This blog is a adjusted version of the essay that I wrote in December 2011 as an exam assignment for the class ‘Transformation of the State’ that I followed at Aarhus University as part of my Masters degree.
I’ve tried to give my view on current changes going on in world politics and the consequences they’ll have for the future. The main topics I deal with are the economic crisis, rise of the BRIC-states and the Arab spring.
Please note that this is not intended as a journalistic piece but an essay, so reading it might take a while and might be a bit boring. Hope you enjoy reading it anyway.
Rise of the economic crisis
The economic crisis that started in 2008, although it might have come as a surprise, did not fall from the sky. It might have been caused by political and human mistakes, but the reason why it became such a global, destructive crisis has more structural reasons.
Advanced capitalist countries have agreed that states and markets are both necessary for growth and welfare: a well functioning state needs an open economy, but that economy should not be too free. It has to be regulated to a certain extend. Thoughts on how exactly those two are combined (how much ‘market’ and how much ‘state’ is appropriate) differ over time.
After the Second World War, a state centric, Keynesian economic model emerged in the Western world. The state was, compared to nowadays, very much involved in the economy and big industries were nationalized.
Starting with the Bretton Woods system in 1944, a political system that liberalized economies in the Western world and Japan, the international economy has been transforming from shallow integration to a deep integration. Where trade prior to the Second World War was mostly conducted on a national basis, i.e. raw goods for manufactured goods, the Bretton Woods system opened up the doors for transnational corporations, where the economies are not only linked by ‘arm-length’ trade but also transnational production chains run by a transnational company instead of several trading companies operating in different states.
However, a crisis in the terms of stagnation and inflation created the need for a new system (Sørensen 2004: 32). So, in the early 80-ies, a more neoliberal approach to economy emerged, something we now know as the Washington-consensus. This new model, in which we are still living now, is characterised by privatisation, deregulation and competitive exchange rates. The state got a more regulatory function instead of a controlling function, giving companies more flexibility and freedom, eventually resulting in more profit.
Not only the economic market has globalized thanks to liberalization and deregulation; the financial market has also been globally integrated. Financial flows such as bonds, derivatives, options etc. are now also part of a global financial system (Sørensen 2004: 30-31). Financial and economic markets were both very deep integrated by the time of the crisis in 2008.
Although the ‘housing bubble’ in the United States might have been the spark of the crisis that followed, I agree with Robert Wade when he writes that the true cause lies in lack of regulation (Wade 2008: 11), which does not mean that capitalism is a bad (or evil) system in itself. Governments have allowed firms and corporations to use complex constructions of buying loans, turning them into collateralized debt obligations, which are on their turn sold to investors. Western governments have not seen the risks involved in this deep integration of the financial market. If one market collapses: all of them are in trouble.
The rise of the BRICs
During the 80ies, the G7 – The US, the UK, Japan, Germany, France, Italy and Canada – accounted for half of the world’s economy. Those days seem to be over, beginning with the formation of the G8, including Russia and even more notably the creation of a bigger economic forum: the G20. The Western world, although still very powerful, has to take these ‘modernizing’ – a very Eurocentric term - countries into account as well these days.
Four states in particular have been doing well: Brazil, Russia, India and China, or the BRIC countries. China is ‘the best of the rest’, with an incredibly rapidly growing economy gaining on the Western economies. Nearly 60 percent of the total increase in world output between 2000 and 2008 took place in developing countries, half of which happened in the BRICs (Roberts 2010: 3).
Ironically, the countries were first identified as rising powers by the American based bank Goldman Sachs, which stated that investing in these countries could help the US overcome the economic shock that accompanied the terrorist attack of 9/11. The BRICs are thought to reach the equivalent to the collective GDP of the G6 (G7 minus Canada) by 2018. (Skak 2011: 2) Initially, that prognosis was 2040, but the economic crisis that mostly struck the West speeded up the process.
Although this prognosis is not so meaningful as it seems (Western economy, for example, includes more than just the G6 or G7), it is still a strong indicator of where the global economy is headed.
All these states have some major challenges (or flaws) to overcome in order to create a proper functioning market, such as large-scale corruption. However, the facts that they have been opening up their markets for the liberal world, has proven to be working well for their economy.
China as a main example, has been slowly reforming their economy ever since seventies and its leaders have been very open in stating that they see big benefits in economic globalization, both in economic and peacekeeping terms. Foreign investment is welcomed since the eighties, price liberalization started in the nineties. This liberalization towards the global economy has proven to be beneficial.
However, the state still holds a tight grip over the market. Practically, there is no free labour market, large-scale corruoption and the government still owns major (often inefficient) companies. (Sørensen 2004: 141-149) China has definitely moved towards a market economy in the past decades, but it’s definitely not a free market as we know it in the West.
