The Empire Consumes Itself

How Empire Cultivates and Consumes Allies

Introduction to The Anatomy of Empire

We are living through a global conflict of connected crises—in Ukraine, Gaza, the South China Sea, and within the fraying social contracts of Western nations themselves. These are not isolated eruptions, but the symptomatic convulsions of an empire whose internal logic demands perpetual expansion and absolute control. While the previous installments of The Anatomy of Empire have examined the engines of violence and the ghosts of ideological warfare, we now turn to the economic bedrock upon which this entire structure rests: a global system of managed prosperity and deliberate subordination for allies—its subordinates in the Empire of Extraction.

Every empire cultivates dependencies, not partners. For Rome, it was grain and garrisons; for Britain, it was trade and telegraphs. For the United States, it has been a more sophisticated architecture of aid, markets, and security—a system designed to appear as benevolent leadership while ensuring ultimate primacy. The unspoken bargain was clear: allies could prosper, but only within confines that never threatened American supremacy.

This series has traced how the military-industrial complex institutionalized war as an economic foundation and how the Cold War created a culture of critique to disarm class consciousness. Now, we expose the economic master-plan. The mask of mutuality has finally slipped. As US Treasury officials now bluntly admit, allied economies are treated as a “sovereign wealth fund” for America. This is not an accident of policy, but the culmination of a decades-long design.

The following history reveals the relentless rhythm of this system: nurture an ally to serve a geopolitical need, tolerate its growth until it approaches rivalry, and then systematically dismantle its competitive threat. From the Plaza Accords that broke Japan to the financial shock therapy of 1997 that humbled the Asian Tigers, and now to the coercive tariffs and energy bondage of 2025 forcing Europe into submission, the pattern is undeniable. This is the story of an empire that builds up only to tear down, creating vassals in the name of partnership and extracting their wealth as its own power begins to wane.

The Empire’s Design

“Allied economies must remain subordinate—their utility expires when they rival core American interests.”
—Zbigniew Brzezinski, Nixon-era documents

Every empire cultivates dependencies, not equals. Rome garrisoned its provinces, Britain dominated through preferential trade, and the United States built its hegemony on a subtler foundation: aid, markets, and security guarantees. What appeared as generosity was in fact design. Allies were rebuilt, armed, and industrialized—yet always within limits that ensured American primacy.

That design is now laid bare. US Treasury Secretary Scott Bessent, commenting on Donald Trump’s tariff regime, offered a blunt assessment: “Other countries, in essence, are providing us with a sovereign wealth fund.” The mask of benevolence has slipped; what remains is transactional empire.

Treasury Secretary Scott Bessent on allies supplying America’s sovereign wealth fund.

The Cold War Bargain

In the aftermath of 1945, Washington confronted a strategic imperative: rebuild Europe and Japan not out of altruism, but as bulwarks against communism.

In Europe, Marshall Aid rebuilt factories, but came tied to dollar supremacy and market access for American goods. NATO’s security umbrella freed Western Europe to divert resources into welfare states and industrial subsidies. Social democracy was tolerated, even encouraged, because prosperity immunized against Soviet appeal.

Similarly, in Japan Washington allowed what it condemned elsewhere. The Ministry of International Trade and Industry erected tariffs, nurtured keiretsu conglomerates, and guided cheap loans toward strategic sectors. Export-led growth turned Tokyo into a capitalist showcase against Mao’s China.

Likewise, the Asian Tigers—South Korea, Taiwan, Hong Kong, and Singapore later joined by Thailand, Malaysia, and Indonesia—received access to US markets and protectionism was tolerated. Their state-led, export-oriented models were permitted to flourish because they advertised the virtues of capitalism against communist insurgency.

The implicit bargain was clear: Washington would tolerate mercantilist policies, subsidies, and industrial planning, so long as they served the geopolitical goal of communist containment.

When Success Breeds Rivalry

The system began to fray as allies grew too strong. Japan’s GDP surpassed the Soviet Union’s by 1980, its firms dominated semiconductors, automobiles, and consumer electronics. Alarm bells rang in Washington.

