We live in a world that was created by the Second World War. The modern state system and the global economy are, even 60 years later, largely reflections of how power and wealth came to be distributed at the end of that conflict. This status quo has been threatened many times, but it has survived these challenges largely intact. Now, however, change has become inevitable. The scales of power are shifting. To understand the new world into which we are plunging, however, it is crucial to understand how the present global order came into being following World War II.
Central to this story is the role of the United States of America. It was American money that rebuilt the shattered post-war European economies following the war and it was American propaganda and military strength that confronted the spread of communism and socialism around the globe and promoted capitalism as the alternative. It has been American policy makers that took the most active steps to discourage third world countries from using trade barriers and regulations to develop or industrialize their domestic economies. Where necessary the United States has overthrown governments and invaded countries to maintain a basic status quo: raw resources and eventually unskilled manufactures flow from the poor countries to the wealthy ones, but almost always at prices set by the first world.
Of course there have always been challenges to the status quo. In the early postwar period the greatest challenge was posed by the Soviet Union. The awful human rights violations and mass murders of Lenin, Stalin, and the Communist Party were never a serious concern to American and European politicians. In private conservation President Harry Truman even praised Stalin as an honest man and both he and Winston Churchill agreed that Stalin was someone they could work with. Nor did the Soviet Union pose a real threat of world domination: the Soviet economy and military were utterly devastated following World War II. The Soviets sent money to friendly regimes and viciously crushed internal dissent, for instance Czechoslovakia in 1968. However, with the sole exception of Afghanistan in 1979, the Soviet Union never invaded a country that they did not already control. Thuggish and petty though the Soviet leadership were, they were never the apocalyptic threat as they were portrayed as Americans.
Instead, the quest to secure natural resources and a good climate for investment has been the guiding aim. Despite all of this, however, the American empire has always been unique. Though it is the most powerful country in modern history, much of its influence has always been informal. America has shown little taste for outright colonization; its leaders much prefer to simply give local elites money and then let them worry about governing. Because of this, American power has always rested on the strength and dynamism of the American economy and American culture. Should these sources of “soft power” decline, the American world order would be threatened with disintegration.
If the American economy ceases to be the largest and most dynamic in the world then how long can American power be sustained? In next week’s column we will examine the global implications of a declining American economy and the rapid rise of the East Asian economies.
