By Ajith Rajapaksa –

The Decline of the American Empire and the End of Capitalism

A significant intellectual and political debate is currently unfolding about the inevitable decline of the American Empire and the end of capitalism. Prominent intellectuals such as Richard D. Wolff, Michael Hudson, Jeffrey Sachs, Yanis Varoufakis, John Mearsheimer, and Noam Chomsky argue, with strong reasoning, that the American Empire is approaching its end.

A Historical Parallel: The Fall of the British Empire

Until the end of World War II, Britain was known as the empire on which the sun never set. However, with the war’s conclusion, British dominance came to an end. The primary reason for this was the extensive destruction of the country’s industries and infrastructure, leading to an economic collapse. Additionally, Britain was heavily indebted to the United States. Meanwhile, America had emerged from the war as a military and economic superpower. Britain, struggling with economic challenges, could no longer maintain or protect its colonies, especially as independence movements in those regions intensified.

Thus, Britain was compelled to align with the United States, accepting its financial and military dominance. This led to the establishment of plans like the Marshall Plan, which aimed to rebuild war-torn Europe, with significant financial aid from the U.S. Agreements such as the Bretton Woods system were also formed, stabilizing exchange rates and establishing the U.S. dollar as the global anchor currency for transactions. As a result, institutions like the International Monetary Fund (IMF) and the World Bank were created, paving the way for the global expansion of American dominance.

Today’s Reality vs. the Past

Today, the American Empire, which has maintained global dominance for decades, is weakening significantly. Most manufacturing processes have shifted to China and other Asian countries. Capital has moved to regions with cheaper labour markets. With the decline in domestic production, the U.S. is now trapped in an unsustainable debt crisis. Its economic competitiveness has severely weakened, and capitalism itself is in deep crisis.

To maintain its global influence, the U.S. has engaged in multiple wars worldwide, investing trillions of dollars in military conflicts. However, in contrast, China: operating under state capitalism, has become the world’s rising economic and military power. China has amassed enormous dollar reserves and reinvested a large portion of this capital into the American market. The decline of the U.S. would, therefore, directly impact China, as its investments in America would lose value, and demand for Chinese goods would drop significantly.

Recognizing this risk, China has started investing its excess dollar reserves in other countries while actively seeking new global markets for its products. Meanwhile, the U.S. government has relied on printing more dollars to temporarily delay the crisis, but this strategy has its limits. Excessive money printing leads to inflation, rising interest rates, and economic instability, ultimately eroding global confidence in the U.S. dollar.

Artificial Intelligence (AI) and the U.S. Strategy

To overcome this economic crisis, the U.S. has invested billions of dollars into Artificial Intelligence (AI), aiming to establish dominance in the tech industry and stimulate economic growth. Leading American companies such as Microsoft, Google, Amazon, Meta (Facebook), Apple, and Nvidia are at the forefront of this AI revolution.

However, China recently disrupted this U.S. AI strategy by releasing DeepSeek, a free AI model on the internet. This unexpected move sent shockwaves through the AI industry, significantly affecting the business models of major American tech firms.

On January 20, when DeepSeek was released, the U.S. stock market suffered a major decline, as investor confidence in AI-driven businesses wavered. This was particularly damaging to hardware companies producing AI-related technology, such as Nvidia, which manufactures advanced AI chips. Investors rapidly pulled out, leading to a sharp drop in Nvidia’s stock value.

Adding to the tension, the U.S. had previously imposed a complete ban on selling Nvidia’s AI chips to China. However, the chips still made their way into China, raising concerns in Washington about how Beijing managed to bypass these restrictions.

The Shift in Global Power

Similar to how the British Empire declined after World War II, the American Empire is now in crisis. The economic power shift is moving toward China and other Asian nations. Furthermore, organizations like BRICS: formed by countries from Asia, Latin America, and Africa are strengthening their cooperation, signalling that the next major global economic transformation will be led by these regions.

As a result, many intellectuals argue that the U.S. must acknowledge the growing influence of China and BRICS and adapt to this new geopolitical reality. Instead of clinging to its declining dominance, the U.S. should embrace cooperation with emerging global powers.

However, rather than accepting this shift, the U.S. continues to impose economic sanctions, tariffs, and new legislative restrictions, attempting to maintain its influence through outdated strategies. The U.S. is also undermining international agreements and institutions, disregarding the cooperative frameworks it once championed.

If the U.S. persists with these aggressive policies, there is a serious risk of escalation into a global conflict, potentially leading to nuclear war. Given America’s military power, unlike Britain in the past, it is unlikely that the U.S. will peacefully relinquish its dominance. Whether the American people can recognize this reality and push for a different course remains a critical question.

The Role of Democracy and Global Cooperation

Ultimately, the future of the U.S. lies in the hands of its citizens, not its billionaires. However, after decades of political manipulation, fearmongering, cultural and ideological indoctrination, misinformation, and disinformation, it is uncertain whether the American public can make rational, bold decisions to change the course of their nation.

