Saturday, 25 October 2008

The sun has set; the end of Western power

. Quite some time back I wrote a speculative article entitled ‘The setting of the sun’ which argued that Western power was waning; that the ‘War on Terror’ would in fact lead the West into cataclysm. My basic thesis was that it would divide Western societies and that it would so destabilise the Middle East that some conflagration was inevitable. Now, the entire Western (and indeed the wider) world is on the brink of economic implosion and the already waning ideological and military influence of the West is matched by a failing economic one and the picture is much more complete than when I wrote the first article.

Military impotence

One of the most striking examples of this inability to act was provided recently when Russian tanks rolled into Georgia. Various sabres were rattled; luminaries such as US Secretary of State Condoleezza Rice visited Georgia and offered their support but we all know that in practice this support was verbal only and amounted to nothing practical. Most laughable was the way Russia was threatened with ‘dire consequences’ by the US, as if Russia was not fully aware that the US military is already stretched to its limits in Afghanistan and Iraq.

Vladimir Putin was right to say that we now live in a multi-polar world and anybody who thinks differently was dramatically proved wrong in Georgia. The vast military commitment made by the US due to the ideological one of the Bush administration in pursuing its ‘War on Terror’ is now looking increasingly unsustainable. Neil Lyndon writing on First Post reports;

“The Congressional Budget Office estimated in 2007 that the combined cost of the wars in Iraq and Afghanistan could total $2.4 trillion over the next decade."

However, this far from the end of the story; Joseph Stiglitz feels that this ‘guesstimate’ maybe too conservative. He feels that the cost will be closer to $3 trillion; he bases his figures on the $600 billion cost already admitted and the $12 billion a month operational costs. Writing in The Guardian he explains that this is not just composed of the cost of ongoing military operations but also the;

“costs to the economy that go beyond the budget, for instance the cost of caring for the huge number of returning disabled veterans that go beyond the costs borne by the federal government - in one out of five families with a serious disability, someone has to give up a job”.

You do not need to be a Nobel Peace Prize winning economist like Stiglitz to see from this that the notion of any further ‘wars of intervention’ are totally unviable on an economic not to mention a political level. If, for example, the United States felt that ‘something should be done’ about Iran’s nuclear program it would have no choice but to ask Israel to act on its behalf and even that strategy would pose serious risks; namely, that the action would inflame already sensitive Shia opinion in Iraq and bring further strife (and cost) to that area.

Returning to Georgia for a second, it was absolutely clear that there was never going to be a consensus even for sanctions let alone anything military among even America’s staunchest allies in Europe. As we can see above economic reality now necessitates multilateralism, gone is McCain’s fantasy ‘League of Democracies’; it has been superseded by the cold hard reality of the books not balancing.

Economic dependency

It has been said, on my blog, that essentially what will save capitalism as a social system is not the ‘bail-out’ but the continued growth of the so-called ‘Tiger’ economies. It is hoped that the situation will essentially be a reversal of the slump of the early 1990’s when the contagation started in the Far East; most notably Japan. However, all is not rosy in the ‘tiger’ garden; for example, India’s growth is slowing, it slowed to 7.9% in the three months up to June. Sounds allot doesn’t it still?? It sounds allot but is negatively offset by high inflation. China’s growth slowed to 9% which is ‘far more than the government expected it too’.

Obviously the interconnection of the financial markets (not to mention the importance of exportation to the West which will slump) will tame the tigers to some degree. Nonetheless, let’s assume that these economies will weather the storm better than Western economies. Whether they will ‘bail-out’ Western governments is a moot point which will be determined by politics as much as economics. Furthermore, if they do then there will be an invariably be a political price for Western governments to pay to secure this bail-out and serious questions will be asked about whether that price is worth paying.

One price that will invariably be paid is the independence of Western governments to act in an interventionist way. Who can seriously imagine the US rolling aircraft carriers up the Taiwan Strait when China owns over $500 billion worth of US Treasury securities? This might not be an entirely bad thing in that it will curb the destructive recklessness of governments but on the other hand will mean that deeply unwholesome regimes like the one in China will be able to act with carte blanche. It is unfathomable to imagine that the political ramifications of this new found economic dependency will not be far-reaching and that taken cumulatively it signals the end of Western power.

Russia has already signaled its willingness to use financial clout for political ends and as we have seen above its rulers are more than self-aware of what this new found strength means in terms of global realpolitik. If you want to ruminate over something then maybe it should be this; that the Georgia crisis played out before the financial whirlwind of the last month. In other words, Russia was more than sufficiently self-aware before it had the inviting prospect of a powerful loan-brokering position.

So, where does that leave progressives? Essentially it leaves with the urgent business of making the case for urgent reform of multilateral institutions which the US in particular has treated with a disgraceful feckless bravado. Oh how the mighty have fallen. I expect a sudden revival of faith will occur in a new US Obama-led administration but in reality realpolitik would have forced it upon a Republican incumbent too. Democratisation and rationalisation of institutions like the United Nations will further empower them as legitimate arbiters of dispute but as better institutions of governance. A West which sees its future as best guaranteed by the power of one nation or just several nation-states is a lame-duck. It is dying and fading; multilateralism, internationalism are the way for it to rise out of its own ashes.

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