America need not be the best harbor for capital, just the only one left

The autumn of 2026 is sending signals that refuse to fit into a single picture. Stock indices sit at record highs, yet on October 7 the yield on the 10-year US Treasury note, as CNBC reported, touched its highest level in 24 years. In September the Federal Reserve raised its benchmark rate to a range of 3.75-4%, at a time when the whole world had only recently been waiting for cuts. France's public debt, the second-largest economy in the eurozone, has reached 119% of GDP, a level not seen, according to Fortune, since the years right after the Second World War. And on October 17 a cost-of-living march in Milan turned into street fighting in Piazza del Duomo, on the same day that French cities were burning.

The easy reading is to treat all this as a catalogue of triggers for the next crash: elections, debt, oil, interest rates, riots. But a catalogue explains nothing. It records symptoms and leaves the central question unasked. Why does capital, which in every crisis goes looking for a safer berth, stay put in a place that charges it more and more for risk? And where could it go if it wanted to leave? That question is what compels a reading of this autumn through the lens of Giovanni Arrighi. It also leads to a hypothesis that this essay sets out not to proclaim but to test: the war Russia unleashed against Europe fits the logic of an American hegemony prolonging its autumn, because it destroys the only territory to which capital could relocate.

It is a strong hypothesis, and for that very reason it has to be weighed. That something benefits someone does not mean that someone designed it. So what follows keeps apart three things that geopolitical arguments routinely blur together: consequences, which can be measured; structural interest, which can be demonstrated; and intent, which has to be proven.

The harbor and its tenant

In "The Long Twentieth Century", Arrighi described the history of capitalism as a sequence of systemic cycles of accumulation: Genoese, Dutch, British and American. Each cycle has a phase of material expansion, when money flows into trade and production, and a phase of financial expansion, when returns in the real economy fall and capital retreats into finance. The financial phase is the hegemon's autumn: wealth still grows, but it is the wealth of a rentier, not of a builder.

For the argument here, another point matters more, and Arrighi built it into his very first cycle. The Genoese bankers of the sixteenth century had no army worthy of an empire. They had money, a credit network and a gift for arithmetic. The army, the fleet and the territory belonged to Spain. Genoese capital lived under the protection of the Spanish crown, lent it money for its wars and took American silver in return. The capitalist power and the territorial power, in other words, were two distinct actors bound by an alliance.

From this comes the model I start from. Capital has no permanent address. It is a mobile entity, ready to abandon its old harbor the moment the harbor grows uncomfortable. The harbor, for its part, must meet at least two conditions. First, it is a maritime power with a strong military, able to protect trade routes and guarantee that what is invested will not be seized. Second, it holds the world's currency and is able to keep its value stable, so that capital does not lose its money. The Netherlands, Britain and the United States each served as such a harbor in turn. Each time, capital moved when the old harbor became too expensive and the new one could already supply both protection and money.

Two conditions, however, are not enough. A third has to be added, one that is easy to overlook because it seems to belong to another age. That condition is protocol.

The protocol that once crowned emperors

The medieval Church was not merely an institution of faith. It was a bank, an arbiter and a judge, and its cathedrals and monasteries often doubled as warehouses for trade. The Church's sphere of influence effectively coincided with the reach of a trading union: wherever one Church was recognized, one set of rules of exchange applied, one kind of oath, one kind of liability for breaking it. Commerce and the Church were tied into a single knot. The Florentine bankers who served the papal Curia held an instrument no secular creditor possessed: a debtor who refused to pay could be excommunicated.

Above this knot stood a military chief, the emperor. The Church crowned him into the protocol, and he became the guarantor of the terms on which everyone who had accepted that protocol lived. Whether one calls the protocol religious or commercial hardly matters. What matters is that it was universal and stood above any single ruler: the emperor protected the faithful, but he too was bound by rules he had not written.

Translated into the language of the twenty-first century, the protocol becomes law that applies equally to insiders and outsiders: English common law, the courts of New York, London arbitration, the dollar settlement system. And excommunication now goes by an entirely secular name: sanctions. Cutting a bank off from dollar clearing means roughly what cutting a merchant off from communion once meant. Nobody kills him, but nobody trades with him anymore.

This third condition explains why a harbor cannot simply be built. An army can be expanded within a decade, a currency can be issued within a year. But trust that the judge does not belong to the sovereign takes centuries to accumulate. It is here, as will become clear, that the contenders stumble.

Does capital have a reason to move?

If the thesis of a prolonged autumn is correct, the American harbor ought to be giving capital reasons to flee. The data deserve a look, because intuition is often misleading here.

