‘US Hegemony’ (Internationaltimes.it, 2018)
US dominance, economically, politically and militaristically, has increased over the years, particularly since the end of World War Two and the decline of the British empire, the end of colonialism and in conjunction with a new wave of neo-colonialism. There are two identifiable ways in which the US has been detrimental to the world, but what stands out the most in regards to this American hegemony is their military interventions – not only a costly affair for the attacking nation, but for all the nations that have been targeted as a result of the US’ continuation of exceptionalism. It is argued that the US as a hegemonic power today, need to ensure they protect their economic and political position, thus they should go to war at any cost in order to maintain their hegemonic position (Yazid, N. 2015). However, the quest for imposing western-style democracy and retaining the dollar as the world’s reserve currency across the world, has witnessed lengthy, costly wars in Iraq, Afghanistan and interventions in Syria and Libya for example, that affect the entire global economy.
How does war impact on the global political economy? Not only does the US dedicate roughly $850 billion per year (The Balance, 2017) to their military spend, countries that feel the effects of war or interventions in their home nation naturally suffer much more. Yemen, Syria, Iraq, Libya and Afghanistan have been destroyed, with pure humanitarian disasters in these nations with “about 13.5 million people [who] need humanitarian aid in Syria; in Yemen, 21.1 million; in Libya, 2.4 million; and in Iraq, 8.2 million” (World Bank, 2016), along with heavy decreases in their respective GDPs. Worryingly the interventions across the Middle East, which are massively detrimental to the economies of those involved, could worsen further and we could see an escalation in war between the great powers, or at the very least a new cold war era, an arms race, which could cost trillions in a battle for who can produce the best guns and weaponry for the sake of idle threat. In Syria especially, devastation has seen near complete damage to businesses, infrastructure, housing and healthcare facilities, with the GDP of Syria declining and damages “estimated at $226 billion, about four times the Syrian GDP in 2010” (World Bank, 2017). The effects of these wars, which the US have a direct or indirect involvement with, have spread across the MENA region reducing neighbouring countries Lebanon, Jordan, Turkey and Egypt’s individual GDP Per Capita by roughly 1.5% (World Bank, 2016), further aided in poverty and, as a consequence, mass migration, which has a separate detrimental affect across the world economy, and with the latter costing Germany, for example, $20billion in 2016 alone (World Bank, 2017). Is it fair to say that the global economy is hindered and (at times) helped sporadically by the actions and efficacy of the US? As a world superpower the scope of their influence, in both political and economic affairs must be acknowledged.
Another major impact of the American superiority is the power of the economic actions to sabotage the entire global economy. Whilst Bush was the incumbent President during the US financial housing crisis, which witnessed an entire global recession, as nations were halted in their progression and inflation rose, at the detriment to the poor, Obama soon preceded, actually increasing national US debt by 68% in eight years – the addition of $7.917 trillion (The Balance, 2017). Massive debt leads to inflation, it can lead to mistrust and withdrawal of investments, and shifts to cheaper labour or manufacturing forces, which subsequently creates unemployment, personal debt, and inability to contribute to the GDP through consumerism, which halters the American dream of capitalism and profit. The US, as a global hegemonic power, have an underlying control over the economic (in) stability of the rest of the world as seen in The Great Depression in 1929 (Lombra, 2018). Globalisation and interconnectedness, along with international trade between nations means that “one nation’s economy can have a dramatic effect on that of others” (Lombra, 2018). This is particularly exacerbated when considering the size and dominance of the US in the global political economy. Growth declines on US exports and imports, lead to budget cuts that, due to interdependence between many nations across the world, are witnessed across the global economy, and lead to periods of economic malaise and employment cuts which create soaring unemployment or cheap, illegal labour prevailing to make up the lost costs required to continue the profiting of the elite or through Transnational Corporations (TNCSs) which increase inequality between the rich and poor. Socio-economic issues increased as a result of the US financial crisis, however, whilst those at the top seemed to slip through feeling the effects of such a monumental crisis, “the first synchronised world recession since 1974” (Gokay, 2009) led to increases in inequality and poverty, not only in the US but in both developed and developing nations around the world, with it estimated that “an estimated 55 to 90 million more people will be living in extreme poverty than anticipated before the crisis” (Evans, 2009).
