Neocon Fantasies of Empire Crushed: the New Global Reality

By Mark Engler, Foreign Policy in Focus. Posted April 21, 2009.

Ironically, one effect of the crisis thus far has been to sustain high demand for the dollar. The logic is simple. In a chaotic economy, many investors consider U.S. Treasury bonds the only safe place to hold their money—even if interest rates are low. But this won’t last forever. Already noises of discontent have come from major investors. As world leaders were gathering in London for the recent G20 summit, Zhou Xiaochuan, the governor of China’s central bank, called for a new "super-sovereign reserve currency," which would displace the dollar. 

Progressive economists such as Paul Krugman and Dean Baker have debated the significance of China’s latest posturing, and it is doubtful that an immediate abandoning of the dollar is in the offing. But when other countries do decide to change economic strategies and turn to a new reserve currency, it could be a tipping point for America’s imperial designs. Washington need only consult London about the gravity of this problem. As many historians have observed, the unraveling of the British Empire came hard on the heels of the shift away from pounds sterling as the global currency of choice.

Even if the United States weathers the crisis with its economy more or less intact, most political observers believe that its power will diminish in coming years, at least relative to that of other countries. "Multipolarity" has become the watchword of the day. In a multipolar order, there will no longer be a sole superpower, the United States, calling the shots. Instead, America will have to function within a constellation of regional political and economic powerbrokers.

Even before the financial crisis, U.S. government intelligence sources predicted a significant international realignment over the next two decades. In early 2005, the National Intelligence Council released a 119-page report entitled Mapping the Global Future. As Slate reported, the document argued that in the year 2020 "the United States will remain ‘an important shaper of the international order’—probably the single most powerful country—but its ‘relative power position’ will have ‘eroded.’ The new ‘arriviste powers’—not only China and India, but also Brazil, Indonesia, and perhaps others—will accelerate this erosion by pursuing ‘strategies designed to exclude or isolate the United States’ in order to ‘force or cajole’ us into playing by their rules." 

These predictions are proving to be well founded. According to the London Independent, the G20 summit put a version of a multipolar order on display; it was "a summit that show[ed] the new balance of power." There, "the voice of the United States was one, albeit an influential one, among others….  By inclination or by necessity, the post-Bush United States seems to see its place in the world a little differently: less American exceptionalism, more consensus-seeking. In the G20, the presence of China, India and Indonesia, among others, gives a foretaste of a future world order." Standing out among other nations, "China made its shy debut as a rising power.”

Debates rage about the implications of the multipolar shift. Some commentators have worried that, paralleling the rise of fascism in the interwar period, a global economic collapse could bring reactionary, xenophobic movements to power in many countries. And already in the Bush years, conservative defenders of empire, such as Harvard historian Niall Ferguson, spread fear about the prospects of unipolarity’s end. "If the United States retreats from global hegemony—its fragile self-image dented by minor setbacks on the imperial frontier—its critics at home and abroad must not pretend that they are ushering in a new era of multipolar harmony, or even a return to the good old balance of power," he wrote in Foreign Policy. "Unfortunately, the alternative to a single superpower is not a multilateral utopia, but the anarchic nightmare of a new Dark Age." The historian warned of "Waning empires. Religious revivals. Incipient anarchy. A coming retreat into fortified cities. These are the Dark Age experiences that a world without a hyperpower might quickly find itself reliving." 

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Mark Engler, a writer based in New York City, is a senior analyst with Foreign Policy In Focus and author of How to Rule the World: The Coming Battle Over the Global Economy (Nation Books, 2008). He can be reached via DemocracyUprising.com.

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