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America’s Global Hegemony Could Be Coming To An End

  • Paul Jay
  • July, 2019
  • 148
  • Cover Story

WHAT FOLLOWS IS A CONVERSATION BETWEEN INSTITUTE ON NEW ECONOMIC THINKING PRESIDENT ROB JOHNSON AND PAUL JAY OF THE REAL NEWS NETWORK. READ A TRANSCRIPT OF THEIR CONVERSATION BELOW

Paul jay: welcome to the real news network. I’m paul jay.

Big power rivalry is heading into very dangerous waters. The rise of China as an economic and military superpower is threatening the global hegemony of the United States. Russia has been pushed into an increasingly tighter relationship with China to balance the attempts by the West to isolate it. President Trump, representing the most aggressive sections of American capital, is responding with a trade war, and an unparalleled massive peacetime military budget that was justified by his Secretary of Defense Shanahan with three words: China, China, and China. Christine Lagarde, the IMF’s managing director, said in a briefing note that taxing all trade between the world’s two largest economies would cause some $455 billion in gross domestic product to evaporate. The report said this would be a loss larger than South Africa’s entire economy.

In a recent meeting between Russia’s President Putin and Chinese President Xi Jinping, apparently the 29th such meeting in the last few years, it was announced with the two leaders looking on that the Chinese tech company Huawei has struck a deal to build Russia’s first 5G wireless network. This is the same company that Trump has banned from developing the 5G network in the United States, and is pushing Europe to do the same.

Paul Jay: So just how dangerous is this trade war? When you listen to the, sort of the business media, it goes anywhere from, well, they’re all going to sort it out at a meeting in June, to this is just the beginning of something that’s going to get extremely messy.

Rob Johnson: I would say we can’t know whether things will be what you might call mended back together, or whether we’re opening a very, very big and contentious hole in the design of the world system. I was recently at a conference run by a man named John Mallery at MIT, which was an outstanding collection of people from intellectual property rights, trade representatives, artificial intelligence, machine learning experts, and from the intelligence community.

There’s also a very, very severe what you might call scenario, where the architecture of our global financial system and credit allocation is increasingly vulnerable to cyberattack.

So it’s very daunting. But I think the relationship between military concerns and commerce is almost unsolvable at present. And it’s scaring lots of people, because you don’t know who’s hacking you, you don’t know where they’re coming from. And it’s hard to create what you might call rules of fair play between U.S. and China and then have somebody hack into the system, and not know whether it’s your counterpart that’s cheating, or a third party pretending, say, to be from Wisconsin, or to be from Shanghai, intruding on system, when they might be in Albania or Latin America.

Paul Jay: It seems to me the underlying issue here is is the U.S. oligarchy-and that’s not monolithic by any means. There’s very different interests within the most powerful circles, economic circles in the United States. But are they willing to accept this is going to be a multi-superpower world, certainly at the very least China and the United States? I would say within a few decades it’s not out of the question a country like India might even enter those kinds of circles, when you start having populations of a billion and you start having this technological evolution that’s taking place in China. But there certainly seems to be circles within United States that do not accept the idea that this will be anything but a single-superpower world, and they’re trying to do something about it.

Rob Johnson: Well, I think there is a big-you spoke of the awful geopolitics in the introduction. And we’re in a very treacherous and difficult place, which is you have two cultures, the United States and China, that represent, essentially, Western Cartesian enlightenment and the Confucian or Daoist traditions.

When we had the changing of guard from the British to the American leadership of the world, as Charles Kindleberger, my former teacher, wrote about in The World of Depression. You still had stumbling. You had things fall between the cracks. You didn’t have what Kindleberger called the hegemon that provided global public goods. I don’t know that there’s a transition from the United States to China, or whether there’s just the growth of China and things are multipolar now. But these two traditions don’t see through the same lens, through the same ideas. And that makes it more difficult. The United States officials that you referred to thought China would fall into the global t...

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