Posts Tagged ‘Russian financial crisis’

The world as problem-solving community

July 17, 2009

Like every new century, the dawn of the twenty-first tempted the pundits. They eagerly mustered an ample supply of adjectives to describe it: “American”,  “Pacific”, “Asian”, “unipolar” (American), “bipolar” (democracies/autocracies) and “multipolar” (USA, Russia, China, India and Japan), see our previous post on “Which New World Order?”. But the decade between 1997 and 2007 saw such a rapid succession of contradictory events that the validity of these predictions became easier to measure in months than in centuries: financial crises in Asia (1997), Russia (1997) and on Wall Street (LTCM 1998; US military interventions with UN Security Council mandate (Afghanistan, 2001) or without (Kosovo, 1999, Iraq 2003); economic rise-and-decline indicators favoring China since 2001, India since 2005, Russia since 2006; challenges to US power by terrorism (September 11, 2001), insurgencies (Iraq, Afghanistan 2003-2007), or diplomacy (“old Europe” against the Iraq war 2003, effective Chinese prodding in the six-way negotiations on denuclearizing North Korea replacing verbal US pressure in 2007); functioning nuclear deterrence taming conventional belligerence between India and Pakistan (2002); the growth of Middle Eastern and Asian sovereign funds (from 2007); climate change on the G-8 agenda (2007) and skyrocketing energy and foods costs (2007/2008); and, finally, a global economic melt-down  not seen since the Great Depression. The acceleration of changes forced pundits to ponder.

The foreign-policy schools of thought that have been competing for 300 years in the western world need revisiting. Idealism appeared to have been discredited after the Iraq war, while realism was drawing new followers. But this reaction did not do justice to either approach. For the neo-conservative war to spread democracy was the expression of a third school of thought, a combination of idealism and realism that is both aggressive and utopian (Table 1). The new world order we ought to look for, should pragmatically combine the still applicable virtues of traditional idealism and political realism without relapsing in the dogmatic contention that has gone on since John Locke and Thomas Hobbes. It should dispense with all polarities, all “rise-and-decline” predictions, and all power hierarchies in the international community. The events from 1997 to 2007 listed above make one thing clear: the powerlessness of the “power” of even the most powerful of the nation states as defined in the Westphalian system.

Table 1: Foreign Policy Schools of Thought

1. Multilateralism and functionalism

The new Asian power centers discussed in our previous post are not alone in initiating  integration processes. Multilayered, overlapping networks of functional cooperation span the globe. Figure 4 shows the most important regional organizations in Africa (AU, SADC), America (OAS, Mercosur, NAFTA, SICA), Asia (ASEAN, ASEAN+3, East Asian Summits), Eurasia  (SCO), the Gulf region (GCC) and the Pacific Rim (APEC, US-Japanese Treaty on Security and Cooperation).

Figure 2: Asymmetrical overlaps of functional organizations

Source: Michèle Schmiegelow & Henrik Schmiegelow, “Gulliver’s Shackles”,Internationale Politik Global Edition Vol 9 N°4 (Winter edition), p.54-61

These functional networks may appear suspect to traditional power centers since they function like the strings used by the Lilliputians to tie down Gulliver. For instance, Washington observed with initial skepticism how the ties between ASEAN, China, Japan and South Korea (ASEAN+3) led to an astonishing depth of economic integration without its involvement. And all this happened within the geographic area of APEC, which the US itself had inspired. On May 22, 2008, reviving the 1977 Fukuda doctrine of his father, Japanese former prime minister Yasuo Fukuda took the wind out of the sailsof such US concerns by advocating a long-term transformation of the Pacific into a “inland sea” analogous to the seventeenth-century Mediterranean. He invited the North American and Latin American countries bordering the Pacific to participate, along with Australia, New Zealand, the ASEAN states, China and Russia. A student exchange program emulating the European Erasmus system would establish this functional integration in the minds of future generations.

Yukio Hatoyama, Prime Minister of Japan since September 2009, went further. In an article entitled “My political philosophy” published shortly before his election in the Japanese monthly Voice , he referred to the ideas of Count Richard Coudenhove-Kalergi , the paneuropean visionary, and  advocated an East Asian Community. We are delighted that his advocacy is very close indeed to our arguments explained in our article “The Road an Asian Community” published in the November 2007 issue of the global edition of Internationale Politik, as well as in our blog posts on functional integration in Asia. It seems Europe has contributed to the emergence of a new world order, if only through the pale immateriality of thought.

Today’s interdependent world faces problems that truly demonstrate the powerlessness of “power”. Richard Haass emphasized this point using the example of American GIs in Iraq. Though equipped with high-tech weapons, they are powerless against “low-tech” ambushes by insurgents (On the remarkable evolution of Richard Haass arguments see our previous post on „Which New World Order?“). Another example is India’s and Pakistan’s reluctance to actually use either the millions of soldiers deployed at their border or their nuclear arsenals in the 2002 Kashmir crisis, which was provoked by an Islamist terror attack in New Delhi.

