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World Affairs
Vol. 2, No. 4 (Oct–Dec 1998)
Global Realignment In The New Millennium: Three Possible Scenarios
By Ismail Shariff
Now that the cold war has come to an end, which geoplotical configuration will the international system adopt in the new millennium — unipolar, regionalised or multipolar?
The end of the cold war has prompted a torrent of speculation about the institutional framework for the new millennium. Francis Fukuyama, a policy planning official in the US State Department, noted in 1989 it was time to witness “the end of mankind’s ideological evolution and the universalisation of western liberal democracy as the final form of human development.” Fukuyama’s explicit proclamation seems to be contradicted by the continuing flood of world events: the Tiananmen Square massacre, the Gulf War, ethnic cleansing in Bosnia and Croatia, and finally, the on-going tension in the Middle East. In this context an attempt has been made below, to throw light on the past and the present as the predicator of the future in the new millennium.
Revisiting The Past
Adam Smith, the father of classical economics, was a product of the Newtonian Age. Just as Isaac Newton formulated the Natural Laws of Gravity and Motion to explain the behaviour of planets in the solar system, Smith employed the laws of supply and demand to explain the operation of the economic system. To Smith, the market economic system was a permanent part of the natural world. He spoke of a system of natural liberty that was governed by a system of natural prices. Mercantilist restrictions could interfere with the natural progress of opulence, but they could not fundamentally change or replace the underlying laws of the system.
The Smithian view of the world and its future was quickly challenged. Hegel, the German philosopher, and Darwin, the British naturalist, introduced dialectical and evolutionary modes of thought that questioned all static conceptions of life and social organisation. The French and American revolutions demonstrated the feasibility of revolutionary action and led to demands for political, economic, and social equality. By 1846, Karl Marx and Frederic Engels believed that the conditions already existed for a communist revolution that would quickly spread around the world and “abolish the present state of things”. (Karl Marx and Frederic Engels, “The German Ideology”, in the (Marx-Engels Reader, Oxford University Press, 1978, p 168). Writing two years later, John Stuart Mills was more uncertain: ‘We are too ignorant either of what individual agency in its best form or socialism in its best form can accomplish, to be qualified to decide which of the two will be the ultimate form of human society.’ (John Stuart Mills, Principle of Political Economy, London: Penguin Books, 1970, Books 4 and 5, p 350).
The possibility of a socialist revolution was finally demonstrated in 1917, when the Bolsheviks seized power in Russia. From the beginning, observers in the West found it difficult to believe that the system would last. When Lenin established his market-oriented, new economic policy in the early 1920s, many believed that the Socialist experiment was over. From that point forward, every Soviet programme of reform was greeted by many Westerners as a return to capitalism.
During the Great Depression, the old conceptions of capitalism and socialism seemed to lose their meaning. In the Soviet Union, Stalinist repression of the workers made a mockery of socialist ideals. In the United States, the New Deal policies seemed to modify the nature of the market system. A path-breaking study by Berle and Means revealed that many capitalist forms were no longer controlled by capitalists. (AA Berle and Gardner C Means, The Modern Corporation and Private Property, New York: Commerce Clearing House, 1932, p 79) An elite corps of professional managers had taken charge, they said, because ownership of the large corporations was now divided among thousands of powerless stockholders.
In 1941, James Burnham detected a common thread in the evolutions of Russia, America, and Nazi Germany; he argued that all the industrial countries were shifting away from capitalism and socialism towards a middle ground that he called the ‘Managerial Society’. In this new society, he said, the means of production would be owned by the state, enabling the government to eliminate the mass unemployment of the capitalist system, but no progress would be made towards a Socialist classless society. The managerial and technocratic elite would “gain preference in the distribution of products, not directly, through property rights vested in them as individuals, but indirectly, through their control of the state.” (ibid. p 72). Russia had already “advanced furthest along the managerial road”, but all the other industrial societies were on the way. Burnham’s gloomy view of the future was shared by Fredric Hayek in his 1994 book, The Road to Serfdom, (Chicago University Press, 1944, p 39).
