About the Statement
After the fall of communism most analysts viewed global competition as, essentially, pitting a more market-based, ‘Anglo-Saxon’ model (represented by the United States and the UK) against a ‘continental’ model espoused by France and Germany. There was talk, also, of a tri-polar world economy, with Japan as a third centre. But that vision of the world economy has been perturbed by China and India’s economic growth and influence of the institutional setup that has ordered international economic affairs after the Second World War. The results are tectonic shifts in the global economy and the need for the West to find a new sense of place because the competitive challenges are enormous. However, the challenges to the United States and the EU are greater than the emergence of dynamic and very large competitors.
We are not talking only about competition within one type of capitalism --“liberal capitalism”, as the political scientist Fareed Zakaria described the western world; different types of capitalism are clashing. In Asia, except India and, partly, Japan, the prevailing form of capitalism has an authoritarian nature and hinges on state structures. A similar system also operates in Russia, where the state controls major groups in the energy field.
Globalization is exacerbating some tensions. The pressures of globalization have not created a “flat world economy”, as the American journalist and author Thomas Friedman would say. The redistribution of world economic power is producing effects on, among others, regional political and economic dynamics, political and security alliances, the structures of global governance, and the struggle for the control of strategic resources.
For the foreseeable future, the Western world will remain the most powerful force in the world, both economically and militarily. But the United States has been weakened by external deficits and its military overstretch in Iraq and Afghanistan. Likewise, while there is a wide variety and quality of the EU states’ performances economically and socially, the EU is struggling to manage its increasing organizational complexity, while demographic trends and strains on the welfare state are compounding the challenges of implementing an agenda already overwhelmed by policy trade-offs. The Reform Treaty – the Treaty of Lisbon – is a significant step forward, but it has yet to show concrete benefits.
In this weakened state, facing competing dynamic authoritarian capitalist systems, struggling with the effects of global warming, and worried by terrorism, the West may feel the temptations of direct state involvement in the economy, and even of authoritarian policies. Moreover, the spreading financial mess around the world provides a strong vindication to those who have long cautioned against market fundamentalism and reckless deregulation. This financial crisis has tarnished business practices the Western world has been preaching to others. It is now high time to enact policies that value pragmatism and distinguish between free and non-regulated markets.
The world we are heading toward will not secure the supremacy of ‘liberal democracy” automatically, everywhere. And it is quite likely that in the decades to come the relative economic power of the US and the EU will decline. However, it could decline in relative terms while still increasing its soft power, especially if that were accompanied by liberal values. But for the West to expand its soft power implies that it must be more concerned about global issues as others perceive them as such and involve the emerging global powers in managing those challenges; it also implies less hubris and arrogance in its conduct of foreign and security policy, pragmatism and open-mindedness in policy-making and – by no means least – a reappraisal of those ethical values that have brought prosperity and empowerment to its citizens in its modern history. Such a reappraisal would include paying genuine attention to the concerns of the rest of the world.
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