America, Europe, and the Emerging World Order

By Stephen Gill | 1991-05-01 12:00:00

While in Western Europe we see political and economic integration, in Eastern and Central Europe, we see the disintegration of communism. These changes mark the start of a new era. Although it is unlikely that Europe will supplant American primacy in the foreseeable future, the changes in Europe are probably more central than the Gulf War in determining the emerging world order.

The European Community's integrationist project rests on a contradiction between its economic and political aspects. In major ways, the single market runs counter to democratization. Some of the changes in Western Europe are responses to the imperatives of a more globalized, dynamic, and mobile capitalist system. The project is to make Europe more competitive and coherent. The slogan for this project is "1992."

The economic crisis of the 1970s and '80s explains the 1992 program. Enthusiastic proponents see it as revitalizing the goal of a United States of Europe. A catalyst for the 1992 initiative was the European Round-Table, a coalition of big European multinationals which promoted the European Commission and the Single European Act (the main legal statute mandating the 1992 program) as well as the Delors Plan for Economic and Monetary Union. Progress has been achieved toward the single market and the development of institutions to regulate the new, enlarged economic space. German unification has sped up this process.

International economic challenges prompted these initiatives. A massive effort was made to meet the competition of U.S. and Japanese firms. The key was the creation of a European economy with its own central banking institutions and increased coordination of the 12 member states. A regional set of political institutions will be needed to consolidate and protect this region. To create the preconditions for renewed European competitiveness, it will be necessary to move away from the Keynesian era on which the post-war political order in Western Europe had been based.

A key problem for West European integration is the lack of legitimacy and accountability of European institutions (with the possible exception of the European Court): what is called the "democratic deficit." Each member state (especially Britain) is reluctant to cede more control to the supra-national institutions of the European Community. Although German unification has given political momentum to West European unification, the problem of legitimacy is still not being addressed fundamentally. Ironically, while democratic institutions are being painfully reconstructed in the East, partly inspired by Western traditions of liberal democracy, attempts to establish more democratic foundations for supra-national West European institutions are notably absent. Until the American media began focusing exclusively on the Gulf, all these questions were being discussed in political circles.

Partly because the dollar is central for other countries engaged in international trade, American policies will remain crucial. Some argue that the U.S. "is bound to lead" because no other nation can impose order and stability in world politics. However, to restore its credibility as a leader, the U.S. must refrain from pursuing interests detrimental to those of its key allies-such as its vast appetite for arms and consumption-and from financing these by borrowing, which shifts present costs onto future generations. From the viewpoint of the EEC and Japan, if the U.S. is to lead, like Ulysses forgoing the lure of the Sirens, it needs to be "bound to the mast."

The U.S. should forgo reckless military adventures and tax-cutting (especially when this mainly benefits the wealthy) for the sake of global economic stability and a peaceful, rules-based international order. U.S. politicians should also forgo creating a new enemy-e.g. Japan, Iraq-and extracting tribute from allies to pay for military intervention.

A struggle is taking place between "transnational" and "national" blocs of socio-political forces, which is crucial to understanding current American policies. Nationalist forces, associated with protectionism and with geopolitical thinkers of the realist persuasion now seem to have the upper hand. Evidence for this includes America's aggressive trade policies, its interventionism (Grenada, Panama, the Gulf War) and its scapegoating of the Japanese for its own economic ills. Transnationalists, on the other hand, are concerned with the competitiveness of U.S. industry and with growing corporate interests that need access to the markets and capital of other countries. They have forged alliances with foreign firms and want to open the world to the freer movement of capital, goods, and services. They are liberal economic internationalists who advocate that the U.S. cooperate more with its key allies in stabilizing the global economy. Included in these ranks are big U.S. financial corporations and banks who benefit from anti-inflationary policies. They view persistent U.S. budget deficits as a key cause of the huge balance of payments deficits, the rise of protectionism, and the gyrations in the value of the U.S. dollar. Given that the Pentagon consumes, after social security, by far the lion's share of the U.S. budget, we can expect these forces to oppose the Pentagon and the nationalist bloc in general.

President Bush's decision to send forces into the Gulf War is related to a widespread questioning of the ability of the U.S. to lead, as reflected in the popularity of the best-selling thesis of Paul Kennedy, The Rise and Fall of the Great Powers. This debate concerns the future stability of the world system and the place of the U.S. within it. Nevertheless, the key debate is not between "declinists" and others; rather, it concerns the capacity of an ever-more economically central U.S. to destabilize the world order system. This could occur if the aggressive nationalist forces prevail or if unfettered market forces, especially those associated with finance, are allowed to destabilize economic growth and development world-wide, as happened in the 1980s. World order needs far-sighted international cooperation-and thus an internationalization of outlook on the part of U.S. leaders and the public.