The 1985 Plaza Accords forced a massive Yen revaluation, crippling Japanese exporters. Cheap credit policies unleashed by the Bank of Japan to counter the blow inflated a spectacular real estate and stock bubble, which later collapsed into decades of stagnation. Trade “agreements” imposed quotas, price floors, and structural reforms that dismantled Japan’s supply chains. GDP growth slowed from 6% to 1%. Japan’s challenge was neutralized.

The Asian Tigers were next. In the 1997 financial crisis, US hedge funds shorted their currencies; IMF “rescue packages” imposed austerity, forced privatizations, and compelled governments to dismantle protective industrial policies. Capital flight to Wall Street funded America’s dot-com boom even as Asian economies sank. A generation of prosperity was sacrificed on the altar of dollar hegemony.

The pattern was clear: allies could rise—but not rival. Once they reached the frontier of American strength, they were cut down.

Europe’s New Subordination

The pattern has reemerged, starkly, in 2025. Trump’s “trade rebalancing agreements” with the EU and Japan formalize economic subordination with a contractual precision that recalls colonial tribute.

For Europe, the July 2025 deal was capitulation disguised as compromise. Baseline tariffs of 15% were slapped on most EU exports, with steel and aluminium stuck at punitive 50% rates. German automakers, French aerospace firms, and Italian machinery exporters saw profit margins vanish overnight.

The industrial logic is transparent. To avoid ruin, Europe’s crown jewels—BMW, Audi, Mercedes—are relocating advanced battery and EV production to US soil, drawn by Biden-era subsidies under the Inflation Reduction Act and bludgeoned by Trump-era tariffs. Production, jobs, and technology flow westward; what remains in Europe are hollowed-out assembly lines with high-end components imported.

Energy adds a second chain of dependence. The EU is compelled to purchase $750bn of American LNG—nearly twice the cost of pre-sanctions Russian pipeline gas. Infrastructure must be rebuilt at Europe’s own expense, as US LNG requires different regasification terminals. At the same time, Washington carved exemptions from EU carbon tariffs for its own exports, turning climate policy into a weapon of asymmetric advantage.

Military dependency forms the third chain. A mandated $600bn in US arms imports, sold as “burden-sharing,” entrenches reliance on American hardware. Europe may fly its own flag, but it cannot field a military without Washington’s supply chain.

Japan’s Tribute

Japan’s 2025 trade deal mirrors Europe’s fate. Tariffs of 15%—quadruple pre-deal levels—target autos and electronics, while steel faces 50% barriers. Even agriculture is is on the chopping block: decades of protection for Japanese rice farmers have been swept aside, opening the market to cheap, subsidized American GM rice.

More telling is the $550bn sovereign investment fund Tokyo was compelled to establish—managed overwhelmingly by US financial institutions, with a profit split heavily favouring Wall Street. What should be domestic capital for revitalizing Japan’s economy now finances American industry.

The echoes of the 1980s are unmistakable: Japan rises, Washington clips its wings. The difference today is that the leash is financial, contractual, and near total.

The 2008 Crisis: The Accidental Extraction

Long before the deliberate coercion of the IRA and Trumpian tariffs, the 2008 Global Financial Crisis orchestrated an even more spectacular transfer of global wealth to the United States—albeit largely by accident, revealing the structural supremacy of the American financial system. While the crisis was “Made in America,” born of its subprime mortgage bubble, its resolution forcefully demonstrated that when the U.S. financial core catches a cold, the world not only gets pneumonia but also pays for America’s medical bills.

The mechanism was twofold: a flight to safety and the Fed’s dollar supremacy. As the global system seized up, panicked capital from European banks, Asian sovereign funds, and emerging markets worldwide fled into the perceived safety of U.S. Treasury bonds and the dollar. This massive capital inflow artificially depressed U.S. borrowing costs at the very moment its government was launching massive bailouts, effectively allowing America to finance its recovery at a discount subsidized by foreign capital.