With great power comes great responsibility
In the previous chapter I have explained how the Western world’s economy is shrinking, and how other states are slowly gaining on the Western world. What does this mean for the global power structure? Most of the modernizing states do not share the exact same values (such as human rights) as we do in Western countries. Will these upcoming powers realize that - to quote from The Amazing Spiderman - “with great power comes great responsibility”? And what does responsibility even mean in the world of politics?
The world has been shifting from a bipolar world, with the USA and the Soviet Union being the main powers, to a multi-polar world: a world with a bunch of big powers who do not necessarily share the same liberal ideology. In between we have experienced a short period of uni-polarism with the US as the only strong power. As Robert Kagan writes: “History’s back”, referring to the work of Francis Fukuyama who states that the battle of big ideologies had ended after the collapse of the Soviet Union.
The peaceful rise of China?
Militarily and politically, the world is still very unipolar: the US remains the one power that really matters. However, the economic crisis has shown how much of an impact money makes in our lives these days. When we’re talking about economical clout, we are definitely shifting towards a multipolar world (Zakaria 2008: 2).
However, so far none of the BRICs have shown any intention of overthrowing the Western world. It is important to note that a big share of the BRICs political clout is at the moment manifesting through the international institutions that are already in place, but were previously dominated by Western, liberal states.
China is definitely not as isolationist as it was before. It is taking part in several international organisations and forums more than id did thirty years ago. Although China seems to be favouring the status quo at the moment, Barry Buzan is right when stating that China is probably not really happy with the status and rank it has within the international community. China’s policy is characterized by its strong preference for sovereignty, nationalism and non-intervention, often opposing liberalist, western values such as human rights and environmentalism (Buzan 2010: 17-18).
The Westphalian model comes to mind (Buzan 2010:31): where the West have been moving away from national sovereignty, giving more and more power to international organizations and wishing the rest of the world would do so as well, China would prefer to keep the monopoly on authority within its borders. And that’s not so strange, of course, considering the fact that China’s values and standards are often quite different than the goals pursued by the mostly Western dominated international organizations.
Considering this, we can China a ‘reformist revisionist’ (Buzan, 2010) state: China will attempt to reform the rules, but not try to overthrow the rules. The same could also be said for another ‘BRIC’: Russia, who has always strongly opposed any humanitarian or political interventions, with its recent elections and it ignoring foreign election supervisors as a textbook example.
Making this change of power happen in a peaceful way needs some effort from all parties: America must not let pride come in the way when cooperating with the emerging states (Patrick 2010: 9, Buzan 2010: 20). Where the US was regarded as ‘the sheriff’ of the world, not taking too many other opinions into account, the US now have to be more careful. As Patrick puts it: “compromise will be the order of the day”, and America can’t ‘go at it alone’ anymore.
China, on the other hand will have to make an effort as well. Because of its growing power, China cannot increase its power ‘under the radar’ anymore. They are a power that has to be taken into account, and they also have to accept that themselves and take responsibility. In cases such as the economic crisis and environmental issues, other nations will look at China, and China has to answer with some action. Although this is complicated in the case of the environment (environmental goals will hamper economic growth), China has shown responsibility during the Eurocrisis in 2011. This included demeaning gestures by lending large sums of money to the IMF instead of lending it directly to the EFSF (the European emergency fund), and telling the United States that they have to stop their ‘addiction to debt’. These are (not just rhetoric) signals that China has accepted their role of a leader. I wrote a instead of the, because a Chinese unipolar world is not even remotely in sight yet.
Growing power of China will possibly also cause other states to feel threatened, including the US – as Buzan also underlines (Buzan 2010: 20). China has thus far spoken with a clear, realist voice. In order to keep growing and still keep peaceful relations with other nations, China has to work on its diplomatic skills.
The BRICs main goal remains economic progress. They will therefore use their new power to strengthen their own sovereignty and influence in international politics, but they will also be cautious for pushing too hard: we all need the global economy.
Meanwhile, in Europe
While the BRICs are doing quite well, the US and mostly Europe are struggling to keep their heads above water. With the economic crisis still going strong in Europe, economic power is declining and, as many analysts and scholars indicate, the Washington Consensus needs to make place for something new.
As the treaties signed by most of the EU members in late 2011 showed, regulation is no longer a taboo. States actively intervened during the crisis, both in the US and the EU, nationalising and bailing out banks. The new EU treaties give more control to the European bank and the new European institution to be created, the European Stabilisation Mechanism, or ESM. However, the market doesn’t seem to have calmed down yet, and more regulation and measures seem to be necessary for Europe to bring its economy back in shape.
