A time to
celebrate … or worry?
by Branko Milanovic on 1st
February 2021 @BrankoMilan
Branko Milanovic worries that in the
new global constellation a second cold war—with China—could be in the offing.
Branko Milanovic
Most of the world with some
political influence seemed to have breathed a sigh of relief: Donald Trump had
finally left the White House. Four years of chaotic policies, interspersed with
racist invective, had come to an end.
United States liberals had fended
off another existential challenge—this time from within
their own nation. The current mood might be subdued by the ravages of the
pandemic but, when this is over, would they not go back to the celebratory
triumphalism of the early 1990s? There are indeed strong similarities between
then and now.
Democratic victory
The end of communism was a victory
for democratic capitalism and, in the US, for the coalition of conservatives
and liberals established in Harry Truman’s postwar presidency and lasting
through that of Ronald Reagan in the 1980s. Around the late 60s, communism had
ceased to be an internal threat, as communist parties in western countries
became less important politically and step-by-step transformed themselves into
social democrats. Eventually they mostly self-extinguished.
But externally the power of the
Soviet Union was formidable. It could destroy the US (and be in turn destroyed)
within less than half an hour—as recently released documents about a 1983
US exercise precipitating Soviet preparation for nuclear attack show. The
coalition of democratic states prevailed when the Soviets decided to jettison
communism and join the richer western coalition.
The winning coalition of
conservatives and liberals in the US then felt free to engage in the building
of a ‘new world order’ and in quick succession launched a number of wars: on
Panama, Iraq (twice), Serbia, Afghanistan and Libya. The North Atlantic Treaty
Organization expanded into the former Soviet sphere in eastern Europe and US
military outposts—now numbering around 800—were established around the world.
Ideological belief
What underpinned this extraordinary
manifestation of power was the ideological belief that all challenges to
liberalism had been shown to be politically and economically weak. Those who
had yet failed to embrace the nostrums of Washington, the story went, had not
done so only because they were not allowed to express their deeply-held
desires—or were incurable ‘Islamo-fascists’, a term coined specially for
the second Iraq war. In March 2003 the neoconservatives dominant in the
administration of George W Bush and the majority of liberals who supported the
war claimed that the streets of Baghdad would be strewn with ‘garlands and
flowers’ for the conquering ‘coalition’ armies and that a newly democratic Iraq
would join democratic Israel in ensuring peace and prosperity in the middle
east.
Reality in Iraq plus the global
financial crisis, followed by domestic insurgencies in the international
centres of liberalism, put paid to these views. As the liberal-conservative
coalition had to deal with ‘internal enemies’ in most important
countries—ranging from the gilets jaunes in France to
Brexiters in the United Kingdom and Trump in the US—the last few years were
quiescent in foreign affairs.
Now, with this latest threat
successfully subdued, the danger is that the triumphalism which accompanied the
end of the cold war may return. And that could precipitate another cold war,
this time with China.
Hysterical behaviour
Trump already did all the
preparatory work. However gratuitous was the trade conflict between China and
the US, in principle at least it was soluble—the two sides were moving toward a
compromise. But Covid-19 ended these hopes. Trump’s increasingly hysterical
behaviour indicated that he saw the epidemic as a Chinese plot to oust him from
power. His own and his administration’s attacks on China became increasingly
strident and frequent.
By now, however, the anti-China
attitude was shared by all influential segments of US politics. Many may not
wish to admit that they are following in Trump’s footsteps, but they are—with
an ominous escalation. What was a trade conflict has morphed into a conflict of
values. Conflicts of values are by definition irresolvable, except by the
victory of one side and defeat of the other.
The explanation for a new cold war
proffered by Democratic leaders is that US engagement with China and
acquiescence in its membership of the World Trade Organization were based on
the idea that China would gradually liberalise its politics. It was a form of
the modernisation theory the US establishment
had believed in since the early 1960s, a belief reinforced by the fall of
communism. In this reading of history, the conflict with China is inevitable
because the Chinese leadership has not behaved according to the US
establishment’s script and has failed to follow its economic prowess with
multi-party democracy.
Losing supremacy
But a different reading of the roots
of the conflict is possible too. It is based on Realpolitik, where
US supremacy is seen as potentially endangered by the rise of China and creation of a
bipolar world. Additionally, if a different type of capitalism is shown to be
economically more efficient, would that not undermine liberals’ own view of the
‘end of history’? The conflict may be due to the fear of losing economic, and
with it ideological, supremacy—not just the spurned hope of China emulating the
west.
Thucydides, general in classical
Athens and historian of its war with Sparta, wrote that people fight because of
interests, honour or fear. The fear of loss of US mastery may push the
resurgent coalition of liberals and conservatives to continue with Trump’s
anti-China policy—and to elevate the tensions another notch by presenting the
conflict as one between incompatible values. The idea of ‘regime change’ cannot
be far behind.
Does the world need a second cold
war? We were lucky to have escaped nuclear apocalypse with the first. No sane
person could be in favour of having another brush with destruction, just
because one part of the world wants to impose its system of values on another.
But the stars seem so aligned.
Covid-19 may be seen by future historians (in the optimistic scenario that
there are future historians) as the trigger that launched the world into an
unnecessary and destructive political, and perhaps military, confrontation.
This article is a joint publication
by Social
Europe and IPS-Journal
About Branko Milanovic
Branko
Milanovic is a Serbian-American economist. A development and inequality
specialist, he is visiting presidential professor at the Graduate Center of
City University of New York (CUNY) and an affiliated senior scholar at the
Luxembourg Income Study (LIS). He was formerly lead economist in the World
Bank's research department.
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