In the year that Burnham’s work appeared, a far more significant event captured the attention of the world and temporarily changed the Soviet image. The German invasion of Russia broke the bond of totalitarianism formed between Hitler and Stalin in 1939, and the Soviet Union joined in an alliance against Hitler with the western democratic forces. In 1942 Wendell Wilkie, the Republican candidate in the 1940 presidential race, spent ten days in the Soviet Union during a round-the-world ambassadorial trip for President Roosevelt. Upon his return, Wilkie published his best-selling book, One World, which contained a plea for post-war cooperation between nations:
‘Now, we do not need to fear Russia. We need to learn to work with her against our common enemy Hitler. We need to learn to work with her in the world after the war. For Russia is a dynamic country, a vital new society, a force that cannot be bypassed in any future world.’ (Wendell J Wilkie, One World, New York: Simon and Schuster,1943, p 87).
Captured by that same wartime spirit of cooperation, a Russian-born Harvard sociologist, Pitirim Sorokin, argued that Russia and the United States “exhibit an essential similarity in a number of important psychological, cultural, and social values”. (Pitirim Sorokin, Russia and the United States, Oxford University Press, 1942, p 9). Both countries, he noted, are continental in scope, cultural and racial melting pots, and have similar structures.
Because of their environmental similarities Sorokin predicted a “mutual convergence” of the economic and social structures of both countries. As cultural interchange expanded between Russia and the United States, each country would be influenced by the strength of the other system.
‘Without even diplomatic pressure the United States will strongly influence the Soviet regime in the direction of terminating its dictational violation of the elementary rights of Russian citizens... On the other hand, Russia will continue to fructify the culture — particularly by the fine arts — of the United States; and it may facilitate a decrease of the commercial hypocrisy, selfishness, and exploitation inherent to a certain extent, in any appropriate business on a large scale.’ (ibid p37.)
This convergence, Sorokin believed could provide a basis for international cooperation. He called on the American and Soviet leaders to create a framework for lasting peace by establishing a “real, efficient, and powerful international authority empowered with the right of decision in all international conflicts between all states.” (ibid p129). One year later, his hopes were partially fulfilled when the United States, the Soviet Union, and 49 other countries signed the United Nations Charter.
In addition, after World War II, several circumstances seemed to support the contention that capitalist and socialist countries were converging towards a middle ground. England and several other capitalist countries initiated large-scale nationalisations of industry, and countries such as France and Japan established systems of indicative planning. In West Germany, the new system of codetermination placed labour representatives on corporate boards of directors. The Yugoslavs broke from the socialist mainstream in 1950 to establish their system of worker’s self-management and gradually replaced central planning with market exchange.
In 1956, three years after Stalin’s death, Nikita Khrushchev delivered two historic speeches to the Twentieth Party Congress. The first speech, delivered publicly, proclaimed that Lenin’s doctrine of the inevitability of war between capitalist and socialist countries was rendered obsolete by the danger of nuclear extinction. He announced a policy of peaceful coexistence — a shift from military confrontation to economic and political competition. Furthermore, he attempted to draw Yugoslavia back into the fold by recognizing the legitimacy of different roads to socialism. In his second speech, delivered to a secret session of the party congress, Khrushchev denounced the crimes of Stalin. (Pravda, September 9, 1992 reprinted in Current Digest of Soviet Press, October 3, 1962, pp 13-15).
In the West, the Kennedy administration opened the 1960s with an emphasis on governmental activism and civil rights. In Great Britain, the conservative government established the National Economic Development Council (NEDC) in 1962, influenced by the French record of rapid economic growth under indicative planning. Even in West Germany, a bastion of anti-Keynesianism, a Council of Economic Experts (CEE) was established in 1963 to strengthen national planning.
As the eastern nations dabbled with markets and democracy and the western nations enlarged the roles of their governments, the convergence theory gained broad acceptance in academic circles. Jan Tinbergen, who would later share the Nobel Prize in economics, published his Theory of the Optimum Regime in 1959, suggesting the existence of a superior system somewhere between the poles of atomistic capitalism and centrally planned socialism. According to the usual formulation, this system would allow the market to prevent imbalances in the short run, and it would employ economic planning to coordinate long-term decisions. In 1961, Tinbergen argued that systemic changes “are in fact bringing the Communist and free economies closer together”, although he was quite aware that “there are very large differences still.” (Jan Tinbergen, Do Communist and Free Economies Show Converging Patterns? Soviet Studies, (April 12, 1961, pp 333-341).
The convergence theory reached a popular audience in 1967, when John Kenneth Galbraith published his international bestseller, The New Industrial State. According to Galbraith, the international dissemination of mass production technologies, employed with enormous investments of time and money, required all countries to engage in the planning of production, distribution and pricing. To perform these tasks, it was necessary for a Burnham style technocracy of industrial managers to gain authority in all industrial countries. Thus, technology was driving a convergent pattern of planning and management throughout the world. True, the planners in some countries were employed by private corporations and in other countries they were employed by the state, “but these obviously are differences in methods rather than purpose”.
