The
American Crisis Requires a New European Global Commitment
By
Carlo Pelanda (September 15th 2008)
(Modified
and translated by Marie Plishka)
The current crisis will not destabilize the
global market. But there is another one
on the horizon that could do it. The global
system of governance centered on the United States is rapidly losing its
regulating capacity and its drive in international affairs. So much so that one can hypothesize that both
America’s
reign and the globalized market will cease to exist by 2015. The problem is that there is not yet another
system to replace the one we have known for 70 years. We have to learn to see the new reality to
find new solutions.
The tail of the
financial crisis in America
has caused implosions more extensive than expected that it has managed to surpass
the Federal Reserve’s barrier of defense.
Thankfully, the magnitude of the disruptions is inferior to the ability
to manage them. The world will be able
to absorb the crisis even though the crisis has created “black holes.” But the key to a successful exit from this
crisis will depend both on the quality of the political management and on the
coordination of the central banks and the states. Nevertheless, America is going to find herself
very weak after the crisis. This crisis,
in fact, is aggravating another problem that has been present since the end of
the 1990s. America’s model based on
opportunity is fading because the structural growth is not sufficient to
sustain it. In fact, Alan Greenspan had
to create bubble after bubble to spur economic growth. By doing so, he had to separate “confidence”
and “stability.” But economic
performance is compromised if the two are too far removed from one
another. America can no longer rely on
bubbles for economic growth, especially after this current bust. Therefore, it will no longer be able to drive
global growth. The hypothesis of
“decoupling” is false in that many other economic regions do not have a driving
force equivalent to America,
and we are able to see it in this crisis: if America imports less and is weak,
the rest of the world would be adversely affected. First problem: the world would be lacking an
economic powerhouse. The second problem
is worse. America’s power has become too
small to contain the emergence of new authoritarian powers. China and Russia are not
interested in disrupting globalization, from which they draw their wealth. Particularly not China. Their priority is to defend their regimes by
reducing both America’s
sphere of influence and its pressure to democratize. Moreover, they need to fuel nationalistic
pride, via expansion, to maintain consensus for the regime. They are succeeding at an impressive
rate. Dozens of dictators, from Iran to Venezuela, are
growing bolder and more aggressive because they know they will be protected by
either Moscow
or Beijing. The dissuasive American power imploded at the
global level. It is very likely America will no
longer have the power to regulate the economic and geopolitical behavior of the
majority of the nations. This will
weaken the “Western governance” of the world, governance based on economic
balance and order. The authoritarian
capitalist models will implode on their own due to their intrinsic instability
and will contaminate a global system less capable of repair. Without America as the pillar in the global
system, the group of democracies that rule the global economy will no longer have
sufficient influence. The cycle of
capital will not find the necessary confidence.
McCain or Obama will be able to reconstruct part of America’s
global strength, but not all of it. And
perhaps America
is tired. At some point in the future we
will have an ungoverned world headed towards chaos. For the first time since 1945 we face the collapse
of the American pillar. Solutions? Only one solution is taking the steps to
restore global governance based on western rule. Europe
should integrate America’s
yielding power and create with her a symmetric alliance and a common market
system. Then should come the push for
the integration of the euro and the dollar.
This solution would provide the new pillar of world order. But this plan requires a Europe
that in a few years transforms itself from and introvert into an extrovert, from
being driven to being the driver.
www.carlopelanda.com