This raises another key question: Can progressive movements, including the Democratic Party, provide the necessary leadership for this transition?

Beyond America, the broader challenge for the global population is preserving the fundamental values that have emerged alongside capitalism over the past century; human rights, freedom, democracy, justice, and the rule of law, while also addressing urgent global issues like climate change and environmental protection.

Previously, the U.S. and Western Europe played a leadership role in these efforts. Now, the question is: Who will take up this leadership in the new world order?

While organizations like BRICS offer an alternative to U.S. dominance, doubts remain about whether they can uphold democratic and inclusive global leadership. Therefore, it is now more important than ever to build a multilateral, cooperative international framework that ensures a more democratic, fair, and sustainable future for all nations.

The End of Capitalism

The Role of AI and Automation in Capitalism’s Decline

According to Marxist theory, the internal contradictions of the capitalist system particularly its reliance on the labour of the working class are now being fundamentally challenged by artificial intelligence (AI) and the data-driven economy. As automation reduces the need for human labour in production and services, capitalism faces a crisis in its core mechanism: the extraction of surplus value from workers. Karl Marx argued that profit is derived from “unpaid labour,” meaning the surplus value workers generate beyond what they are compensated for. However, with automation replacing human labour, this profit-generating structure is under threat.

Moreover, AI and technologies like 3D printing are decentralizing production, enabling individuals to manufacture goods locally, often using renewable energy sources. This disrupts the monopolization of production and services traditionally maintained by large corporations. Additionally, capitalism’s long-standing contradiction “overproduction versus underconsumption” begins to dissolve as decentralized production allows for economic expansion without environmental destruction.

This transformation is already evident across industries. In education, vast online repositories of books, lectures, and discussions provide knowledge to anyone, reducing the necessity of traditional institutions. The internet has essentially become an open university. Similarly, the decline of print media, newspapers, and even physical storage formats like CDs and USB drives highlights the shift toward digital consumption. Various service industries, including banking, postal services, translation, and secretarial work, are also diminishing due to automation.

With the rise of AI, many white-collar professions including medical consultations, pharmacy services, library management, clerical work, and financial services are being automated. For example, travel agents have largely been replaced by sophisticated algorithms (e.g., Skyscanner, Google Flights) that offer better options at competitive prices. Additionally, consumers are increasingly becoming producers, as seen in the widespread adoption of solar energy, which allows individuals to generate and even sell electricity.

3D printing has further decentralized production, allowing individuals to manufacture a wide range of products, from footwear and eyewear to automotive parts and industrial tools. In a striking example, a firearm used in a high-profile shooting in the U.S. was recently revealed to be 3D-printed, making it impossible for authorities to trace its origin.

These technological advancements dramatically reduce marginal costs, promoting sustainable consumption through minimal resource use and renewable energy. A clear example is higher education, where online courses require minimal investment compared to traditional university infrastructure. A single online course can be accessed by millions at no additional cost, prompting universities to increasingly shift to digital platforms. Similarly, blue-collar jobs are disappearing in industries such as telecommunications and automobile manufacturing. Once, telephone exchanges employed thousands, today these systems are remotely operated and automated. The automobile industry, once labour-intensive, now relies heavily on robotic automation. With the emergence of self-driving technology, jobs in transportation are also at risk, as autonomous taxis, buses, and trains become more prevalent.

Recent AI models, such as ChatGPT and DeepSeek, have demonstrated the ability to solve complex problems within seconds. Many specialized AI models are currently in development, accelerating automation across various industries and further challenging the capitalist system’s reliance on human labour.

The Impact of Industrial Revolutions

Throughout history, industrial revolutions have reshaped economic systems and social structures. The First Industrial Revolution, marked by the invention of the steam engine and the telegraph in the late 18th century, led to the collapse of feudalism and slavery, giving rise to an urban working class. The Second Industrial Revolution, fuelled by electricity, petroleum, and mass production, accelerated urbanization, and the expansion of large-scale industries. However, harsh working conditions sparked frequent conflicts between workers and factory owners, leading to the rise of trade unions and labour strikes.

This period also saw the golden age of capitalism, characterized by mass production, large corporations, and extensive transportation networks, including railways and aviation. The Third Industrial Revolution, driven by the internet, computers, and mobile technology, revolutionized sectors such as education, healthcare, and communication. Key  indicators such as life expectancy, literacy rates, and national income improved significantly. At the same time, social movements advocating for human rights, democracy, and labour rights gained momentum.

However, as capitalism expanded, so did global markets, leading to intense competition for raw materials, economic crises, and wars. The inevitable outcome of capitalism has been extreme wealth concentration. According to 2024 reports, the richest 10% of Americans own 70% of the nation’s wealth, with the top 1% controlling nearly $40 trillion. Meanwhile, 11.1% of Americans (approximately 36.8 million people) live in poverty, while the others struggling to survive on pay cheque to pay cheque. The global wealth disparity is even more severe: the richest 1% of the world’s population controls 50% of global wealth, while the top 10% owns 80%. In contrast, the poorest 44% own virtually nothing, with the most extreme inequalities observed in Africa and Latin America.

