NYTimes.com Article: 2011

This article from NYTimes.com 
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"There is a third trend that has been at work for more than a decade: the 
transition of American global power from informal to formal imperialism"

It amuses me to no end that its sour conservatives like Ferguson and John Gray, 
rather than liberals, who seem to have some clue about the dynamics of 
'globalization' etc.

Steven Sherman

SWSYSTEM@AOL.COM

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2011

December 2, 2001 

By NIALL FERGUSON


 

Take the long view. What will New York be like on Sept. 11,
2011? It's not difficult to imagine a rather wretched
future. You need only visit one of those cities --
Jerusalem or Belfast -- that have been fractured by
terrorism and religious strife to get a glimpse. Imagine a
segregated city, with a kind of Muslim ghetto in an outer
borough that non-Muslims can enter only -- if they dare --
with a special endorsement on their ID cards. Imagine
security checkpoints at every tunnel and bridge leading
into Manhattan, where armed antiterrorist troops check
every vehicle for traces of explosives and prohibited
toxins. 

Does that mean you also have to count on even worse
gridlock on the Van Wyck Expressway? No, because you also
need to imagine a decline in the number of cars on the
road. For by 2011, the third and final oil shock will have
heralded the end of the internal-combustion era. 

Still, there will be some comfort to be found downtown.
There, rising like a phoenix from the rubble of the World
Trade Center, will be that gleaming monument to American
resilience: the twin towers of the Nafta Center. Even if
world trade couldn't be rebuilt after the Great Depression
of 2002-03, at least the city's beloved landmark could. And
the new towers will be even taller -- thanks to the
antiaircraft turrets on top. 


In its immediate aftermath, the destruction of the World
Trade Center looked like one of those events -- the
assassination at Sarajevo, the bombing of Pearl Harbor --
that set history on a new course. Some excitable
commentators began talking about ''World War III'' almost
the same day the twin towers fell. That's one possible
future. Much more likely, however, is the nightmare scene
sketched above. That's because this outcome could arise out
of already discernible trends, all of which predated Sept.
11, 2001. Tragic and spectacular though it was, that event
was far less of a turning point than is generally believed.


We should be wary, in fact, of ever attaching too much
importance to any single event. It was not Gavrilo Princip
alone who started World War I. In his great novel, ''The
Man Without Qualities,'' Robert Musil dismissed the idea
that history moves in a straight line like a billiard ball,
changing direction only when struck. For Musil, history was
more like ''the passage of clouds,'' constantly in flux,
never predictable. That quality is what makes it impossible
to predict where exactly we will be 10 years from now. 

Yet Musil's analogy of history and clouds illuminates
something else. Though the weather is hard to forecast, the
range of possible weathers is not infinitely large. It may
not rain tomorrow, but we know that if it does, it will
rain water, not boiling oil. It may not be quite as warm as
yesterday, but we know that it will not be minus 50
degrees. 

In other words, Sept. 11 was the historical equivalent of a
violent and unpredictable storm. But the storm did not
alter the fact that summer was slowly shading into fall. In
just the same way, the attacks on New York and Washington,
however shocking, did not alter the direction of several
underlying historical trends. In many respects the world
will not be so very different in 2011 from the world as it
would have evolved under the influence of those trends,
even had the attacks not happened. 


The first deep trend is obvious enough: the spread of
terrorism -- that is to say the use of violence by nonstate
organizations in the pursuit of extreme political goals --
to the United States. This kind of terrorism has been
around for quite a while. Hijacking planes is certainly not
new: since the late 1960's, when the tactic first began to
be used systematically by the Palestine Liberation
Organization and its sympathizers, there have been some 500
hijackings. As for the tactic of flying planes directly at
populous targets, what else were the 3,913 Japanese pilots
doing who killed themselves and many more American
servicemen flying kamikaze missions in 1944 and 1945? 

All that was really new on Sept. 11 was that these
tried-and-tested tactics were applied in combination and in
the United States. Between 1995 and 2000, according to
State Department figures, there were more than 2,100
international terrorist attacks. But just 15 of them
occurred in North America, causing just seven casualties.
It was the successful extension of international terrorism
to the United States that was the novelty. 

