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Jewish World Review Feb 22, 2012 / 29 Shevat, 5772 The State of the World: A Framework
By
George Friedman of Stratfor
http://www.JewishWorldReview.com |
Editor's Note: This is the first installment of a new series on the national strategies of today's global power and other regional ones. This installment establishes a framework for understating the current state of the world.
The evolution of geopolitics is cyclical. Powers rise, fall and shift. Changes occur in every generation in an unending ballet. However, the period between 1989 and 1991 was unique in that a long cycle of human history spanning hundreds of years ended, and with it a shorter cycle also came to a close. The world is still reverberating from the events of that period.
On Dec. 25, 1991, an epoch ended. On that day the Soviet Union collapsed, and for the first time in almost 500 years no European power was a global power, meaning no European state integrated economic, military and political power on a global scale. What began in 1492 with Europe smashing its way into the world and creating a global imperial system had ended. For five centuries, one European power or another had dominated the world, whether Portugal, Spain, France, England or the Soviet Union. Even the lesser European powers at the time had some degree of global influence.
After 1991 the only global power left was the United States, which produced about 25 percent of the world's gross domestic product (GDP) each year and dominated the oceans. Never before had the United States been the dominant global power. Prior to World War II, American power had been growing from its place at the margins of the international system, but it was emerging on a multipolar stage. After World War II, it found itself in a bipolar world, facing off with the Soviet Union in a struggle in which American victory was hardly a foregone conclusion.
The United States has been the unchallenged global power for 20 years, but its ascendancy has left it off-balance for most of this time, and imbalance has been the fundamental characteristic of the global system in the past generation. Unprepared institutionally or psychologically for its position, the United States has swung from an excessive optimism in the 1990s that held that significant conflict was at an end to the wars against militant Islam after 9/11, wars that the United States could not avoid but also could not integrate into a multilayered global strategy. When the only global power becomes obsessed with a single region, the entire world is unbalanced. Imbalance remains the defining characteristic of the global system today.
Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". HUNDREDS of columnists and cartoonists regularly appear. Sign up for the daily update. It's free. Just click here. The 1991 Maastricht Treaty set the stage for Europe's attempt at integration and was the framework for Europe in the post-Cold War world. Tiananmen Square set the course for China in the next 20 years and was the Chinese answer to a collapsing Soviet empire. It created a structure that allowed for economic development but assured the dominance of the Communist Party. Saddam Hussein's invasion of Kuwait was designed to change the balance of power in the Persian Gulf after the Iraq-Iran war and tested the United States' willingness to go to war after the Cold War.
In 1989-1991 the world changed the way it worked, whether measured in centuries or generations. It was an extraordinary period whose significance is only now emerging. It locked into place a long-term changing of the guard, where North America replaced Europe as the center of the international system. But generations come and go, and we are now in the middle of the first generational shift since the collapse of the European powers, a shift that began in 2008 but is only now working itself out in detail.
What happened in 2008 was one of the financial panics that the global capitalist system periodically suffers. As is frequently the case, these panics first generate political crises within nations, followed by changes in the relations among nations. Of these changes, three in particular are of importance, two of which are directly linked to the 2008 crisis. The first is the European financial crisis and its transformation into a political crisis. The second is the Chinese export crisis and its consequences. The third, indirectly linked to 2008, is the shift in the balance of power in the Middle East in favor of Iran.
THE EUROPEAN CRISIS
However, embedded in the idea of the European Union was the idea that Europe could at some point transcend nationalism and emerge as a United States of Europe, a single political federation with a constitution and a unified foreign and domestic policy. It would move from a free trade zone to a unified economic system to a single currency and then to further political integration built around the European Parliament, allowing Europe to emerge as a single country.
Long before this happened, of course, people began to speak of Europe as if it were a single entity. Regardless of the modesty of formal proposals, there was a powerful vision of an integrated European polity. There were two foundations for it. One was the apparent economic and social benefits of a united Europe. The other was that this was the only way that Europe could make its influence felt in the international system. Individually, the European states were not global players, but collectively they had the ability to become just that. In the post-Cold War world, where the United States was the sole and unfettered global power, this was an attractive opportunity.
