WILL THE GLOBAL CRISIS
LEAD TO GLOBAL TRANSFORMATIONS?
2. THE COMING EPOCH OF NEW COALITIONS*
Leonid Grinin and Andrey Korotayev
This article presents possible answers, and their respective probabilities, to the question, ‘What are the consequences of the present global crisis in the proximate future of the World System?’ It also attempts to describe the basic characteristics of the forthcoming ‘Epoch of New Coalitions’ and to forecast certain future conditions. Among the problems analyzed in this paper are the following: What does the weakening of the economic role of the USA as the World System centre mean? Will there be a leader in the future World System? Will the deficit of global governance and world fragmentation continue to worsen? How can national sovereignty be transformed?
Keywords: global crisis, the World System, World System leader, global hegemony, center, periphery, global governance, national sovereignty.
On the Possible Ways of World System Development
1. Change of Leadership or a Fundamental System Modification?
It is quite obvious today that we observe the weakening of the economic role of the USA as the World System centre; in a more general sense we observe the weakening of the World System core countries as a whole.1 That is why there is no doubt that sooner or later (in any case in the foreseeable future) the USA's status as the World System's leader will change and its role will diminish. American analysts are worried by this more than anyone else (see, e.g., Mandelbaum 2005; National Intelligence Council 2008). The current crisis is an important step toward the present leader's weakening. As we have already spelled out (see Grinin 2008c, 2009a, 2009e; Grinin and Korotayev 2010: ch. 4), the former priorities and foundations of the world economic order which were based on making profits for the USA will sooner or later start to transform into a new order. In the foreseeable future such a transformation will constitute collisions of relations between USA national interests, on the one hand, and the general world interests, on the other (see Grinin 2008c, 2009b; Grinin and Korotayev 2010: Conclusion for more detail).
However, such a collision will lead to very important transformations, which, unfortunately, tend to be ignored. There is a general universal tendency to believe that in the proximate future, the USA's current tenuous leading position will be occupied by the European Union, China, or some other country (starting with India and ending with Russia [see, e.g., Frank 1997, 1998; Pantin and Lapkin 2006]). But to model the World System transformations mostly with regard to a change of its leader is a serious mistake. Today we are dealing not only with a crisis in the World System or even a crisis of the World System core; rather, we are dealing with a crisis of the established model of its structure which is based on having a leader who concentrates many aspects of leadership (political, military, financial, monetary, economic, technological). The USA also acts as an avant-garde of the developed countries as a whole (about some aspects of USA position in the World see, e.g., Renwick 2000; Nye 2002; Bacevich 2002). Thus, we are dealing with a rather complex leadership structure: the USA – leading European countries and Japan – newly industrialized countries of Asia and so on. Besides, a special position is occupied by the USA's neighbors (Mexico, etc.).
When we speak about the USA losing their leadership status, we should not simply surmise that there will be a change in leader of the World System. We should rather presume that there will be a radical transformation of the overall structure of the world economic and political order. The simple change of the World System leader is rather unlikely already due to the fact that no country will be able to occupy the position of leadership in a way that is equivalent to the one held by the USA today, as no country will be able to monopolize so many leadership functions. Only as a result of this factor (although there is a number of other important factors), the loss of the leading role by the USA will mean a radical transformation of the World System as a whole.
First of all one should point out that the USA world leading position is unique in history. We also believe that the concentration of the world's economic, financial, military, political, and innovation-scientific potential in one centre (i.e. in the USA) after World War II was a generally positive factor (and the existence of the USSR as the alternative political and military center even amplified its positive value in some respects). Let us recollect that the USA became the World System leader after World War I. But even at that time the United States controlled only economic and financial power, it lacked equivalent political power, and did not even strive for it. Further, it should be emphasized that such a situation, i.e., the absence of a recognized World System leader, contributed significantly to a very severe economic and political World System crisis during the period between the two World Wars and also the start of the Second World War.
In the 1960s one could observe a decrease in the economic role of the USA in the World System which led to the emergence of a three-center model of economic leadership: the USA – Western Europe – Japan. However, it is important to note that this system was formed under the political and military (recognized and desired) leadership of the USA. This structure turned out to be rather viable for almost four decades. It works even now; yet, if it turns out to be impossible to restore the economic dynamics of the Western economies, its role will weaken (whereas since the early 1970s one can observe a general trend toward the decline of the economic growth rates in all the three centers). Unfortunately, today those centers are not able to give much to each other as they have rather similar problems. The opportunity to strengthen themselves is connected to unifying their forces in order to preserve certain advantages inherent to developed countries (and that are also useful for the World System as a whole, see below). In a way this process would be similar to the one just after World War II through which the West strengthened itself against the backdrop of the expansion of the Communist Block and the simultaneous disintegration of its colonial empires, by uniting militarily, politically, and ideologically (and partly economically).
One cannot exclude the possibility, of course, that the emergence of new revolutionary technologies could give new life to the economic development of the USA (as happened in the late 1980s and 1990s), and the West as a whole; however, first, such technologies do not seem to be likely to be developed in the forthcoming decade, and in this period the problems in the American economy will be aggravated; second, in order for such new technologies to produce major results would take a rather long period (at least 15–20 years) and over that time many things are bound to change; third, even such new technologies would be unlikely to help preserve military and political leadership.
