The U.S.A. in a New World Order

USA in a New World Order
Few if any will contest that the United States of America for the last couple of decades has been hegemon and a global leader in relation to politics, economy and culture. The majority would probably argue that this has been the case since the end of World War II and the beginning of the Cold War. Even though the world was divided between to hegemonies during the Cold War at least one half of the world acknowledged and even depended on the American supremacy. The collapse of the Soviet Union and the end of the Cold War in 1991 really demonstrated that USA was the one and only superpower in the world. Since then the world has changed and new countries and regions seem to emerge and challenge the American role as the world leader. First of all China is predicted by the OECD to overtake USA as the world largest single state economy around 2016. As well India is predicted to overtake USA within the next decades. Secondly the European Union is already contesting USA as the biggest economy. Thirdly did the end of the Cold War result in the emergence of other cultures, religions and regions and especially new patterns of conflict, which seem to be more and more dominant. How will the new rising economies and conflicts determine the role of USA in the future? Fourthly is USA facing a coming debt crisis that makes the debt crises in Europe seem like a storm in a teacup. This could as well result in a change of the world order.
In this paper I will discuss the present and future role of USA as a global hegemon in contrast to other countries and regions, like China, India and the European Union. I will especially focus on political and economic issues and to a lesser extent on cultural issues. In order to discuss the present and future role of USA a comprehension of the past role is imperative, why I will begin by elaborating on this. Finally I will reflect on the different scenarios in relation to the future.
This will lead me to an answer of the following research questions:
• How is the global role of the US constituted presently?
• Which challenges is the US facing today and in the nearby future and how will these alter the American hegemony?

Hypothesis: in the future the US will play a less significant role on equal terms with other powerful nations. However the American point of view on economy, politics and culture will prevail.
As a method to discuss these questions I will use the theory of hegemonic stability, which is rooted in research from the fields of political science, economics and history. The theory of hegemonic stability indicates that the international community is more likely to remain balanced when a single nation is the leading world power or hegemon.
Before beginning the actual discussion I will first of all explain the role of the USA and their powerful presence in the international society from a historical point of view beginning from the end of WW2 up till today. The WW2 finished with the defeat to the former Great Powers of Germany and Japan. The victors were USA, UK, France, and USSR and to a lesser extent China and now they emerged as the post war Great Powers. However the cost of the war was too large for France and UK and subsequently they lost status and influence on the international scene, which left only USA and USSR as the real victors. They agreed to divide the world and especially Europe between them. An American part in the west dominated by democracy, capitalistic market economy and liberalism versus a Soviet part in the East controlled by communism and planned economy. This was the beginning of the Cold War, which lasted for nearly five decades. Even though the Cold War was between two Superpowers, USA still was most powerful. The US produced 50 % of the steel in the world, they were from the beginning the only of the two which controlled nuclear weapons, possessed up till 70 % of the world’s ships and aircraft and produced half of the goods in the world.
From a pre WW2 world dominated by several Great Powers including USA, USSR, Germany, Japan, China and France the world developed into a bipolar system controlled by two Superpowers, USA and USSR. The American hegemony in the western part of the world now developed in different phases. The first phase lasted up until 1973 and was characterized by the establishment of the American hegemony and the consolidation of supremacy in the western block. The hegemon was strong and dominant regarding military forces, economic trade and support, technological development and culture. In the next phase from 1973 to 1990 is characterized by a chain of powerful defeats to the American hegemony. The US is affected by relatively economic and political decline due to some external and internal circumstances. First of all the world experienced the first serious oil crises in the beginning of the 1970s, when a war in the Middle East between Israel and Syria resulted in an oil price hike. Secondly the American war in Vietnam, which they lost, caused a general aversion against the US both internally and externally. As well did the cost of the war stress the American budget and the war was a huge burden on American economy. These two incidents resulted in a USA, which was weakened both from a political/military and an economic point of view. The American hegemony was pressured. In the third phase from 1990 to 2001 the American hegemony was reinforced once again. Most important of all the only other Superpower and competitor to the American hegemony the Soviet Union collapsed. This left the US as the one and only Superpower, or as Francis Fukuyama put it, the last man standing. Besides the ideological victory and the reestablishment of the global dominating power status the US experiences economic growth in this period. The focus is on scaling down military engagement and expenses and a balanced military budget. The American hegemony is strengthened once again. This period is characterized by relatively peacefulness. However this period ends September the 11th 2001 when four coordinated terrorist attacks were launched by the Islamic terrorist group al-Qaeda upon the US in New York City and around Washington D.C. The attack, which is the first foreign attack on American soil