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How the US could lose the new Cold War


Joseph E. Stiglitz, a Nobel laureate in economics, is a professor at Columbia University and a member of the Independent Commission for the Reform of International Corporate Taxation.

The US will have to make up a lot of lost ground in seeking the world’s favour over China. Its long history of exploiting other countries does not help, nor does the nation's deeply embedded racism.

The United States appears to have entered a new cold war with both China and Russia. And US leaders’ portrayal of the confrontation as one between democracy and authoritarianism fails the smell test, especially at a time when the same leaders are actively courting a systematic human-rights abuser like Saudi Arabia. Such hypocrisy suggests that it is at least partly global hegemony, not values, that is really at stake.

For two decades after the fall of the Iron Curtain, the US was clearly number one. But then came disastrously misguided wars in the Middle East, the 2008 financial crash, rising inequality, the opioid epidemic, and other crises that seemed to cast doubt on the superiority of America’s economic model. Moreover, between Donald Trump’s election, the attempted coup at the US Capitol, numerous mass shootings, a Republican Party bent on voter suppression, and the rise of conspiracy cults like QAnon, there is more than enough evidence to suggest that some aspects of American political and social life have become deeply pathological.

Of course, America does not want to be dethroned. But it is simply inevitable that China will outstrip the US economically, regardless of what official indicator one uses. Not only is its population four times larger than America’s but its economy also has been growing three times faster for many years (indeed, it already surpassed the US in purchasing-power-parity terms back in 2015).

While China has not done anything to declare itself as a strategic threat to America, the writing is on the wall. In Washington, there is a bipartisan consensus that China could pose a strategic threat, and that the least the US should do to mitigate the risk is to stop helping the Chinese economy grow. According to this view, preemptive action is warranted, even if it means violating the World Trade Organization rules that the US itself did so much to write and promote.

This front in the new cold war opened well before Russia invaded Ukraine. And senior US officials have since warned that the war must not divert attention from the real long-term threat: China. Given that Russia’s economy is around the same size as Spain’s, its “no limits” partnership with China hardly seems to matter economically (though its willingness to engage in disruptive activities around the world could prove useful to its larger southern neighbour).

But a country at “war” needs a strategy, and the US cannot win a new great-power contest by itself; it needs friends. Its natural allies are Europe and the other developed democracies around the world. But Trump did everything he could to alienate those countries, and the Republicans — still wholly beholden to him — have provided ample reason to question whether the US is a reliable partner. Moreover, the US also must win the hearts and minds of billions of people in the world’s developing countries and emerging markets — not just to have numbers on its side, but also to secure access to critical resources.

In seeking the world’s favour, the US will have to make up a lot of lost ground. Its long history of exploiting other countries does not help, and nor does its deeply embedded racism — a force that Trump expertly and cynically channels. Most recently, US policymakers contributed to global “vaccine apartheid,” whereby rich countries got all the shots they needed while people in poorer countries were left to their fates. Meanwhile, America’s new cold war opponents have made their vaccines readily available to others at or below cost, while also helping countries develop their own vaccine-production facilities.

The credibility gap is even wider when it comes to climate change, which disproportionately affects those in the Global South who have the least ability to cope. While major emerging markets have become the leading sources of greenhouse-gas emissions today, US cumulative emissions are still the largest by far. Developed countries continue to add to them, and, worse, have not even delivered on their meagre promises to help poor countries manage the effects of the climate crisis that the rich world caused. Instead, US banks contribute to looming debt crises in many countries, often revealing a depraved indifference to the suffering that results.

Europe and America excel at lecturing others on what is morally right and economically sensible. But the message that usually comes through — as the persistence of US and European agricultural subsidies makes clear — is “do what I say, not what I do.” Especially after the Trump years, America no longer holds any claim to the moral high ground, nor does it have the credibility to dispense advice. Neoliberalism and trickle-down economics were never widely embraced in the Global South, and now they are going out of fashion everywhere.

