Why the World Needs America
The global economic order – the post-war framework of global governance built on rules-based institutions and free and open markets – is largely America’s creation. It has been the midwife of growth and globalization that have produced prosperity around the world. Much debate in recent years has centered on the impact of such rising powers as China and India on the American order. The focus needs to turn to a different question: can the United States uphold the order it authored?
As the Great Crisis of 2008-09 unfolded from America around the world, a chorus of critics rose to declare the United States a declining nation and to call an end to the current global economic order. In countless depictions, America was passing the baton of global stewardship to emerging nations, and a new world order led by China was thought to be waiting in the shadows.
But the American order persists, and the aftermath of the crisis has in some ways only reinforced it. Its new institutions, the G-20 and Financial Stability Board, are but sequels to U.S.-created entities. Investors have deemed America the safe haven, and the dollar has persevered as the world’s reserve currency. The mission and capacities of the Bretton Woods twins, the IMF and the World Bank, have only been expanded. Protectionism has by and large been held at bay, and the WTO is alive. No country has resigned from these institutions; rather, outsiders are demanding a seat on the coveted IMF Executive Board or an invitation to the charmed club of the G-20. Nations have opted in, not out of, the American order.
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