The first argument for flight: the dollar is weakening as a reserve currency. Its share of central bank reserves worldwide, according to IMF data, has fallen below 57%, a level last seen in 1995. At its 2001 peak that share stood at around 72%. At the same time central banks have been buying gold: 863 tonnes were officially reported for 2025, and estimates that include undeclared purchases exceed a thousand tonnes. Gold's share of global reserves has risen to roughly 30%. States, or at least some of them, really are moving their savings out of the dollar system and into a metal that no foreign court can freeze.

Private capital, however, behaves in the opposite way. Analysts at ING noted that net purchases of US securities by private foreign investors rose to about $1.5 trillion in 2025, up from roughly $1 trillion a year in 2022-2024. The foreign share of the US securities market reached 20.2%, its highest in a decade. Most striking of all, the biggest buyer turned out to be Europe. European investors hold about $17 trillion in American assets, nearly half of all foreign holdings, and in 2025 they increased their net purchases to $0.9 trillion. That was more than enough to offset Chinese selling.

Here, then, is the first contradiction: it is sovereigns, not capital, that are fleeing the dollar. Central banks are insuring themselves against sanctions, that is, against excommunication. Private money goes where the profit is, and in 2026 profit is concentrated around artificial intelligence, a concentration that is distinctly American. Expectations for Anthropic's IPO, according to market estimates, reached $2 trillion, although some investors have already lowered them to $1.5 trillion. Whether that valuation is inflated is beside the point. What matters is that the biggest bets on the new technological wave are being placed in the American harbor.

To the question "have the profits gone?" the answer is therefore no. They have not gone; they have concentrated in a narrow group of companies. To the question "is the dollar falling?" the answer is twofold: as a reserve for states it is weakening, as a magnet for private capital it has never been stronger.

What, then, keeps capital in the United States? Three things, all of them straight out of the harbor model. The depth of the market, meaning the ability to move in and out by the billion without shifting the price. The army and the navy, which still police world trade. And the protocol: New York law, which for a private investor remains more predictable than any alternative. To these one should add a fourth factor that analysts are embarrassed to name aloud: there simply is no alternative.

The price the harbor pays

Here a second contradiction arises, and it strikes directly at my hypothesis. If the United States had already become the monopoly harbor and could dictate terms to capital, it would be borrowing cheaply. A monopolist sets the price. Yet the market of October 2026 shows the opposite: the 10-year yield at a 24-year high. The yield is worth explaining on the spot: it is the price a state pays to borrow. The higher the yield, the more every dollar of debt costs the US government, and the harder capital drives its bargain.

Put differently, capital is not yet listening to the harbor. It is sending the harbor a bill. And the bill is rising: servicing the US national debt costs more every month.

There are two ways to resolve this contradiction. The first: the monopoly has not yet been achieved, because the spare harbor has not been destroyed for good, and capital keeps bargaining because it still has somewhere to threaten to go. The second is more honest: the war through which the harbor supposedly eliminates its competitor costs money, and that war is paid for in the bond market. This is where Arrighi's model runs into what I call the economics of losses. The state systematically shifts risk from private capital onto taxpayers while profit stays private. In this logic war turns out to be the most convenient line of expenditure, because its costs cannot be verified. The economics of losses is precisely the mechanism that prolongs the hegemon's autumn: it lets the financial phase last longer than market logic would allow, but it does so on credit. A 24-year high in yields is the accounting imprint of that credit.

The contenders

If capital ever does decide to move, it formally has two destinations.

The first contender is China, and Arrighi himself bet on it. In "Adam Smith in Beijing" he suggested that the center of the world economy was shifting to East Asia. China has its emperor, a concentrated power capable of giving guarantees. It has a strong army and a fast-growing navy. It has a currency. Yet the yuan never became a reserve currency. The usual explanation, that China has nothing to back it with, needs refining, because China has both gold and industrial might.

What China lacks is precisely the third condition: protocol. Its political order is atheist in more than the religious sense. It recognizes no arbiter above itself that treats insiders and outsiders alike. Capital controls, courts answerable to the party, the state's ability to rewrite the rules for a given company overnight: all of this means that in the Chinese harbor the judge belongs to the sovereign. The medieval emperor was crowned into the protocol and bound by it. The Chinese leadership is the protocol itself, and can rewrite it. For capital, which remembers how states have taken everything from it, this is a fundamental difference. It is why central banks buy gold, not yuan.

The second contender is the European Union, and specifically the Union as a union, not any of its member states on its own. On paper it has almost everything. It has a currency, and the euro ranks second in the world. It has a protocol, perhaps the most developed of all: European law, the Court of Justice of the EU, the supremacy of rules over governments. But the EU has no army as a single force; it has the armies of individual states, tied to the American one through NATO. Nor does it have a single treasury: the euro is issued by a common central bank, while the debts are written by separate governments. That is why France with debt at 119% of GDP is not only France's problem. And it lacks stability: in Germany the Alternative for Germany is rising, in France Marine Le Pen has announced her intention to run in the 2027 presidential election, and the polls are led by candidates of the far right and the far left.

