Contours of the World’s Future

World politics will shift as a consequence of the global economic crisis.

The world economic crisis, which began in 2008, is systemic. This can be seen in its global character, its length and severity, and also in the interweaving of financial and political turmoil. These features of the current crisis are reminiscent of the crises of the 1930s and the 1970s, which were accompanied by structural transformations of the world economy, including the formation of a new model of economic regulation and a new model of world economic ties and of international monetary relationships.

Both of the systemic crises of the 20th century led to significant shifts in the world political arena. One of the consequences of the Great Depression and later, World War II, was the transfer of world leadership from Great Britain to the United States. After 1945, colonial empires began to break up, and the bipolar system of international relations began to form. The crisis of the 1970s was marked by the collapse of authoritarian regimes in the countries of southern Europe, as well as political and economic stagnation in the USSR. These events were the prologue to the breakup of the socialist camp and the deepening of European integration in the late 1980s and early 1990s. Will the current crisis be fraught with such political changes?

Strengthening of Germany in the EU

An important outcome of the crisis in the eurozone is the return of Germany to an indisputable position of leadership in Europe’s integration processes. Over the past two years, Germany had the best macroeconomic indicators on the continent: In 2010, their gross domestic product rose 3.7 percent; in 2011, it rose 3 percent. In December of last year, the level of unemployment fell to its minimum since the reunification of the country: 6.6 percent. In the course of the European financial crisis, Germany has provided more than €200 billion to save the public finances of debtor nations, demonstrating an example of European community solidarity. At the start of 2012, Germany was the primary initiator for the process of signing the Treaty for Stability, Coordination and Governance, which was devised to prevent a repeat of the debt crises in the EU. These circumstances have shifted Germany into the role of a “locomotive country” for European integration, which will undoubtedly impact the start of the institutional transformation of the EU needed to overcome the euro crisis.

The Arab Spring

Other manifestations of the global crisis were political shifts in the governments of the Middle East, many of which are rich in natural resources. The falls of autocratic regimes in Tunisia, Egypt, Yemen and Libya bear witness to the achievement of a level of socio-economic development under which a competent and urbanized society is not willing to put up with a government that is not interested in their viewpoints. The overthrow of dictators who had been in power for some decades was confirmation that authoritarian regimes, despite their external appearances of strength, collapse like houses of cards. Today it is difficult to predict the results of the Arab Spring. The establishment of stable democracies in the Middle East cannot be guaranteed. Everyone has in front of them the example of the Iranian Revolution of 1979, which initially brought a broad coalition to power, but then fundamentalists seized power and established a theocratic republic. Only one thing may be said with confidence: This region will no longer be an island of stability, based on oil rents.

U.S. Introversion

Yet another consequence of the world economic crisis is the gradual decrease in foreign-affairs activities of the U.S. In December 2011, President Barack Obama announced the end of combat operations in Iraq. The 44th president of the U.S. was true to his pre-election promise “to bring our troops home.” Doctrinal documents of the Obama administration are permeated with the desire to limit America’s global ambitions and to focus on the domestic agenda. It is quite likely that the high level of unemployment and low rate of economic growth will dictate a restrained foreign policy for the next president of the U.S., whomever that may turn out to be.

Still another explanation can be found for these changes. In U.S. foreign policy, there are successive periods of extroversion — readiness to use direct diplomatic, military or economic pressure on other nations for the sake of achieving American goals — and introversion — a focus on internal problems of American society. Historian Frank Klingberg revealed this pattern in his 1952 article, “The Historical Alternation of Moods in American Foreign Policy.” According to Klingberg, the introversion phases in the foreign policy cycle last about 21 years, while the extroversion phases last about 27 years.

After the end of World War I, the U.S. Senate refused to ratify the Treaty of Versailles, because they were reluctant to participate in the League of Nations, where Great Britain and France had the greatest influence. The 1941 attack on Pearl Harbor symbolized the end of that period of isolationist foreign policy, which lasted for the term of the 20 inter-war years. The Vietnam War marked the completion of the extroversion phase, which had been characterized by active U.S. participation in arranging the postwar world. In the 1970s, there was the detente in the relationship with the Soviet Union, rapprochement with Maoist China, and the diplomatic resolution of the Egypt-Israel conflict (the U.S. acted in the capacity of mediator in preparation for the Camp David Accords).

To all appearances, today we are witnesses to the completion of the next extroversion series of wars, begun in the mid-1980s when Ronald Reagan declared his “crusade” against communism. The past two and a half decades have been marked by the extension of American influence into the countries of the former socialist camp, and by U.S. and NATO military operations in Yugoslavia, Afghanistan and Iraq. Obama’s presidency is a period of transition to a new introversion phase; for American foreign policy it will be characterized by a preference for resolving international conflicts by diplomatic means, rather than military ones.

The Rise of China

The rapid strengthening of China, about which much has been written and said during the past 10 years, is even more pronounced in the course of the current crisis. In 2010, China’s GDP surpassed that of Japan, which had been second only to the U.S. for the past four decades. Today, China is the world’s largest target of direct foreign investment and also the world’s largest holder of international reserves. In recent years, disagreement has worsened among Washington, Brussels and Beijing on the issue of the artificial devaluation of the yuan, which leads to a very large U.S. and EU trade deficits with China. The manner in which this global imbalance will be resolved depends greatly on the configuration of the post-crisis world.

The rise of China has another subtext. Russian researchers Vladimir Pantin and Vladimir Lapkin have called attention to the fact that modern history has seen repeated conflicts between nations implementing polar strategies of political modernization.From the second half of the 17th century to the first half of the 18th century, there was confrontation between absolutist France and the bourgeois-democratic Holland (The Republic of the United Provinces). Long and ruinous wars between Holland and France in 1672–78, 1688–97, 1702–13 and 1747–48 brought an end to Holland’s dominant position in western European politics. Great Britain took Holland’s place at the start of the 18th century, once again opposing first the French monarchy, and then revolutionary France. The Napoleonic Wars and the continental blockade of England were the apotheosis of the confrontation between two great powers, which culminated in the final defeat of France in the struggle for world hegemony.

In the place of France, after Napoleon III’s empire fell in 1871, in the path of liberal-democratic development, there came Germany, which successfully undertook industrialization and military modernization from the second half of the 19th century to the first half of the 20th century. As a result of World War I, Great Britain and Germany were significantly exhausted, and the United States claimed the place of world leader. The Great Depression led to the establishment of the Nazi regime in Germany, whose struggle for world domination precipitated World War II. After the fall of the Third Reich, Germany converted to sustainable democratic development, and the confrontation between the USSR and the U.S. became the hub of world politics, ending half a century later with the collapse of the socialist camp. At the beginning of the 21st century, America’s main competitor in the world arena is authoritarian China, which is rapidly gaining economic and military power. This indicates that in the not-so-distant future, Russia will see new opportunities for integration with developed countries, and a transition to a real, rather than imitation, political competition.

Challenges for Russia

In the systemic crises of the 20th century, there was a military component. In particular, the end of the crisis of the 1930s brought about World War II, which in turn brought about a radical redrawing of the global political map. Today such a global conflict is hard even to imagine, but the likelihood of regional clashes must not be excluded. Tension over Iran is vivid evidence of that. In this situation, it will be extremely important for Russia to step back from participation in any armed conflicts and not to repeat the mistakes of the late USSR, which, after sending Soviet forces to invade Afghanistan, united the West, the Islamic world, and China against itself. Will Russia manage to avoid these threats? Only future generations of historians will be able to answer that question.  

Kyrill Vladimirovich Rodionov is a junior research fellow at the Gaidar Institute for Economic Policy.