Global risk of U.S. impotence at heart of WikiLeak

November 29, 2010

The biggest secret to be revealed by WikiLeaks should have been the easiest to spot without the website’s classified document dump: American hegemony is on the wane. That underscores a heightened risk for global investors that without U.S. leadership, regional rivalries may turn nasty, trade barriers rise and fiscal policies destroy wealth.

It’s hard to avoid the overall impression from the disclosure of 250,000 secret State Department cables that the 1990s vision of U.S. supremacy and peaceful globalization is irrevocably ending. There are a number of risk-reducing advantages to the world in having a clearly defined hegemon, provided its intentions are reasonably benevolent.

In the early and middle 19th century, for example, British hegemony pushed the global economy towards free trade and defused regional rivalries and armaments wars. Then after 1873 the decline of Britain’s relative economic strength and the later build-up of the German Navy reduced Britain’s power and led to increased protectionism, armaments wars and eventually decades of global conflict and violence.

The WikiLeaks documents show the United States attempting to assemble regional alliances to address problems like North Korea’s continued isolation from the global community, and Iranian nuclear ambitions. Yet its efforts in these areas have been ineffectual as the nation’s power to coerce and cajole has been reduced by its relative economic and military decline.

The outcome is that Iran’s attempts to establish a nuclear capability and North Korea’s aggression against its southern neighbor have been met with no effective response, increasing risk premiums in their respective regions and across the globe.

In previous decades, the United States led the way towards global trade expansion, as did Britain in the 19th century. Today there appears no longer to be a Congressional consensus to ratify even the limited Colombia, South Korea and Panama free trade deals, while the Doha global free trade talks are stone dead. The United States can no longer afford to act as an unquestionably benign trade hegemon; hence its petty retaliation against certain Chinese exports and its monetary policies perceived as mercantilist that encourage other countries to erect barriers to free movement of goods and capital.

During the 1990s, under the “Washington Consensus,” U.S. advisers pushed emerging market governments to cut deficits and run sound monetary policies. Today those developing economies plead with U.S. policymakers to follow their own sound advice.

Without a hegemonic sovereign force, as philosopher Thomas Hobbes predicted, the world has fewer barriers against life becoming “nasty, brutish and short”. With the United States incrementally shrinking in that role, investors must steel themselves for risk premiums to rise.

Comments

Give me a break, Mr. Hutchinson. There is some real substance to be digested in these criminally leaked documents, such as the clear solidarity of Arab countries with the US on the issue of Iran’s nuclear ambitions. This is quite unlike “hegomonism”, a word you appear to love.

Posted by mheld45 | Report as abusive
 

Come,come Mr Hutchinson. As problematic and bare knuckled as foreign policy is, I don’t think the world is presently as anarchistic and dangerous as was the state of personal safety in Thomas Hobb’s century when he wrote the Leviathan. Being a scholarly person, you are aware that amongst Hobbs’ works is an excellent translation of Thucydide’s “The Pelopenisian Wars”. It begins with a discusion of banditry in Greece before the classic period. Now that sort of insecurity really did impress Hobbs, as it does me, and influenced Hobbs’ writings in favor of hegemony in the political area.

Today it is simply an ethical imperative that the rest of the world begins to find and make heard thier voice in international afairs.

Analogous counterexamples demonstrating that good results can obtain without hegemony consists of the formation of the European Union and the Southeast Asian trading block.These would be inviable under conditions of absolute hegemony.

I agree totally with you that the Wikileaks situation illustrates the progressive weakening of American hegemony. Nevertheless there are many historians who feel that a silver lining is to be found in that particulair cloud.

Posted by davidldahmen | Report as abusive
 

Actually, Mr. Hutchinson, I believe you have a point. It is quite evident that America, and the West, has been ill-served by the recent occupants of the White House, both Mr. Bush and Mr. Obama. Talk of the American ‘hyper-power’ seems like a million years ago, and at present there really doesn’t seem to be anyone in US politics of the stature of Ronald Reagan, for instance, who seems capable of taking charge of the situation and setting things right. Europe taking a leadership role? China? As if. The most likely outcome, unfortunately, will be American isolationism, and that is in no one’s interest.

Posted by Gotthardbahn | Report as abusive
 

Economic decline, maybe; military decline, no. But, we can’t garrison the whole world, even if they are willing which they most assuredly aren’t, and most of us don’t want to anyway. Still, I can recall others, including guys like Henry Kissinger, pronouncing the triumph of the Soviets and the decline of the west.

Never, ever, underestimate your enemy’s ability to make as many or more mistakes than you. Ahmadinejad is one riot away from a lynching. The rising son in N.Korea is so addicted to western pleasures we will probably be able to buy the whole country as soon as China puts it on the market, unless China decides it wants it as a market for itself. Chavez joins Danny Ortega the first time he disappoints one of his generals. Eventually, China is going to look north and see lots of raw materials…

Posted by ARJTurgot2 | Report as abusive
 

I have grown up in the USSR which self-proclaimed itself the leader of the progressive world and eventually failed. USA self-proclaimed itself the leader of the democratic (and possiblky the whole) world, and it is failing for the same reasons. All the countries cherish their freedom (including even the freedom to make mistakes), and they typically do not want to be led by anybody, even by the allegedly (but not really) benevolent superpower like US. And I am quite comfortable with that.

Posted by Heretic1 | Report as abusive
 

If we hadn’t rushed headlong into Afghanistan and Iraq, squandering trillions and wearing out our armed forces in the process, taking on Iran wouldn’t seem nearly as daunting. Now the mere thought of military intervention in Iran sends shivers up our collective spines, including those of the fire breathing Neocons (even they know that we aren’t fit to take on another ground war). And if that weren’t bad enough, we now have the Chinese asserting themselves in truly unimaginable ways. Who would have thought they’d have the capability or the nerve to launch a missile a mere forty miles off the coast of California? There’s a reason the Pentagon hasn’t leveled with us about that incident — they’re scared to let the American people know that our worst enemy may be our largest trading partner.

Posted by IntoTheTardis | Report as abusive
 

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