At the same time, China has excelled not at delivering lectures but at furnishing poor countries with hard infrastructure. Yes, these countries are often left deeply in debt; but, given Western banks’ own behaviour as creditors in the developing world, the US and others are hardly in a position to point the finger.

I could go on, but the point should be clear: If the US is going to embark on a new cold war, it had better understand what it will take to win. Cold wars ultimately are won with the soft power of attraction and persuasion. To come out on top, we must convince the rest of the world to buy not just our products, but also the social, political, and economic system we’re selling.

The US might know how to make the world’s best bombers and missile systems, but they will not help us here. Instead, we must offer concrete help to developing and emerging-market countries, starting with a waiver on all Covid-related intellectual property so that they can produce vaccines and treatments for themselves.

Equally important, the West must once again make our economic, social, and political systems the envy of the world. In the US, that starts with reducing gun violence, improving environmental regulations, combating inequality and racism, and protecting women’s reproductive rights. Until we have proven ourselves worthy to lead, we cannot expect others to march to our drum. DM


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All Comments 6

  • The ancient Greeks believed that hubris brought with it the seeds of its own destruction. But the process is painfully slow, and the path thereof long and painful to all, for the sinners and those sinned against. The USA political leadership of any persuasion is not going to engage in introspection in our lifetimes.

    • This simple yet fundamentally correct critique, fails to even mention the “special military operation” (thank Putin for that oxymoron/euphemism) that the state of Israel has been carrying out against Palestinians for several decades now – with the explicit indulgence and unwavering support of all shades of the US political class ! Imagine the US asking for an ‘independent’ and ‘credible’ investigation into the assassination of a leading female journalist ! What does that mean when it has been state policy (undeclared) to assassinate any person they regard as a ‘threat’ to their state – in the same way Putin Novichok’s or jails opposition to the regime? How is the one invasion and displacement of people any different from the other ?

  • Thought-provoking article. A few points could be added however: Firstly there is more to the animosity of the west against China & Russia than just democracy against dictatorship; as Fareed Zakaria says, it is about the rules-based international order that is being challenged by both in different ways. I must say that even many role players in the USA does not really understand that; even USA President Biden is finding it out only now. This rules-based order is assisting all of the developing and third world in providing ways to uplift those who live in poverty, and to give hope for more peaceful existence in places where no-one knows what peace looks like. And there is a pattern in which countries are in the USA’s cross-hairs; it seems to me that it is actually those who don’t adhere to this rules-based order. It would also be in line with Kissinger’s doctrine of balance of powers, which has to a large extent determined USA international involvement ever since he left office. Secondly, while everyone, including me, always thought that China will inevitably replace the USA as the worlds biggest economy, what I have read recently indicates that the Chinese economic “Christmas” may be over; Xi’s more restrictive ideas of the economy, as well as the maturing of the Chinese economy, is causing the economic growth to dwindle downwards at a pace. And the Chinese population is also shrinking; some forecasts say that it will dwindle to about 600 million in 2100.

  • . . . But that the USA has to change its’ politics in order to keep its’ image as the international political leaders of the world can’t be disputed, and it is not just what the article says. The USA population seems to have an obsession with tearing their country apart, and unless they start to realise that democracy means government by and for ALL of the people and not just one side, they may just be successful in ending the “American experiment” and leave it to the rest of the free world to take it further. And I would not be surprised if that is actually why so many dictatorships are trying to challenge the world order; because they sense an opportunity to get away with it. So it is not about dictatorships per se; it is about dictators who think that they don’t need to respect others’ self-determination and the sovereignty of other countries.

  • Given the always notable articles by Stiglitz, and a recent useful one about Failed States … i think people in the townships would define failure differently, being as poor, violence-prone and unemployed as they were 30 years ago. But this probable new world order, led by the west, is still preferable to the alternative – Chinese or Russian versions. Despite many reservations about the USA and its allies. (But one should not say “Russian” … it is Putin’s version of Russia). There is something about rules, and about values. Not that our present leaders seem to have either. Ho hum.

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