The convergence theory also drew attention for the Soviet side in the 1960s, but primarily in the form of condemnation. According to the official Marxian position, the capitalist countries were destined to experience socialist revolutions, not gradual transition to mixed economies. As Khrushchev told a group of diplomats who visited the Kremlin in 1956, socialism would not converge with capitalism, but it would eventually and inevitably witness the submergence of capitalism.
However, few voices in the Soviet Union drew inspiration from the idea of convergence. Andrei Sakharov, the dissident physicist who later received the Nobel Peace Prize, proposed a plan in 1968 for economic and political convergence and disarmament. Thirteen years later, living in internal exile, Sakharov summarized his position as follows:
‘My ideal is an open, pluralistic society with an unconditional observance of the fundamental civil and political rights of man, a society with a mixed economy which would make for scientifically regulated, comprehensive progress. I have voiced the assumption that such a society ought to come about as a result of a peaceful convergence of the socialist and capitalist systems. This is the main condition for saving the world from thermonuclear catastrophe.’ (Andrei Sakharov, Progress, Coexistence and Intellectual Freedom, New York: W.W. Norton 1968, p 49).
Between the late 1960s and the late 1970s, the international trend seemed to turn from convergence to divergence. In 1968, although the Hungarians were able to introduce their new economic mechanism, Soviet troops crushed a more significant revolution in Czechoslovakia. In the United States, 1968 was the year when Republicans regained the White House and liberalism lost two of its most important spokesmen — Martin Luther King Jr and Robert Kennedy. In the Soviet Union, some of the 1965 economic reforms were rolled back in 1971. When international oil prices shot upward in 1973, even the Hungarians were forced to scale back their reforms.
A new era of revolutionary reform began in the East in the late 1970s, and persisted through the 1980s, overpowering the forces of ideology, bureaucracy, martial law in Poland, and an attempted coup d’état in the Soviet Union. The outlines of this revolution also engulfed China and Poland. Led by Deng Xiaoping, China adopted a firm commitment to pragmatism in 1978, two years after Mao’s death. In Poland the independent solidarity union was established in 1980, and won a number of concessions from the communist government.
In the United States any hint of middle ground convergence was dispelled in 1980 by the inauguration of the Reagan administration, and in England, Margaret Thatcher initiated a privatization campaign that would quickly spread around the western world. The socialist government of François Mitterrand entered office in France in 1981, but its leftist programmes were short-lived.
The degenerative rule of Leonid Brezhnev finally ended with his death in 1982, and Mikhail Gorbachev gained power in the Soviet Union. Three years later, after progressively more radical political and economic reforms, communist governments were overthrown throughout Eastern Europe between 1989 and 1991, and the Soviet Union was dismembered. In retrospect, Khrushchev was correct in his 1956 prediction that a major system would be buried, but he identified the wrong victim.
Towards The New Millennium
In the 1990s, too many forces for change are at work in the international system to allow anyone realistically to believe that the current global status quo will be preserved in the new millennium. Despite the proliferation of communication and information technologies that allow us to know more and more about the world we currently live in, the shape of the world in the new millennium is increasingly unknown and unknowable at this juncture.
Nevertheless, looking at the present trend we can say that a number of clear and distinct challenges will confront the human race in the new millennium. These challenges range across a wide spectrum of issues: population growth, food production, nuclear and conventional arms race, the environment, drugs, health, equitable distribution of wealth, trade and exchange, minerals and energy scarcity, economic development and developmental aid; these are just a few to keep our plate full. Failure to initiate action to face these challenges could seriously degrade the quality of life on earth in the new millennium. Efforts to come to grips with these challenges must be cultivated now, or in the near future, and they must be undertaken on a widespread and even on a global basis.
It is true the twentieth century has been a century of immense change for the international community. As the century opened, a few states and their empires dominated the international landscape. Today, 187 states exist and overseas empires are gone. Furthermore, many other types of actors exist like the Inter-governmental Organizations (IGOs), Multinational Corporations (MNCs), and the Non-governmental Organizations (NGOs), and from all predictions their role will exert a great deal of pressure that may shape the environment and political climate in the new millennium. No doubt economic and military issues remain with the edge flowing to the economic issues throughout the new millennium. In the economic realm, questions of dependence and interdependence, distribution, depletion and development, demand specific answers. For, at the threshold of the new millennium the world is experiencing another period of systematic change. The East-West conflict is over. Economic issues have gained new prominence as additional centres of economic power have developed and gained strength. New global issues are emerging to join old transnational concerns.