Thus, it is evident that a place similar to the one held by the present-day USA cannot be occupied in future, neither by another state nor by an alliance of states. In the foreseeable future, there will be no country (nor even, an alliance of countries) that will be able to concentrate several aspects of the World System leadership.
It is often proposed that China will replace the USA as the new World System Leader. But this function is not likely to be performed by China even if China eventually surpasses the USA with respect to its GDP volume. Those who suggest China as such a leader do not appear to take into consideration that its economy is not adequately innovative, that it does not develop on the basis of technologies of tomorrow (and, to some extent, even of today).2 In addition, it is too much export-oriented. In this respect it is not sufficiently autonomous. There are no entirely autonomous economies in the world now, but there are some that are more self-sufficient than the Chinese one.3 What is more, its dynamics, power, and successes appear to be based on its ties with richer economies, they depend on their fluctuations to a considerable degree.4 We believe that the economic center of the World System cannot be based on the exporting of non-innovative (and even not sufficiently highly technological) products. Besides, the Chinese model is very resource-intensive which makes it dependent on the opportunities of extending the world raw materials production and their prices. And at the same time this makes the world extractive industry extremely dependent on the Chinese economy's growth (Gel'bras 2007: 29–30). And what is more important, the economical growth in China is based to a great extent on the faulty technology (Ibid.: 30).
In order to perform the World System centre role, the Chinese economy should become, on the one hand, innovative and highly technological (which is hardly compatible with heavy industry, or conveyor industries), and ecologically advanced – on the other hand. However, China does not possess necessary conditions for this. One would need no less than 20–25 years to become an innovation pioneer. We believe that it is India that is more likely to become a technological leader, but India does not have many other leadership components that China has.5 That is why the idea that in 15–20 years many countries will be more attracted by ‘China's alternative development model’ rather than by the Western models of political and economic development (National Intelligence Council 2008: iv), provokes serious doubts. The Western models may be criticized, whereas it is quite natural that China's successes could hardly avoid bringing attention. But it is very unlikely that any country (with a possible exception of North Korea) will try to introduce the Chinese model.6 The point is that this model simply cannot be introduced. In order to do this one would need a totalitarian communist party. Even the USSR was unable to copy the Chinese model. Not to mention that Chinese polluting model of economy can hardly suit any country.
The issue of the restructurization of the model of the Chinese economy is tightly connected with the ability of China to preserve the current high growth rates, whereas the latter is extremely important for the ideological prestige of the Chinese administration (though it includes a fraction that believes that it is necessary to slow down the growth rates in order to decrease the social stratification and tension). The transition to such an economic model focused on internal consumption and technological innovation is further complicated by the following points: а) the growth of internal consumption implies the acceleration of the growth of the living standards and Chinese labor costs (that are growing anyway); b) the growth of the labor costs is not likely to be compensated by an adequate increase in the labor productivity; c) consequently, the costs of exported commodities may increase, their competitiveness may fall, while the attractiveness of investments in China will then decrease.7 This may cause a slowdown of growth rates. Thus, the transition to a new type of economy in China with simultaneous preservation of its leadership in economic growth rates is hardly possible. Even though home demand will continue to develop, either it will be incapable of sufficiently replacing the export demand, or this will mean a profound structural rebuilding of the economy. Investments into infrastructure, housing construction, etc. can be locomotives of development only if sufficient resources obtained through exports are present, but combining the two directions simultaneously does not seem probable in the long run.8 A decrease in growth rate implies a state revenue decline accompanied by the aggravation of unemployment and an increase in social obligations.
Moreover, it can be assumed that in the coming decade the Chinese economy's growth rates will sooner or later, and inevitably, decline (regardless of whether the attempt to re-orient the economy from an export model to the model of internal consumption will turn out to be successful or not). As a result, the same processes may start that were observed in Japan after 1975 (see, e.g., Karsbol 2010). However, the slowing down of growth rates, particularly in an authoritarian country (where remarkable population ageing is to be observed soon), will lead to the aggravation of social conditions and changes in state priorities, which may ultimately weaken China's economic potency. The developing impulse force is still great in China, while inertia is still powerful, but it is quite obvious that all will most probably weaken. At the same time, the idea of higher living standards by the majority of China's population will be increasing at an advanced rate. This has both positive (as this inspires energy and new search motivations in some part of the population) and negative (as it increases ungrounded claims to the state and decreases the competitiveness of Chinese economy) implications.
2. Hypothetical and Real Alternatives
Thus, the future World System will not be able to possess the same structure as the current one with an equally strong centre. What can be an alternative to the modern ‘order’ in the world? Here we step upon unsteady and ungrateful soil of forecasts.
Let us first consider the future structure based upon the following probable but still hypothetical suggestion. Objectively, globalization leads to the appearance of some new forms of political and economic establishments of a supranational type. The EU represents just one version of such a type, other types and forms have just been outlined or are currently being outlined. However, they may emerge rather fast at favorable conditions. The largest states (e.g., the USA, China, India) may, for quite a long time, rival such supranational establishments, but still the future lies in front of the latter, not the former.