A novelty, yes, but hardly a surprise. Terrorism had been a
fact of life in major cities around the world -- including
New York's elder sister London -- for decades. The only
surprising thing was that New York was spared for so long.
Put it this way: if economics could be globalized, why not
political violence? The two are in fact connected. Year
after year it becomes easier for small bands of fanatics to
perpetrate mass destruction because the means of
destruction get cheaper and more readily available. The
last time I checked, a used AK-47 assault rifle could be
purchased in the United States for $700 and a new one for
$1,395, almost exactly the price of the portable computer
on which this article was written. 

In the same way, the real cost of a nuclear warhead -- and
certainly the real cost of a kiloton of nuclear yield -- is
lower today than at any time since the Manhattan Project
achieved its goal. That cost two billion 1945 dollars.
Converted into 2001 prices, that figure rises roughly
tenfold, which is enough to buy more than 400 Trident II
missiles. (Let's face it: if nukes were expensive, Pakistan
wouldn't have them.) It seems reasonable to assume that the
same process has reduced the cost of biological weapons
like refined anthrax. 

The bad news is that no amount of warfare against the
states that harbor terrorists will rule out further
attacks. The Western European experience of combating
leftist and nationalist terrorism shows that the real war
against terrorism has to be fought on the home front by
domestic intelligence agencies, police forces and humdrum
security guards around all potential targets. 

So, welcome to the world of the daily security check, the
fortnightly bomb scare and the annual explosion. Ten years
from now, New York firefighters and Washington postal
workers will feel the same weary resignation that Londoners
developed during the I.R.A.'s bombing campaign. 


The second trend that Sept. 11 did nothing to change is the
economic downturn. The asset bubble of the late 1990's
peaked a year and a half before the terrorists struck. And
despite their proximity to Wall Street, the real crashes of
Sept. 11 did not cause a metaphorical crash on the stock
market -- just its temporary closure. 

Admittedly, in the immediate aftermath of the attacks,
investors had to grit their teeth as prices threatened to
go into free fall. Yet so far, the deflation of the late
1990's asset price bubble has been a gentle affair compared
with the cataclysmic meltdown that followed the bubble of
the 1920's. To give some orders of magnitude, a crash on
the 1929-32 scale would take the Dow down from over 11,723
-- where it stood at its peak in January last year -- to
about 1,266 by November next year. On Nov. 15, it stood at
9,872, less than 3 percent down from Sept. 10. When Alan
Greenspan coined the phrase ''irrational exuberance,'' the
index was 6,473. In this light, the most striking thing
about the economic consequences of Sept. 11 would seem to
be their insignificance. A 3 percent drop in the Dow is
nothing. Oil prices, too, have continued their yearlong
decline. And there has been virtually no movement in
long-term interest rates, which might have been expected at
a time of increased political risk. 

Nevertheless, the world economy has two serious economic
weaknesses -- also predating Sept. 11 -- that cannot be
ignored. 

The first is the nonglobal nature of globalization. Far
from being perfectly integrated, the world's markets for
goods, capital and labor appear to have become remarkably
segmented. Thus, the overwhelming bulk of American,
Canadian and Mexican trade now takes place within the North
American Free Trade Area, just as most European trade takes
place within Europe. Back in 1913, international capital
was truly international: about 63 percent of foreign direct
investment in 1913 went to developing countries. But in
1996, the proportion was just 28 percent. Labor mobility is
also distorted, with the United States able to cherry-pick
the best-qualified and most-talented workers from European
and Asian economies under its various visa programs while
letting in many more unskilled (and untaxed) Latino workers
through the Mexican back door. 

This is one key reason that the process we call
globalization has tended to result in widening inequality
between nations. In the 1960's, the richest fifth of the
world's population had a total income 30 times as great as
the poorest fifth's; in 1998, the ratio was 74:1. In 1965,
real gross domestic product per capita in Chad was
one-fifteenth of the U.S.'s ; in 1990, one-fiftieth. If
there was a substantial measure of convergence of incomes
during the first age of globalization, in this age there is
a pronounced divergence. And such inequality seems likely
to increase the resentment felt in poorer countries toward
the super-rich United States. (That said, we should not
make the mistake of assuming that this poverty is the
principal cause of support for organizations like Al Qaeda,
most of whose recruits come from relatively prosperous
backgrounds.) 

