Uneasy Lies the Head That Wears the Global Crown

Trump’s interactional strategy – such as it is – is leaving opportunities that others are filling.

In the middle of the nineteenth century, England was the world’s greatest economic power and led the greatest empire the world had to then experienced. What was not understood was that its supremacy was already being challenged. At the core of the Great War was the contest between the British Empire and Germany, already a bigger economy than Britain’s. It was won by the economic weight of the United States which had overtaken both of them.

After the Great War the US chose not to exercise its power globally. That did not happen until Round Two of the British-German clash, also known as the Second World War, again won by the US. This time it stayed active internationally and became the global hegemon.

England’s empire unravelled (the US prodded it). While New Zealanders think its core was the Dominions, the jewel was the huge South Asian subcontinent. Many Brexiters are similarly blind, talking about the reestablishment of the British Commonwealth trading zone. To summarise another essay, the zone would be peripheral without India which has a quite different agenda.

As tough as the brief rehearsal of the facts are, I was struck, when I was in England in the 1960s, by how little they were appreciated. Britain had lost its dominance half a century earlier butmy students who had parents born after the loss of  that hegemony, still carried a lot of the England-is-dominant thinking. Even intelligent and informed Brits struggled to understand the implications of the decline.

I am not sure whether one would describe the US currently as ‘hegemonic’ although militarily, economically and even culturally it remains the most powerful nation in the world. But it is no longer as dominant in the world as it was immediately after the Second World War.

There is a popular American literature which shrilly describes the US economy as challenged by Japan, the EU or – the current fashion – China. That misses the point; I doubt that there will be a future global hegemon. Rather there will be a number who contest – America, China, the EU and possibly India and Japan – with each being limited by a veto from some of the others.

Obama was aware of this. Much of his foreign policy was a thoughtful ‘how can America leverage its power when it does not have as much as it likes to think?’ Trump‘s is almost exactly the opposite: ‘how to use the power Americans think they have when it does not seem to work?’

The strategy is failing in arena after arena with Trump making unilateral decisions and the rest of the world doing something else. (For example, there was the grandiose, ‘we will not sign the TPP’; the other 11 went their own way and signed. Now, on some days, Trump thinks the US might crawl back, although joining up later probably means that the US cannot do so on terms it would find acceptable.)

Is Trump so uninformed that he cannot see the dangers his approach presents? What is certain is that his public attitudes reflect the majority of Americans who are showing the same incomprehension of the changing world and their country’s role in it as I saw among the English in the 1960s. The ineffective charging into Iraq, or wherever the public gets uptight about, illustrates this irrationality. The result is the opposite of Obama (who had to work with the same incomprehension).

Trump is minimising American leverage, leaving a vacuum for China. The EU remains influential but its world role is currently limited by Brexit, the troubles in the European Monetary Union and the political difficulties in Germany. No doubt China sees the current climate as an opportunity to shape the world the way it wants, but it is offering leadership, not hegemony. It is probably is smart enough to guess the window is temporary. One day American will have a more strategic POTUS and the EU will be more cohesive.

What China actually wants is being debated in informed circles. For instance, it is likely to be more casual over intellectual property rights than Disney-driven US, although that may be temporary when it switches to being a net exporter of IP. (This was the US experience; it was IP-lax in the nineteenth century.)

China will also try to weaken the American Empire (just as the US did to the British Empire). This includes reducing institutions set up when American was very powerful which favour its domination; the Asia Infrastructure Bank is intended to reduce the role of the World Bank. It is trying to promote the Renminbi to reduce the importance of the US dollar. 

The American equivalent of the British Empire is the foreign direct investment of its corporations. Again China will be undermining their reach (although it is into forms of FDI of its own).

 Most fundamentally, it wants to relocate the centre of the world economy from the Atlantic to China itself. That is the role of its ‘belt and road’ initiative which aims to build an international infrastructure centred on China.

 This is by no means a bad thing for New Zealand, for it places us closer to the centre of the world economy. How we respond to the rest of the Chinese initiative is more complicated.

 Going off the deep end about putative Chinese hegemony is not going to do much good. Instead we need to do our best to maintain the international rule of law, work with like-minded nations (as always, Australia is key here) and try to foster counter-responses by the EU, India and Japan. Additionally we must do our best to work with our American friends to encourage an Obama-like response. Which will be difficult given that the American public cannot grasp that the world is changing.

 It all requires a nimble and smart Ministry of Foreign Affairs and Trade, which seems to be recovering from the McCully-Allen assault on it. But it also requires a New Zealand public more in touch with international reality than the American public is.