I've recently been doing quite a lot of thinking and writing about the highly interdependent state of the world's major politico-economic nations and blocs. In my recent article in the The Christian Science Monitor on the implications of the Georgia crisis I wrote,
The interests of the world's leading powers are deeply entwined. China and Japan hold large amounts of US debt; Russia supplies much of Europe's energy needs; markets, investments, and production systems criss-cross national boundaries.
This interdependence makes open warfare among them less likely. A war would be devastating for the whole system – especially for the US, whose military is stretched very thin and whose economy relies on overseas oil and loans.
I sent that article to Branko Milanovic, the World Bank economist whose work on global inequality I used a lot in Ch. 3 of Re-engage! And I was really pleased when he came right back to me with an email in which he said he saw matters very differently. He also graciously allowed me to publish on my 'Just World News' blog an article he had written that argued almost directly against my thesis that global economic entanglement increases the chances for global peace.
Milanovic's article, which you can read here, is titled From Global Trade to Global War. In it, he draws on the historical precedent of the lead-up to World War I to argue that
today the struggle between the West and Russia that threatens the world with not only another cold, but rather hot, war is between the two bands of greedy men, and it involves the riches of the Eurasian heartland (“the world island”) east of the Urals. It is an implacable fight because it is a zero-sum game.
I was very happy to publish his piece on my blog, because I think it's very important to discuss and try to understand these matters. If you go over to where the full article is on JWN, you can see we have the start of a good discussion there already.
And today I just put another post onto JWN on the same theme. This one, titled Rest-of-world saving US from recession?, draws on some fascinating work done by Fred Bergsten and other economists that indicates that continues economic growth in the rest of the world has done a significant amount to save the US economy from full-blown economic recession.
This is not an argument we hear made much in the US today, though I think we should! It's a fascinating argument. Bergsten writes:
Every percentage point by which the rest of the world expands domestic demand faster than internal growth in the US produces gains of about $50bn (€32bn, £25bn) for the US external balance. Weighted by US exports, foreign growth exceeded US growth by about 2 percentage points in 2007 and will do so by an average of about 1.5 points this year and next as decoupling persists. Taken together, these currency and comparative growth factors have already improved the real US trade balance, and hence GDP, by almost $150bn since 2006, with gains of another $150bn or so likely through 2009.
In my blog post there, I give hyperlinks to Bergsten's original artuicle and to a few other handy sources on this topic. I also write a few of my own reflections on how, though the globalization of the world's economies has imposed costs on many groups of people-- within the US and far beyond-- still, on balance it seems to have been a very good thing for humanity. Plus, there are ways that its more egregious inequities and excesses can still be reformed and corrected.
Tell me what you think about these matters-- either here or there.
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