Sunday, February 16, 2003

Globalization 101

Tom Friedman once again demonstrates his ability to score the occasional bullseye. Writing in today's New York Times Friedman argues that the post Cold War world order is as bipolar as the Cold War world order was, and that now the two armed camps are the World of Order and the World of Disorder (hmm...maybe he's been reading Innocents Abroad...). His point is that globalization and the economic growth it enables requires the stability the World of Order camp provides. He's writing chiefly about China, and how with a heavily export-dependent economy the Chinese leadership is being incredibly short-sighted in thinking (or at least acting like they think) they don't have a stake in the conflict between the U.S. and Iraq. But what Friedman is saying about China could be said for every country with a developed or export-oriented economy: if the U.S. becomes more interested in security than commerce - and we are probably only one more 911 away from that -- the primary engine of the global economy will not be running on all cylinders.

Old Europe, aka the E.U., is the primary center of anti-Americanism outside of the Muslim/Arab world. The inability of the E.U. to effectively influence matters relating to international security without American leadership is historically demonstrated. More recently, the tenuous nature of the political bonds linking member countries into a "union" has become apparent. The only thing left that prevents the notion of union in "European Union" from being an open joke is the economic infrastructure shared by these countries -- an infrastructure already difficult to maintain given the complexities of integrating the fiscal and monetary policies of separate sovereign nations sharing a common currency. If the global economy slows down much further, there'll be increased pressure on European politicians to provide economic relief and/or stimulus for their constituents, making this fiscal and monetary policy integration -- essential for maintaining a stable euro -- even more difficult. Politically the E.U. is beginning to look like a house of cards, and the strength of its economic foundations will be put to the test like never before if European resentment of the so-called American Empire succeeds in hampering America's ability to fight the War on Terror. Given the E.U. response to the challenges of the post Cold War world order thus far, optimism regarding the E.U.'s fate if tested like that seems to us misplaced.


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