Magazine article New Statesman (1996)

The Playground Bully: US Missiles Are the Policemen of a Global Market, Just as the Royal Navy Was in the 19th Century. Can US Hegemony Last Longer Than Britain's? (Essay)

Magazine article New Statesman (1996)

The Playground Bully: US Missiles Are the Policemen of a Global Market, Just as the Royal Navy Was in the 19th Century. Can US Hegemony Last Longer Than Britain's? (Essay)

Article excerpt

An extraordinary experiment has dominated world history since the fall of communism: the construction of a global market unsupported by a global state. Except in France, the political elites of the west insist, with breathtaking insouciance, that this experiment is necessary, inevitable and benign. In truth, it is much more hazardous than they appreciate. Historically, states came before markets. Adam Smith may have been right that a propensity to "truck, barter and exchange" is fundamental to human nature but, as the history of his own country showed, that propensity could not be fully realised until a powerful and impersonal state, with the will and capacity to enforce contracts, keep the peace and dismantle traditional obstacles to the operation of market forces, had come into existence. National markets were created by nation states; the states concerned were then sustained by the wealth that national markets brought in their train.

To be sure, the 19th century saw an experiment in stateless globalisation presaging the one through which we are now living. As far back as 1847, Marx and Engels proclaimed the "universal interdependence of nations" in The Communist Manifesto. They were premature but, by the late 19th century, a global market, more complete than anything seen until our own day, was unmistakably in being. It, too, had developed without the help of a global state.

The surrogate for such a state -- the architect and linchpin of the global market -- was Great Britain, the world's first global hegemon. The Royal Navy policed the world's sea lanes, opening markets in distant continents and keeping them open. The world's trade was conducted in sterling, and largely carried in British ships. The gold standard, operated by the Bank of England, ensured currency stability across the globe. Britain was overwhelmingly the world's chief creditor nation, earning vast sums from overseas investments and exporting capital on a huge scale. Her formal empire was the biggest in human history. It was buttressed by an informal one: the economic ties that bound Buenos Aires to London were as strong as those that bound Brisbane and Bombay; the British ideal of gentlemanly capitalism flourished as vigorously in Hamburg as in Hudders-field, in Cambridge, Massachusetts, as in Cambridge, England.

But Britain's days as a hegemon were numbered, and the global market she had brought into being came to a bad end. The dynamic continental powers that triumphed in the American civil war and the Franco-Prussian war -- the US and imperial Germany -- challenged her politically, economically and, in the German case, militarily. By the turn of the 19th and 20th centuries, far-sighted intellectuals and politicians, from Alfred Milner and Joseph Chamberlain on the right to Sidney Webb and Ramsay MacDonald on the left, were beginning to suspect that she was no longer strong enough to bear the burdens of hegemony. Their suspicions turned out to be only too well-founded. In the 1920s, British political and economic elites made heroic, self-lacerating efforts to repair the damage that the First World War had inflicted on the global system and to put Britain back on her hegemonic perch. But when the national government was forced off the gold standard in 1931, the game was up. The global system collapsed, with disastrou s consequences for the entire world.

Will history repeat itself? Or will we learn from it to shape a more enduring, multilateral, civic version of globalisation, based on law, negotiation and political participation rather than on the power of an inevitably self-interested and temporary hegemon? These questions reverberated through the anguished debates that followed last year's atrocities in America, and will do so again after Bali. They hovered over the Johannesburg Earth Summit, and they haunt the UN Security Council and the feverish diplomatic manoeuvres over arms inspection in Iraq. …

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