A New World Order?

Does the US need to strike a grand bargain with like-minded countries to pool their efforts? What does this tell us about today’s global politics?

Perhaps the most remarkable editorial of last year was the cover leader of the London Economist on 19 November 2020. Shortly after Joe Biden was elected president, that stalwart of sensible liberal business wrote that in order to deal with China’s increasing influence ‘America needs to strike a grand bargain with like-minded countries to pool their efforts.’

It was an open admission that the US was no longer powerful enough to take on any other country by itself. The Economist was not arguing that the US was no longer the most powerful country in the world, Rather, that the gap between it and the others was shrinking.

Of course the hegemon always wears the crown uneasily, and there has been a constant flow of claims that the US dominance was economically or militarily challenged by another – the EU, Japan, Russia, as well as China. But in the past the solution was that the US should sort out the threat by itself. The Economist has concluded that it may be no longer powerful enough to do that.

For while the US has been the frontier economy leading the world, it is increasingly easy for other economies to catch up. There is an economic theory, for which I see both merit and evidence, that eventually the world will return to the situation before 1750 when economic power was distributed in proportion to the population of each country. That day, when per capita incomes are approximately equal across all countries, is a long way off, but you already can see the movement towards it. The EU and Japan have already caught up.

China is still a long way behind the richest countries in per capita terms but it is now, on some measures, the largest economy in the world as a consequence of its huge population. That gives it enough economic surplus to exercise an awful lot of muscle – arguably too its centralised government makes it easier for it to use its power.

But even if the US has a huge economy, it is finding its reach limited. It is still the biggest military power in the world but its generals warn they are not able to fight major conflicts on two fronts. (Who else might even try?)

The diminished power of the US is acknowledged by even Donald Trump and his followers. His slogan ‘MAGA’ – Make America Great Again – implies that America is no longer great. The diagnosis, though, is hopelessly wrong. America’s diminishing authority is not because its leadership lacks the will and that a strong leader would restore US leadership (shades of Nietzsche), nor that the ‘deep state’ in Washington has been betraying the country (shades of McCarthyism).

So the relative power of the US is diminishing. Serious American thinkers acknowledge this but perhaps are not as willing to say too publically, given that the MAGA crowd are likely to accuse them of treachery. Barack Obama and his advisers were well aware of this situation and were trying to maximise their leadership leverage. However, many members of Congress – even senators – were (and are) more MAGA inclined.

Trump had the US running the fight single-handed. Old allies – ‘weaklings’ – were henchmen, not partners. The outcome of Trump’s policies was to leave a huge space in the international political order for China to fill.

Instead, the Economist is arguing that the strategy should be closer co-operation with like-minded countries. Its cover image has Australia, Britain, Canada, the EU, Japan, South Korea and the US holding hands in a linked circle.

New Zealand is too small to feature in such grand strategies. In any case we have problems which highlight its difficulties. It is certainly true that we are more comfortable with the seven in terms of their (mostly) liberal democratic institutions and practices, while our strongest military and intelligence relationships are, broadly, with them. But China is our largest trading partner (although we export more to the seven collectively); it is also the largest trading partner of Australia, Japan and South Korea, three of the Economist’s seven.

How to tread the path between the two sides? The uneasy example is China’s recent treatment of Australia which has been bully rampant, signalling a threat to the US. That is the danger of being a small ally of a large power: the other side may pick on you to make an example.

MAGA America appears to have given little support to Australia in its conflict with China. I imagine that Biden’s America will offer more. But MAGA reminds us that the US may not always be reliable. Trump’s legacy has been to weaken America’s ability to provide leadership, because no one can trust it in the long run.

Biden’s more sophisticated understanding of the international order can only provide some remediation, especially as Congress is unreliable. Recall that Obama’s new engagement with the Pacific included joining the TPP. Neither Trump not Hillary Clinton was committed to the deal. Whatever their personal views, they knew they could not have got it through a Congress where MAGA had sufficient support to block it. The MAGA crew are still there.

Uncomfortably then, the rest of the world are in the hands of a couple of big bullies. China’s direction may be clear but we are very uncomfortable with it, especially the internal repression which is especially acute in Hong Kong, Xinjiang and Tibet while there is increasing repression of freedom of expression throughout China.

We ought to be more comfortable with the US, but it is a far greater paradox – recall Churchill’s description of Russia as a ‘riddle wrapped in a mystery inside an enigma’. (He said that the key was national interest.) Much the same applies to the US.

How can a country with the finest cadre of scientists in the world be so scientifically illiterate – only a third of Americans believe in evolution? Its medical fraternity is equally world class so how has the US been able to make such an enormous cock-up over its response to a pandemic? I admire so much the American thinking on liberty, yet I look at their treatment of blacks. The country which dominates the world is populated by those who have little knowledge of global geography. It has been a leader in promoting the rule of law but finds its parliament building invaded by a mob supporting a president whose understanding of the law is, at best, tenuous.

Hopefully we will experience a saner US than we have seen over the last four years but that will not resolve the challenges the world faces.