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Globalization 2.0: A Century for Sale, Any Taker?

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The Munk Debate in Toronto has in the past three years become a significant forum for discussing global issues of our age. The most recent one held in June 2011 (Does the 21st Century Belong to China?) has now been published as a book with the same title. The debaters were luminaries no less than Henry Kissinger, Fareed Zakaria (for "No"), Niall Ferguson, and Li Daokui (for "Yes"). For Dr. Kissinger, it was claimed that this was his first participation in a public debate on any subject anywhere.

The debate goes off on a strong start with Ferguson, demonstrating his usual mastery of both language and analysis, firing off undeniable facts, past and present, to make his case that China is well on its way to owning, indeed dominating, the 21st century: History is on its side; demographics is in its favor; industrial and financial power makes its strength unstoppable. To top it off, Western decline has opened up an historic window of opportunity for its rapid and inevitable rise.

Zakaria weighs in with a forceful rebuttal. China would repeat Japan's derailment twenty years ago when it was thought to be taking over the world. Its faulty political system and economic structure would sap its vitality from within and the geo-political oppositions from its neighbors backed by America would contain it from the outside. As the debate goes on, Zakaria reminds his audience of another important factor: for all its current problems, the United States is not to be counted out. The innate power of America, its innovative culture, its economic resilience, and its military dominance would combine to help it retain the 21st century in its vault -- another American century may be upon us. At one heated moment of exchange, the usually thoughtful Zakaria even throws in human rights as a wedge separating China from its prize.

Dr. Kissinger, the most senior and experienced practitioner in international affairs on stage, gives the most balanced and thoughtful analysis. China is much too pre-occupied with the internal challenges it faces in building a strong and sustainable nation to have the desire or the capacity to dominate the 21st century. Besides, the world seems to be moving in a direction that the question of who might dominate it is no longer relevant.

The most revealing presentation is given by the only Chinese participant in the debate, the economist and senior government advisor Li Daokui. Li extols China's obvious accomplishments and expresses confidence in the country's continued success. But he largely refrains from saying anything about China dominating the 21st century -- the motion he is called upon to support. Only in the end he divulges his true position: China will succeed but the 21st century would not belong to China; it belongs to any and all who are capable of adapting to a fast changing world in which leadership is but a fleeting concept. It turns out this was a three-to-one debate all along -- against the motion. Ferguson was the lone "Yes".

Yet, on closer examination, the underlying fault-line of the debate points to an even two-two match -- albeit inadvertently: Ferguson and Zakaria vs. Kissinger and Li.

Ever since the onset of this current century, those on the side of Ferguson and Zakaria, mostly in the West, have been obsessed with the question to whom this new century shall belong. Since the last century indisputably belonged to America, it is indeed urgent that we determine who the owner of this century is so that all can organize their affairs accordingly.

But perhaps the concept of owning a century was but a short-lived anomaly in the history of human civilization. For a large portion of recorded history China generated a dominant share of the world's GDP and maintained the longest continuing civilization; but no one called those Chinese centuries. The few hundred years during which the sun of the British Empire never set were not called British centuries. There were no Roman centuries or Athenian centuries. So what made the 20th century so special that someone had to be given ownership of it?

The 20th century was indeed a special one. It was when modernity, given birth by the Enlightenment a few centuries ago, culminated into an existential struggle between two universal ideologies: Soviet communism and democratic liberalism. Both were modern and both were Western. Furthermore, both were totalitarian in nature in that each claimed the inevitability of a preconceived totality for all mankind. No one had made such a claim before, but the 20th century saw two.

In Soviet communism, class as the fundamental unit that transcended all cultural identities would take the whole world to the communist utopia. On the other side of the coin, democratic liberalism counted on divinely empowered individuals to vote their way to the liberal utopia. Both armed themselves to the teeth and drove their visions from continent to continent, even reaching the moon. In the end, the Soviet Union died and the American-led West lived -- hence the American century.