Europe as a harbor, then, has the protocol and the currency, but neither the sword nor a single purse. That is what makes it at once the only real contender and the most vulnerable target.

Britain deserves a word of its own. It left the European Union, but not European security: it is London, together with Paris, that leads the coalition of the willing backing Ukraine. The question that arises is this: is Britain trying to win back "the runaway bride", the capital that once moved from London to New York? The City of London remains the principal offshore hub between America and Europe, and English law still governs a vast share of the world's contracts. But in the harbor model, it has to be weighed that Britain today has neither a military of global reach nor a first-tier reserve currency. It can be a go-between, a matchmaker, but not the groom.

The burned-harbor hypothesis

The central hypothesis can now be stated in full. If the only real alternative to the American harbor is Europe, then a hegemon intent on keeping its monopoly has an interest in seeing that alternative burn. Not necessarily literally: it is enough that it becomes dangerous for capital. In this reading, Russia's war against Ukraine, and more broadly against Europe, is a war in which the United States used its cryptocolony to scorch the ground to which capital might escape. The aim: to become the monopoly supplier of locations for capital, and therefore to stop listening to its terms and start dictating its own.

The design, if one follows the hypothesis, was meant to look like this. Russia quickly seizes Ukraine, Ukrainians become part of the Russian army, and that army then marches victoriously across Europe, turning what it captures into another East Germany, another "Donetsk People's Republic" and other bantustans. The British, who knew of this scenario, left Europe in advance. But something went wrong: the Ukrainians broke the plan. And now, with no quick victory in sight, the United States is doing everything it can to split Europe from within.

Let me begin with what holds up, because a good deal does. The war's consequences for Europe are measurable, and every one of them works in the American harbor's favor. Europe lost cheap Russian gas and became the largest buyer of American liquefied natural gas. The 2022 energy shock made European production more expensive, while American subsidies were simultaneously luring industry across the Atlantic. European capital, as the ING data show, is not fleeing America; it is fleeing into America, at $0.9 trillion in net purchases a year. Europe is shifting to military budgets financed with debt, and spends a significant share of that money on American weapons, including for Ukraine. European taxpayers, in other words, are paying for a war whose profits partly settle in the American defense industry. This is the economics of losses in its purest form: risk and costs land on the European budget, profit stays private, and it stays mostly outside Europe.

Structural interest can also be demonstrated. And here there is a document that leaves no room for guesswork. The US National Security Strategy released by the White House on December 4, 2025 warns of Europe's "civilizational erasure" and names as one task of American policy "cultivating resistance to Europe's current trajectory within European nations". The document openly calls the growing influence of "patriotic European parties" a cause for optimism. The claim that Washington has an interest in a divided Europe is therefore not a conspiracy theory: Washington formulated it itself.

The irony of this coincidence is worth noticing. The "patriotic parties" on which American strategy pins its hopes are historically the ones closest to Moscow. In Europe, then, Washington and Moscow are pulling the same rope in the same direction. For the hypothesis of Russia as an instrument, that is a strong argument.

Now to what does not hold up, or what contradicts the hypothesis.

The first contradiction concerns the very word "cryptocolony". The comprador elite that I describe as Moscow's central structure across the centuries serves whoever holds its money. And for decades the money of Russia's ruling class sat not so much in New York as in London, in Cyprus and in Swiss banks. If Moscow is anyone's intermediary, it is the intermediary of many masters at once, Beijing included, without which it could not sell even half its oil today. An intermediary that serves everyone belongs wholly to no one. The formula "Russia as an American cryptocolony" would thus be more precise as follows: Russia as an instrument that different players use at different moments, and which in 2022 struck where it suited Washington.

The second contradiction concerns intent. In the winter of 2022 the United States publicly declassified Russia's invasion plans, naming dates and axes of advance. A puppeteer who has planned his puppet's blitzkrieg is unlikely to print its timetable in the newspapers. Washington offered Ukraine's president an evacuation, which means it expected Kyiv to fall quickly, but that offer speaks to a forecast rather than a design. Then came tens of billions in aid, sanctions against Russia, frozen assets. True, the aid arrived in such a way that Ukraine would not lose but would not win quickly either, with restrictions on strikes deep into Russia. That fits the logic of the economics of losses well: a war that goes on is more profitable than a war that has ended. But such logic describes the management of a war, not the commissioning of one.

