The start of 2016 has been anything but calm. Falling equity prices in China have destabilized markets worldwide. Emerging economies seem to have stalled. The price of oil has plunged, pushing petroleum producers into crisis. North Korea is flexing its nuclear muscles. And in Europe, the ongoing refugee crisis is fomenting a toxic tide of nationalism which threatens to tear the European Union apart. Add to this Russia’s neo-imperial ambitions and the threat of Islamic State’s terrorism, and comets streaking across the sky may be the only thing missing from a picture of a year shaping up to be one of prophetic doom.
Wherever one looks, chaos seems to be ascendant. The international order forged in the fires of the twentieth century seems to be disappearing, and we have not had even the faintest glimpse of what will replace it.
It is not difficult to name the challenges we face: globalization, digitization, climate change, and so forth. What is not clear is the context in which the response will come. In which political structures, by whose initiative, and under which rules will these questions be negotiated?
Global political and economic order does not simply arise from peaceful consensus or an unchallenged claim by the most powerful. It has always been the result of a struggle for domination between or among rival powers. Only through conflict are the new pillars, institutions and players of a new order established.
The liberal Western order in place since the end of WWII was based on the global hegemony of the United States. As the only true global power, it was dominant not only in the realm of hard military power (as well as economic and financial), but in nearly all dimensions of soft power (culture, language, technology, fashion, etc).
Today, the Pax Americana that ensured a large degree of global stability has begun to fray. The US may still be the world’s strongest power, but it is no longer able or willing to make the sacrifices needed to guarantee order. Indeed, in a globalized world, with ever closer integration in terms of communication, technology, and the movement of people, the centres of power are diluted and dispersed.
And yet, while a new global order may inevitably emerge, its foundations are not yet indiscernible. A Chinese-led order seems unlikely. China will remain self-absorbed, focused on internal stability and development. Furthermore, China lacks the soft power that would be indispensable if it were to try to become a force for global order.
In fact, the main challenge of the coming years is likely to be managing America’s declining influence. There is no framework for the retirement of a hegemon. While a dominant power can be brought down through a struggle for domination, voluntary retreat is not an option, because the resulting power vacuum would endanger the stability of the entire system. Indeed, overseeing the end of Pax Americana is likely to dominate the tenure of America’s next president.
For Europe, this raises an equally difficult question. Will the decline of Pax Americana, which has served for seven decades as a guarantor of Europe’s internal liberal order, unavoidably lead to crisis, if not conflict? Rising neo-nationalism across the continent seems to point toward such a scenario, with appalling implications.
The bleak prospect of European suicide is no longer unthinkable. What will happen if the United Kingdom leaves the European Union or if Marine Le Pen captures the French presidency? A plunge into the abyss is the most dangerous outcome imaginable, if not the likeliest.
Courtesy: Project Syndicate