According to this hypothesis, the new World System leader (if it emerges altogether) will hardly be a separate state, but rather a (potentially increasing) block of states. Will this alliance be headed by some of the largest states of the modern world, or will it arise from a coalition of states of medium size and power? Or will such a coalition emerge on some other bases? Obviously, neither China, nor India can unite around themselves some relevant group of countries on their political (for India also civilizational) specific features. In order to become such an integrating center, China must change its political regime.9 For China, changing its political regime will most probably imply a severe shock (presumably even disintegration, Tibet being the main candidate for separation10), while the preservation of the regime requires relying on its own capacities. The regime in China will remain solid and strong until it is capable to support the process that is quite accurately denoted by Yunxiang Yan (2002) as managed globalization. This implies the ability of the government to control diverse (cultural, in particular) global influences. That is why China is not ready to lead the process of the economic coordination of the region. But, at the same time, it will not agree to perform the role of ‘number two’ (see, e.g., the opinion of a famous Japanese economist, Richard Koo [Ivanter 2009: 97]) and clearly increases the economical influence on the ASEAN countries (Kanayev and Kurilko 2010: 43–44). Still, Richard Koo's statement that China sooner or later will have to burden itself with the leadership, at least in Asia (Ibid.), does not look entirely convincing.
A more natural integration of the American region under the aegis of the USA (some kind of a pan-America) could theoretically revive the role of the USA as the world center. However, the disposition of political forces in Latin America is too unstable, and the level of development differs greatly among the states. Brazil has already stepped into the first line of the largest countries. Besides, quite a number of regimes are much tempted to play on confronting the USA. A union with Mexico and Canada (NAFTA), though supplying more than 85 % of the whole export for Canada and Mexico, is incapable of fulfilling such a role which could solve the above-mentioned task (Kirichenko et al. 2008: 226).
Among all variants of the emergence of such hypothetical leading union the European version has the largest (though on the whole small) probability. Even though European expansion comes across natural geographical limitations, the possibility of Turkey with its more than 70 million population entering the EU someday should not be excluded. This would turn the EU into a supra-European union (we should also account for the strengthening ties between the EU and non-European Mediterranean states). If Europe could integrate with Russia, Ukraine, and Belarus, this would give a certain impulse to restructuring the World System relations and even form some strong centre. In terms of practice, this is a highly complicated, but not an impossible scenario.11 In any case the EU must cope with financial problems, periodically encountered by one or another member.
All the above-mentioned scenarios are rather unlikely. Thus, the most real alternative to the role of the USA is currently... the USA itself. That is why during the nearest one or two decades the USA will remain the most real leader if, of course, the Americans do not undermine their positions themselves (through a sharp change in foreign policy, strong devaluation of dollar, a default, or an economic collapse).12 In the current absence of an obvious leader counterweighing the USA, the world will be obliged to support the preservation of the USA as a non-alternative, though getting decrepit, center as any weakening in the USA position can lead to a great extent uncontrolled transformation of the World System. A certain ‘imbalance cycle’ arises (National Intelligence Council 2008), where imbalances support each other. On the one hand, this plays into the hands of the USA, but on the other hand, the absence of strong competition for leadership greatly weakens the capacities of the USA to renewal. There exists an opinion that, though the demand for the USA leadership remains high, the interest and readiness of the USA to play the leading role may decrease, as American voters will reconsider their attitude towards economic, military and other expenses of American leadership (National Intelligence Council 2008). To put it more exactly, fluctuations in foreign policy are more possible, along with variations of the struggle between isolationism and hegemony, as a result of which foreign political activity of the USA may decline for some time. However, state transition from the policy of sheer hegemony and external expansion to passive foreign policy took place a number of times in the course of history, in particular, in Japan, Germany, and in most recent times in Russia.
In uncertain conditions the number of probable scenarios can be great. Thus, the document prepared by the National Intelligence Council of the USA Global Trends 2025: A Transformed World (National Intelligence Council 2008) considers four hypothetical scenarios: ‘A World Without the West’ when new forces press the West out of its leading positions in the geopolitics;13 ‘October Surprise’ – an ecological catastrophe; ‘BRICs' Bust-Up’ – a conflict between India and China over the access to vitally important resources; ‘Politics is not Always Local’ – when various non-state structures unite in order to develop an international program for the environmental protection and to elect a new Secretary General of the United Nations. All of them, though based on certain trends of the modernity, do not seem sufficiently real, which is admitted by the authors themselves (National Intelligence Council 2008).