All matters that detriment the global political economy can be identified as having witnessed increases due to the actions of the US. This is why hegemony by one nation gives them too much authority and control over the rest of the world. ‘Hegemonic stability theory’ originated by Krasner, argued that one hegemonic power is needed for the maintenance of an international liberal economic system (O’brien and Williams, 2016: 82) and that this hegemony is what keeps stability in the global economy (Yazid, N. 2015). However, not only have the US proven detrimental to its fellow states in the global political landscape, the decline of a hegemonic power would bring about instability that could recreate another global recession as evidenced through the UK’s hegemonic decline during the Great Depression (O’brien and Williams, 2016: 82). Paul Kennedy in his ‘Overstretch Thesis’ (The Economist, 2002), could be correct in assuming that the decline of the US is inevitable and imminent; whilst this could be beneficial for economic equality between nations, due to the influence that the US seemingly exhibit in world affairs, we must also worry that this could create havoc in the global political economy.
Leila Lerari – M00559185
Bartlett, M. (2015). Nobel panel saw Obama peace prize as ‘mistake,’ new book claims. [online] The Washington Times. Available at: https://www.washingtontimes.com/news/2015/sep/16/nobel-panel-saw-obama-peace-prize-mistake-new-book/ [Accessed Dec. 2017].
Blum, W. (2013). America’s Deadliest Export: Democracy – The Truth About US Foreign Policy and Everything Else. Zed Books.
Evans, R. (2009). Recession adds 6 percent to ranks of global poor: U.N.. [online] Reuters. Available at: https://www.reuters.com/article/us-financial-poverty/recession-adds-6-percent-to-ranks-of-global-poor-u-n-idUSTRE56502P20090706 [Accessed 17 Apr. 2018].
Gokay, B. (2009) ‘The 2008 World Economic Crisis: Global Shifts and Faultlines’, Global Research, 15 Feb. Available at: https://www.globalresearch.ca/the-2008-world-economic-crisis-global-shifts-and-faultlines/12283. (Accessed: 10th April 2018)
Internationaltimes.it. (2018). The Megalomania of Modern America | IT. [online] Available at: http://internationaltimes.it/the-megalomania-of-modern-america/ [Accessed 10 Apr. 2018].
Lombra, R. (2018). The U.S. Financial Crisis: Global Repercussions. [online] Pennsylvania: JA Worldwide. Available at: https://www.juniorachievement.org/documents/20009/36541/USFinancialCrisisGlobalEffects.pdf/f94cdd1c-2d2e-4efc-865d-82a0260f914d [Accessed 6 Apr. 2018].
O’Brien, R. and Williams, M. (2016). Global political economy. 5th ed. Palgrave Macmillan, p.82
The Balance. (2017). How Much Did Obama Add to the Nation’s Debt?. [online] Available at: https://www.thebalance.com/national-debt-under-obama-3306293 [Accessed Dec. 2017].
The Balance. (2017). Which President Added Most to the U.S. Debt?. [online] Available at: https://www.thebalance.com/us-debt-by-president-by-dollar-and-percent-3306296 [Accessed Dec. 2017].
The Economist. (2002). Imperial overstretch?. [online] Available at: https://www.economist.com/node/1188741 [Accessed 8 Apr. 2018].
World Bank. (2016). By the Numbers: The Cost of War & Peace in the Middle East. [online] Available at: http://www.worldbank.org/en/news/feature/2016/02/03/by-the-numbers-the-cost-of-war-and-peace-in-mena [Accessed 18 Apr. 2018].
World Bank. (2017). The Toll of War: The Economic and Social Consequences of the Conflict in Syria. [online] Available at: http://www.worldbank.org/en/country/syria/publication/the-toll-of-war-the-economic-and-social-consequences-of-the-conflict-in-syria [Accessed Dec. 2017]
Yazid, N. (2015) The Theory of Hegemonic Stability, Hegemonic Power and International Political Economic Stability. Global Journal of Political Science and Administration Vol.3, No.6, pp.67-79, (December 2015). Published by European Centre for Research Training and Development UK (www.eajournals.org)