The universal nature of those two warring ideologies made the Cold War a life and death struggle -- a zero-sum war -- and it was only logical that the survivor would claim ownership of the entire century. And it seemed only natural that the United States would then move on to actually implement the utopia of democratic liberalism to cover every corner of the earth -- globalization -- as it has come to be known. Seven billion rational individuals would all make the right choices in the voting booth and the marketplace and thereby eventually unify the world under a single set of political and economic rules. At the 20th anniversary of the fall of the Soviet Union, an interim report card may be due on America's universal project.

Economically, globalization has led to a period of prosperity around the world. It brought about industrialization at unprecedented speed and scale in developing countries of which China is the most notable one. In developed countries, dramatic economic benefits have been realized from technological advances and increased efficiency in capital allocation. This process has been undertaken within a global economic and security infrastructure led and underwritten by the United States. A myriad of global organizations such as the WTO, the IMF, and the World Bank provide the institutional framework within which goods and capital flow ever more freely. The physical sea lanes vital to it all are kept open and safe by the U.S. navy. American political and military power safeguards the delicate balance of the Middle East -- the source of energy for this global industrial expansion. The complex web of U.S. built security alliances around the globe has kept the world from any major destructive military conflicts. All these many call global "public goods" are provided by the United States part and parcel to its ownership of the century.

But not all have gone according to plan. At this juncture, the world is drifting further away from the original universal vision that drove this project. First, China became the largest beneficiary by taking maximum advantage of globalization. In just one generation, it went from a poor agrarian country to the second largest economy in the world. Yet, China does not, and probably never will, subscribe to the universal ideology of democratic liberalism, and its vibrant market economy is pointedly not capitalism. Many Americans are surprised by this as it was widely believed that China's economic development and integration into the world order would necessarily turn it into a convert of the Western religion of modernity. This is because ideological faith often leads to self-delusion. It is no different from the Soviet communists who believed all workers of the world would transcend their national and cultural allegiances to unite against capitalists of all nations. The same delusion is now leading many in the West to champion the Arab Spring for giving birth to liberal societies across the Middle East.

China has, and always will, act in its own best national interests. Its worldview is consistent with the cultural roots of the Middle Kingdom -- keeping out barbarians, not invading them. It is directly opposite to the 20th century Soviet and American notions of universality. China appears to be a natural in this post-ideological century -- exploiting the international system for its own benefit while defending against external encroachments of its sovereignty. With or without sufficient capacity, it will never seek to lead the current global system let alone invent, and pay for, a new one to run the world. So, in essence, the Americans have built a global system with a universal plan; China has ridden that system for free but would not subscribe to the plan -- to be fair China never said it would. Furthermore, its success is showing new possibilities to many other developing nations that never embraced the plan but were told by the West they could not prosper without it.

Second, the universal project, while failing to universalize the world, is instead universalizing -- colonizing -- America itself. During the debate, Zakaria touts it as a distinct advantage that the United States is becoming a [universal] nation, building a land of opportunity for the world's best and brightest. This is indeed the case except Zakaria's [universal] nation is being built at the expense of the [American] nation.

While wars and nation building in the name of universality are being carried out in distant lands, at home in America globalization has created a permanent cosmopolitan class, or the Davos Men, in the late Samuel Huntington's memorable phrase -- the small group of globe-trotting, option trading elites who reap the lion's share of the assorted benefits of globalization. The rest of the Americans -- the 99%, to borrow from Occupy -- languish in stagnant and even falling living standards with the nation's industry being hollowed out and its polity incapacitated by debt. It is no surprise that the same elites are the most insistent on America carrying on with the universal project to make this another American century. For the first time since the Great Depression, a structural threat to American social cohesion has emerged.

Who will own this young century of ours? There is little uncertainty to China's approach. The world's second largest economy and longest continuing civilization will keep on managing its currency and trade rules to help it industrialize, enjoy the complimentary protection of the U.S. navy to secure its trades in raw materials and finished products, and gain increasing competitive advantages from solar panels to shoes. America's path is the unknown. Will it retreat and rebuild the American nation, or will it allow its 1% to continue its universal project paid for by a mortgage on the future of the 99%? And what if America insists on extending its century ownership from the 20th to the 21st? China's response seems to be: Keep it.