Given the wide range of the variants of future, it is remarkably difficult to consider all variations. That is why it is better to select certain main parameters for the analysis of the hypotheses. Let us take such an important parameter of future development as the degree of suddenness and sharpness of geopolitical and geoeconomic changes. Obviously, if the process proceeds gradually, people get accustomed to it and try to put it under influence, and the system somehow has time to transform. If the changes occur suddenly, for some time there arises a vacuum of the system and order, chaos, hasty building of temporary and thus not always successful constructions. Let us view two such hypothetical scenarios: the one of gradual change and the one of sharp change.14
In the first one, the USA power would decrease not sharply, but gradually. In this case the USA, trying to preserve its leading position, would possibly be obliged to maneuver, enter some coalitions, give in sometimes in certain questions, and accept some global ideas in order not to lose leadership and to preserve the acceptable geopolitical balance. On the other hand, the USA would aspire to create something at the global scale, try to institutionalize the situation, seeking to strengthen the position of primus inter pares in some commonly accepted international and interstate agreements and interaction systems (organizations, consultations, etc.) at the same time not insisting on absolute or even evident hegemony which is present nowadays.15 Naturally, this would require great skill. This process would be more successful if the USA could, according to Brzezinski's recommendation, unite with Europe and Japan in important directions (Brzezinski 2004; for the analysis of American foreign policy and the USA position in the world see also Kagan 2003; Bacevich 2002; Jervis 2005). Given the low growth rates in developed countries, the West is objectively interested in creating such an order which would institutionally formalize some of its advantages (to some extent this would be useful for the whole World System).16 It is questionable whether this necessity could be realized in time, but the success of such an institutionalization greatly depends on whether this realization occurs sooner or later.17 This would be, so to say, a scenario of ‘planned re-building’.
The second scenario will occur in case when the USA changes its position dramatically, i.e. as a result of a sudden dollar collapse and especially as a consequence of an American default (say, at sudden change in the global economy resulting from a crisis sharper that one of fall 2008).
In this case the US public opinion may sway to folding up the global functions of the USA, which will additionally aggravate the vacuum of international governance. In this situation, the possibilities include anarchy (a less likely scenario) or hasty gathering (or ‘knocking together’) of some system capable of supporting the collapsing world order and solving the momentary tasks, offering certain palliative solutions and agreements which on the whole can turn out to be perspective further on.
However, among all hypothetical variants the two alternative ones seem most probable to us. The first one, which is naturally more preferable, is the expansion of the ‘club’ of leading global players up to a number which would allow them to influence somehow the course of world development (which will be considered further on). The second variant implies spontaneous uncontrolled development where main players will be mostly concerned with domestic problems, the politicians will mind only the popularity ratings, while the global problems will be solved in passing. The Japanese society is
a good example of such self-isolation (though even there some certain trends to integration can be observed [see, e.g., Ivanter 2009: 99]), the EU also too frequently reveals reticence with their own interests. For Western countries there exists a danger of becoming hostages to a democratic system, in which the position of politicians precludes them from thinking about future, and this could ultimately turn them into demagogues and state-mongers. Besides, incidents of protectionism and other anti-globalization measures are in no way excluded. In this case only unexpected shocks, such as the modern crisis, can wake Western politicians and societies up. Surges of national, civilizational, and hegemonic pride are also useful.
3. Will the Deficit of Global Governance and World Fragmentation Increase?
We have already mentioned in our previous works that economic and financial globalization greatly advances the development of international law and political globalization (Grinin 2008b, 2008c, 2009c, 2009d, 2009f). Will the political component of the World System lag behind the economic one even more in the decades to come? The answer to
a great extent depends on what the economic development will be in the nearest future. Numerous economists and social scientists, presenting various arguments (sometimes basing on the dynamics of the famous Kondratieff cycles), suppose that in the next
15–20 years world economic development will most probably proceed at a slower rate than in the preceding period.18 We support this point of view (see Grinin and Korotayev 2010). However, if this forecast comes true, will not the political component of the World System be able to catch up slightly? Besides, the weakening of the US leadership and the absence of an alternative (in any case leader change is a lengthy and complicated process) must obviously lead to the international system transforming faster and in a more substantial way. Consequently, we are entering a period of searching for new structural and systemic solutions within the World System, which means a considerably complicated period awaiting us in the nearest future. Working out and stabilizing the model of a new political order within the World System will be a complicated, lengthy, and rather contentious process.
Somehow or other, global governance deficit is present, and in the forthcoming decades it obviously will not disappear. Supposedly, it will become more ideologically sensible, while the project of eliminating this deficit will become relatively feasible. However, global governance requires great effort and substantial sacrifices. To what extent will the states and non-state subjects wish or be able to endure the growing burden of global governance? A refusal to divide this burden will aggravate the situation of increasing institutional lack (National Intelligence Council 2008). Seemingly, there will be quite a few countries ready to take some burden of international regulation by themselves, in the same way as nowadays only a few states take obligations to make large contributions to international organizations including the UN. That is why for some time many countries will still be interested in the USA leadership even though, as has been mentioned above, the USA itself in certain conditions may not be interested or capable of continuing to be a leader. Certain large states rivaling the USA leadership will be most probably incapable of global governance as well.
Such a situation may reveal the most important spheres the regulation of which will be profitable, as well as certain important fields where it will be compulsory to participate according to international obligations. This should strengthen the trend to various collective activities, formation of associations, and developing different types of cooperation. This will also transform the global governance towards new technologies.
