Globalization Or War: Our Only Choices?
Globalization is in retreat. Supply chains are splintering, as are manufacturing and resource extraction industries, including oil. Everybody is suddenly sick of the neoliberal world in which everything is done and made where it can be done and made most efficiently, thereby maximizing economic growth and its associated modes of exploitation, pollution and carbon emission. Reasons for this disaffection differ, as do preferred fixes, but the perception that something is wrong is pervasive. I have written many times of the potential this opens up for reimagining society as something better, something in which all life can flourish. But what if globalization is what has been keeping the peace? We degrowth and localization advocates must consider the possibility that our approach would make war more likely. What then?
Full-on war between the US and China was barely imaginable a mere year or two ago — or rarely imagined anyhow. Even when Donald Trump was swaggering around wildly firing off tariffs into the packed China-US trading space, few supposed it would lead to fighting with live ammunition. Trade wars were still generally accepted as bad at that point. Shooting wars between countries as powerful and economically intertwined as the US and China were unthinkable.
Suddenly, a shooting war is being discussed all over, including by US generals. Shooting down of multiple unidentified flying objects by over-armed US forces, following their destruction of a harmless Chinese balloon, is the latest of several threatening episodes. I say the balloon was harmless because, if it weren’t, it would surely have been shot down before it traversed the entire country, maybe stopping to examine military bases on the way. That was official US Story A. Story B from Washington officialdom is that the balloon blew off-course while checking out Guam — not all that different from the Chinese story.
In the meantime, war frenzy has built. Was that the point of shooting down balloons and equally harmless UFOs? Was it all part of a struggle within the foreign policy and defense establishment between those who hate China most and those who hate Russia most, as some claim? Who knows?
Poking fun at balloon and UFO incidents isn’t meant to belittle the risks they pose. Presumably one such episode, one of these days, could turn into war. What needs belittling are the ridiculous stories US and Nato officialdom tell us about what’s going on, wherever and whatever it is. I have in mind both the obviously absurd, such as the one about the Russians blowing up their own Nord Stream pipelines, and the murkier, conflicting tales about who’s walloping whom in Ukraine.
The most hopeful article I’ve read on the subject lately was by historian and inveterate hawk Niall Ferguson, who suggested in a column in Bloomberg that US military manufacturing capability is so aged and ill-functioning that some vital munitions could run out “in less than a week” of active fighting. Nato Secretary General Jens Stoltenberg and Chairman of the Joint Chiefs of Staff Mike Milley each conceded soon afterward that nobody in Nato is making ammunition at the speed required in Ukraine, much less for a full-fledged war — like fighting the Chinese over Taiwan, for example.
I’m pretty sure Ferguson, Stoltenberg, and Milley don’t see shortage of ammunition as hopeful, but to me, any impediment to war is hopeful.
Toward the End of Time?
At some point in all the balloon hullaballoo I remembered that somebody had imagined the possibility of a war between the US and China 25 years ago: John Updike in Toward the End of Time. I wouldn’t say it’s a great novel, and I certainly wouldn’t defend its over-abundant aging-male sex fantasies. But it’s evocative for being set in a post-war US in the then-fictional future of 2020. The US population has been halved by a four-month war fought with China, mainly from offices using computer-controlled weapons.
There’s no federal government or national currency left. Fedex and UPS are the main functioning nationwide “networks” competing to replace the non-functioning central government. In the meantime, criminal gangs keep some semblance of local services going in return for protection money that the well-off storyteller, a retired investment advisor living in a still-luxurious house on the Massachusetts coast, describes as being somewhat less than his prewar taxes — paid in Massachusetts state money.
The tale is frighteningly plausible, except for all the snow, indicating an absence of climate change. It’s just a made-up story, of course. But its sudden plausibility underscores the question in the title: Are we left with a choice between two paths to the same terrifying place, The End of (human) Time? How should those of us who advocate multipolar international relations atop a decentered economic structure think about the schoolyard silliness that passes for international relations at the moment –- silliness between countries capable of extinguishing much of life on Earth?
Did something actually exist that could reasonably be called the 20th Century Pax Americana and its 19th Century Pax Britannica predecessor? And will the end of American hegemony and the Washington Consensus, which many of us have been hoping for, turn out to be the beginning of another period of war similar to the 30-year span from 1914-45 that separated the two Anglophone Paxes? But this time complete with nuclear weapons.
Of course, there were many wars through both the last two centuries of supposedly global peace. But outside the 1914–45 breakdown, the wars weren’t in the West. They were anywhere and almost everywhere else, including most recently Afghanistan, Congo, Iraq, Syria and Yemen. Or they fell loosely under the ludicrously named, and terrifyingly pursued, War on Terror that still engulfs large parts of the already climate-oppressed Sahel region — where “radical Islamists” go to rebuild and recruit if they get pushed out of Algeria, Iraq, Libya, Syria or elsewhere.
The Cold War stayed cold at its core, however hot it got at the periphery, and the Soviets continued to supply fossil fuels to Europe even as “proxy wars” were fought around Southeast Asia, Africa and the Middle East.
Bringing It All Back Home
Which gets us around to the war in Ukraine, a conflict that broke the first rule of the late 20th Western order by bringing fighting into the West itself. What has become clear — to the considerable discomfort of many in Washington, London, Berlin, Brussels, and other points West — is that the Rest of the World never quite bought into that particular rule.
People in places where wars have been routinely pursued by the US and others as politics by other means don’t tend to see Russia’s attack on Ukraine as singularly heinous, in a way all those other wars were not. In fact, more than a few saw US attacks hither and yon as heinous, and so are not going out of their way to help patch up the fraying globalized order. On the contrary, they seem quite happy to aid in the splintering process — including through the way oil and other commodities are bought and sold by countries including Russia.