The third contradiction concerns Britain. Brexit became a fact six years before the full-scale invasion, and it had domestic causes of its own. After 2022 Britain did not flee Europe; on the contrary, it returned to it through security and became Ukraine's most active ally. If the British knew the scenario, they are behaving not like those who escaped it but like those trying to break it.

There is, however, an argument that strengthens the hypothesis, and it comes from my own model. Nuclear weapons have eliminated the traditional mechanism of "cleansing" that a great war between core powers used to provide. The hegemon cannot fight its competitor directly. But it can allow the competitor to be exhausted by a war on the periphery waged by a third force. If a direct blow is impossible, the harbor is burned by other hands. And no conspiracy is needed for that: it is enough not to put out the fire once it has started, and to profit from it.

The riots: the mundane explanation first

The weakest point of the hypothesis is the claim that the United States ignited a storm of protest and revolt across Europe. Here the rules of analysis demand that the mundane explanation be checked first, and it lies on the surface.

The protests in Milan, Bologna, Turin, Paris and Lyon share a common denominator: the cost of living. Fuel prices are climbing because Iran has stepped up attacks on tankers in the Strait of Hormuz. France, in order to hold the bond market, has to cut spending, and Prime Minister Sébastien Lecornu's government proposes trimming the budget deficit from 5.4% to 5% of GDP. Students were marching against crumbling classrooms and missing teachers even before the Saturday unrest. Italian teenagers in Milan, as Il Sole 24 Ore noted, waved Albanian flags in support of an uprising in Tirana, where protesters attacked branches of the central bank. This is a picture of contagion, of anger leaping from one country to the next, not a picture of stage direction.

Does that mean Washington has nothing to do with it? No. But the connection is different from the one the hypothesis proposes. The price of oil that is hitting European wallets is tied to the war in the Middle East, in which the United States is a direct participant. American policy really is setting Europe alight, but through the oil bill, not by organizing crowds. And between the "cultivating resistance" declared in the strategy and the organization of street battles lies a distance that no available fact yet bridges. To claim otherwise would be to turn analysis into conspiracy dressed up as theory.

China on the riverbank

The last piece of the configuration concerns China. The hypothesis holds that China has come to terms with the United States: it benefits from everyone else being at war while its own potential grows. It will wait on the riverbank until the bodies of the contenders, and of the hegemon itself, float past.

The first half of the claim is documented. In September Xi Jinping arrived in Washington on a state visit, and the two sides extended their trade truce through January 10. China buys Russian oil at a discount and sells Russia what its army could not fight without. It draws direct benefit from the war.

The second half, however, runs into a contradiction that Beijing understands better than anyone. The Chinese model rests on exports, and Europe is one of the largest markets for Chinese goods. If Europe burns, what floats past the riverbank will be not only the bodies of competitors but also the bodies of customers. China benefits from a war of attrition, but not from the collapse of the European consumer. Chinese strategy therefore looks less like waiting for someone else's death and more like keeping every participant in a state of chronic illness, from which no one dies and no one recovers. That, incidentally, is also the economics of losses, only seen from the other bank.

The bill capital has presented

Put the weighing together, and the picture is more complicated than the hypothesis and at the same time more alarming.

The consequences the burned-harbor hypothesis predicts have indeed come to pass. European capital is flowing to America, not the other way around. Europe is financing war with debt and buying American weapons. France, with debt at 119% of GDP, has become the weakest link in the eurozone, and its streets are on fire. Washington has officially declared its intention to support forces that divide Europe from within. And the only contender with a protocol and a currency lacks exactly what no one becomes a harbor without: a sword of its own and a single purse.

But the intent, without which the hypothesis becomes an accusation, has not been proven. Moscow behaves like the intermediary of many masters, not the colony of one. The United States published the invasion plans rather than concealing them. Britain returned to European security rather than fleeing it. The riots have a mundane explanation, and the American trail in them runs through the oil bill, not through the crowd.

And most important of all. The hypothesis promises that a burned harbor will allow the United States to dictate its terms to capital. The bond market of October 2026 shows that this has not happened. The hegemon is paying more to borrow than at any time in 24 years, and the bill grows with every monthly debt payment. Capital has stayed in the American harbor, but it has stayed on its own terms. It did not believe that it had nowhere to go. It simply decided that it was too early to leave, and named a price for its patience.

America, then, may indeed not need to be the best harbor, only the only one left. But a sole harbor that pays its tenant an ever-higher rent not to move out looks less like a landlord and more like a debtor. The question of the autumn of 2026 is not whether the spare harbor in Europe has burned. The question is how much longer the American budget can afford to pay so that capital does not notice it has not burned down completely.