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Economy
In reply to the discussion: Weekend Economists Reminisce: Black Monday October 19, 1987-2012 [View all]Demeter
(85,373 posts)70. The End of the New World Order By Seumas Milne
http://www.guardian.co.uk/commentisfree/2012/oct/19/new-world-order
In the late summer of 2008, two events in quick succession signalled the end of the New World Order. In August, the US client state of Georgia was crushed in a brief but bloody war after it attacked Russian troops in the contested territory of South Ossetia. The former Soviet republic was a favourite of Washington's neoconservatives. Its authoritarian president had been lobbying hard for Georgia to join Nato's eastward expansion. In an unblinking inversion of reality, US vice-president Dick Cheney denounced Russia's response as an act of "aggression" that "must not go unanswered". Fresh from unleashing a catastrophic war on Iraq, George Bush declared Russia's "invasion of a sovereign state" to be "unacceptable in the 21st century".
As the fighting ended, Bush warned Russia not to recognise South Ossetia's independence. Russia did exactly that, while US warships were reduced to sailing around the Black Sea. The conflict marked an international turning point. The US's bluff had been called, its military sway undermined by the war on terror, Iraq and Afghanistan. After two decades during which it bestrode the world like a colossus, the years of uncontested US power were over. Three weeks later, a second, still more far-reaching event threatened the heart of the US-dominated global financial system. On 15 September, the credit crisis finally erupted in the collapse of America's fourth-largest investment bank. The bankruptcy of Lehman Brothers engulfed the western world in its deepest economic crisis since the 1930s.
...................................
In 1990, George Bush Senior had inaugurated a New World Order, based on uncontested US military supremacy and western economic dominance. This was to be a unipolar world without rivals. Regional powers would bend the knee to the new worldwide imperium. History itself, it was said, had come to an end. But between the attack on the Twin Towers and the fall of Lehman Brothers, that global order had crumbled. Two factors were crucial. By the end of a decade of continuous warfare, the US had succeeded in exposing the limits, rather than the extent, of its military power. And the neoliberal capitalist model that had reigned supreme for a generation had crashed...It was the reaction of the US to 9/11 that broke the sense of invincibility of the world's first truly global empire. The Bush administration's wildly miscalculated response turned the atrocities in New York and Washington into the most successful terror attack in history. Not only did Bush's war fail on its own terms, spawning terrorists across the world, while its campaign of killings, torture and kidnapping discredited Western claims to be guardians of human rights. But the US-British invasions of Afghanistan and Iraq revealed the inability of the global behemoth to impose its will on subject peoples prepared to fight back. That became a strategic defeat for the US and its closest allies.
This passing of the unipolar moment was the first of four decisive changes that transformed the world in some crucial ways for the better. The second was the fallout from the crash of 2008 and the crisis of the western-dominated capitalist order it unleashed, speeding up relative US decline. This was a crisis made in America and deepened by the vast cost of its multiple wars. And its most devastating impact was on those economies whose elites had bought most enthusiastically into the neoliberal orthodoxy of deregulated financial markets and unfettered corporate power. A voracious model of capitalism forced down the throats of the world as the only way to run a modern economy, at a cost of ballooning inequality and environmental degradation, had been discredited and only rescued from collapse by the greatest state intervention in history. The baleful twins of neoconservatism and neoliberalism had been tried and tested to destruction.
MORE
***********************************************************
This is an edited extract from The Revenge of History: the Battle for the 21st Century by Seumas Milne, published by Verso. Buy it for £16 at guardianbookshop.co.uk
In the late summer of 2008, two events in quick succession signalled the end of the New World Order. In August, the US client state of Georgia was crushed in a brief but bloody war after it attacked Russian troops in the contested territory of South Ossetia. The former Soviet republic was a favourite of Washington's neoconservatives. Its authoritarian president had been lobbying hard for Georgia to join Nato's eastward expansion. In an unblinking inversion of reality, US vice-president Dick Cheney denounced Russia's response as an act of "aggression" that "must not go unanswered". Fresh from unleashing a catastrophic war on Iraq, George Bush declared Russia's "invasion of a sovereign state" to be "unacceptable in the 21st century".
As the fighting ended, Bush warned Russia not to recognise South Ossetia's independence. Russia did exactly that, while US warships were reduced to sailing around the Black Sea. The conflict marked an international turning point. The US's bluff had been called, its military sway undermined by the war on terror, Iraq and Afghanistan. After two decades during which it bestrode the world like a colossus, the years of uncontested US power were over. Three weeks later, a second, still more far-reaching event threatened the heart of the US-dominated global financial system. On 15 September, the credit crisis finally erupted in the collapse of America's fourth-largest investment bank. The bankruptcy of Lehman Brothers engulfed the western world in its deepest economic crisis since the 1930s.
...................................
In 1990, George Bush Senior had inaugurated a New World Order, based on uncontested US military supremacy and western economic dominance. This was to be a unipolar world without rivals. Regional powers would bend the knee to the new worldwide imperium. History itself, it was said, had come to an end. But between the attack on the Twin Towers and the fall of Lehman Brothers, that global order had crumbled. Two factors were crucial. By the end of a decade of continuous warfare, the US had succeeded in exposing the limits, rather than the extent, of its military power. And the neoliberal capitalist model that had reigned supreme for a generation had crashed...It was the reaction of the US to 9/11 that broke the sense of invincibility of the world's first truly global empire. The Bush administration's wildly miscalculated response turned the atrocities in New York and Washington into the most successful terror attack in history. Not only did Bush's war fail on its own terms, spawning terrorists across the world, while its campaign of killings, torture and kidnapping discredited Western claims to be guardians of human rights. But the US-British invasions of Afghanistan and Iraq revealed the inability of the global behemoth to impose its will on subject peoples prepared to fight back. That became a strategic defeat for the US and its closest allies.
This passing of the unipolar moment was the first of four decisive changes that transformed the world in some crucial ways for the better. The second was the fallout from the crash of 2008 and the crisis of the western-dominated capitalist order it unleashed, speeding up relative US decline. This was a crisis made in America and deepened by the vast cost of its multiple wars. And its most devastating impact was on those economies whose elites had bought most enthusiastically into the neoliberal orthodoxy of deregulated financial markets and unfettered corporate power. A voracious model of capitalism forced down the throats of the world as the only way to run a modern economy, at a cost of ballooning inequality and environmental degradation, had been discredited and only rescued from collapse by the greatest state intervention in history. The baleful twins of neoconservatism and neoliberalism had been tried and tested to destruction.
MORE
***********************************************************
This is an edited extract from The Revenge of History: the Battle for the 21st Century by Seumas Milne, published by Verso. Buy it for £16 at guardianbookshop.co.uk
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