since the Japanese attack on Pearl Harbor in 1941 introduces a new phase of the American Hegemony. First of all the US realizes they are not invulnerable. Not even in their own country and homes. Secondly does the US begin an international military campaign, which the then President George W. Bush named the war on terror. This campaign includes among other operations wars in and following occupations of Afghanistan and Iraq. The campaign is very costly and especially the two wars in Afghanistan and Iraq and the following occupations results in imperial overstretch , which characterizes the situation when the hegemon is engaged in too many wars and has too few armies and resources to protect and win them all . In addition to the war on terror and the enormous costs of the engagements USA faces the worst financial crisis since the Great Depression in the 1930s followed by global recession the following year. The financial crisis resulted in high rates of unemployment and a contraction of the US economy of billions of $. In addition to this did the US international debt grow to 30% of the GDP (Brøndum Ramussen 2012 gæld er på 4,400 milliarder dollars) in 2005, which was result of decades of imbalance of import and export . Especially the trade deficit in relation to China is worrying for the American leaders. The American hegemony is once again threatened. This time it seems to be more seriously. The question is if the US once again is able to reestablish its global dominance? Or will other powers grow so powerful that they will challenge the American hegemony and even establish a new hegemony, which will leave the US as a number second or even third? I will elaborate on and discuss the political/military, economic and cultural perspectives of this matter.
To begin with the political/military aspect several scholars within international politics and relations have discussed the issue of the new world order and the structure of the international system in the contemporary world. Basically the different schools can be separated in those who believe in a unipolar world only with one remaining hegemony and those who believe in a multipolar international system dominated by several great powers, or cultures/religions who competes equally for power and dominance. First all I will return to Francis Fukuyama and his theory about the international system after the Cold War. In his work The End of History and the Last Man he describes how the modern history has been characterized by conflicts between the great ideologies and the only ideology which is left and has survived all the other ideologies of socialism/communism and fascism/Nazism. The latest ideological conflict between liberalism and socialism/communism, which took place during the Cold War, finished by the collapse of the Soviet Union and the following split up of the Union in the Great Power of Russia and several minor states. The winner of the conflict was the US and the ideology of liberal-democracy and capitalist free market economy which according to Fukuyama is a statement of this particular political ideology and economic belief being the only true structure. This will imply that the international system and the players within will arrange themselves according to the ideas of liberal-democracy and a capitalistic free market economy. The development towards a world dominated by liberal-democratic states and consensus regarding the ideological position will eliminate the risk of international political and military conflicts. Fukuyama predicts that the purpose for a state of engaging itself in wars will be eliminated as the conflicts according to modern history has been from ideological reasons. When only one ideology is left the reasons for conflicts and war are gone. Fukuyama believes that the end of the Cold War introduced a unipolar international system composed of liberal-democratic states, which have no interest in conflicts as they have the same objective in the capitalistic free market economy. The winner of the Cold War and the primary advocate of liberal-democracy and capitalism is the US, which then is the only pole or hegemon in the international system. The 9-11 attack did not change this picture as such; as it could be interpreted as a last desperate leg from a terrorist organization realizing the battle was lost.
However the theory of the end of history is contrasted by Samuel P Huntington. His thesis about a new international system characterized by conflicts between cultural and religious identities is explained in his work The Clash of Civilizations and the Remaking of World Order from 1996. He predicts that the new world order will be concentrated on conflicts and disagreement between the great cultures and religions of the world. The cultures or major civilizations Huntington is referring to are first of all the western civilization, the Latin American, the Orthodox, the Islamic, the African, the Sinic, the Hindu and the Japanese. Even though all cultures are separate from each other the central axis of world politics will be the conflict between the Western civilization and non-Western civilizations. Or as Kishore Mahbubani puts it: The west and the rest. The conflicts will especially develop when the West endeavors to make its own values universal. The west wishes to force the other cultures to adopt values such as democracy, liberalism and the capitalistic free market economy. In this perspective the US will play a vital role. However according to Huntington they will not succeed as the rest does not possess or are interested in the western values. Among the non-western cultures one will be especially important in opposing the west. The Islamic civilization, religion and culture will expand and dominate the non-western cultures. Huntington suggests that the international system will develop into multipolar world and the pattern of conflicts will be between the different poles. The main conflict will be between the western civilization and the Muslim civilization. As the US is the far most powerful country in the western civilization the US will remain very important. The four attacks on the US September the 11th 2001 are supporting this view as the attacks were executed by the Islamic terrorist group of Al-Qaeda.