Large scale protests in the form of the Occupy movement, successful or not, also showed public concern to the low level regulation that the financial world has to deal with. Where privatisation was the buzzword since the eighties, regulation is back in fashion since 2008.
Does this mean that Western states will pull back from their deep financial and economic integration, as defined earlier? No. At least in this case, Georg Sørensen is right when he writes that the debate between ‘state-centric’ and ‘state retreat’ is a wrong discussion to formulate: there might be some elements that point towards state centralism and other elements pointing towards the other (Sørensen 2004:26). Although Sørensen’s work is written before the crisis, he is still right when defining the process as ‘a changing role for the state’.
Although European states are giving up sovereignty to an increasingly powerful European Union, the EU itself is quite a protectionist ‘political body’. A retreat of the state is therefore not covering the entire story; because that would imply that state power slowly vanish into the global society. That’s not the case here.
Global regionalism
The current economic crisis and the lost in faith of an international ‘Washington Consensus’, gives opportunity for new, regional economic models to be deployed (Bremmer 2010: 34). One option for a peaceful rise of China would be, according to Bremmer, to create some kind of a regional international society ‘based on Asian values’, like the EU has formed an international society based on European values.
Patrick concludes something similar, but relating it to the US: “[US officials] will need to convene different clubs for different purposes, balancing encompassing arrangement such as the G-20 with smaller affinity groupings such as the G-8, which allows the United States to collaborate with long time partners that broadly share its fundamental political and economic values” (Patrick, 2010: 8).
Global regionalism will allow big blocs to be formed, allowing the various players on the global stage to have political and economical cooperation with other players, while still holding on to their own values. To conclude with Bremmer: (Bremmer 2010: 36): “The global level of international society would get thinner, and the regional level, as perhaps foreshadowed by the EU, thicker and more distinctive.”
The Arab Spring
When a vegetable seller in Tunesia set him self on fire in December 2010, a spark was lit and demonstrations throughout the Middle East have been going on through the entire year of 2011.
The international community was quick to respond, but also mixed in its response. Saudi Arabia intervened in Bahrain, quickly pushing down the revolt but obviously angering Bahraini opposition. Turkey enacted economic sanctions on neighbouring country Syria after the government repressed the protests with violence. More eye catching was the intervention in Libya, with the US and UK actively supporting the rebels, quickly joined by 27 other countries from both the Middle East and Europe. Chesterman points out that this was not so much a matter of international law; it was mostly a political and rhetorical matter (Chesterman 2011: 3).
China, on the other hand, stayed aloof. According to a CNN blogger, China is too worried (and perhaps rightfully so) that the Arab revolts might spark something within its own borders. “The party has created an extensive police and surveillance network to monitor its citizens and react to any potential threat to stability,” a US Congress report on China-US relations said (quoted from CNN).
The West was quick to coin it as a protest for a democracy, and media thanked western products as Twitter and Facebook . However, the first round of the only election held thus far, the one in Egypt, resulted in a victory for an Islamist party. 47% of the voters voted for the Muslim Brotherhood, a party that would rather see the western tourists - and their western ways – disappear from their country.
George Freeman is right when he writes that the Arab Spring is not as simple as it depicted in the media: there was a powerful share of the populations – perhaps not a majority – supporting the regimes in Libya and Syria, making the revolt very complicated (Friedman 2011:2). As shown, not all regimes will be overthrown: most of the Arab states have been successful in preventing the revolts from achieving their political goals.
Francis Fukuyama raises an important and at the moment very relevant question when asking if the values of the liberal west are truly universal (Fukuyama 2004: 19). Current developments hint that it is not: the outcome of successfully overthrowing an authoritarian regime as in Egypt does not necessarily result in Western values. If anything, the direction the Egyptian election is headed at the moment is mostly a reality check for the Western world. It shows that the wish for democracy, the wish to have a say in who you are governed by, could be universal. However, a liberal democracy seems to be a western idea, which is not exported so easily, if that is even possible.
In order to bring these into the (or a) security community, economic and political ties must be strengthened. The BRICs are prime example of how integration into the global politics and opening up to the global economy can make a state grow and develop (Sørensen 2007: 361).
The challenge for the countries that have been able to overthrow their governments first lies in building the proper political infrastructure for their countries by creating powerful institutions within their state (Fukuyama 2004:30): an economy cannot be managed properly by a corrupt state.
The international community can help here: modern and post-modern states such as the US, China and the European countries have a responsibility towards these states to share their experience in proper state building. However, while helping these people achieve their freedom, they must be left truly free in picking and developing their kind of freedom, which is not necessarily based on Western, liberal values and ideals and might result in a completely different freedom than ours.
