regions to repress or at least weaken their nations’ communist and socialist parties. The US moved very aggressively (as in the Taft-Hartley law of 1947) also to destroy labor unions at home and collaborated with anti-union forces across Europe. Where war-weakened Europe lost its colonies, a strong post-war US could and did rush in to integrate the ex-European colonies into a US empire. The new US empire had to be informal. It had to allow the ex-colonies formal political independence even as it subordinated them to US economic, military, and political dominance across most of Asia, Africa and Latin America. Europe sank into the role of the US’s very junior partner.
The US-western Europe connection brought the US valuable allies against the USSR. Given the military technology of the two world wars – reliance on huge armies fighting across immense terrains – Europe was a land buffer usefully located between the US and the USSR. It provided added protection to the Atlantic ocean’s water buffer. European colonialism had created a genuine world economy that the US could take over. Within that world economy’s particular hierarchy, Europeans were dominant nearly everywhere (except, of course, in the case of Japanese colonialism). Non-Europeans were integrated as subordinated people (economically, politically, culturally). As the Europeans’ formal empires gave way to the US informal empire, colonialist hierarchies persisted with the only real changes occurring at the top. There the civilian and military chiefs of the US (and their delegates) chose, elevated and enriched local elites to direct its informal empire’s development.
The Marshall Plan funded postwar Europe’s recovery in ways that also secured its subordinate role in the new US empire. Funds distributed by the US Central Intelligence Agency since 1947, by the US Endowment for Democracy since 1983, and by other public and private groups supplemented the Marshall money. The advisers who often came with the funds gave Europe’s anti-communist political parties, mass media, labor unions, academic and cultural organizations, many means to use against their domestic enemies. The post-1945 US-western Europe alliance mounted an immense, richly-funded, never ending campaign to shape and control world history. It worked well, overcoming numerous challenges, for 70 years until internal and external forces combined to end it. Now, as the US-western Europe connection dissolves, the contours of its totality and historical significance become clearer.
The relentless rise of China’s economy outgrew the economies of all parts of the US-western Europe alliance over recent decades. China thereby contributed crucially to that alliance’s dissolution. So too has China’s ability simultaneously to forge a new global economic coalition, the BRICS (initially Brazil, Russia, India, China, and South Africa). The BRICS’ establishment and growth (with new members and partners) responded to their felt needs for mutual support and less economic dependence on the US. The BRICS passed a milestone in 2020 (downplayed in Europe and the US) when their aggregate GDP surpassed that of the G7. The former has continued without interruption to outgrow the latter through the present.
The anti-colonialism that inspired the transitions from colonies to independent nations over the last century has survived that transition. It sometimes infuses rebellions against the hegemony of the US. At other times and places it coalesces with religious movements and populist social movements. In these and other ways, it too helps shape changing patterns of global trade and investment. Ex-colonies seek and engage alternatives to trade and investment with former colonial masters in London, Paris, Berlin, etc. They form new economic partnerships with China and increasingly with other BRICS. Increasing competition and lost economic opportunities challenge western Europe, Japan and the US. They also reduce the role of the US dollar as world currency.
The Trump regime represents both the extent of that decline and extreme efforts to stop or at least slow it. Hitting nearly the whole world with tariffs, suddenly and massively without warnings or negotiations, is a desperate act. Offering subsequently to lower initially high tariff rates in exchange for tribute (foreign nations’ commitments to spend and invest hundreds of billions of US dollars in the US) is a blunt, stark, and hostile act. That European Commission President Ursula von der Leyen accepted it is a craven act of Europe’s even more desperate submission. The war on Iran with Israel without consultation or preparation with its European and other allies, coupled with demands for massive, risky support for the US war effort, was also a desperate act. Its goal was to reverse the decline of the US empire; its result was the opposite. The decline accelerated.
The decline, still not admissible publicly in most US politicians’ discourses, nonetheless lurks everywhere in widespread feelings of lost national direction and/or impending social doom. Trump bitterly reproaches former allies like Mexico, Canada, South Korea, Japan, and, above all, western Europe. For example, he rewrites post-1945 history as a story of western Europeans, among others, cheating and abusing the US economy because weak US governments failed to resist and fight back. Trump presents his tariffs as the overdue fight back heroically ending the previous weak governments. Trump was so invested in such political theater situating him as “the strong leader,” that his sudden, rushed tariff program was intolerable even to a Supreme Court he otherwise controls.
