America: From Globalization to Isolationism

By Edward Goldberg

Uncertain of its role in the globalized world that it nurtured, the United States is being pressured internationally and domestically to re-think its commitment as the world's cop. Internationally, the role of cop has defined America since the end of World War II. At home, the prestige of being the cop along with the nationalistic overtones that derived from that prestige offered enough positive feedback to dampen America's re-occurring dream of isolationism.

American fostered post-war globalization depended on five unwritten American-based rules:

· That the rules of the game would basically be U.S. rules, very subtly enforced.

· That as the sole superpower, the United States would act as the neutral world policeman to protect and nurture world trade.

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· That the citizens of the United States would understand that, in the rising tide of global prosperity, the country that makes the rules would benefit proportionately more than others and, consequently, should not be threatened by the rise of new economic powers.

· That the U.S. political leadership would accept the idea that a Chrysler owned by Fiat is neither an American company nor an Italian company but a globalized company.

· That in accepting that concept, the leadership would convince the segment of the American population that was not immediately benefiting from globalization that everything would be OK.

Globalization's dramatic success of lifting hundreds of millions of people out of poverty, along with its failures, economic contagion, and the inability of developed countries to protect their workers, have made some of these rules obsolete and in retrospect seem very politically naïve.

The very success of these rules, however, has created a direct and very unfamiliar challenge to America's staring role as the cop -- emerging market nations based on their new economic weight now want to decide where and who should patrol the beat. Globalization has mandated that market size and vitality be viewed as a key component in measuring a nation's power. And under the protection of America's globalized umbrella, China, India, Brazil and other nations blossomed into economic giants. And although America has obviously gotten wealthier, due to the emergence of these new giants its comparative global economic weight has shrunk. The U.S. economy as a percent of global GDP went from 31 percent in 2000 to 22 percent today.

Ironically, America's increased energy production further adds to this challenge. It is creating a strange paradox: Increasing energy independence is freeing America of much of its global economic dependency but it is also diminishing America's influence in the world.

Energy independence naturally is causing America's energy imports to fall. It is also changing America's international buying habits in terms of heavy industry, chemicals and other basic products. Very cheap domestic natural gas has enabled the U.S. to become the inexpensive producer of those items, thus reducing the need for importation.

The decline in imports, whether oil, chemical or heavy industrial equipment, will cause a decline in what is known as the "buying power of the customer." Under the market driven game of globalization, part of America's power was derived from the fact that it was the world's largest customer, a situation that is the exact reverse of Germany today. America's trade deficits, and its tremendous buying power gave it tremendous economic global clout. Now with American global purchases declining due to its new energy resources, by definition it looses the influence of the powerful customer to whom the rest of the world must cater.

Domestically, energy independence and a false sense of security brought on by that independence, combined with budget constraints in Congress, will fuel a new push towards isolationism. Add to that global fatigue, the unfamiliarity and unease of having to share power with emerging market countries, and you understand the sense on the part of many Americans that globalization has, at best, been detrimental to both their own and the country's economic well-being.

We have already begun to see a swing towards isolationism in the reaction of some members of Congress to the proposed Syrian vote. At a time when immediate security threats could be viewed as diminishing, the easy question for a Congressperson to ask, with the hard-to-defend political answer, is what is the ROI (return on investment) to the American taxpayer for America to continue in its role as the liberal hegemonic cop.

The reduction in economic need and influence will cause a re-think of America's global commitments by Washington. But isolationism and withdrawal begets withdrawal. If the American democracy makes the determination that its interests are better served by significantly narrowing its role as the hegemonic cop it implicitly sanctioned the rights of other countries to withdraw from the tacit round table we know as globalization.

And by doing this the global landscape will change the most since the end of World War II. Creating a more dangerous world, very similar to the world of pre-World War I economic nationalism.

Edward Goldberg is an expert on globalization and how geo-economic/political events shape our lives. He is an Adjunct professor at Zicklin Graduate School of Business, Baruch College, City University of New York. In addition he is on the adjunct faculty of the New York University Center for Global Affairs.

(AP Photo)

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