International organizations, globalization, and super power paradigms.

[SOS2008]

In follow up to the earlier thread on Economic Hit Men (EHM), the increasing debate regarding the usefulness of the UN and future function of international organizations (IMF, WTO, etc.), globalization--most specifically trade, it also has been debated whether the United States can remain a super power with only military strength while losing economic strength (i.e., economic control) including outsourcing of jobs, cheap illegal alien labor, etc.

Interview with John Perkins, American author of the best-selling book Confessions of an Economic Hit Man
by Cher Gilmore

How does the ‘economic hit man’ (EHM) system work?

John Perkins: Basically our job is to create empire, and we have managed to create the first truly global empire in the history of the world. We created it without the military for the most part, and it is an empire that is unique in that there is no emperor, no king. Instead we have what I call a “corporatocracy” — a group of men and a few women who run our biggest corporations, our banks, and our government.

There are many ways we have created this empire, but perhaps most typically we identify a developing country that has resources we covet, such as oil. Then we arrange a large loan from the World Bank or its affiliate organizations to that country. Most of the loan goes directly to US corporations, ones that we have heard of, such as Bechtel, Halliburton, Stone & Webster, to build large infrastructure projects such as power plants, harbors, industrial parks and other projects that serve the rich of those countries. The country then is left holding a huge debt, so large that it cannot possibly repay it. At some point the economic hit men go back in and say: “Look, you owe us a lot of money, you can’t pay your debts, so give us a pound of flesh. Sell our oil companies your oil real cheap, or allow us to build military bases on your land, or vote with us at the next critical UN vote, or send your troops to Iraq or some other place where we’d like you to support us.” That type of thing. In that process, we have managed to build this amazing empire.

http://peaceworks.missouri.org/articletrinity.html
IMF, WTO and the World Bank: the Unholy Trinity of Globalization
by Kim Dill

The IMF and WB are both Bretton Woods institutions, that is they were created at a conference held near the end of World War II to create a system for managing the capitalist world's post-war economy. The IMF originally dealt with the interface of national economies in a world of fixed currency exchange rates. It provided loans to help countries stabilize their currencies and technical support to help maintain the system. Later, in an era of floating exchange rates and extensive Third World debt, the IMF's role grew into one of spearheading "structural adjustment plans" (SAPs). These are programs to privatize public sectors, cut spending on social programs, remove subsidies, etc.

The WB was originally set up to provide reconstruction loans to post-war Europe. Subsequently, they turned their lending to fund large development projects (often environmentally and culturally disruptive ones) in the Third World. More recently, the WB has joined the IMF in making general loans to debt-burdened countries, conditioned by SAPs.
The WTO is an outgrowth of the General Agreement on Tariffs and Trade (GATT), established shortly after WWII to negotiate reductions in import taxes. While GATT operated on a consensus model, only facilitating changes in trading rules when all countries were in agreement, the WTO, which was established in 1995, has far more power. Its rules have been used to facilitate trade, but in the process, the WTO has severely undermined democracy.

http://www.economic-data.com/economic_theory.htm

The original ideals of the International Monetary Fund and the World Bank were very laudable. So too can one say it of "The United Nations." However today the U.N. is regarded as dysfunctional and in-effectual and by the same token the functions of the I.M.F. and the World Bank are shall we say, not as popular as they were originally. As this article is merely "philosophical thoughts on economics and economic theory," it is not for us to pass judgment or offer alternatives. At best it may turn out to be merely comment and at times a little advice as well. Having said that, we think it now time that the functions of the I.M.F. and the World Bank should be re-assessed. A lot of what they do today is either seen not to work, or to be at times even unfair in its rules and applications. At times even biased in its distribution of funds and the onerous and often ridiculous rules of enforcement.

What should the future role of international organizations be, if any? If/how does globalization and/or “corporatocracy” affect the super power paradigm? Is the United States in danger of losing economic strength? (The last question might be more appropriate to economics under the Social Sciences section…)

 

[2CentsWorth]

http://www.rand.org/publications/MG/MG304/
The UN’s Role in Nation-Building –

Abstract:
Reviews UN efforts to transform eight unstable countries into democratic, peaceful, and prosperous partners, and compares those missions with U.S. nation-building operations. The UN provides the most suitable institutional framework for nation-building missions that require fewer than 20,000 men — one with a comparatively low cost structure, a comparatively high success rate, and the greatest degree of international legitimacy.

Also, it’s interesting how the U.S. starts programs such as the UN Oil-for-Food Program http://www.state.gov/r/pa/prs/ps/2005/41576.htm, and how U.S. agencies knew of problems with the program including years during the Bush administration. Yet it is argued that because of the scandal, Bush was justified in ignoring the UN in his decision to invade Iraq, per web sites such as this (though not necessarily a reputable source, but reflective of some views) http://www.acepilots.com/unscam/archives/000773.html :

Why is the OFP Scandal Important?
It is not just about which bureaucrat had his hand in the till. Nor is it just about which company slipped a dictator a few (or many) bucks.