Which brings us back to the central question: Did fossil fuel-enabled globalization — for all its flaws in terms of equity and the planet-threatening Climate Crisis it facilitated — keep the peace among nuclear weapons states, thereby preventing another form of planetary destruction? And if it did, is the ongoing war against the Earth waged by that system a price worth paying to improve chances of world-level peace among men? Of avoiding World War III?
Or looked at from the other side, is it worth running a heightened risk of war between countries as large and powerful as China and the US if that risk is a biproduct of a splintering process that is necessary to end the onslaught of greenhouse gas emissions, plastics, pesticides and other remorseless killers of people, plants and other animals?
There is no acceptable answer, of course. Destroying the planet is inherently unacceptable, whether the destruction is wrought with guns (nuclear bombs included) or with carbon dioxide and other poisonous residue of the fossil fuel genie released “at scale” from its bottle beginning with steam engines in the early 1800s.
The Great Transformation
Karl Polanyi, writing in the early years of World War II, said that “haute finance” had kept the peace from the end of the Napoleonic Wars in 1815 to the outbreak of World War I in 1914, with the brief exception of the 1870–71 Franco-Prussian War. This renowned Hungarian social-democratic politician and economic historian gives only scant credit to the British Navy, or even the Concert of Europe and Holy Alliance by which European governments attempted through the first part of the period to keep power balanced on the continent and its extensions in Russia and, via the Istanbul-based Ottoman Empire, the Middle East.
This loose arrangement at times helped resolve specific incidents that might have led to war, but it took more than that to maintain “the massive face of the Hundred Years Peace,” Polanyi argues. “… the secret of the successful maintenance of general peace lay undoubtedly in the position, organization, and techniques of international finance.”
While conceding that political power and national interests often outweighed financial interests in the world of late 19th/early 20th century geopolitics, Polanyi weaves a tale of how “haute finance” cajoled, pressured and finessed governments to avoid wars in which “the holders of government securities, as well as other investors and traders, were bound to be the first losers” — i.e. haute finance itself.
As Polanyi saw it: “The Pax Britannica held its sway sometimes by the ominous poise of a heavy ship’s cannon, but more frequently, it prevailed by the timely pull of a thread in the international monetary network. The influence of haute finance was ensured also through its unofficial administration of the finances of vast semicolonial regions of the world, including the decaying empires of Islam in the highly inflammable zone of the Near East and North Africa.”
Yet another level down, it was all premised on “self-regulating markets,” Polanyi’s name for the freewheeling, globalized industrial capitalism we now call neoliberalism, and that haute finance financed. Part of the concept of self-regulation by markets was the fiction that gold was a commodity like any other, so linking national currencies to gold through the Gold Standard meant that money was part of the market system, not a form of monetary regulation.
It worked until it didn’t, and wars resulted. In the wake of World War I came the collapse of the Gold Standard and the banking empires that attended it and, by Polanyi’s reckoning, kept the peace. What followed were right-wing nationalists, most notably the Nazis, and soon enough, World War II. When writing his famed book The Great Transformation during the height of World War II, Polanyi was convinced that the self-regulating market system was well and truly dead.
It turned out he was wrong. Self-regulating markets were in abeyance, but they weren’t dead. Nor was the Gold Standard or the dollar-based system that took on its role. First, the 1944 Bretton Woods agreement squeezed the dollar into the middle of a resuscitated Gold Standard by making the dollar convertible to Gold and linking other currencies to the dollar. That maneuver was necessary because the US basically had all the Gold, so other countries couldn’t make their currencies convertible to gold.
It worked until it didn’t, in the early 1970s, when the US no longer had a near-monopoly on gold — or the oil that not just moved the components of globalized capitalism around in ships and trains, but also provided underpinnings for the financial structure. The Nixon Administration first devalued the dollar and then stopped guaranteeing its conversion to gold. But the dollar remained the lynchpin of world trade, with US financial and military might replacing gold as the guarantor of confidence in the global monetary system.
As the earnings from oil shifted to the Middle East, the confidence to trade and invest in de-anchored dollars was helped mightily by the Petrodollar Accords of the mid-1970s.
The Great and Necessary Transition
Amid the Ukraine War — but for reasons that go back much further — the Petrodollar Accords are sliding into history, as is the unchallenged rule of the dollar and the so-called Washington (neoliberal) Consensus that assured self-regulating markets, or neoliberalism as we’ve come to call it. Will weakening of the financial order built around Wall Street and the dollar — the order that replaced the Paris- and City of London-centered haute finance of a century ago — again lead to fascism and war, as it did in Polanyi’s day?
I don’t know. What does seem evident to me is that two vital elements of the equation have changed over the last century: Neoliberalism has failed not just once (as in the depression of the 1930s) but twice (as in the Great Recession starting in 2008), and is now more thoroughly discredited; and second, the growth binges that preceded those failures have left behind Earth-threatening accumulations of carbon and other greenhouse gases in the atmosphere, as well as plastics, pesticides, and other pollutants in water and land.
That legacy precludes a return to the state-regulated but nonetheless growth-based capitalism that constituted the Western response of the post-war decades to the first failure of self-regulating capitalism.
We’ve heedlessly used up too much of the bounty of the Earth. We cannot return to living on borrowed time and resources. And since capitalism as practiced over the 250 years since the Industrial Revolution won’t work without economic expansion as its baseline, we have to find something new. Something less cruelly demanding of the Earth and of each other.
Navigating through the threat of war between “emerging power” China and the “fading hegemon” of the US and, simultaneously, developing an Earth- and people-friendlier economic and social system is a tall order. But humanity — all of us — must try. We have no alternative. This is not where we wish to be. It is where we are.