Concluding
If one thing is clear, it is that the global power structure is shifting. The BRICs, with China as their obvious leader, are coming up, and they’re coming up fast – at least, in terms of the economy. On a humanitarian level the BRICs are not even close to Western standards. However, as long as a state can effectively keep civil disobedience at a low level, it doesn’t have to interfere with the economy too much.
Meanwhile, the Western countries have slipped into a deep economic crisis, and it doesn’t seem to be ending any time soon. This does not only affect the dominant position of the United States on the global political stage; it also means that the Western economy based on the Washington Consensus has to be rethought.
I am optimistic on the question whether the shift in power can happen in a peaceful way: upcoming powers have been incorporated in many international organisations. China doesn’t seem to be out to cause a revolution, it wants to reform the rules of the game that is already being played, not overthrow the entire infrastructure of current international politics.
The shift towards a multipolar political world means that the United States and the West cannot ‘go at it alone’ anymore: other powerful players have to be taken into account, and all players have to be ready to make compromises. However, compromise is not always possible. Therefore I predict that more small to medium scale cooperation such as the European Union and NAFTA, and perhaps the BRICs, will be created in the coming decades. Cooperating on a regional level while maintaining looser global ties allows states to work together with other states that are culturally and economically closer to themselves, which will be harder in a world with not one strong power, but a handful of them.
It is important that, while regionalizing, global ties are still well maintained. The fact that the BRICs are so integrated in the global economy has allowed them to emerge in a peaceful way: they benefit from the system that the West benefits from as well, so major conflict would not be beneficial for either of them.
Egypt as a prime example indicates that liberal democracy is not necessarily a universal value. They should be free to adapt Western values, but they should also have the freedom to not do so.
Concluding, the economic crisis and the rising BRIC-states will change the power structure from a unipolar world to a multipolar world. Although compromises have to be made, major conflict can definitely be avoided. At least, if the major powers, both new and old, take their responsibility.
Literature used
Bremmer, Ian (2009), ‘State Capitalism Comes of Age: The End of the Free Market?’, Foreign Affairs, Vol. 88/3, May/June 2009, pp. 40-55.
Buzan, Barry (2010): ‘China in International Society: Is peaceful rise Possible?’, The Chinese Journal of International Politics, pp. 5-36.
Drezner, Daniel W. (2007), ‘The New World Order’, Foreign Affairs, March /April 2007, 86:2, pp. 34-46.
Ethics and International Affairs (2011), ‘Special Issue on humanitarian intervention in Libya’, See especially Simon Chesterman, ‘Leading from Behind: The Responsibility to Protect, the Obama Doctrine, and Humanitarian Intervention after Libya’, pp. 1-7 (7 pp.),
Friedman, George (2011), ‘Re-Examining the Arab Spring’,STRATFOR, 15 August 2011, pp. 1-4 (4 pp.).
Fukuyama, Francis (2004), ‘The Imperative of Statebuilding’, Journal of Democracy, Vol. 15, No 2, pp. 17-31, 15 pp.,
Kagan, Robert (2008), ‘History’s Back: Ambitious autocracies, hesitant democracies’, The Weekly Standard, Vol. 13, Issue 46, 25 August 2008, 5 pp.,
Patrick, Stewart (2010), “Irresponsible Stakeholders? The Difficulty of Integrating Rising Powers”, Foreign Affairs, Vol. 89, No. 6, November/December 2010, pp. 44-53.
Roberts, Cynthia (2010), ‘Polity Forum: Challengers or Stakeholders? BRICs and the Liberal World Order’, Polity, Vol. 42, No. 1, pp. 1-13.
Skak, Mette (2011), ‘The BRIC Powers as Actors in World Affairs. Soft Balancing or?’, Paper for the Joint IPSA-ECPR Conference in Sao Paolo, February 2011 (PDF), 19 pp.
Stewart, Scott (2011), ‘Libya After Gadhafi: Transitioning from Rebellion to Rule’, STRATFOR, 24 August 2011, pp. 1-5 (5 pp.),
Sørensen, Georg (2004), The Transformation of the State. Beyond the Myth of Retreat, London: Palgrave/Macmillan, 2008, Core text.
Sørensen, Georg (2007), ‘After the Security Dilemma: The Challenges of Insecurity in Weak States and the Dilemma of Liberal Values’, Security Dialogue 38:3, 357-78,
Zakaria, Fareed (2008), ‘The Rise of the Rest’, Newsweek, 12 May, 2008, 8 pp.
Wade, Robert (2008), Financial Regime Change? New Left Review, 53, September-October 2008, pp. 5-21 (17pp)
Journalistic sources
De komende verkiezingen staan nu al in het teken van Europa. Tijd om ons voor te bereiden dus. De antwoorden zijn niet zo lastig om te vinden op het internet, maar laten we ze maar even op een rijtje zetten. Eens kijken. Wat kost Europa ons?
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