Oscar Ugarteche: the crisis of hegemony and changing world order

 

This paper reviewed the elements that determine the crisis of U.S. hegemony and the general crisis of capitalism, which is currently taking place. Undergo a process of rethinking of the economic crisis, and will attempt to review the crisis of hegemony in a hard way.

The assumption is that there is a transfer of power from the old economy of Seven other economic group, but it is a struggle for power among the world powers waning, and do not put forward any new initiatives. Everything points to the fact that the country's new big seven behave in Latin America, as a former member of this group. It seems that there is a change of epochs, suggesting, in turn, change the world order.

The crisis of hegemony and its development in 2007-2011

 

Those who have meditated on the current crisis, should have noticed that he appeared in the winding waves, rather similar to the acoustic vibrations than letters. The obvious is the fact that the current crisis has two speeds. This indicates that the U.S. economy is not playing its role of the locomotive of world economic growth, as it was in the period from 1930 to 1990. They said that if the United States cold, then the global economy pneumonia. But the truth is that the inflammation of the lungs in the U.S. has led to colds in several countries in South America, the influenza epidemic in the Caribbean, and cause short-term headaches, leave alone Asia. But the more mature and interconnected economies pneumonia passed on in full, first hitting the financial system, then the manufacturing sector, but after budget cuts, impact on consumption and public expenditure. The difference between the current crisis and the crisis of 1929 is in the public debt of the industrialized countries, which at that time had no such volume. The crisis of 1929 has affected developing economies for the same reason as in 1981, rising interest rates and falling commodity prices. Now the situation is different.

While before the crisis was not yet clear that the rich Europe and Japan have high debt, after 2007, they, along with the United States, began to feel the effects of high debt of the state and private companies. The scale of the problem in 2007 were subsequently not as obvious to the U.S., which has accumulated huge domestic consumer debt, did not expect to get a tapered funnel. It was assumed that after the revision of the mortgage due to economic growth resumes. After four years, all suggest that any of the industrialized countries, with the exception, perhaps, of Germany, economic growth will not occur. What emerged as the financial problems in 1929, is a much more serious problem of the production sector and the rules of the game. While this may seem a purely theoretical question, it should be remembered that the budget cuts, which the IMF demands that the European countries are similar to those which he had once demanded of Latin America. Thus, their theoretical views do not undergo any change, while this crisis was generated abstract that unregulated markets to solve their problems, and less state intervention in the management of the economy, the higher the economic growth.

Some advances in the changing world order

 

International institutions, established to serve the post-war world order is slowly but surely becoming obsolete. World order based on U.S. hegemony and the American model of peace (Pax americana), has come to an end. Assigning rights to unleash war and the erosion of the objectives of the war are part of the decline of hegemony. Inability to impose its own rules the world and lead the way out of the crisis is likely to further enhance understanding of the need to change the world order.

The World Trade Organization was the first institution, the creation of which the final stage of the previous world order has made it obsolete before beginning work. U.S. to undermine multilateral world order in its own interests, creating a system of bilateral peace. Thus, multilateral world order that emerged after the war, went into oblivion, opening the way for a new rivalry. During the reign of George W. Bush held neoconservative course, strongly resisted multilateral world order, which was eloquent testimony to the changing world order. If the new scheme of international relations based on bilateral agreements in all areas, the competition will weaken the global hegemon and will open up new opportunities for the growing power of regional powers. Developing this idea, it should be assumed that the use of the dollar as an international means of payment will decrease with changes in the international monetary system, gravitating toward regionalization. Due to the volatility of the dollar, a growing trend towards the use of regional currencies in international payments. This is observed in the relations between China, Brazil and Russia and the countries within the scope of their influence. The loss of U.S. hegemony is obvious, and maintain it by military means, most likely, will not give new impetus to economic development of this country, but rather, will only increase the downturn in the economy and will put a big question mark on its political legitimacy.

Speaking about the global political economy, Harvard University, John Gerard Ruggie (John Gerard Ruggie) proposed in 1982 to define the world order as a public institution, which is aimed at participants' expectations that particular field of international relations. World order, the scientist, like language: we can consider them as part of the "language of the state." "Education and the Remaking of World Order can occur specifically in the internationalization of political power." He adds: "When you create a liberal order is given to a certain rational functioning of the market. However, this does not mean that the government does not have any effect on this order. This means that the government is building their relationship in such a way that in the first instance to provide the most freedom to develop markets, and do not put them obstacles. " However, this does not allow to understand why there is a change in world order.

According to Ruggie, the internationalization of political power structure reflects the merger of power with legitimate social objectives. That social purposes distinguish the same initiative, coming from two different poles of power. The form may be one and the same, but with different content. To understand the content, you must examine the merger of power with social goals and political circles as it moves into the area of international relations. "The relationship between the economic structure and international transactions will necessarily carry problematic, because the competence of the world order is the behavior of one state against another, and both relative to the market, but the market itself." "International economic structures create a favorable environment for the specific international transactions that the participants perceived as an extension of fusion power and social goals, which is an integral part of these forms."

A realistic model offers a single source and two directions of change of the world order, pointing to the strengthening or weakening of the global hegemony of the beginning or end of a phase. Must take into account all of the above in order to understand how different parts of the world are formed new political-economic spaces that make up the reality of the post-American world. In this reality to the fore rising powers of regional powers, as well as, a new architecture of international power, reflecting new areas of trade and investment flows coming from the new poles of power.

In the first years of the XXI century, apparently, there is a strong covariance between the changes of power poles and social goals. This is partly a reflection of the weakness of the old regime, epitomized by a Group of Seven, led by the U.S.. The problem of declining value of the dollar against the euro and the currencies of Latin America in the period from 2002 to 2010. They also show the back side of building new poles of power, the dynamics of growth of the regional powers have gained strength in conditions of the global crisis, and the weakness of the old poles of power.

Called post-Washington consensus reflected in a dozen Latin American countries, almost all countries in Asia. In Europe, the collapse of social programs are adopted in the postwar years, which is consistent with the content of the obsolete Washington consensus, emasculate the content of its own project, as previously done in United Kingdom.

Weakness hegemony will not diminish the financial interests of determining the dynamics of capitalist society. Just the thing is that these interests are not part of the national interest. Like the military interests, they have become an end in itself, further weakening the hegemony.

Oscar Ugarteche (Oscar Ugarteche), («Rebelion», Spain)

Oscar Ugarteche — Peruvian economist, Institute of Economic Research of the National Autonomous University of Mexico. President of the Latin American Information Agency (ALAI) and coordinator of the Latin American Economic Observatory (OBELA)

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