In alignment with Huntington’s theory, Barry Buzan, Ole Wæver and others have developed a theory about international relations to describe the global system in the post –Cold War world. The group of scholars has improved and modified the theory of neorealism, which explained the bipolar international system during the Cold War. In the modified neorealism the focus is as well on a multipolar world with several great powers. Buzan states that after the collapse of the Soviet Union and the tension between the two Superpowers ceased the awareness of a global military and politically hegemony ceased as well. For the US this meant that the arms race and political and military presence in countries, which feared a communistic invasion was not necessary any longer. So the US withdrew from many of the regions where they had been present before. This opened up for an increasing regionalization. In contrast to Huntington however the modified neorealism states that the pattern of conflicts in the new international system will be within the regions and not between them. This is the case in regions with relatively weak state as the absence of the two Superpowers are leaving a military and political vacuum with room for tribes and clans, guerilla groups and even criminal organization to take over the power. In addition will the new regionalization result in military and political cooperation within regions with strong states. According to this theory the US will renew their isolationistic politics and stay out of the many trouble zones in the world.
Another scholar who is advocating the importance and rise of the non-western regions and economies are Fareed Zakaria . He has studied the curtailments of the options of the American foreign and security policies, which have arisen in the international system in relation to the increasing global separation of power. In alignment with Huntington and Buzan et al he states that after the last 20 years of unrivaled global dominance from the American hegemon the world are now moving into a new era, when countries in all regions will be important players in the international system. In contrast to Buzan Zakaria does not think that the US will withdraw and follow an isolationistic policy in the new post-American world. Instead they will use their military/political and economic advantages to play the diplomatic card. With the possibility of conflicts between the new rising powers in especially Asia: China, India and Russia the US will have the option of functioning as a mediator and adviser. However the US will have to get acquainted with the new role as an equal partner and not as a supreme hegemon. In this regard Zakaria also states that the American control of international affairs and of global policies of economic and international security are in decline, and in the nearby future the US will have to include the new rising powers.
In conclusion the different scholars all points at different scenarios for the US in the new global world. First of all Fukuyama states the American hegemony will continue to dominate the international system in a unipolar world. He is opposed by Huntington, Buzan and Zakaria, that all believe that the different regions and civilizations will play a more important role in a world characterized by multipolarity. However they disagree in what role the US and the regions will play. Huntington believes in a world order with conflicts between the many regions and especially between the west and the rest. He is contrasted by Buzan who states that the regions will not feel inclined to interfere in internal affairs of other regions. Instead the countries within the regions will follow either a collaborative policy or a policy of conflict in order to gain more power within the regions. According to this the US will pursue a policy of isolationism. Finally Zakaria believes that the US still will be an important global player, but on equal terms with all the other powerful players.
So how does the contemporary political role of the US compare with the different scenarios I have outlined? Regarding Fukuyama’s theory I would argue that the US hegemony and the western ideology of liberal democracy, capitalism and a free market economy to some extent has been accepted and applied in most of the world. Not so much the liberal democracy, but definitely the capitalism and the free market economy. Even though the world has experienced the recent Arab Spring, which was proclaimed to be a wave of democratization of the Arab World the result is debatable. According to several media the Arab spring is turning into an Arab winter with civil wars, new dictatorships and worst of all regarding the American ideal of liberalism, democracy and capitalism: Islamic leaders, who oppose all the American ideals. Furthermore is the situation not the best regarding democracy in neither China nor Russia. Even though Russia officially is a democracy the standards such as participation, transparency and free and equal elections are very low. According to the Freedom in The World 2013 report issued each year by Freedom House which measures the degree of political freedom and civil liberties in countries around the world, Russia has reverted to authoritarianism after the return of Vladimir Putin as president. The standards of democracy in the former Soviet republics are as well low. Of the 12 non-Baltic former Soviet republics, eight are brutal autocratic regimes. China is not even claiming to be democratic but is a one party state. However as there are no other single alternative to democracy, other than different forms of authoritarianism, I would still argue that democracy will be a relevant form of government in the future. First of all the rising economy of India is officially a democracy. As well will the population in China due to the growing economy and the growing middle class possible at some stage demand more political rights and civil liberties.
