By Saad Boutayeb
Beijing- MWN
The 2008 Western economic crisis has shown that the global economy, which functions via the principles of capitalism, is dynamic but also fragile and that capitalism is a system which works through convulsions or crisis. In the 19th century, when Marx spoke of a world market in the Communist Manifesto, he predicted that systemic capitalist functioning is prone to crisis.
In The Manifesto, Marx claimed that: “capitalism is a society that has conjured up such gigantic means of production and of exchange, that it is like the sorcerer, who is no longer able to control the powers of the netherworld whom he has called up by his spells.” What Marx meant by this statement is that capitalism does not necessarily control where it is going.
As a matter of fact, capitalism has inherent contradictions, thus the inevitable crises. The world witnessed multiple crises throughout history. The most famous ones are the 19th century bankruptcy of the railways in Europe (1845-1848) that led to financial crisis, massive unemployment of the proletarians that eventually led to the 1848 Revolution. Then came the 1929 Wall Street Crash, which swallowed the world in a great recession, and then World War II occurred years later.
In addition, the 1997 ASEAN economic crisis in Asia provided lessons for Asian economies. Finally, the 2008 financial and economic crisis-the causes of the 2008 economic crisis are the subprime mortgages and the credit crunch scandal which led to a crash of the financial system, and caused millions of people to unemployment, global recession. The actors behind the crisis were a financial oligarchy that applied a form of financial crime to enrich itself via this sort of deliberate financial coup.
As a matter of fact, the real estate domain area through which the subprime mortgages operated was a conscious financial policy best represented by Leman Brothers Corporation and Goldman Sachs bankruptcy. The debate over an eventual power shift, which could result from the 2008 crisis, is more than ever present in academia. An eventual Power Shift from West to East.
To start with, a power shift is the transition from the dominion of one state to another one. Let us note however, that power is not monolithic. It has various dimensions. Are we talking about Military power or economic power? These aspects will be elaborated below. As for the purpose of this essay, it will be argued that instead of a power shift, what occurred is what F. Zakaria calls, “A Rise of the Rest”, which has not necessarily led to a power shift but a relative decline in the West.
The essay will start with a brief historical account of how China made a transition from a command economy, which clearly was a failure, to its current economic success. Second, we will see how a booming economy in the BRICs, more particularly in China, can raise the question of whether there is a power shift in transition. Finally, the essay will insist that the West, especially the United States is still the 1st superpower and that it will take more than what’s happening in world politics to undermine the USA.
Finally, the essay will proceed by looking at several aspects of power to see that power shifts occur, mainly via conflicts.
To start with, some historical background is necessary to understand China’s economic success today. When Chairman Mao died in 1976, he left behind a dysfunctional and backward economy and a nation with over 900 million people (David Lai). In other words, a China with an unsuccessful command economy, constantly in preparation for war against its capitalist enemies, was beginning to get caught in a catastrophic socio economic situation.
However, by the late 1970’s Deng Xiaoping led the CCP leadership to put a stop to Mao’s utopic, but inefficient communist system and launched the economic reform in 1978 that gradually led China to become the 2nd economic superpower today.
However, in terms of GDP, The United States and the European Union make up 40 to 50 per cent of world GDP. According to the World Bank, the USA alone has 49,965 GDP per Capita, whereas China stands only at 6,091 GDP per capita. That means that China is still behind, but it does not mean that China will not catch up given the speed of its economic growth. There is an interesting prediction made by Kishore Mahbubani.
Mahbubani states that, “For 1800 years of the last 2000 years the two largest economies in the world were China and India. For the last 200 years there was an artificial western dominance. By 2050 China will be the number 1 economy, India number 2 and the USA number 3 (Mahbubani). This is an interesting prediction, but no one really knows if the United States will try to maintain its dominating power via various economic, political, and military strategies and adopt reforms that could lead the US to counter China’s rise to power.
As for the BRICs, the block has indeed experienced a considerable rise. However, as Michael Cox highlights in his work ‘Power Shifts? Economic Change, and the Decline of the West’, California alone in GDP terms is more wealthy than an entire Brazil or Russia, and almost twice as wealthy as Turkey and Indonesia combined. Furthermore, the Texas economy is almost as big as the Russian economy (Michael Cox). Indeed, this is a central question to raise. Is the decline of the West overrated? Finally, this rise of the rest is a relative economic phenomenon, what F. Zakaria calls, a Western single politico-military world, and an economic rise of the rest still in transition (F. Zakaria).
In terms of the military, the United States is clearly the 1st superpower. From 9/11 up to now, the world witnessed a gargantuan deployment of military might during the aggressive interventions in Iraq and in Afghanistan. It is interesting to see that, when visiting Washington D.C, the city’s monuments are inspired by the Roman Empire era. Thus, we can make an analogy the Pax Romana was in the past what today the American Army is. In fact, power shifts throughout history have occurred through violence, mainly via the means of the institution of war. War has always existed, and will always exist in power transitions.
Moreover, war is considered an institution in the IR academia. Realism, as a paradigm for instance, claims the flaw in human nature, which is prone to violence. Thomas Hobbes, one of the founding thinkers of the realist school, famously stated that human nature in a hypothetical State of Nature is one characterized by violence and the will to dominate and aggress others.
There is an interesting analogy from human beings to states called the domestic analogy, which makes states as political units equally prone to violence. If a hypothetical power shift occurs, (which is doubtful) it is probable that it will be characterized by conflict. This is indeed true. History confirms it.
Power shifts throughout history have been characterized by violence and bloodshed, mainly via the institution of war. In other words, conflict in power shift is a historical invariant. Let’s state a few examples. The Napoleonic wars ended up in the defeat of France and a military power shift from France to Britain. Then, came World War II, which ended the dominance of the British Empire, and a power shift brought the USA as the 1st economic and military superpower, having as a sole rival the USSR.
To sum up, this essay argued, that instead of a power shift, what occurred is a rise of the rest, especially China becoming the second economic superpower.
According to a CIA report on the decades to come, the USA will remain the number one power. If the report turns out to be inaccurate, and China becomes the 1st economic and military superpower, then conflict will necessarily arise. Let us not forget that the liberal West has conflicting values with a Communist free market China. This will be the main cause of conflict that will confirm the invariant historical conflicts, which occur during power shifts mentioned above.
Reference list:
CIA World Factbook. Retrieved 18 august 2013 from https://www.cia.gov/library/publications/the-world-factbook/
Cox M. Power Shift? Economic Change And The Decline of The West?
International Relations Vol.24 No4 2012.
Mahbubani,K. http://www.mahbubani.net/
Marx, K. The Communist Manifesto. Penguin edition
World Bank. Retrieved 18 august 2013 from http://data.worldbank.org
/indicator/NY.GDP.PCAP.CD
Zakaria, F. The Post American World (New York: w.w Norton, 2008)
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