It is about the UN and its legitimacy. During the run-up to the Iraq war, George Bush's opponents accused him of many misdeeds. Chief among them was "going to war without the UN." But if, the UN was, in fact, Saddam's enabler, if the UN Secretariat was effectively on Saddam's payroll, if important people in major antiwar countries were likewise beholden to the Iraqi regime, then that casts a wholly different light on "unilateralism."

And that is precisely why so many people, on both sides of the global debate, weigh in strongly on the Oil-for-Food scandal.

Though this site also points out that:

Various U.S. agencies reported on the graft and kickbacks throughout 2002 and 2003, with modest attention. The lid blew off the OFP scandal on January 30, 2004...

They do not ask why nothing was being done about the scandal during the Bush administration. I agree that the role of the UN, and ways countries participate in the organization, needs review. However, why do I suspect that it is the neocons that may want to justify and remove roadblocks in their nation-building agenda?

 

[SOS2008]

Some people feel the UN should be dismantled completely, but I feel it still has purpose, but agree it needs review--and as usual, how to police the police?

I should probably clarify a little more my thoughts. The 100 year cycle of hegemonies theory has always been of interest to me. This theory holds that a super power must have military and economic strength, and focus has been on the military aspect and how nuclear weapons would change the paradigm. In other words, would nuclear weapons allow the United States to be a super power longer than 100 years (currently over 60 years into the cycle)?

Since the time of this theory, however, the global economy has changed. What effect will this have? For example, is it any different to be in debt to an international organization the way third world countries are versus the US being in debt to foreign countries like China?

 

[2CentsWorth]

If I'm understanding this correctly, it would seem that terrorism would be a new twist on things too. In regard to military strength and how nuclear weapons create a stale mate, I feel this is why countries like North Korea, and perhaps Iran want nukes. However, terrorists may not settle for a stale mate position - there was an article on MSN this weekend about how Al Qaeda was seeking to obtain nukes. When I have time, I'll see if I can find the article...

 

[SOS2008]

Good point -- terrorism does add a new twist too. In an earlier thread this was discussed somewhat with regard to the neocon concept of addressing so-called "hot spots" and spreading democracy to end terrorism. This, however, then gets back to an economic problem of over-extension.

 

[Informal Logic]

Talking about EHMs, I can't believe there hasn't been more concern about the Bush administration in regard to oil and family connections, or Haliburton, which is far worse than Whitewater if you ask me.

If you look at domestic economics, and Bush's tax cuts for the wealthy, proposal of "guest worker" amnesty to insure cheap labor for business, and now his Social Security scam, one has to wonder about this too. One of the sources in the original post points out that money invested in the stock market does not produce jobs. I haven't had time to read more on that site, but if I can, I'll probably respond via a post in the economic section under Social Sciences...

 

[SOS2008]

A recent update on the topic of the UN:

MSNBC News Services
Updated: 8:18 p.m. ET April 11, 2005
"Nominee Bolton vows to strengthen U.N.
But Democrats seem united in opposing Bush choice for ambassador"

followed by:

http://slate.msn.com/id/2114553/fr/rss/

"U.N." nominee: Bloggers are asking why President Bush would appoint Bolton as U.N. ambassador considering that he once said that "there's no such thing as the United Nations" and "if the U.N. secretary building in New York lost 10 stories, it wouldn't make a bit of difference."

 

[loseyourname]

I should probably clarify a little more my thoughts. The 100 year cycle of hegemonies theory has always been of interest to me. This theory holds that a super power must have military and economic strength, and focus has been on the military aspect and how nuclear weapons would change the paradigm. In other words, would nuclear weapons allow the United States to be a super power longer than 100 years (currently over 60 years into the cycle)?

Can you elaborate on this? Haven't many historical states or statelike entities been pre-eminent world powers for longer than 100 years in the past?

 

[SOS2008]

Can you elaborate on this? Haven't many historical states or statelike entities been pre-eminent world powers for longer than 100 years in the past?

You must have been reading my mind (frightening, I know ). If my memory is correct, the theory is based on modern history of hegemonies (super powers). It is stated that Britain was able to enter a second 100 year cycle only because the US was isolationistic (though much stronger militarily and economically) therefore Britain went another 100 years by default. With some quick googling, I found this recent publication, which follows what 2CentsWorth has noted above:

http://usembassy.state.gov/dakar/wwwucol7.doc

AMERICAN HEGEMONY AFTER THE SEPTEMBER 11 EVENTS: DECLINE OR PERSISTENCE?