Besides the liberal democracy Fukuyama as well states that the world will accept and advance into a free market economy. In this respect the world and the US have really experienced an increase in the number of states which can be categorized as capitalistic and as having a free market economy, or at least play along the rules of a free market economy. The system of capitalism has spread all over the world after the end of the Cold War and are now more dominant than ever. All of the former communist states that were controlled by planned economy have turned to a system of free market economy. As well the Chinese market has opened up to the rest of the world in a steady speed in the last couple of decades, which especially the US has profited from with massive exports to and especially imports from China. Maybe the Chinese capitalism even has been too successful for the US as the trade deficit with China is enormous. The trade deficit with China amounted to as much as 266 billion $ in 2008. The largest of all of the US’s trade deficits to any country in the world. All in all the American imports far exceeds the imports. The overall trade deficit is as much as 700 billion in 2008 . It takes no Nobel Prize winner in economics to conclude that unbalanced payments like that over the years will become catastrophic. Even for a hegemon and the world largest economy. The American negative balance of trade has over the years of course resulted in a massive American foreign debt, which has been financed by other countries. The main reason that countries have been willing to loan the US such amounts of money is because of the huge American consumer market and the fact that the US is the only consumption Superpower in the world . The capitalistic world outside of the US is so to say depending on the American consumption in order to keep their economies up. Especially China is a massive creditor. What this could indicate in the nearby future I will get back to.
Regarding the clash of civilizations of Huntington and the increasing regionalization explained by Buzan and others and the role of the US in these scenarios I will concentrate my discussion on the US and its relation to some of the most important civilizations or regions mentioned above. First of all is the US relationship to the Islamic civilization in the Arab world very interesting. The Arab Spring and the 9-11 attack have both been debated before and need no further elaboration now. Instead I will focus on another important aspect of the American-Arab relationship; the oil. The enormous American foreign debt is not only a result of the unbalance of payments of goods. As well the massive import of oil is crucial. The US is the largest consuming society and is as well the largest consumer of energy. The American population only accounts for 5% of the global population, but consume as much as 26 % of the world’s energy . The domestic production of oil cannot keep up with the consumption and the US has to import as much as 50 % of the oil they consume. The US is very much depending on oil exporting countries. Even though most of the oil is imported from Canada the US is depending on oil from the Middle East. The dependency is illustrated in the decline of the American hegemony due to the 1970’s oil crisis. The relationship to the Arab region is thus very important for the US. It has even been suggested that the latest war in Iraq was a war for oil , and not the connection to Al-Qaeda and possession of weapons of mass destruction as stated as the official reasons. If the American involvement in and dependency of the Arab world will remain in the future is questionable. If the consumption of energy and production of fuel still will be unbalanced the American dependency will remain. However the discovery of a new method of extracting oil and natural gas that is entrapped within shale formations is a game changer. The International Energy Agency predicts that the US already by 2020 will be net exporter of gas and by 2035 the US will become self-sufficient of energy. If this scenario of the future turns out to be realistic the US dependency of and involvement in the Arab world will decrease. Off course will the Iranian question of the development of a nuclear program directed at producing weapons and not only energy still be relevant still be relevant.
Another economic matter of interest is the American relationship to China as a debtor. Jørgen Ørstrøm Møller, a senior researcher at ISEAS, Institute of South-east Asian Studies is paying an interest in this topic . In general the federal debt to the foreign creditors is enormous. In 2012 the debt added up to gigantic 4,4 trillion $ According to Forbes China possesses nearly a trillion $ of US Treasury debt and the debt is only increasing. The International Monetary Foundation predicts that by 2015 the overall federal debt will amount to 115 % of GDB. Each year billions of $ is transferred to China just in order to pay the interest. In 2010 the net interest payment of the foreign debt amounted to 1,4% of GDP, which is around 8-9 % of the federal budget. The debt is only increasing and so is the payment of interest. In 2020 it is predicted that the payment of interests alone will add up to 3, 4% of GDP, which is around 1,5 times the military budget. 3, 4% of GDP adds up to a massive 20 % of the federal budget. A huge amount to spend only on interest. An amount the American society and people will not gain anything from. The consequences of this are difficult to know, but the public spending will definitely have to decrease. In combination with a demographic development that will leave more citizens as benefiters of welfare than beneficiaries the budget will definitely have to the tight and the American government will consequently follow a contractive fiscal policy with no signs of growth. If they follow a contractive fiscal policy with no improvement for many year it will have serious consequences for the Chinese economy – and the world as such – as the US is the single biggest consuming market and the capitalistic economies depend on a thriving American market. When the US government realizes the budget will break it will issue and ultimatum to the Chinese government. According to Møller the ultimatum will include two options. Option 