The European vision was smashed in the aftermath of 2008, when the fundamental instability of the European experiment revealed itself. That vision was built around Germany, the world's second-largest exporter, but Europe's periphery remained too weak to weather the crisis. It was not so much this particular crisis; Europe was not built to withstand any financial crisis. Sooner or later one would come and the unity of Europe would be severely strained as each nation, driven by different economic and social realities, maneuvered in its own interest rather than in the interest of Europe.
There is no question that the Europe of 2012 operates in a very different way than it did in 2007. There is an expectation in some parts that Europe will, in due course, return to its old post-Cold War state, but that is unlikely. The underlying contradictions of the European enterprise are now revealed, and while some European entity will likely survive, it probably will not resemble the Europe envisioned by Maastricht, let alone the grander visions of a United States of Europe. Thus, the only potential counterweight to the United States will not emerge in this generation.
CHINA AND THE ASIAN MODEL
China's core problem is that more than a billion people live in households earning less than $6 a day, and the majority of those earn less than $3 a day. Social tensions aside, the economic consequence is that China's large industrial plant outstrips Chinese consumer demand. As a result, China must export. However, the recessions after 2008 cut heavily into China's exports, severely affecting GDP growth and threatening the stability of the political system. China confronted the problem with a massive surge in bank lending, driving new investment and supporting GDP growth but also fueling rampant inflation. Inflation created upward pressure on labor costs until China began to lose its main competitive advantage over other countries.
For a generation, Chinese growth has been the engine of the global economic system, just as Japan was in the previous generation. China is not collapsing any more than Japan did. However, it is changing its behavior, and with it the behavior of the international system.
LOOKING AHEAD
Somewhat outside the main processes of the international system, the Middle East is undergoing a fundamental shift in its balance of power. The driver in this is not the crisis of 2008 but the consequences of the U.S. was in the region and their termination. With the U.S. withdrawal from Iraq, Iran has emerged as the major conventional power in the Persian Gulf and the major influence over Iraq. In addition, with the continued survival of the al Assad regime in Syria through the support of Iran, there is the potential for Iranian influence to stretch from western Afghanistan to the Mediterranean Sea. Even if the al Assad regime fell, Iran would still be well-positioned to assert its claims for primacy in the Persian Gulf.
Just as the processes unleashed in 1989-1991 defined the next 20 years, so, too, will the processes that are being generated now dominate the next generation. Still powerful but acutely off-balance in its domestic and foreign policies, the United States is confronting a changing world without yet having a clear understanding of how to deal with this world or, for that matter, how the shifts in the global system will affect it. For the United States strategically, the fragmentation of Europe, the transformation of global production in the wake of the Chinese economy's climax, and the dramatically increased power of Iran appear as abstract events not directly affecting the United States.
Each of these events will create dangers and opportunities for the United States that it is unprepared to manage. The fragmentation of Europe raises the question of the future of Germany and its relationship with Russia. The movement of production to low-wage countries will create booms in countries hitherto regarded as beyond help (as China was in 1980) and potential zones of instability created by rapid and uneven growth. And, of course, the idea that the Iranian issue can be managed through sanctions is a form of denial rather than a strategy.
Three major areas of the world are in flux: Europe, China and the Persian Gulf. Every country in the world will have to devise a strategy to deal with the new reality, just as 1989-1991 required new strategies. The most important country, the United States, had no strategy after 1991 and has no strategy today. This is the single most important reality of the world. Like the Spaniards, who, in the generation after Columbus' voyage, lacked a clear sense of the reality they had created, Americans have no clear sense of the world they find themselves in. This fact continues to define how the world works.
Therefore, we next turn to American strategy in the next 20 years and consider how it will reshape itself.
Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.
George Friedman is the founder, chief intelligence officer, financial overseer, and CEO of the private intelligence corporation Stratfor. Strategic Forecasting, Inc., has been dubbed by Barron's as "The Shadow CIA," it's one of the world's leading global intelligence firms, providing clients with geopolitical analysis and industry and country forecasts to mitigate risk and identify opportunities. Stratfor's clients include Fortune 500 companies and major governments.
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