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... was exported abroad because of the dollars role in international exchange. Americas allies, especially France and Germany, became very concerned over the impact of this erosion in the dollars value as the worlds reserve currency. Ultimately, these problems led to the U. S. abandonment of the Bretton Woods fixed exchange rate system and to the emergence of a more volatile era of floating exchange rates.
Hence, although American policy may have laid the groundwork for the growing globalization of markets, the decline of American leadership prompted many, especially in the United States, to worry about the future stability and direction of the world economy. Critics of U. S. power, however, especially Susan Strange, have either denied any decline in U.
S. capabilities or lauded the effects of the decline of irresponsible U. S. power. Nowadays, such concerns about American power have receded. By the mid- 1990 s, the decline of U.
S. hegemony no longer seemed so assured. Claims about the decrease in U. S. power appeared exaggerated given the demise of the Soviet Union, persistent recession in Japan, high unemployment and slow growth in Europe combined with the challenge of integrating Eastern Europe into the European Union, and American industry's return to competitiveness. Moreover, the relationship between hegemony and an open, stable world economy has been cast into doubt by a number of scholars, such as Robert Keohane and David Lake.
As U. S. behavior during the interwar period illustrates, the possession of superior resources by a nation does not translate automatically into great influence or beneficial outcomes for the world. One reason why the distribution of power among countries is not seen as the exclusive factor shaping the workings of the international economy is the important role played by international institutions. Keohane has made the most ambitious claims about the role of these institutions. He argues that although hegemony might be necessary for creating such institutions, once begun, they take on a life of their own, and states come to see them as worth preserving.
Multilateral institutions such as the United Nations, International Monetary Fund (IMF), World Bank, World Trade Organization (WTO), and EU provide information to states about each others behavior, reduce the cost of negotiating agreements, and can expose, and sometimes even punish, violations of agreements by states. The claim is that without these institutions the international economy - and international politics - would be much more unstable, less open, and more conflictual. In the case of the EU, for example, many see peace in Western Europe over the past 40 years as partially a product of this institution; and scholars and politicians often cite the maintenance of peace in Europe as a primary motivation for monetary union. The relationship between American power and globalization is inevitable topic of much interest now.
It is undeniable that U. S. policies have helped create the current international economy. But some claim that globalization is not only a creation of the United States but also a creature controlled by it. Countries such as France and Malaysia have vehemently expressed the view that globalization is basically the extension of American economic practices and ideals to the world, and a tool for the exertion of American power. They see resistance to global market pressures as defiance of the United States.
Or, as some South Koreans have claimed during the recent financial crisis there, the IMF is just doing Americas bidding. That may be leadership, but it is not the type of leadership these countries would like to see. Ironically, many Americans see globalization as beyond their countrys control. Indeed, in their eyes, the United States is ever more constrained by global forces, just like everyone else: All states must heed the dictates of international bond traders and investors or face the consequences. The United States let globalization out of the bottle and now cannot contain it. This loss of national control is bemoaned by some and applauded by others, but none doubt its reality.
What is striking in this debate is the difference in perception between Americans and the rest of the world about the relationship between globalization and American influence. The impact of globalization remains an area of intense research. The recent economic travails in Asia have underlined how even well-developed states can be affected by international investors and the vast capital flows they now control. How this crisis is resolved will have important consequences for many countries and for the future of the global economy. Will the pressures exerted by international financial actors fundamentally change the relationship between Asian governments and their economies? Will the crisis lead to greater convergence between the economic practices of Asian institutions and those common in the West?
Will the famed industrial policy practiced by many Asian governments disappear? This issue is especially important for China and other developing countries seeking models of how best to foster economic development. Such questions beg a look at the role of the state in economic policy, both foreign and domestic. In the aftermath of the two world wars, government intervention in the economy became accepted practice at both the micro and macro levels for eliminating boom and bust cycles in the economy.
Indeed, the twentieth century has witnessed the greatest growth in government intervention in the economy ever seen. Globalization and the spread of more orthodox economic ideas, however, have undermined confidence in such intervention in many areas. As states' roles in their economies are reduced, what will happen to both the economy and the states? Or is the withdrawal of the state from the economy a passing trend? Will new ideas arise that sanction a greater role for the state in the economy? Finally, the impact of power and international policies on the global economy is of great interest.
After all, political conflict and war after 1914 destroyed the global economy created in the late nineteenth century. What effects will the post-Cold War international system have on the world economy? Will major international conflicts reappear, thus fracturing it into blocs? Will institutions that have helped to keep the peace such as the EU, NATO, and UN disappear, while new political alliances form, reshaping economic flows? Critically, what impact will such changes in the distribution of power and the organization of international politics have on the global economy?
These issues will form some of the general research agendas for scholars in international political economy. Many questions are left open ended because we can not give a 100 percent correct answer now, because we need to see how the situation in the World will be developing. Recent events have underlined the need for fresh ethical reflection on international issues. The likelihood that the United States will go to war against Iraq has suddenly and urgently placed U. S. foreign policy on the table for discussion.
Environmental and economic policies are pressing concerns that quickly push ethical analysis beyond national limits. Many international friends and partner churches complain that despite the size and power of the U. S. , the ethical perspectives of its people remain parochial. We need quickly to get up to speed. For this, Peter Singers book is a good conversation partner. Singers premise is that changes in the material world are posing new ethical and organizational challenges that push both moral thought and human institutions in new directions- directions that transcend the nation state and make a new global ethic an urgent necessity.
He builds his argument around four areas: the economy, the environment, international law and community. Since complex environmental questions such as holes in the ozone layer and global warming are not confined to individual nations, they cannot effectively be addressed by individual nation states. They require international ethical thought and the international cooperation of governments, scientists and citizens. While Singer concedes that there is some validity to these complaints, he concludes that something like the WTO is necessary: Just as national laws and regulations were eventually seen as essential to prevent the inhuman harshness of 19 th-century laissez-faire capitalism in the industrialized nations, so instituting global standards is the only way to prevent an equally inhuman form of uncontrolled global capitalism.
He argues that it is possible to imagine a reformed WTO in which the overwhelming commitment to free trade is replaced by a commitment to more fundamental goals. Singers point that the world needs global standards and an end to uncontrolled global capitalism is well taken. But he does not adequately deal with the charge that the WTO is a primary mechanism through which northern and western countries impose their philosophy of trade on the rest of the world, to their own great economic benefit. The same complaint is raised against other international agencies such as the International Monetary Fund and the World Bank, but Singer confines himself largely to a discussion of the WTO. In fact, American exceptionalism in the past several years proves the point that power is an important factor when thinking about moving beyond the nation state.
The many instances in which the U. S. has refused to cooperate with already established international rules or in creating new ones, ranging from the Kyoto Treaty, to the treaty on landmines, to its frequent disregard of the United Nations, are examples of one way of living globally: as a hegemonic power that plays by its own rules. The international concern over such American exceptionalism is widespread. Americans should try to comprehend it and take it seriously.
The issue is not simply how to live together, but how to live together when one nation is so economically and militarily dominant. Singer is absolutely correct in asserting that we need a global ethic. We cannot address environmental, economic and many other issues without thinking beyond the nation-state. We are indeed one world and need to come to terms with what that means.
What one hopes for Christian thought in these matters is what one hopes for the thought of others: that while it is particular and therefore inevitably limited, it can contribute to a more universal global ethic, which will finally result from many similarly limited voices. Singers perspective is an important part of the conversation, but it is just one voice among many.
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