1 will be to restructure the debt and write part of if off. This will allow the American government to pursue an expansive fiscal policy and refrain from protectionism. The second option for China will be to have the loan repaid dollar by dollar. However this will mean that the American growth will decline, even reverse and they will have to pursue a contractive fiscal policy and go protectionistic and introduce heavy duties and quotas to protect the domestic industries from foreign competitors. The Chinese economy and growth are strong, but not strong enough to diminish the American market. As stated before the relationship between the two countries is very important for both parts. The connection has even been dubbed “Chimerica” . Møller predicts that the Chinese government will accept the offer of writing off part of the debt. However they will not do it free of charge. The Americans will possible have to make a few concessions. First of all China will not accept any interference in what China regards as its domestic affairs. Secondly the US will have to accept China as the only contested major power in Asia. China will not accept any flirtation with India or any alliance with Japan. If this scenario turns out to be real it will probably indicate a change in the world order. The US will possible pursue a policy of isolationism and withdraw from military operations and engagements to an even larger extent than they have already done. Due to the economic problems and the massive debt the world will lose the trust in the American dollar as the international reserve currency, which again will indicate that the US will lose status as a hegemon and the western dominance of global finances will end. For Europa as a region on its own it will indicate that the American engagement in and support of Europe will diminish. A much weaker US will force Europe and particularly EU to stand on its own feet, from both an economic and a politically/military perspective. As an example of a particular interesting case the situation in the Middle East and Northern Africa and how Europa will deal with it on its own will be interesting to follow.
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In general it will be interesting to follow the situation in Africa in the coming years. Again China will play a more important part and the US a less important part, which as well will demonstrate a change of the world order. The western world, the US and especially Europe have traditionally been dominant as donors in Africa. This relationship has had several goals. During the Cold War the presence of the US was primarily due to the support of the African leaders in the ideological conflict with the Soviet Union. In return for the support the US has helped African states with military and economy, the so called hard power. Since the end of the Cold War the relationship has somewhat changed. Instead of ideological support the African leaders should arrange their authority according to Western ideas of democracy, human rights and good governance in return for aid. This is called soft power. Of course the western world is as well interested in all the resources, oil and minerals Africa can provide. However the Western world is not the only part, who is taking an interest in Africa. Peter Kragerup, professor of International Development, RUC is stating that China is getting more and more active in Africa for one of the same reasons as the Western world: The resources, oil, metals and mineral and even farmland for growing food for the Chinese population. In return Africa is receiving Chinese aid and investments in the fast growing African economies: four of the 10 fastest growing economies in the world are African and the combined African economies have experienced yearly growth rates of 5-6 % since 2000. In 2011 China invested up till 160 billion $ in Africa and in contrast to the Western world China is not demanding any changes of governance or improvements of human rights. This is the crucial point as the African governments are more inclined to deal with China than with the West. As well polls are showing that the satisfaction with China and their involvement in Africa is high among the African populations.
Until now I have concentrated the discussion on political and economic issues. Before my final discussion and conclusion I will shortly focus on another topic of interest regarding the American presence in the international community. For many decades the US has played an important role in relation to popular culture. In terms of language, movies, music and food the American way of doing it has spread all over the world. Even in the most anti-American countries in the Middle East you will find symbols of American culture like Coca Cola, jeans and Hollywood movies. To illustrate how fast the spread of the American lifestyle is, McDonalds opened a restaurant in the very center of the former enemy of the Soviet Union already in 1990, only a year after the fall of the Berlin Wall. Even if the film industry of India, Bollywood in Mumbai is producing more movies than the American equivalent in Hollywood , the film industry of the US is supreme in terms of revenue. It takes only one Hollywood studio, like Walt Disney to double the yearly revenue of Bollywood (1, 75 Billion $ in 2006). Looking globally at the movie industry the American is dominating as well. First of all Hollywood brings in almost 75 % of total revenue in the world, even though they only produces a fraction of the movies in the world. As well does half of the revenue come from foreign markets while for Bollywood it is only 20%. The American lifestyle is particular spreading fast with the invention and spread of media like internet. Many Indians and Chinese would be familiar with McDonalds, Coca Cola, Tom Cruise and Michael Jackson, but not many Americans will be familiar with the Chinese and Indian equivalents.
In my final discussion

In conclusion I will argue that USA and the American concept or idea will still be predominant in the nearby future. Even though China soon will take over as the economic superpower it is still based on the American ideal of
I do not claim that China will be the hegemon. There will be a power vacuum as the US is holding back politically/military and