American analysts suppose that а) in the nearest future politicians and the public will have to cope with the growing demand for multilateral cooperation; b) current trends are leading to the emergence in 15–20 years of a fragmented and contradictory world; c) multipolarity and structurelessness are the main features of the future system (National Intelligence Council 2008).
As regards the demand for multilateral cooperation, which is already high nowadays, it will continue to grow. It seems, however, that the growth of this demand а) gives an opportunity for certain regional states and unions to strengthen their positions; b) will contribute to faster emergence of various formats of multilateral cooperation. It should be noted that the new international order would best emerge with the formation of a sufficient number of supranational unions, coalitions, coordination centers, multilateral agreements, as well as influential NGOs and networks varying in type and scale, on the one hand, and with presence of de jure (or at least de facto) accepted institutionalized leading center of the World System.
Multipolarity (though this term is interpreted differently) has become a geopolitical motto for some states and it seems to be forming (see also Nye 2002). New centers of power (first of all, economic, but also military and political) are being established, causing new configurations within the World System. However, in any case multipolarity in the context of peaceful coexistence implies the presence of some order, so multipolarity and structurelessness are opposites to each other.
Fragmentation increase would imply the World System disintegration (at least temporary). To what extent is it possible? We consider this to be unlikely due to some realities of a certain quasi-unity being customary for us. Even the crisis did not lead to disintegration; on the contrary, it united the world to some extent. Certain global conscience seems to be being formed. Let us bring just one example of unexpected metamorphoses of modern economic psychology. During the period of a particularly low fall of production indexes in 2008–2010 many economists were circulating the idea that the Chinese economy would pull the whole world out, and so things are not too disastrous.
4. The Epoch of New Coalitions and Sovereignty Transformation
We have already written on the transformation process in the context of national sovereignty, i.e. on the decrease of the real volume of state sovereign powers, which is to a great extent voluntary (for more details see: Grinin 2008b, 2009b, 2009c, 2009d, 2009f). The necessity to pull up the political component of the World System and to strengthen the global regulation of financial and other agents contributes to the sovereignty transformation process, as the states must voluntarily limit themselves in some spheres, and sometimes undertake additional functions (for more details see Grinin 2008c, 2009a, 2009b, 2009c, 2009d, 2009e; Grinin and Korotayev 2009). The global crisis has revealed the sovereignty limitations more clearly, showing that even the USA cannot act without real support of other countries.
‘By 2025 a single “international community” composed of nation-states will no longer exist. Power will be more dispersed with the newer players bringing new rules of the game while risks will increase that the traditional Western alliances will weaken’ (National Intelligence Council 2008: iv). Indeed, the real composition of ‘international community’ will most likely be more complicated in the next decades due to the addition of some supranational unions, official or unofficial councils of leaders of states and unions, temporary or constant coalitions, and, possibly, NGOs.
However, sovereignty transformation within the new world order creation is not a unidirectional and unilinear process. Firstly, national state will for a long time remain the leading player in the world arena, as in the foreseeable future only the state will be capable of solving a number of questions. Secondly, sovereignty may even increase in some aspects, as the modern crisis shows once more that the fate of national economies to a great extent depends on the state strength. Thus, it is quite probable that the nearest future may reveal a certain ‘renaissance’ of the state role and activity in the world arena. In some countries sovereign powers that had previously been (sometimes thoughtlessly) given away to supranational organizations, unions, and global capital may possibly be returned. In long-term trends such ebbs and fluctuations are not only possible but unavoidable. Thus, the seemingly steady movement towards democracy in the early 20th century suddenly made a swerve toward totalitarianism; the development of free market trade in the late 19th century was turned to protectionism. Thus, a return to etatism can be both rather lengthy and rather useful.
Nevertheless, it should be mentioned that such a return to the increasing role of state cannot be performed on the former bases, when the benefits of a state (even within the fulfillment of undertaken obligations and the observation of common international norms) were accepted in international relations as the highest cause of its activity on the world arena. We suppose that the return of the state role cannot be successful without a substantial change in the state foreign policy ideology. In other words, we can suggest that purely egoistic interests of states will to a much lesser extent underlie the foreign policy concept and performance.19 Naturally, national egoism will not disappear altogether for a long time (if ever at all), but it will be more disguised by supranational interests and necessities than it is now. To put it more exactly, every action may require not only a real interest, but also an ideological grounding. Viewing the global arena as a ‘great chess board’ (Brzezinski 1997) where the strongest wins, while small pieces may be exchanged or sacrificed will possibly not be in demand any more. The world arena will rather be viewed as a common field of interests where rules advantageous for everybody must be stated and somehow supported. The countries will more and more remarkably define not only their own security in such categories which would accord with interests of the others, as Brzezinski advises to the USA (see Brzezinski 1997), but also all their large-scale actions. That is why it is sensed that gradually the mottos of common (regional, global, group) good will strengthen in foreign policy, though the ‘who-represents-the-global-interests-better’ formula may, as always, disguise egoistic causes.20 However, this will lead to substantial changes, generally positive. In any case, the countries continuing to roughly stand up for their national egoistic interests will eventually lose, sooner or later. Radical changes will be unavoidable in the policy of large states aimed at direct and rough domineering in global or regional scale (including the most independent and egoistic sovereign, the USA).
