A Pyrrhic victory? (II)

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If I did not have to keep my promise to present in this editorial the contents of the second thesis regarding the significance of President Trump’s gesture to withdraw from the nuclear deal with Iran, the topic of the present commentary should have been Russia and its role in this issue. Because, during these days in which Europe is on the brink of a decision of great significance for its future – the attitude it should adopt toward Washington’s decision –, European leaders of major importance are travelling to the capital of Russia. A reality that can be explained only in connection to the aforementioned decision. Could Europe be trying – having Russia’s backing – to oppose the U.S. in this dossier? But, let us respect the promise…

Hence, the Rachman thesis, which outlines that the U.S. will win in the Iranian dossier by applying “aggressive unilateralism,” is reasonably opposed by another thesis, the one we have dubbed a ‘Pyrrhic victory’ that Washington registers through this action. By that, we want to say that by obtaining the anticipated success in the short term, the U.S. eventually registers a weakening of its own systemic position.

Maybe one of the best descriptions of this thesis is made by a comment posted on G. Rachman’s article, signed Paul A. Meyers. It is, in fact, ranked first by the influential British newspaper among the comments posted on the editorial (over 650). In fact, the comments made by this keen reader of the Financial Times’s foreign affairs editorial are always highly appreciated by readers. Usually, Mr Meyers is very sure of his opinions, which he argues with seriousness and precise data, sometimes also providing the sources, always impressing through fresh, logical, attractive interpretations. Here is the ‘Pyrrhic victory’ thesis in its basic elements.

The current decision – believed to be substantiated by national security advisor John Bolton – “is a fundamental miscalculation to move towards a power-based order when one’s own power is in relative decline and the principal adversary’s power is on the increase.” While in 2017 the U.S. represented 24.7 percent of the global GDP (in nominal terms), in 2025 this economic primacy within the system, a frequently used indicator of power, will drop to 21.5 percent. In contrast, China, which represented 15 percent in 2017, will reach 18.4 percent in 2025. But the meaning of the “fundamental miscalculation” is rounded off by another difference in global economic developments. Namely that the group of emerging economies, China among them, will surpass the group of developed economies, U.S. among them, during the same period.

The latter will drop from 57.4 percent of global GDP in 2017 to 49.6 percent in 2025. Thus, “in 2025, the emerging market/developing economies will be more than half of world GDP in nominal terms and crucially, these economies will be growing at two to three times the rate of the advanced economies. Dynamism will go with the new and rising. With regard to purchasing power parity measures, the shifts will be even more dramatic. And Chine will be the dominant and most influential power in the emerging market/developing economies.” But the story goes on: the U.S.’s biggest advantage is the maintaining of an open global economy, and any measure taken to close it puts the U.S. at a disadvantage and creates resentment toward it at systemic level. When appointing an ambassador like Grenelle to the strongest European economy, to Germany, which allegedly shows “inability to think of the national interest in internationalist terms,” when moving the U.S. embassy to Jerusalem – “signals to the 1.8 billion Muslim world that the US no longer cares about its opinion and goodwill,” Washington basically diminishes its chances for the long-term consolidation of the top systemic place it holds today. Referring to the opposing thesis, Myers notes that it is based on some data that actually exists today, such as the dollar’s systemic role as a reserve currency, hence configuring a leading role in the global economy for the U.S., translated as preeminent global power, but, according to the aforementioned trends, a reconfiguration of systemic hierarchy is foreseen in the mid-2020s, to the detriment of the U.S. Myers concludes: “Rather than enjoying ‘exorbitant privilege’, America may find itself something of just another everyman in a much larger world economy without an interest-free credit card.” And, according to the thesis presented here, the real advantage of this credit card was squandered several decades ago when the U.S. mistakenly opted for a culture of consumerism and inconsistent fiscal policy instead of investing in its own future potential.

The challenges of this future will be transnational, and the solutions will have to be collective. Through its tendency for unilateralism, the U.S. excludes itself from the process of undertaking such collective decisions, hence it loses its leading systemic role.

This thesis may be reproached for relying on development trends that might not be confirmed in the future – is not the purpose of D. Trump’s policy, constantly reiterated, that of making America strong again? –, and the mix of measures unilaterally taken at present could actually contribute decisively to the attainment of this purpose. In other words, even the “aggressive unilateralism” used now could initiate and avoid a sizeable change in the general systemic landscape at the expense of the U.S., around 2025.

It must be considered that, even in the paradigm used by Myers, emergent economies would register failures and the group of advanced economies, under American impulse, would decisively overturn the terms of the problem, namely the former economies’ – China, America’s main competitor, among them – rise to power. However, we rule out the interpretation given by another reader of the FT editorial, who considers that the theory that spurs the actions of the current administration (J. Bolton’s theory) is allegedly war: “because the US has a military advantage over all its current and potential adversaries, the US can, by going to war early and by going to war often, set back its adversaries and not give them a chance to catch up with the US.” Even the commenter himself rejects this possibility through the logic – taken from Paul Kennedy’s famous book on the rise and fall of the great powers – according to which war does not prevent but accelerate the decline of the systemic hegemon.