Monday, February 23, 2009

Imperial competition or hegemony

Two perspectives on the world economic system today are that globalization has produced a stateless system where flows of money and capital go across borders freely according to the global market and that while globalization is real, the national origin of the corporations involved, whether that's Europe, the United States, or Japan, still matter and that states attempt to break the rules with relation to particular countries. An example of the latter in the U.S.' back yard would be the influence we exert on Central America, which seems more about promoting the interests of United States than absolute free trade. But is there a third option?

There's an idea out there called Hegemony theory that says that in all eras international politics and economics have been shaped by Great Powers that have been strong enough to dictate the ground rules to other countries. This could be applied to the United States in the era of globalization by saying that while free trade is supposed to be stateless, it's really the support of the idea by the U.S., working through the WTO, the World Bank, the IMF, and on its own accord, that anchors the system of free trade in place. Or anchored I should say, since we really aren't in a place to dictate too many terms now. It's not too unreasonable to say that a Hegemon in formulating its ideological doctrine manages to include features that are specifically beneficial to them, like in the case of the U.S. where our limited social safety net made advocating free trade and less government intrusion more believable than, say, if Europe had done it. Now that the U.S. has fallen in power it might be a good thing to try and identify the features of the new economic outlook.

Also, all three perspectives could be right if you see them not as absolutes but as ideas that certain interest groups are trying to get across. There are companies vying for absolute free trade, companies linked with nation states who want a sort of imperialist relationship with countries, and U.S. firms who want to have it both ways.

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