In this case national interests assertion, rivalry forms on the world arena, conflicts and litigations will acquire a different form from now. Rivalry will increase on directing the process of new world order formation. Rival forces will perform under mottos of a new, more honest world arrangement, for just and crisisless global development, against national (especially American) egoism, etc. For conducting such a policy, allies and blocks are obviously necessary. Thus, regrouping of forces on the world and regional arenas will invariably start. In the struggle for a place of honour in globalization and coalitions, in organization and functioning of a new world order the phenomenon occurs which we named the epoch of new coalitions (see Grinin 2009b, 2009f). As a result, new force disposition may be outlined for quite a lengthy period.
Forms, particular aims and activity directions of the new coalitions will depend on numerous factors, in particular, on how far the process of making common decisions will go and what means and forms of common decision-making will be realized. Thus, it seems that the system of simple democracy (one state/participant – one vote) on the World System level will hardly be viable.21 China and India cannot be equaled to Lesotho (less than 2 000 000 inhabitants) or all the more Tuvalu with the population less than 15 000.
Probably, for some time the mobility of partnerships within the World System will increase, the arising coalitions may turn out to be chimerical, ephemeral, or fantastic. In the course of search for most stable, advantageous, and adequate organizational supranational forms various and even rapidly changing intermediary forms may occur, where the players of the world and regional political arenas will be searching for most advantageous and convenient blocks and agreements. For example, if population number and other parameters will be taken into account at decision-making (and quota distribution),22 countries and participants may block with each other basing on the relative advantages of everyone in order to accept a decision advantageous to them (similar to political parties). However, some of the new unions and associations may eventually turn from temporary into constant ones and accept specific supranational forms.
Some new imperatives of global law will start being worked out in the same process. This idea is quite supported by the events connected with the modern global crisis, in particular the G-20 meetings. Direction towards such supranational regulation forms is obvious, though it is unclear whether namely G-20 will become a constant organ, as 20 is possibly too great a number. However, as it has been stated above, another variant of leading players' club expansion is possible. Bringing the number of ‘G club’ members up to at least 11, i.e. 7 plus BRIC countries could already make this organ more influential than it is today. However, presidential meetings once a year or even more rarely, and even ministerial meetings do not suffice. Such meetings bear more of a ritual than practical character. In order to make such an organ not just influential, but a real global one, at least de facto, it is necessary to arrange the formats of negotiations, consultations, private agreements etc. on various levels and in different combinations.
One more form, much less likely but, in our opinion, much more desirable, would be the form of certain union representation. It would be reasonable to create a certain organ representing 10–15 leading establishments of the world (EU, OAS, LAS, CIS, etc.). Its sessions could allow representing the whole world through a limited number of representatives, while within the frames of representatives' powers the unions and coalitions would have an opportunity for better understanding of their common interests. Even such a dialogue in itself could be useful.
The stability of new geopolitical and geoeconomic forms will depend on numerous factors. However, historical experience shows the most stable ones to be those with not only particular advantages and objective necessity, but also with certain non-political bases for uniting (i.e. geographical, cultural, economic, ideological etc.).
As regards the particular reasons for the convergence of certain societies, it should be taken into account that in the condition of a certain bifurcation which the world is currently going through, new lines and vectors contributing to the countries uniting into supranational establishments, unions, groups, blocs and clusters depend on a variety of reasons, among which a certain feature of proximity may turn out to be critical. Beside geographical proximity, economic relations and common political (geopolitical) interests, the proximity of culture and mentality (i.e. civilizational affinity and similarity) can be the strongest in many cases. These political, cultural, and religious specific features may lead to the creation of some special regional or even interregional supranational approximation models. For example, Chilean political scientist Talavera asks whether there is a special Latin way of action in the globalized world? He states there is such a way and quite particular indicators exist which confirm this. Further on, he points at the formation of a development variant implying the coexistence of socioeconomic order based on openness and free market relations (i.e. a purely Western phenomenon – L. G., A. K.), with conservative socioreligious regime (Talavera 2002)., i.e., let us add, a cultural form typical for a part of the old Europe.
Naturally, the movement towards the new world order will proceed on different levels. The regional level is very important. Regional leaders gather power very quickly; consequently, they will probably play a more significant role than now.23 Besides, some regional states will start playing the key role in the whole geopolitical disposition in huge territories. Nowadays, according to some opinions, Iran is starting to play such a key role (see, e.g., Bykov et al. 2009: 101–102). The eminent role of regional states will be revealed not only in geopolitical and geoeconomic aspects, but also, so to say, in geocultural aspect, which would be in no way less important than the first two.24 It is not improbable that, responding to the probable deficit of global governance, non-governmental actors will form networks concentrated on particular problems.25 However, neither the role of NGOs nor networks should be exaggerated. The main part in the formation of a new world order will most probably be played by states, while supranational unions of all formats and forms will be gathering strength.