As a result, a new set of questions will dominate whatever international system emerges in the new millennium. The core question revolves around the question of economic interdependence as to whether increased economic interdependence will accelerate a trend towards a new world order (NWO), based on the principle of equalizing national interest to international interests or will it precipitate a move towards increased protectionism? Will affordable energy and materials alternatives be found or will energy and materials availability decrease, thereby heightening the chances of resource wars? Will scientific and technical breakthroughs enable the developing world to accelerate its pace of development and reduce the North-South gap? Will the industrialized world reap most of the advantages of the future by precipitating the existing status quo between the North and South, thereby widening the gap further? And even more critical, is the question as to whether humankind survives, given existing stockpiles of nuclear weapons and the virtual existability of nuclear proliferation?
Seeking Answers
Answers to these questions are at best speculation, even so, given our understanding of the past and the present international system, and the forces that shaped and are shaping it, speculation may prove useful in preparing us for a change. As Paul Kennedy has reiterated, ‘despite the size and complexity of the global challenges facing us, it is too simple and too soon to conclude gloomily that nothing can be done. Even Malthus was careful enough to end his essay on population by suggesting that despite the ominous demographic trend, the astounding technical advance of his day could have positive influence upon the moral and political dimensions of society.’ (Paul Kennedy, Preparing for the Twenty-First Century, New York: Random House, 1993, p 348)
It is true many earlier attempts to peer into the future concluded either in a tone of unrestrained optimism, in gloomy foreboding, or (as in Toynbee’s case) in appeals for spiritual renewal. Perhaps as this century draws to a close, it is rather appropriate to begin the new millennium on a positive note, even though the geo-political economic system that emerged after World War II had completely collapsed and, for the time being at least, seems to have been replaced with democratic capitalism. The Soviet Union, one of the world’s two dominant super-powers in a bi-polar power equation from 1945-1991 is no more, torn apart by internal political, economic, social and ethnic problems. The United States, the other super-power, remains unified and militarily strong, but is facing difficulties in its search for a defining identity to lead the world into the new millennium. Western European states are inching slowly and uncertainly toward economic and perhaps political unity, but Eastern European states continue to struggle economically and in some cases politically as they attempt to dismantle the legacy of communism. Japan has emerged as a powerful international economic force but is buffeted by its own internal banking and economic difficulties. Meanwhile, the world’s most populous country, China, has enjoyed rapid economic growth throughout the 1980s and 1990s, but it too, is beset by questions of leadership succession and international respectability which it lost in 1989 when its army tried to quell the thirst for democracy by force. Now on its own China is not only changing but also surely inching towards both democracy and capitalism. In the Middle East, despite a breakthrough agreement between Israel and the Palestine Liberation Organisation (PLO), long-term stability and permanent peace remains elusive. In South Africa, apartheid has been dismantled and a black majority government has come to power. In Latin America, democratic governments are struggling to solve the challenges that confront them. Overall much of the third world remains mired in economic stagnation or decline, giving the people there little to look forward to other than continued poverty, hunger, and ill-health.
Given this status quo of the world politico-economic situation as it enters the new millennium, The United States as the only super power has a greater role to play in the new millennium than ever before; it is true that the United States, which had risen to the task of rebuilding the global economy after World War II, is once again at a point in history when it must exert leadership, as it did then, to develop a comprehensive strategy for addressing the myriad issues before the international economy. The only difference is that this time the United States can act with the help of a group of nations that were less able to play a major role in the 1940s in sharing the responsibility for providing ideas, a sense of direction, and resources necessary to meet the challenges ahead.
It is true that the world has made remarkable economic progress since the devastation of World War II and rightfully the credit should go to the United States, for the critical role it played in this success. (The Marshall Plan and the NATO Alliance are two outstanding examples that manifest the role of the United States in this regard.) Most of the goals set by the United States for achieving a stronger and more prosperous democratic world over the last 50 years have been met beyond expectations. Market economies have demonstrated their superiority to totalitarian economies, and world trade and investment have expanded dramatically.