The recurring crises of US financial markets demonstrate the fallacy of the concept of “economic power.” For Henry Kissinger, the conservative political realist, the discontent globalization’s losers analyzed by liberal economist Joseph Stiglitz is a serious concern. He castigates the “profligate and obscurantist practices” that caused the US sub-prime crisis (and preceding crises). He advocates the combination of an economic and a political world order (Henry Kissinger, “Falling behind: Globalization and its Discontents,” International Herald Tribune, May 30, 2008.) This takes us far from the Westphalian system and the balance-of-power model, of which Kissinger has always been the foremost analyst.  Traditional political power cannot slow down or stop the melting of the polar icecap, global epidemics, the depletion of finite resources, and so on. There is increasing awareness throughout the world that everyone is in the same boat when it comes to finding solutions to global problems.

When the 2007 US sub-prime crisis grew into the worst economic meltdown since the great depression of the 1930’s between September and November 2008, major “powers”, regional organizations and multilateral institutions were pushed by a rapid succession of neo-functional spillovers:

–          in September: international policy coordination of central banks which had been considered out of fashion in the unipolar 1990’s,

–          in the second week of October: joint action of EU member states to recapitalize their banks and guarantee inter-bank lending, a method initially rejected but, once implemented in Europe, immediately adopted by the US.

–          in the third week of October, when the full impact of the financial crisis on the real economy in China as well as in G 7 countries became apparent: a meltdown of commodity prices including a “reverse oil shock”  (David Yergin) changing the perceived “power balance” between resource-rich “authoritarian” Russia, Venezuela and Iran and the G 7 countries

–          on October 24/25  at the ASEM summit:  basic agreement between EU members and ASEAN+3 members on the necessity to strengthen regulatory supervision and stabilization of global financial markets

–          on November 15th at US invitation: a second “Bretton Woods Summit” to adapt IMF and World Bank to the challenges of the 21st century.

Since then, the G 20 has emerged as a new global policy forum, diluting the “shares” of the G8 in world leadership. As a result, the world has become much more multilateral even in what had long been considered as its most influential multilateral policy procedures.

2.  The world as problem-solving community

In our previous post we have recalled the shift to a more dispassionate approach to foreign policy towards the end of the George W. Bush Administration.  It had been a significant recognition of US interest in a functional world order. President Barack Obama’s foreign policy discourse promises the return to important fundamentals of American idealism, most ostensibly in his plea for nuclear disarmament, his offer of dialogue with Islam, his prodding of Iran to turn its fist into an outstretched hand, his readiness to share leadership on major world issues with China. His foreign policy practice, which is perceived by some as lacking decisiveness and profile, in fact constitutes a welcome revival of American philosophical pragmatism (Charles Peirce, William James and John Dewey). It provides an effective antidote to the violence-prone utopianismof the neoconservatives, which intellectual historian John Gray sees as having much in common with the methodology of Marxist world revolution (Reviewed in Frankfurter Allgemeine Zeitung, “Der Übergang der Utopie zu den Neokons,”(“The Passage of Utopia to the Neocons”) April 16, 2008). The open debate within the Obama Administration on a new strategy in Afghanistan is the opposite to the neo-conservative decision-making style on Iraq. That style had been inspired by Chicago philosopher Leo Strauss (Table 1, right column) whose discourse on a platonic elite that should at times withhold the truth from the uneducated masses was a startling step backward from both critical rationalism, today’s universal standard for scientific theory (see Karl Popper, Conjectures and Refutations: The Growth of Scientific Knowledge (London Routledge & Kegan Paul (1962) New York: Basic Books (1963)),  and the political philosophy of the open society (see Karl Popper, The Open Society and Its Enemies (London, 1945) Princeton: Princeton University Press (1971)), which decisively shaped postwar Europe.

The advantage of American philosophical pragmatism is that it does not force praxis into the service of a theory that dogmatically seeks self-confirmation— such as neo-conservatism in the Iraq war. Inversely, fully aware of the fallibility of human knowledge, it examines all available theories with respect to their usefulness for problem-solving practice. European trans-atlanticists might also take a cue from it. At any rate, America’s partners in Asia feel more comfortable with American philosophical pragmatism than with neo-conservative dogmatism. Japanese economic policymakers have already used this philosophy as the basis for a strategic pragmatism that is recognized and used as a model throughout Asia (see our post on “What is Strategic Pragmatism”).

The world order that is urgently needed is, we submit, a problem-solving community. Its fundamental trans-cultural norm should be a simple categorical imperative, superbly defined by Hans Jonas (Das Prinzip Verantwortung: Versuch einer Ethik für die technologische Zivilisation (The Responsibility Principle: Essay on an Ethics for the Technological Civilization), Frankfurt am Main: Insel Verlag, 1979) :“Act in such a way that the maxim of your action is compatible with the survival of humanity”.