A coordination centre is desperately necessary, without which the net world will become an uncontrolled conglomerate. Besides, there is a prevailing stereotype on the necessity of some global institutions, so they will be aspired to, more or less successfully. Thus, the question of the coordination-political center of the World System remains exceedingly important. If some collective political (coordination) center (with limited rights) could be created, the coexistence of other functional centers could become more possible and systemic, interactive.26 Namely states and especially supranational unions are most likely to be capable of moving towards the creation of such a center.
Search for global answers to major problems will lead to various types of solutions at highest political level, from ones aimed at forming an order capable of functioning for decades (huge experience of the 20th century proves this to be quite possible) to a mass of non-systemic, pragmatic, and palliative ones. However, even impulsive decisions allow starting the formation of a new system of decisions and institutions, coalitions and unions. On the other hand, the success of certain institutions will allow creating some projections on world restructuring.
Thus, we are regarding a wide range of decisions, institutional and juristically formalized, aimed at systemic building of a new world; global, but for narrow problems, which, along with important but less global decisions will gradually be creating the outlines of a new world order.
Thus, the future epoch will be an epoch of not only new coalitions, but also one of new global institutions, and new international technologies of multilateral (diplomatic, social, cultural) cooperation, on which much will depend. For example, the format of international congresses and multilateral agreements that originated after the Napoleonic Wars and reached its apogee in the 20th century is likely to be pressed by other formats which most probably will be based on modern communication technologies. Thus, some standing commission that work not at a bargaining table, but through the video conference format could become a convenient and rather cheap organ which could work permanently on solving certain problems. As Charles de Gaulle said, politics is too serious a matter to entrust politicians with it (Belmis 2009: 238). The same may be said about the diplomacy in the globalizing world.
* The first part of this article (‘The Global Financial System: Pros and Cons’) was published in Issue 1 of this journal (Journal of Globalization Studies. 2010. Vol. 1. Num. 1. Pp. 70–89).
1 This is manifested in the slow-down of the economic growth rates in the World System core and their acceleration in the most of the World System periphery (see Grinin and Korotayev 2010; Khalturina and Korotayev 2009; Meliantsev 2009; Inozemtsev 2008 for more detail), in too rapid and anarchic deindustrialization, in the dependence on cheap imports, budget deficits, general growth of public and private debts, negative demographic developments, etc. This resurrects the ideas of the ‘death of the West’ (see, e.g., Buchanan 2002). On the other hand, today we observe a certain decrease of general indebtedness manifested in the so called deleverage of the world economy in connection with the writing off of bad debts and cautiousness with respect to new credits (e.g., Karsbol 2010: 101), but this tendency is not likely to continue for a long time.
2 Even those analysts who have rather optimistic moods with respect to the China's capabilities to sustain extremely high GDP growth rates for long time in future note that China confronts the threat of the growing technological gap with respect to the USA, EU and Japan (Mikheev 2008: 311). ‘With respect to its scientific potential, China will not be able to become a pioneer in the field of fundamental research and to secure a vigorous current of new breakthrough technologies’ (Ibid.: 319). On the other hand, China has already moved to the third place in the world (after the USA and Japan) with respect to the absolute size of its R&D expenses (Meliantsev 2009: 123–124).
3 In particular the role of exports in the Chinese economy is c. 2.5 times higher than in India (calculated on the basis of Machavariani and Tanasova 2008: 387; Meliantsev 2009: 106), though the proportion of export in the Indian GDP is constantly growing (Volodin 2008: 334). Naturally, there are some economies (e.g., South Korea) that are even more export oriented than China.
4 The explanation of a relatively small slow-down of the economic growth rates in China, India, and some other countries during the crisis needs additional research; yet, it is already quite clear that one should take into account (1) a certain developmental inertia; (2) state efforts aimed at the stimulation of the internal demand and very considerable financial infusions. In addition, one cannot exclude that those countries will become victims of the next crisis, that the crisis has been delayed rather than prevented in those countries (see Grinin and Korotayev 2010b).
5 In this respect, some suggestions seem to be noteworthy (National Intelligence Council 2008) which state that in ten years India will almost have reached the USA level of human and scientific capital (as measured by the model of National innovational system), while China will almost have reached the USA in terms of state receptivity to business innovations. This seems dubious but is nevertheless revealing in terms of different development vectors of these two great Asian states. Substantial differences in the export structure of Chine and India should also be noted. While in the former 90 % of export growth is supplied by growing goods exportation, in the latter 40 % of export growth accounts for the growth in service exportation, particularly in the information sector (Meliantsev 2009: 107). The USA would most probably preserve for a long time its role of the innovation leader of the World System, accounting for the fact that the USA currently produce 40 % of global expenses for research and development (Ibid.: 60).
6 Those capable have already introduced it (we mean first of all Vietnam).
7 Before the crisis there has already been forecasted some decrease in direct foreign investments into Chinese economy during the next 15 years (Mikheev 2008: 311).
8 Economy re-orienteering turns out to be very complicated even for such developed countries as Japan. Let us remember that attempts made in Russia during several decades to re-orient the export have been unsuccessful so far.
