Firstly, the 9/11 terrorist attacks and America's ensuing War on Terror mark a significant break with America's traditional strategic partners. This break has been ratified by Bush's recent reelection. Simply put, very few people outside this country's borders view the post-9/11 world through lenses similar to even the Democratic Party's or garden variety liberals, to say nothing of the American right. No longer do European or East Asian nations - to say nothing of the "global south" - view America's primary global concerns as their own. And this is highly unlikely to change. But why should this matter, many in this country ask?
Well, the US currently has a choice (or at least it had one, I don't know if it does anymore). It can maintain the world system it created in the aftermath of World War II, which succesfully integrated Western Europe, East Asia, and a significant number of third world client states into its sphere of influence. Although there were frequent grumblings and in some cases, challenges, to this US-instituted system, the peoples of these nations broadly looked to the United States for political, moral, economic, and military leadership, if for no other reason than that the Soviet alternative was unpalatable. And indeed, many nations gained much from this arrangement. The "Euro zone," Great Britain, South Korea, Japan, Taiwan, and some others profited greatly from a globalized world constructed under the watchful eye of the American aegis. This was termed by its American proponents the "American century," a phrase coined by Time/Life magnate Henry Luce during World War II, imagining the potential postwar world order.
This is why the "project for the new American century's" desire to create a new American world system outside the older systems insitiutions and rules - like the UN, which were instituted to enhance, not reduce American power, economic, military, and moral - will not succeed, and will probably only work to facilitate the very American system's decline they hope to perpetuate. Because the EU and China and Japan and series of other nations can operate with a degree of economic autonomy not possible during the formative years of the post-World War II order and because they simply don't interpret terrorism as the kind of threat many in the US do, there is no need to follow the US. Increasingly, then, the rest of the world looks at the US with incomprehension and sometimes fear, worrying its rash and uber-hawkish behavior is doing more harm than good to the proper functioning of the global economy. To use an anology, the US is like an alcoholic who in his early stages of his disease, was the life of the party, but in his terminal stages, becomes dangerously anti-social. This is the view of this country from abroad, and it is not a view simply held by those traditionally hostile to the projection of US power - i.e. the leftists who opposed the US during the Cold War around the world. This is mainstream. In some ways, this antipathy becomes a mutually reinforcing cycle, as the US's moral and economic power declines, Americans - particularly American rightists like thos currently in power - become more and more inclined to flex their one real advantage, this country's extraodinary military power. This does not gain the US economic and moral legitimacy, however, but rather facilitates a further erosion of not only the United States's moral credibility, but also its economic power, as the global capitalist cast no longer feels it can trust a United States literally drunk on its own delusions of grandeur and unsustainable consumption levels. Thus, global capitalists begin to sink their money into sources outside the US.
This week, the Economist - a vital publication for understanding the fundamental mind of the global capitalist cast - published a frankly extraordinary article about this very process, ostensibly about the current decline of the dollar. Below I quote from these articles at length:
The requirements of a reserve currency are a large economy, open and deep financial markets, low inflation and confidence in the value of the currency. At current exchange rates the euro area's economy is not that much smaller than America's; the euro area is also the world's biggest exporter; and since the creation of the single currency, European financial markets have become deeper and more liquid. It is true that the euro area has had slower real GDP growth than America. But in dollar terms the euro area's economic weight has actually grown relative to America's over the past five years.
Where the dollar has failed is as a store of value. Since 1960 the dollar has fallen by around two-thirds against the euro (using Germany's currency as a proxy before 1999) and the yen (see chart 1). The euro area, unlike America, is a net creditor. Never before has the guardian of the world's main reserve currency been its biggest net debtor. And a debtor may be tempted to use devaluation to reduce its external deficit--hardly a desirable property for a reserve currency.
Those bearish on the dollar are asking why investors will want to hold the assets of a country that has, by its own actions, jeopardised its reserve-currency position. And, they point out, without the intervention of central banks, which have been huge net buyers of dollars, the dollar would already be lower. If those same central banks were to begin to sell some of their $2.3 trillion dollar assets, then there would be a risk of a collapse in the dollar. However you look at it, America is likely to find it increasingly hard to finance its huge current-account deficit. . . .In 1913, at the height of its empire, Britain was the world's biggest creditor. Within 40 years, after two costly world wars and economic mismanagement, it became a net debtor and the dollar usurped sterling's role. Dislodging an incumbent currency can take years. Sterling maintained a central international role for at least half a century after America's GDP overtook Britain's at the end of the 19th century. But it did eventually lose that status.
If America continues on its current profligate path, the dollar is likely to suffer a similar fate. But in future no one currency, such as the euro, is likely to take over. Instead, the world might drift towards a multiple reserve-currency system shared among the dollar, the euro and the yen (or indeed the yuan at some time in the future).
Yesterday, the Financial Times weighed in with another astonishing article, that Josh Marshall quotes:
Members of the Organisation of Petroleum Exporting Countries have cut the proportion of deposits held in dollars from 75 per cent in the third quarter of 2001 to 61.5 per cent.
Middle Eastern central banks have reportedly switched reserves from dollars to euros and sterling to avoid incurring losses as the dollar has fallen and prepare for a shift away from pricing oil exports in dollars alone.
Private Middle East investors are believed to be worried about the prospect of US-held assets being frozen as part of the war on terror, leading to accelerated dollar-selling after the re-election of President George W. Bush.
Frankly, I was not aware of these trends, but they tend to reconfirm what I argue above and what I have felt for a long time. (The Economist posts some fascinating graphs demonstrating that the American economy's relative decline is not simply a short term aberration, but is systematic and long-standing. It only receives attention during particularly acute periods of decline like that experienced during the second half of the 1970s, the late 1980s, and today. But it has always been there. Unfortunately, I can't seem to cut and paste these charts. But go look for yourself.). Needless to say, what this all means is that we are moving towards a world without one dominant global hegemon, but towards a return to a world system predicated on a "balance of powers."
For all his faults, Tony Blair understands this and has made the point repeatedly in speeches. Hence, his staunch support for the US, which is most of all an attempt to rebind the United States to its traditional post World War II role of responsible consensus-building. Unfortunately for Tony Blair, he is swimming against powerful currents - in his own country, in American, in Europe, everywhere, that no longer want, need, or desire the old America.
Any Democratic critique of Bush's foreign policy must start from this truly global perspective. That is why the whole Beinert debate is kind of tedious to me and fundamentally misses the point, or loses the forest in the trees to use an analogy. It is too focused on the Middle East and terrorism - both very important issues, no doubt - without seeing the broader context. Its focus, is, how should I say, fundamentally American, and in important ways completely misses how the US's concerns and their relative importance relate to the functioning of a succesful world system. Simply put, to be a global leader, you have to be able to understand what those who would conceivably follow you think about you and how you are leading. If your leadership loses its credibility or importance, it is no longer leadership no matter what you may think or how many stealth bombers you have. In this sense the Bush foreign policy direction has become a classic pursuit of national interest. It is not "internationalist," nor are many of its opponents "isolationist." The "isolationist" epithet - used to denigrate those who question the American policy in Iraq - is thus a lazy canard played by lazy and ignorant folks too stuck in their own assumptions to see the big picture. Now this "national interest" turn may be fine, and you may (and many would perceive it as) conceive it as necessary or most desirable. But don't try to pretend you have the moral high ground or get fooled by Bush's cod-Wilsonian rhetorical gloss.
|
|
|
Permalink :: 8 Comments :: Post a Comment
|
In order to post a comment, you must be logged in. If you have a member account, please log in to comment.
If not, you can make an account right here. It's quick and free.