The obvious question remaining before the United States is to choose what goals and policy instruments need to be employed to address the global economic problems and other important tasks ahead. Also, before any such strategy is adopted, it is equally important to realize that the economic and political relationships among nations and the underlying characteristics of the global economy today differ greatly from those of the 1940’s, when current international institutions like the United Nations, the World Bank and the International Monetary Fund (IMF) were created. And by the end of this century they will be far different still. Today the freedom of capital flow exerts powerful constraints on national management. Burgeoning populations in the developing world exert massive pressure for migration; governments increasingly seek to manage flows of trade and direct investment; the forces of economic nationalism have become stronger as globalization of the world economy renders workers and industries more vulnerable to international forces; nations artificially create competitive advantages to the determinant of others; trade and current account imbalances reflect large domestic imbalances in the United States and its trading partners; populations have come to realize how vulnerable they are to one another’s lack of environmental responsibilities; remarkable changes in the previously rigid economies in the communist world reflect recognition that they lack global competitiveness and are unable to meet the basic needs of their citizens; the world’s poorer nations, most of them debt-encumbered, are experiencing enormous human and economic problems which portend social volatility and international instability; and technological changes are causing quick shifts in competitive advantage and bringing the world closer together by permitting the instant and massive dissemination of information and ideas.
Furthermore, leaders and officials including those of the NGO’s under pressure of time and policies, must make choices that will influence the course of our lives and societies. Often what appears to be insurmountable political or resource constraints on new policies or shifts in priorities, attitudes, or patterns of resource allocation can be overcome if the benefits of doing so, or the costly implications of not doing so, are made dramatically clear. President Franklin Roosevelt conveyed a sense of the cost to America of failing to provide Britain with lend-lease aid by explaining the importance of helping a neighbour to put out the fire in his home lest it next spread to yours.
From time to time it is asserted that democracies take bold decisions only in crisis. However, in the current environment it is not only imperative but it is also essential to build a new framework of international economic cooperation based on mutual interdependence to avoid economic stalemate on a global level. Failure to act puts the United States in general and the western democracies specifically in a troublesome position — vulnerable to an energy crisis, vulnerable to a financial crisis from domestic and international deficit and the growing dependence on international capital flows, vulnerable to an outbreak of economic nationalism as trade issues and imbalances go unattended, vulnerable to massive instability in the third world, along with massive debt problems, vulnerable to ever growing dangers to the physical environment, and vulnerable to the geopolitical consequences of instability in Eastern Europe as their economies deteriorate before becoming sustainable. In a nutshell these are some of the major concerns the United States has to take into consideration in order to deal effectively with adjustments to its role in the new millennium on a global perspective. Failure to do so means a steady drift that may render the United States less and less capable of influencing events, and thus may undermine its leadership role in determining the future direction of the global economy.
To build on the success of the United States leadership since World War II, the principal strategic goal of the United States in the new millennium should be to focus relentlessly on creating an international economic framework based on cooperative global management. In other words, looked at from any perspective, the fact remains that international interdependence is going to be the guiding principle that binds the destiny of the world in the new millennium. Interdependence in the context of the new millennium can be defined not as continuing dependence (as it was until recently) either on the Soviet Union or on the United States, but as a third web of transactions, flows and interactions in the realm of trade, resources, and investment, encompassing both the developed and the developing countries. A web in which virtually all countries are going to be increasingly enmeshed for the future in the new millennium.
From the framework of geopolitics at least three different models of the next international system have been put forward by analysts, policy-makers, journalists, politicians, and other observers of contemporary international affairs. These three models are (i) a Unipolar World based on US military and economic might, (ii) a regionalised world organised around three economic founding blocs, and (iii) a multipolar world based on certain criteria of national and international capabilities.
Irrespective of the kind of geopolitics, (viz, the Unipolar World, the Regionalised World and the Multipolar World) that may dominate the new millennium, the world community, however, must begin to realize and act on the fact that a more equitable international economic order must supersede any model of geopolitical configuration based on trade and mutual interdependence. This kind of mutual economic interdependence is not only possible, but also essential for the world to succeed in the new millennium. Such a new order should be based on the fundamental principle that each nation’s and each individual’s development is intimately bound to the development of every other nation and every other individual in a global sense. In a way, the future of mankind is going to be linked more closely in the new millenium than ever before. Let us hope, therefore, that resources and good sense prevail so that the first, second, third and now the fourth world can truly become a part of one world in the coming millennium — forged together by a common destiny and guided by the human principle of peace, brotherhood, and above all, mutual respect in interdependence.