9 It should be noted that China has got some projections on more active integration with neighbors. In particular, one could mention the idea of free trade area ‘China+ASEAN’ and a united integrative space in North-East Asia with participation of Japan, China, South Korea, and possibly Russian energetic resources. However, taking into account the tense relations between China and Japan this hardly seems realistic (for further details see Mikheev 2008: 319).
10 The latter, not possessing statehood traditions, most probably will go the way of Kosovo, turning into one more drug state (see, e.g., Bykov et al. 2009: 103).
11 However, the high living standard of the Europeans and the aspiration of the new EU members to immediately attain the same level substantially decrease the impulses to adopt new members (the same, but in lesser scale, occurred during the reunification of Germany).
12 The last two ones will indeed require fast decision-making at the global scale. Spontaneous US dollar collapse can lead to downfall of all national financial and currency systems. Along with a sharp fall of the main global currency rate the whole global economy would devalue (see Platonova et al. 2009: 88).
13 As regards economic ousting of the West, which, of course, results from faster economies’ growth in the periphery, there is a fundamental point to note, which will change not so fast, if at all. Currently (and it will stay this way in the foreseeable future) the development vector is still being set by the West, while the fastest-growing economies, with rare exception, are adjuncts to the Western economy. If we try to imagine that only developed countries are left in the world, without the periphery ones, life standard and the level of technology in the West would suffer much less than those in periphery countries in a vice versa situation. Besides, in this fantastic scenario the Western economy would obviously go up rather rapidly, while in the periphery a collapse would occur.
14 Though the process will most probably be uneven: slow uncontrolled changes will be succeeded by large but not fatal collapses and crises, inspiring the transformation process and even changing its directions. As the forecasting experience shows, not a single forecasting model could be realized in its pure version; usually something arises, in which different trends can be seen in specific combination.
15 Wilkinson called a somewhat similar scenario ‘unipolarity without hegemony’, but with probable dominance of the USA (Wilkinson 1999). In our version some crucially important points have been added, including the necessity of trying to secure de jure the advantages in some relations. Securing the prevailing role of dollar turned out to be exceptionally important for the USA in its time.
16 An example of such securing is the definition of the five leading states having the veto right in the UN Security Council. The disposition of powers in the world is changing, while this order is not easy to alter.
17 One of the possible outcomes for the West implies quoting the economy growth rates in order to restrain the all too fast periphery development (on the possibilities of such quoting see Grinin 2009b). If the limitations cannot be achieved through direct quotes on economic growth, they can still be pursued under the mask of struggling for the global ecology, for the rights of wage earners, against dishonest rivalry etc.
18 However, much depends on which methods are chosen for GDP calculation. Many changes actually cheapen the final product, as a result of which the impression of GDP decrease arises.
19 One of the numerous examples of such egoistic approach in the position of the USA on the question of greenhouse gases emission into the atmosphere. Outright declaration of a certain region as a zone of its special interests, intervention into the business of other states under the pretext of weakening somebody (e.g., Russia), as well as supporting the undisguised corrupted regimes etc. are all examples of undisguised egoistic policy. Let us also note that foreign policy of such major countries as India, China, and Japan does not essentially possess any special ideology altogether.
20 For sure, in modern history different actions have been and are still carried out under the aegis of common interests, in particular, intervention into dependent countries (on the part of both the USSR and the USA), pressure upon certain countries under the mottos of defending the human rights, democracy, etc. Ideological aspect will presumably substantially increase.
21 The EU experience shows that this substantially restrains the development process, while such rules in the global representations will simply block it up.
22 There exists an index of national power measurement which integrates GDP measurements, defense expenses, population and the state of technology. Some indexes may serve as a basis for institution at the counting of quotes and votes.
23 We have already mentioned in our previous works that the level of economy and economic relations development in certain peripheral countries most probably belongs to industrial type than to postindustrial one. Accordingly, the level of nationalism is higher there, in large regional states it is just suitable for playing the hegemonic role in their regions (Grinin 2008a). In some Asian and Latin American states which are economically rising and ideologically consolidating, ‘nationalism’ frequently emerges as a state ideology shared by the population. Along with that, an aspiration arises to support one’s own sovereign rights, including the right for nuclear weapons etc. (It is also a convenient way of attracting the attention of international community to the country for a long time like, e.g., Iran has been doing.) Thus, a successful nuclear test became a subject of national pride for the Indians, though it caused strong anxiety in the USA and Western countries (Srinivas 2002: 94).
24 In Bernstein's (Bernstein 2002: 245) opinion, countries lying beyond the West and sufficiently powerful in economy, such as Japan (on the penetration of the Japanese mass culture into Asian countries see Aoki 2002), or in culture, such as India, are capable of influencing the global culture.
25 One could mention as examples of such networks the Financial Stability Forum, the Carbon Sequestration Leadership Forum, and the International Partnership for the Hydrogen Economy (National Intelligence Council 2008: 85).
26 Such a centre could rally the separate centers of the World Systems differing in their innovativity, industriality, financial capabilities, etc. Even though the rivalry between them would not disappear, it would become more productive.
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