Abducting Maduro from Venezuela, the 12-day war on Iran with Israel in June, 2025, and their longer one begun in March, 2026: these are also pieces of the same political theater. They are made-for-the-media distractions: not just from the hovering Epstein scandals or the deeply-troubled inequalities of the domestic US economy, but from the deeper threats of a declining empire. Thus a reaction formation type of neo-colonialism inspires many of Trump’s favorite distractions. So far from admitting decline, those distractions construct a US empire as strong and growing, taking over nations like Venezuela, Cuba, and Iran while planning the same for Panama, Canada, Greenland, Mexico and others. When charged with violating international law and the whole United Nations project, Trump proudly rebrands both actions as bold signs of US strength.
Now again, as in 1945, western Europe and the US find themselves at crossroads. The declining empires then were the Europeans’. Now in 2026 it is the decline of the US empire that has become both the US’s and Europe’s problem. In its desperate moves to slow or stop that decline, the US has turned on its subordinated European partners. That problem and that turning derive from the empire decline shaping this historical moment.
In Trump’s second presidency, he withdrew much of the US’s support for Ukraine in its war with Russia. This not only weakened the Ukrainian side in that war but also left a militarily underdeveloped Europe to rely even more on economic sanctions against Russia. Europe thus lost access to cheap Russian oil and gas. High energy prices resulted, drove up European export prices, and thus damaged its competitiveness. Meanwhile, China’s relentless growth miracle (fast-rising productivity and low inflation) continued its many years of outperforming both Germany’s Wirtschaftswunder and European competitiveness generally. China’s GDP growth far exceeded that of the entire West for the last few decades. Volkswagen’s crisis was so severe it seriously considered the US invitation to move its immense company to the US from Germany. Deindustrialization now deeply disturbs all of Europe’s economies.
The global economy looks increasingly like a great contest between China and the US with Europe increasingly out of the picture or merely a footnote to it. Trump’s massive tariffs on or demands for tribute from Europe combine both abandonments and assaults by the US on its former allies. NATO trembles and faces growing forces of dissolution. Trump demands European nations fund their own defenses in part because the declining US empire needs to enlarge its own military as an offset, Trump hopes, to that decline.
The Europeans are stuck in that metaphorical room whose walls are closing in on them. Their subordination is reflected in their passage from junior partners in US led Coalitions of the Willing to the 2026 Iran war that Spain and Italy have refused to join. Trump openly threatens to leave NATO. The employer classes of Europe are most worried about the combination of no more US-funded defense protection via NATO and the compensatory need to fund expanded European military spending. That will likely mean reducing European spending on its social welfare model of capitalism. Employer classes who do that risk triggering massive opposition from the left (labor unions, socialist, communist and anti-capitalist parties increasingly working together).
So far, Europe’s employer classes have tried to cope with this situation by a quasi-hysterical campaign to demonize Russia as a threat to invade and conquer its European neighbors. Europe’s current, mostly low-in-the-polls heads of state position themselves as great bulwarks against the Russian danger. This strategy aims to justify the increased spending on defense that in turn necessitates reduced government welfare spending. The latter is then rationalized as the whole society’s necessary sacrifice for safety from the Russian demon. The employer classes hope that this way of retaining their wealth, income and power will not be opposed by their working classes as the political issue of our times. The employer classes prefer that the great hyped Russian danger be the political issue.
While the Russian danger discourse might secure Europe’s employer classes a few more years of sitting atop Europe’s wealth and power distributions, it fails to address Europe’s long-term decline. That promises to continue and quite possibly accelerate because little is being done in Europe to directly oppose that continuance. Indeed, the disagreements inside Europe on whether to join the US/Israeli war on Iran coupled with fear of being singled out for retaliations by Trump heightened the competitive pandering among Europeans to curry favor with him. Such divisions have always weakened European unity. Rebuilding that unity is surely a necessary, albeit insufficient, component of any imaginable rescue of Europe from its deepening decline.
The long, uneven, and sometimes frustratingly slow historical shift from capitalist colonialism to today’s anti-imperialism undermined first Europe’s and now the US’s empires. A new crossroads beckons. One way leads toward a new Chinese global empire. Another leads toward a multi-national program of mutual accommodation, a kind of socialism with global characteristics.
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