Who has the upper hand?
The main task of any liberal state is to enable and maintain the wealth of its nation, which of course rests upon wealthy individuals. That imperative brought about another dilemma: O wealthy individual, the state will rob you, but in absence of it, the pauperized masses will mob you. The invisible hand of Smith’s followers have found the satisfactory answer– sovereign debt. That ‘invention’ meant: relatively strong central government. Instead of popular control through the democratic checks-and-balances mechanism, the state should be rather heavily indebted. With such a mixed blessing, no empire can easily demonetize its legitimacy, and abandon its hierarchical but invisible and unconstitutional controls. This is how a debtor empire was born. A blessing or totalitarian curse?
The USSR– much as (pre-Deng) China itself– was more a classic continental military empire, while the USA was more a financial-trading empire. On opposite sides of the globe and cognition, to each other they remained enigmatic, mysterious and incalculable. However, both had a super-appetite for omnipresence. Along with the price.
No global leader has ever emerged from a distrustful neighborhood
Consequently, by the mid 1980s the USSR cracked under its own weight, imperially overstretched. So did the Americans – the ‘white man’s burden’ had fractured them already by the Vietnam War. However, the US imperium managed to survive and to outlive the Soviets. How? The USA, with its financial capital (or an outfoxing illusion of it), evolved into a debtor empire through Wall Street guarantees. Titanium-made Sputnik vs. gold mine of printed-paper… Nothing epitomizes this better than the words of the longest serving US Federal Reserve boss, Alan Greenspan, who famously said to then French President Jacques Chirac: “True, the dollar is our currency, but your problem”. Hegemony vs. hegemoney.
Conventional economic theory teaches us that money is a universal equivalent to all goods. Like no currency before, the US dollar became after World War II the universal equivalent to all the world’s other moneys. The core component of the non-precious metals money is a so-called promissory note– the belief that, at any given future time, a particular paper will be smoothly exchanged for real goods.
Thus, roughly speaking, money is nothing else but a civilizational construct about imagined tomorrows– that the next day (which nobody has ever seen in the history of humankind, but everybody operates with) definitely comes, and will certainly be better than our yesterday or even our today.
This and similar types of social contract (horizontal and vertical) over the collective constructs hold society together as much as its economy keeps it alive and evolving. Hence, it is money that powers economy, but our blind faith in (constructed) tomorrows and their certainty empowers it.
Clearly, the universal equivalent of all equivalents– the dollar– follows the same pattern: Strong and widely accepted promise. What does the dollar promise when there is no gold cover attached to it ever since the time of Nixon shock of 1971?
The Pentagon promises that the oceanic sea lines will remain open (controlled by the US Navy), and that the most traded commodity, oil, will be delivered. So, it is not crude or its delivery that covers the dollar– it is a promise that the oil of tomorrow will be deliverable. That is a real might of the dollar, which in return finances the Pentagon’s massive expenditures.
Admired and feared, the Pentagon further fans our planetary belief in tomorrow’s deliverability– if we only keep our faith in the dollar, and so on and on in perpetuated circle of mutual reinforcements.
The two pillars of US might on the East coast (the US Treasury/Wall Street and the Pentagon) together with the two pillars of the West coast, both financed by the dollar and spread through the open sea-lanes (Silicon Valley and Hollywood), are the essence of the US posture.
This nature of power explains why the USA have missed taking mankind into another direction; towards a non-confrontational, decarbonized, demonetized, definancialized and de-psychologized, self-realizing and green humankind. In short, to turn history into a moral success story. They had such a chance when, past Gorbachev’s unconditional surrender of the Soviet bloc, and Deng’s Copernicus-shift of China, the USA– unconstrained as a sole superpower– solely dictated terms of reference; our common destiny and direction to our future.
Sadly enough, that was not the first missed opportunity to soften and delay its forthcoming multidimensional imperial retreat. The very epilogue of the WWII meant a full security guarantee for the USA, geo-economically (54 percent of anything manufactured in the world was Made in USA), and geostrategically (nearly a decade of nuclear monopoly). The USA still conducted the most N-tests, has the largest nuclear arsenal, and is the only power ever deploying it on another. To complete the irony, Americans enjoy geographic advantage like no other empire before. Save the USA, as Ikenberry notes: “…every major power in the world lives in a crowded geopolitical neighborhood where shifts in power routinely provoke counterbalancing”.
Why an empire by invitation did not evolve into an empire of relaxation, a generator of harmony? Why does it hold (extra-judicially) captive more political prisoners on Cuban soil than the badmouthed Cuban regime has ever had? Why does it remain obsessed with armament at home and abroad? Is the intensity inadequate of our confrontational push or the course of our civilizational direction false?
Indeed, no successful and enduring empire relies merely on coercion, be it abroad or at home. However, the prevailing archrival is only a winner, rarely a game-changer.
To sum up; After the collapse of the USSR, the USA accelerated expansion while waiting for (real or imagined) adversaries to further decline, ‘liberalize’ and bandwagon.The Expansion is the path to security dictum only exacerbated the problems afflicting the Pax Americana. That is how the US capability to maintain its order started to erode faster than the capacity of its opponents to challenge it. And the repeated failure to notice and recalibrate its imperial retreat brought painful hangovers to Washington by the last presidential elections. Inability to manage the rising costs of sustaining the imperial order only increased the domestic popular revolt and political pressure to abandon its ‘mission’ altogether.
When the USSR lost its own indigenous ideological matrix and maverick confrontational stance, and when the US dominated West missed triumphing although winning the Cold War, how to expect from imitators to score even a momentary economic victory?
Neither more confrontation and more carbons nor more weaponized trade and traded weapons will save our day. It failed in past, it will fail again any given day.
Interestingly, China opposed the I World, left the II in rift, and ever since Bandung it neither won nor joined the III Way. Today, many see it as a main contestant. But, where is lasting success?
Greening international relations along with greening of economy is the only way out. Historically, no global leader has ever emerged from a distrustful neighborhood, or by offering some more of the same in lieu of an innovative technological advancement. It all starts at home. Without support from a home base, there is no game changer. China’s home is Asia.
Hence, it is not only a new, non-imitative, turn of technology what is needed. Without truly and sincerely embracing mechanisms such as the NAM, ASEAN and SAARC (eventually even the OSCE) and the main champions of multilateralism in Asia, those being India Indonesia and Japan first of all, China has no future as global leader.