Simultaneously, European banks, far more leveraged and exposed to toxic U.S. assets, were crippled, requiring state bailouts that plunged the continent into a sovereign debt crisis and a lost decade of austerity. The U.S. emerged with recapitalized banks and a booming stock market; Europe was left with shattered public finances and grinding deflation. The crisis proved to be the ultimate stress test of financial hegemony: even when the U.S. was the epicenter of the disaster, the global architecture it built ensured that the bill was ultimately footed abroad.

Carrot and Stick: The New Imperial Toolkit

At first glance, Trump’s tariff Liberation Day and Biden’s Inflation Reduction Act look like ideological opposites—nationalist protectionism versus green-industrial subsidies. Yet they form a seamless whole.

The IRA (2022) offered: $369bn in subsidies luring foreign firms to relocate production to US soil. BMW shifted EV assembly to South Carolina to qualify.

Trump’s 2025 tariffs impose punitive costs that target those who resist relocation. Mercedes faces ruinous tariffs if it continues producing batteries in Germany.

Together they form a two-stage system: lure capital with subsidies, then trap it with tariffs. Whether carrot or stick, the outcome is identical: technology, capital, and sovereignty flow toward the United States.

Empire Without Occupation

What distinguishes this order is its subtlety. The United States does not need to station garrisons in Frankfurt or Yokohama - although it effectively does. The tools are financial, contractual, and regulatory.

Punitive tariff sticks and subsidy carrots shift production across borders; overpriced LNG and infrastructure lock-ins channel rents to US fossil fuel firms; and arms imports ensure allies’ defence sectors remain subsidiaries of Lockheed and Raytheon.

This model mirrors colonial mercantilism—only dressed in the language of “free trade” and “rebalancing.”

Wall Street’s Take?

What Washington frames as “economic patriotism” is, in practice, a financial enclosure movement Behind the industrial reshoring lies a deeper engine: financial extraction. The sovereign investment funds extracted from Japan and Europe are managed through American institutions. Tariff penalties are paid in dollars. Subsidy schemes are structured as tax credits and loan guarantees, with Wall Street intermediating every stage.

The result is a cycle of dollar dominance. Capital flees allies under pressure, inflates American asset markets, and funds federal deficits. Allies finance America’s reindustrialization not through goodwill, but through coercion.

Historical Parallels

The echoes of past episodes are hard to ignore.

• Japan, 1980s: Allowed to rise under protection, then bludgeoned once it rivaled US tech.

• Asian Tigers, 1997: Tolerated as Cold War showcases, then dismantled through speculative attack and IMF austerity.

• Europe, 2025: Shielded under NATO and access to US markets for decades, only to be forced into energy bondage and industrial relocation once China emerged as the true strategic rival.

The cycle is consistent: nurture, tolerate, then dismantle.

Twilight of the Bargain

Vice President JD Vance framed globalization as a ladder: rich countries would move up the value chain, poor ones would remain lower down. In practice, Washington ensures only one nation climbs highest. Allies may climb, but never beyond the rung beneath the United States.

The Cold War bargain—security in exchange for prosperity—is over. What remains is an extraction model: allies as tributaries, wealth redirected by tariff, subsidy, and sovereign fund.

This is not partnership but hierarchy; not competition but annexation. The hollowing out of Japan and Europe is not an accident, but the intended outcome of a managed system.

Vice President JD Vance on the rationale of globalization.

The Empire Consumes Itself

The tragedy of this system is its short-term brilliance and long-term fragility. Washington can indeed siphon capital, relocate industries, and enforce energy dependence. Yet in hollowing out allies, it erodes the very foundations of its order.

Rome drained its provinces, Britain its colonies. The United States drains its allies—financially, industrially, and psychologically. But empires that devour their vassals ultimately consume themselves.

The twilight of Pax Americana is not a peaceful sunset. It is the rise of a protectionist empire, where vassals are milked until they are husks, and where hegemony is measured in assets captured, not partnerships forged. The “sovereign wealth fund” of America’s allies is not the mark of enduring leadership, but the symptom of an empire in decline—extractive, brittle, and unsustainable.

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