by Simon
•Simon is a young Bahamian with things on his mind
who wishes to remain anonymous. His column 'Front Porch' is published
every Tuesday in the Nassau Guardian. He can be reached at
frontporchguardian@gmail.com.
Amidst the pomp, protests and posturing at last week’s Masters of the Universe gathering in London some may have missed the shifting world order and illusion of reality the G20 gathering represented. But before there were 20 there were eight.
Not since the Warsaw Pact fractured after the collapse of the Berlin Wall did an international group fizzle into irrelevance almost overnight. Panicked by a global economic meltdown, the exclusive G8 club resembled a skeleton crew struggling to redirect a supertanker away from a Category 5 hurricane.
Perhaps the G-“Eight is Enough” can dissolve into an old gentleman’s club reminiscing about simpler times when a few, mostly men, set the rules for the majority of the world, whose leaders, including India and China, with one-third of the world’s people, were not invited to the members only fraternity.
In another bow to reality the old boy’s club finally dispensed with the requirement that the heads of the IMF and the World Bank respectively must be a European or an American.
Perhaps it had something to do with the fact that China is the largest holder of American debt, and with possibly two trillion dollars worth of reserves it will increasingly foot more of the bill for these international institutions.
Moreover, if China doesn’t overheat it is poised to grow five times faster than the U.S., speeding up the date when its economy equals the U.S.’s in size.
RESERVE CURRENCY
On the eve of the Summit, China’s central bank governor published an on-line essay suggesting that the US dollar be replaced as the international reserve currency with a new global monetary system controlled by the IMF.
The governor’s language was diplomatically blunt, the goal would be the creation of a reserve currency “that is disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies”.
Meanwhile, though summit host British Prime Minister Gordon Brown -- whose country was the world’s superpower in 1900 -- won international plaudits for his efforts, he failed to secure his version of a global New Deal and may succumb to the domestic reality of a resurgent Tory party led by David Cameron, a 42-year-old five years younger than Barack Obama.
For his part, the 47-year-old President swooped into town with all of the trappings of the American Imperium including the majesty of Air Force One, the luxury of his Cadillac limousine, nicknamed “the beast”, a helicopter fleet and a retinue of 500 aides including a phalanx of security officials, chefs and other courtiers.
As formidable, Mr. Obama arrived with his considerable charm, intellect -- and goodwill. Still, the eloquence, pageantry and Obamamania could not disguise the relative decline of American power. It is a reality Mr. Obama continuously and subtly acknowledges, but which most Americans are reluctant to appreciate:
America is broke, with unsustainable levels of public and private debt, its military is overextended, much of its infrastructure is crumbling, its education system needs overhaul, its regulatory regimes are dangerously weak, and almost alone among developed nations it fails to provide health insurance for millions of its citizens.
Once the world’s greatest creditor nation, America is now the greatest debtor nation. Once the world’s largest exporter of manufactured goods, it is now the largest importer. Once the world’s largest oil producer, it is now the world’s largest consumer of imported energy.
This does not mean that America will not remain a significant power. But much of the exclusive power it once enjoyed must now be shared with multiple actors, and it must dramatically adjust its habits and expectations.
RECKLESSNESS
The American superpower that dragged the world -- not unaided -- into a near depression because of its recklessness, arrogance and indiscipline, will continue to see its dominance decrease because of its own conceits and because of the emergence of other power centres.
One of those conceits is a casino or cowboy capitalism, sometimes called Anglo-Saxon capitalism that has been built on an Everest of easy foreign credit and a merciless cycle of obvious bubbles pumped up by greedy financial elites who rake in massive profits while worsening income inequality and plunging the middle class and the poor into an endless cycle of debt.
And after the inevitable bust, those elites go hand in mouth to the same government whose regulatory power they have relentlessly weakened in the service of a self-serving ideology which author Kevin Phillips shreds in Bad Money: Reckless Finance, Failed Politics and the Global Crisis of American Capitalism.
Like many other (former) great powers America does not accept the irony inherent in all power: that every great power that bragged of exceptionalism eventually became unexceptional. President Obama, an admirer of theologian Reinhold Niebuhr, understands the ironies at the heart of the American national myth. In The Irony of American History Niebuhr warns:
“Should the United States perish, the ruthlessness of the foe would be only the secondary cause of the disaster. The primary cause would be that the strength of a giant nation was directed by eyes too blind to see all the hazards of the struggle; and the blindness would be induced not by some accident of nature but by hatred and vainglory.”
EXCEPTIONALISM
Ironically, but unsurprisingly, those, like the Bush-Chaney axis, who attempted to bolster and expand American hegemony and exceptionalism ended up hastening America’s decline because they preferred ideology over history.
Alternatively, Obama, inclined to smaller sticks and bigger carrots, may help extend America’s influence and place it within a more collaborative world community because he recognizes the relative waning of that influence.
"The international system -- as constructed following the Second World War -- will be almost unrecognizable by 2025." These are not the words of an anti-American critic but of an estimate by the US’s own National Intelligence Council.
In a compelling essay written last year after the G20 Washington summit, Newsweek International Editor Fareed Zakaria captured the moment which is only speeding up as the economic crisis and the response to it continues to unfold:
“This is a rare moment in history. A more responsive America, better attuned to the rest of the world, could help create a new set of ideas and institutions – an architecture of peace for the 21st century that would bring stability, prosperity and dignity to the lives of billions of people.
“Ten years from now, the world will have moved on; the rising powers will have become unwilling to accept an agenda conceived in Washington or London or Brussels.”
Mr. Zakaria appears to be on target, except, depending on how events unfold, his 10 year horizon may be a generous estimate. And in addition to the rising powers, a more empowered developing world may also have gained significantly in its collective influence.
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