Beyond economic disparity, capitalism has also fuelled corporate greed, environmental destruction, and climate change-induced disasters. Scientists warn that efforts to reverse ecological damage may already be too late. The self-destructive cycle of capitalism is reaching a critical point, necessitating urgent change before it becomes irreversible.

Is the Fourth Industrial Revolution the end of Capitalism?

Will capitalism come to an end, or will it adapt and persist in a different form? This will largely depend on who controls the new technologies dominating the future, including AI, data ownership, and automation. If AI technology remains concentrated in the hands of large corporations, we may not witness the end of capitalism. Instead, we might enter an even darker, dystopian phase where power and wealth become further centralized.

Several prominent figures in the field such as Yann LeCun (Chief AI Scientist at Meta), Elon Musk (CEO of Tesla and SpaceX), Demis Hassabis (co-founder of DeepMind), Ben Goertzel (founder of OpenCog), Richard Stallman (founder of the Free Software Foundation), and Tristan Harris (co-founder of the Centre for Humane Technology) advocate for open-source AI, the democratization of technology, ensuring transparency, and reducing monopolistic control. However, the recent behaviour and interventions of billionaires like Elon Musk raise significant concerns, particularly regarding his political influence in the U.S. and Europe.

Musk has financially supported Donald Trump’s far-right agenda and funnelled money into Trump’s campaign. His backing of policies against Latin America, refugees, and various marginalized communities is alarming. Recently, when the U.S. federal government introduced a bipartisan bill to allocate funds for social welfare, disaster management, and agriculture, Musk fiercely opposed it, calling it a massive crime. He even threatened lawmakers, warning that he would use his financial power to defeat those who supported the bill in the next election, leveraging his technological tools like X (formerly Twitter) to manipulate public perception.

Beyond the U.S., Musk has also extended support to far-right political parties in Europe, particularly those with strong anti-immigration stances. His gesture resembling a Nazi salute at a Trump rally deeply unsettled many. This has turned him into a highly controversial figure. During Trump’s inauguration, Musk and other major tech and business magnates were present, a rare occurrence in history, which could be seen as an ominous sign of corporate influence over politics.

If billionaires like Musk continue to control both the economy and politics without democratic accountability, we may not witness the downfall of capitalism but rather a scenario where society is ruled entirely by a handful of ultra-wealthy elites. This is why the question of AI, data ownership, and automation related technology rights is becoming increasingly critical. Those who desire a fairer society must take the lead in challenging this monopolization.

Even though AI technology is still in its early stages, it is expected to evolve into Artificial General Intelligence (AGI) and, eventually, Artificial Superintelligence (ASI), surpassing human intelligence in every domain. Alongside AI, advancements in biotechnology, the Internet of Things (IoT), robotics, data storage, 3D printing, and more efficient communication and transportation systems are driving what is known as the Fourth Industrial Revolution.

American economic and social theorist Jeremy Rifkin offers a more optimistic perspective, suggesting that these technological shifts could push capitalism into crisis and pave the way for a more environmentally sustainable and equitable society. Rifkin, a futurist and advisor to various governments and international organizations, is one of the leading intellectuals discussing the impact of AI and data on capitalism. He strongly advocates for universal basic income (UBI) and the democratization of AI and algorithms, arguing that technology should be open and accessible to all.

Rifkin believes that labour unions, feminist organizations, farmers’ movements, environmentalists, animal rights activists, and fair-trade advocates must mobilize to reclaim what has been taken from the masses. He argues that their goals and activism should focus on building a new economic and social framework. For example, instead of resisting job automation, trade unions should fight for universal basic income and a shorter workweek. He envisions replacing corporate-controlled industrial agriculture with local, sustainable, and regenerative farming. Farmers’ organizations should push for fair land ownership and food sovereignty, while integrating AI-driven precision agriculture to reduce waste and improve efficiency.

In his view, local cooperatives, digital commons, and open-source AI should replace centralized corporate and state control. Social movements must evolve beyond traditional protest methods to engage in more participatory, grassroots decision-making. AI and blockchain technologies can eliminate middlemen and enable direct peer-to-peer economic transactions, challenging corporate-dominated trade systems.

Rifkin also envisions AI and biotechnology revolutionizing the food industry, making lab-grown meat and plant-based alternatives more viable, thereby reducing the need for industrial animal farming. Animal rights activists should leverage AI to increase transparency in supply chains, allowing consumers to make ethical choices.

He argues that cooperative ownership should replace individualistic property rights, transparency should take precedence over privacy, and community-driven initiatives should replace bureaucratic state socialism and ruthless capitalism. Rifkin presents his ideas as a third way, taking the best elements from both capitalism and socialism while discarding their worst aspects.

He believes the younger generation will play a crucial role in shaping this future society one he calls the Post-Carbon Society driven by ecological awareness and sustainability. However, Rifkin also warns that time is running out; if we do not transition quickly, the biosphere may suffer irreversible damage.