Professor. Georges MPWATE NDAUME

These events have revived an old controversy that reached its climax in the 1980s, with the publication of Paul Kennedy’s famous book : The Rise and Fall of the Great Powers (87). Americans are once again divided between those whose believe in the decline of American identity and those who think that Pax Americana is and remains the way of the future for the humanity.

I realized I was combining many topics, but I feel it is all related. The old debate in the 80's was that nuclear weapon stale mates would allow the US to persist beyond 100 years as a hegemony (because there would be no more world wars) in that the theory also holds that super power status typically exchanges hands at the end of the 100 year cycle with a major war.

Since this theory was originally put forth, there are many more variables to consider, such as terrorism. However, since the theory holds that a hegemony can only be a super power with both military and economic superiority, it is also interesting to note changes with regard to globalization of economies. The domestic economy likewise is related because this affects the economic strength needed for the US to remain a super power.

In addition, and per an earlier thread about what country or countries would replace the US if in decline, I feel one must consider new variables such as the EU, etc. The globalization of economies and international organizations established in more recent times seem related to me as well.

IMO, a super power needs both military and economic strength to persist, but the ongoing twists and turns during the US reign makes me question how the theory will hold. And as a side, I also question the role of international organizations as "players" in the global field going forward.

I hope this helps to make more sense...

 

[loseyourname]

I was actually just confused because it didn't seem to me that very many historical powers ruled for only 100 years. I'm thinking Babylon, Rome, China, etc., which were around as powerful empires for much, much longer. According to the paper you provided, though, the theory only says that 100-year cycles started in 1500, and apparently Britain was a world power for 300 years. If why it entered its third cycle is explained by American isolationism, why it entered its second cycle doesn't seem to be. I doubt this theory, which seems based only on what seems to be a trend between 3 major powers over the last 500 years and does have exceptions, has much predictive power.

Whether or not American power will decline is another matter. I doubt it myself. If the Great Depression didn't do it, Al Qaeda and an oil crisis won't do it. The geographic advantages alone are huge. Impossible to invade, still the best and most sustainable farmland in the world, plus easy access to many valuable natural resources other than oil. The lack of internal nationalistic factions makes a big difference as well. No other power has ever been able to assimilate people like the US.

That said, I wouldn't be surprised if US power diminished over the next century. The peak it is currently at would seem nearly impossible to sustain and some other nation (or possibly the EU) has to step up at some point.

 

[SOS2008]

I doubt this theory, which seems based only on what seems to be a trend between 3 major powers over the last 500 years and does have exceptions, has much predictive power.

I agree--I feel all of history should be taken into account--not just one short time period. If you look at the rise and fall of empires, over-extension is a big factor. "Policing" the world is popular to many people in our country, but worrisome for this reason.

Whether or not American power will decline is another matter. I doubt it myself. If the Great Depression didn't do it, Al Qaeda and an oil crisis won't do it. The geographic advantages alone are huge. Impossible to invade, still the best and most sustainable farmland in the world, plus easy access to many valuable natural resources other than oil. The lack of internal nationalistic factions makes a big difference as well. No other power has ever been able to assimilate people like the US.

Good points. Though maybe we survived the Great Depression because our economy was isolated then. Terrorism has proven that the US not only can be invaded successfully, but it can be done without use of traditional military forces. One new problem with farming is they are running out of underground water. Illegal immigration is not the same as earlier years of immigration--it is having a very different affect.

That said, I wouldn't be surprised if US power diminished over the next century. The peak it is currently at would seem nearly impossible to sustain and some other nation (or possibly the EU) has to step up at some point.

Or, it could be that there will be a balance between one or more countries, and no one super power.

 

[loseyourname]

Or, it could be that there will be a balance between one or more countries, and no one super power.

That's actually what I would expect will happen, but I don't know that having multiple powers necessarily means that none is considered a super-power. That is another problem I had with that cycle model. There were times in this century when the US was no more powerful than the USSR, and there were times in the past when Britain was no more powerful than Spain. Generally speaking, nations/empires that have been considered 'superpowers' had dominion over a limited region of the planet. Take the famous instance of the pope giving Brazil and everything to the east to Portugal, everything to the west to Spain. We're in a unique situation now in that the United States is arguably the most powerful influence in every region of the planet. I don't see any way that that can be maintained.

 

[russ_watters]

Terrorism has proven that the US not only can be invaded successfully, but it can be done without use of traditional military forces.

Well, that depends on what you mean by "successfully" - sure an attack can be carried out here, but that's not an invasion and 9/11 had little lasting effect on the fundamental strength of our country. Economically, overall, the impact was limited to a single quarter (and the vast majority of that was the impact of a single week of shutting down the country).