Global Change and World Order

There is little prospect that Europe will replace the U.S. as the dominant power of the global economy, especially if the EEC is enlarged in the next century. For one thing, the initiatives are generally based on narrow economic considerations. Further-more, the political and economic aspects of the integration process lack congruence and the popular support of the European peoples. The EEC initiatives run against the grain of history, which has been marked since World War II by a trend toward democratization and the control of market forces by the state and society.

European integration has a long way to go, particularly in forming a common defence system and a common foreign policy (the Gulf War revealed, for example, divisions between German reluctance, British neo-Americanism and traditional French independence).

Progress in economic and monetary union is proceeding faster than could have been imagined even two years ago; it has been accelerated by German unification, by developments in Eastern and Central Europe, by growing American protectionism, and by acute sensitivity to the Japanese challenge. Because European economies are dependent on international trade and international production, we are unlikely to see fortress Europe in the future. However, the EEC's integration will give it more countervailing bargaining power relative to the U.S. and Japan. This was apparent, for example, in the recent deadlock in GATT negotiations between the EEC and the U.S., which reflected a budgetary impasse in the EEC caused by the Common Agricultural Policy, as well as competitive differences over services, intellectual property, and governmental procurement regulations.

We are far from developing a common European identity and political institutions with democratic legitimacy and the capacity to mobilize the European peoples. This is a stronger constraint on further European integration than the pull of the German model, the push of French political initiatives, or the shall-we, shall-we-not hesitations of the British (reflected, for example, in the lament of the Prince of Wales that the Channel Tunnel would destroy the "island identity" of Britain).

Thus Europe is still far from being a completed economic, military, and political reality. Modern, integrated Europe is but a set of ideas, proposals, and arguments, at least when compared to its major rivals, the U.S. (200 years of political development) and Japan (at least 1200 years). Europe can rival the U.S. if the EC can become more coherent and integral. The driving forces that may make this dream into a reality are, first, material pressures (especially competition for transnational capital) and, second, the problematic need for European security. The next catalyst for European integration may be the political conflicts caused by the Soviet disintegration, if that occurs.

But the twenty-first century will not be the "European century." America's primacy remains unrivalled because of its unified power in the economic, military, political and, in some senses, cultural fields. But does the global order necessarily involve the primacy of one state, or a collection of federated states, relative to others? We need to consider what type of world order is now coming into being. In my view, it is harsher and less legitimate at the mass level. Its social base has narrowed and it has moved backward in reinstituting the self-regulating market and, at least in the West, restricting the trend toward democratization.

If the 1992 program is an indicator, any European superstate may be a larger version of the nineteenth-century liberal states, with their limited franchise and dominance by the aristocracy and the bourgeoisie. The state and its relationship to civil society will be based less on a politics of inclusion and welfare, and increasingly on the self-regulating market. Instead of socialism, the workers of the future Europe are to be persuaded to aspire to the German social market model as the best of all possible worlds. This goes against the grain of history, and stands in contradiction to the rebirth of democracy in Eastern and Central Europe.

Nevertheless, this emerging world order is also generating egalitarian, democratic tendencies (e.g. nationalism, populism, and progressive social movements): counterpoised to the universalism of global capitalism. Its universality is the world-wide ex-tension of market value, worldwide. In this regard, of welfare liberalism that flourished on both sides of the Atlantic after 1945 has begun to disappear, to be replaced by a form of "disciplinary neo-liberalism," particularly in the poorer countries of the world.

Emerging on the horizon is the predatory eagle. The U.S. has decided to exert its commanding influence on the world less by consensus and legitimacy than by dominance. Whether this can sustain a stable, legitimate, authoritative world order is doubtful. In light of the questionable future of the USSR, the EC may have to develop its own military, its independent foreign policy, and its economic defences against American dominance. This will necessarily hasten its unification.

Japan, on the other hand, for lack of creative political leaders and substantial democratization, may remain a second-level political power, despite its formidable economic prowess. That prowess is increasingly working its population into the ground, as the work week gets longer and the level of knowledge and labor in the leading industries rise.

The Japanese ruling classes do not think globally; this means that Japan's ambivalent relationship with the U.S. will continue. However, it may in due course try to offset its lop-sided dependence on the U.S. through economic and political diversification. The EC will also undertake similar diversification as a hedge against the political risks of too great dependence on Washington's policy, but neither it nor Japan will seek to provoke the U.S. Rather, these possibilities open up the prospect for pluralistic and progressive forces to make transnational links and create a differentiated, multilateral world order. This will advance the democratization of global civil society. International politics is currently monopolized by capital and by the governments of the major states, partly under the super-vision of the World Bank, the International Monetary Fund, and the military alliances of the West. To democratize the international arena would help mobilize for solving global problems: social inequality, intolerance, environmental degradation, and militarization. Order might then sup-port human development-and not just among the privileged few.

Such forces might be fostered by an authoritarian crackdown in the USSR-or by world-wide concern about the environment, the defunding and militarization of the developing countries, and the fragility of the global economic system.

Stephen Gill is Associate Professor of Political Science at York University. He is working to make a book based on this article.