The Venezuelan Invasion is a Sign of Weakness, Not Strength

America’s Return to Self‑Defeating Militarism

Shortly after the January 3 Venezuelan attack, the U.S. Secretary of War, Pete Hegseth, boasted, “America is back.” If he meant that America is back in terms of global dominance, the former T.V. pundit is far from accurate. America is back, all right, but only to its usual self-defeating and expensive military adventures that will go south quickly. Rather than a demonstration of strength and a sign that America reigns supreme, the invasion of Venezuela is a signal that U.S. capitalism is in such trouble that the ruling class must resort to armed piracy to acquire the resources needed to slow the dollar’s decline and forestall its fall from world economic dominance.

From Postwar Dominance to Crisis            

From its once world economic dominance, U.S. capitalism is now in freefall. After World War II, Europe’s industries were decimated, while the US was unscathed by the war’s destruction and had its industries fully mobilized for the war effort. From 1945 to 1973, the U.S. ruled the world economically as it enjoyed what economists describe as the golden age of capitalism.

However, the great march of U.S. capitalism faltered in 1973–75 amid a deep recession. Industrial output fell, the jobless rate jumped, and inflation soared into double digits. The economic crisis was driven by oil prices quadrupling, and the international increase in money supply, coupled with the breakdown of the old fixed‑rate monetary order.

The legacy of the 1970s crisis is an economy with repeated financial cycles, alongside chronic inequality and financial insecurity for many workers. Financial cycles—repeated credit‑fueled booms and busts—shifted income toward capital mainly by boosting profits, capital gains, and high‑end financial incomes that rose much faster than wages.

War Spending and Strategic Drift

Despite its economic skid, the U.S. continues to engage in problematic spending. The most damaging is the surreal military spending, which increased despite the end of the Cold War. The war budget bloated to absorb the cost of endless wars and arming the Gaza genocide. While the U.S. churned out weapons and wars, other countries, particularly China, were investing in international trade alliances, loan deals, and overseas infrastructure, drawing trade money away from American coffers.

China’s Ascendance and Commodity Power

Through its international investments and exploitative low wages—made possible by severe labor repression—China is poised to overtake the U.S. as the dominant international economic force. China has become South America’s number one trading partner, a threat that hits close to home. China is also running circles around the U.S. in terms of access to key geological commodities, such as minerals and oil.

The Unraveling Petrodollar Order

Adding to the U.S. economic woes is the eclipse of the petrodollar, whereby global oil sales are priced and settled in U.S. dollars. This arrangement forced oil‑importing countries to hold dollars and then channel those dollars back into U.S. financial assets.

The weakening of the petrodollar is, ironically, the result of the U.S.’s widespread sanctioning policy. Sanctions on Russia and others have pushed oil trade settlements in yuan, rupees, or local currencies. Saudi Arabia and other Gulf producers have openly explored non‑dollar oil contracts and closer financial ties with China, and new payment systems make non‑dollar settlements easier.

The U.S. capital class’s unease at the increasing oil transactions in currencies other than the dollar is exasperated by Venezuela’s oil trade relationship with China, driven deep by U.S. sanctions, which again come back to haunt the U.S. Prior to the January 3 attack, Venezuela was sending roughly 60 percent of its crude exports to China to bypass U.S. sanctions. China has at times priced or settled these flows in yuan or other non‑dollar arrangements. For U.S. capital, watching sanctioned oil move to China in non‑dollar deals is doubly alarming: it loses both control over reserves and the dollar revenues that once flowed back to Wall Street.

Military Force as Economic Strategy

Faced with shrinking domestic reserves, intensifying competition from China, and eroding petrodollar supremacy, the U.S. ruling class under Trump reaches for the resource it possesses in abundance: military force. The invasion is proof that America can seize what it wants; it also lays bare a system that can no longer reliably attract capital and allies and must instead grab resources at gunpoint.

Venezuela’s Oil: Limits of the Bonanza

The Venezuela invasion may not be the oil bonanza Trump promised. Again, U.S. sanctions have backfired; they prevented Venezuela from importing the specialized equipment needed to refine its particularly thick oil. Consequently, to get the oil ready for market, the U.S. needs to spend billions of dollars and wait several years to complete building the necessary infrastructure. Also, putting the refined oil from Venezuela on the market would glut the market and depress oil prices, hurting U.S. oil companies.

Oil companies are not enthused about investing in Venezuela’s oil production for other reasons as well. Chevron has been kicked out of the Venezuela oil production business three times, and its CEO said the company wouldn’t return unless there were substantial security guarantees, which aren’t apparent. The CEO of Exxon flatly called the Venezuelan oil business “uninvestible.”

From Venezuela to Greenland

His Venezuela efforts spurned, Trump has turned his attention to another possible source of mineral wealth: Greenland. However, his threat to take it over sparked widespread alarm in Europe and domestically. As of this writing, Trump has indicated that using military force to take over Greenland is off the table, as Europe has indicated it would resist and even retaliate with a trade embargo against the U.S.

Capitalist Malaise and Political Dead Ends

The U.S. capitalist class remains in a funk, staring at an increasingly bleak future that Trump has only exacerbated. His tariff schemes threaten to drive up costs, reducing consumer demand and dragging down profits. Trump’s bellicose actions have alienated the international community, and domestic unrest about rising prices grows.

The ruling class will undoubtedly shift support to the Democrats in the upcoming midterm elections and in 2028, hoping that the party will be more deft than the Republicans in its efforts to rescue U.S. capitalism, as it has in the past, and grant some pressure-reducing concessions to its varied constituents. However, the Democratic Party is a dubious alternative. Workers are tired of its false promises, its support of the status quo, and its neo-liberal orientation of militarism over domestic spending. It is quickly losing its appeal:  The Democratic Party’s approval ratings in the polls are sinking as fast as those of Trump and the Republicans.

Toward Working‑Class Defense

The invasion of Venezuela is a vivid signal of the U.S. capitalist system in crisis, and indicates the only path the ruling class has: more military muscle overseas and ruthless suppression of growing dissent at home. This will necessitate a strong working-class defense by a united front among the left.

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