The worst-case scenario of economic terrorism (a 50kt nuke in Manhattan) might kill a million people, but it still would not cause any long-term (more than a year) damage to the country/economy. One of the nice things about the information age is not even a nuke would destroy the financial data on which this country runs. The most you could possibly lose is a day's worth of transactions and that's fixed easily enough by a presidential order that "today never happened".

A nuke in DC on a particularly bad day (Inauguration day?) might wipe out the bulk of the Federal government, and that would be the most difficult terrorist act to recover from. But Presidential succession means that in order to really decapitate the government, you'd need to wipe out the entire federal government - otherwise, the most senior member of government takes command. The legislative branch could be rebuilt (with new elections in individual states) in a matter of about a month and the government reconstituted about as fast as the buildings can be rebuilt (a year). (Tom Clancy's "Executive Orders" gives some good insight into this)

One thing important to note: even if the federal government is utterly wiped out, that still would not make us vulnerable militarily. Military commanders have full discretion when it comes to defense and the fleet commander at Norfolk could easily defend the entire east coast of the US by himself.

In other words, would nuclear weapons allow the United States to be a super power longer than 100 years...

I don't consider nuclear weapons to be relevant to this question. They don't do anything for us that would help us sustain our existence. The Cold War was a once-and-done conflict brought on by the creation of a new weapon and a balance of power issue between two superpowers. Now that the dust has settled, people see nuclear wepons for what they are: a limited deterrent with no other use (for a country) and people simply won't play a nuclear deterrece game on anywhere near the scale of the Cold War. One thing Bush started a few years ago but hasn't followed through on is unilateral disarnament: he recognized that there is no reason to have 10,000 nukes. A handful of SSBN's provide all the deterrence we need. No need even to negotiate mutual disarnament - just do it. That's an indication of how useless they are.

Now to the general question posed: I agree with loseyourname in that the US's power will likely diminish proportionally over the next century. Its already happening with the coalescing of Europe's power/economy and the rise of China. But they have a long, long, long way to go before either China or a united Europe becomes the dominant power in the world (I'll elaborate on why later...).

 

[Informal Logic]

...I don't consider nuclear weapons to be relevant to this question. They don't do anything for us that would help us sustain our existence. The Cold War was a once-and-done conflict brought on by the creation of a new weapon and a balance of power issue between two superpowers. Now that the dust has settled, people see nuclear wepons for what they are: a limited deterrent with no other use (for a country) and people simply won't play a nuclear deterrece game on anywhere near the scale of the Cold War. One thing Bush started a few years ago but hasn't followed through on is unilateral disarnament: he recognized that there is no reason to have 10,000 nukes. A handful of SSBN's provide all the deterrence we need. No need even to negotiate mutual disarnament - just do it. That's an indication of how useless they are.

In reference to the theory (Paul Kennedy’s book: The Rise and Fall of the Great Powers), the advent of nuclear weapons was one of the first arguments against the theory, if for no other reason than addressing Kennedy's premise that hegemony status changes hands at the end of the cycle via a major war. Nuclear weapons most certainly are a deterrent (or I should hope this is the case) even if it isn't on the scale that it was during the Cold War. Maybe Bush hasn't continued to pursue unilateral disarmament because deterrence (as has been sought by countries, such as North Korea) is not a unilateral issue anymore.

 

[russ_watters]

Clarification of my above point: while nuclear weapons are a deterrent, my point was just that there is no added deterrence value to having say, 10,000 vs 1,000 weapons.

 

[SOS2008]

Well, that depends on what you mean by "successfully" - sure an attack can be carried out here, but that's not an invasion and 9/11 had little lasting effect on the fundamental strength of our country. Economically, overall, the impact was limited to a single quarter (and the vast majority of that was the impact of a single week of shutting down the country).

I agree, it was not an invasion, it was an attack. Though the US has done a good job of recovering from the effects, I feel the consequences were greater and longer-lasting than we can really know. For example, even now airlines are unable to make good on pension plans.

Now to the general question posed: I agree with loseyourname in that the US's power will likely diminish proportionally over the next century. Its already happening with the coalescing of Europe's power/economy and the rise of China. But they have a long, long, long way to go before either China or a united Europe becomes the dominant power in the world (I'll elaborate on why later...).

Once again, I'm in agreement that the US will be a super power much longer than 100 years. However, if our economy is not addressed, most specifically if record deficits are not reduced, and we continue to engage in military conflicts around the world, I feel that our time as a super power will be significantly shortened.

 

[Astronuc]

Once again, I'm in agreement that the US will be a super power much longer than 100 years. However, if our economy is not addressed, most specifically if record deficits are not reduced, and we continue to engage in military conflicts around the world, I feel that our time as a super power will be significantly shortened.

And one year and two week later, that does appear to be what is happening.