Even more worrying is the medium-term outlook for global
energy supplies. The rise of the S.U.V. as a status symbol
shows how complacent Americans are about their supply of
oil and petroleum. They should not be. True, oil prices are
low right now: a barrel of West Texas crude sells for about
$20, less than half the price (in real terms) as at the
peak of the oil crisis in 1982. But what made prices go
through the roof in the 1970's and early 1980's was
political instability in the Middle East: the anti-Israel
Arab oil embargo, the Iranian revolution and the Iran-Iraq
war. It's no great stretch to imagine something similar
happening again. (Even the demand-side shock of the recent
U.S. boom trebled the oil price between December 1998 and
October 2000's $33 peak.) 

The realities are stark. The Middle East accounts for 31
percent of world oil production but just 6 percent of
consumption. North America accounts for about 18 percent of
world oil production but consumes 30 percent. Even more
sobering, however, are the figures for world oil reserves:
North America has just 6 percent of them; the Middle East
65 percent. 

Feeling comfortable? Total U.S. energy consumption -- of
which petroleum accounts for about two-fifths -- has risen
about 27 percent since 1972, while oil reserves have fallen
by about 30 percent. Right now, the United States depends
on the Persian Gulf -- mainly Saudi Arabia -- for about 12
percent of its oil imports, but that figure is bound to
rise as OPEC countries account for an ever-increasing share
of the world's available oil. 

The time frame may be much tighter than S.U.V.
manufacturers realize. Kenneth S. Deffeyes of Princeton
University predicts that global oil production will start
to decline from 2004. At a conference at the Royal United
Services Institute in London in October, experts warned
that from 2008 supplies of non-OPEC oil will fall steeply
-- reaching close to zero in 2040 -- and that, barring some
major technological breakthroughs, there will be an
effective world shortage from 2010. 

Yet even that estimate could prove to be overoptimistic if
there is a regime change in Saudi Arabia. Like ''the coming
oil crisis,'' the fall of the Saudi monarchy has been
prophesied so often that many people have stopped believing
it could ever happen. Don't be so sure. The position of the
ruling dynasty increasingly resembles that of the shah of
Iran in the late 1970's. Low oil prices may have been good
for the West, but they have produced a significant fall in
per capita income in Saudi Arabia, creating a reserve army
of disenchanted young men who are the natural recruits of
Al Qaeda. 

Make no mistake: radical Islam -- especially the Wahhabist
strain found in Saudi Arabia -- is a revolutionary movement
that has set the Middle East ablaze before now (in the
1880's for example, when a Sudanese holy man calling
himself the ''Mahdi,'' or ''expected guide,'' emerged as
the Victorian Osama bin Laden). A revolution in Saudi
Arabia would be as traumatic a blow to the world economy as
the Iranian revolution of 1979. 

The days of the S.U.V. -- perhaps even the days of the
internal-combustion engine -- are therefore numbered.
American car manufacturers have less than a decade to come
up with an alternative and affordable energy source to
gasoline. If they fail, the world economy could well find
itself reliving the stagflation of the 1970's. 


There is a third trend that has been at work for more than
a decade: the transition of American global power from
informal to formal imperialism. 

Since 1945, the United States has largely been content to
exercise influence around the world indirectly: exercising
economic leverage through multinational corporations and
international agencies like the International Monetary Fund
and political power through ''friendly'' indigenous
regimes. 

As Britain discovered in the 19th century, however, there
are limits to what can be achieved by informal imperialism.
Revolutions can overthrow the puppet rulers. New regimes
can default on their debts, disrupt trade, go to war with
their neighbors -- even sponsor terrorism. 

Slowly and rather unreflectively, the United States has
been responding to crises of this sort by intervening
directly in the internal affairs of faraway countries.
True, it has tended to do so behind a veil of
multilateralism, acting in the name of the United Nations
or NATO. But the precedents set in Bosnia and Kosovo are
crucial. What happened in the 1990's was that those
territories became a new kind of colony: international
protectorates underwritten by U.S. military and monetary
might. 

Since the United States and Britain went to war against
Afghanistan -- with the avowed intention of replacing the
Taliban regime -- I have found myself quoting Rudyard
Kipling on ''the White Man's Burden,'' particularly those
lines (written just over a century ago) that enjoined
Americans to fight what he called ''the savage wars of
peace'' while at the same time filling ''full the mouth of
Famine.'' (Kipling would certainly have grasped the
rationale of simultaneously dropping cluster bombs and food
parcels.) Of course, no one today would be so politically
incorrect as to call governing Afghanistan ''the White
Man's Burden.'' Even in his messianic speech at the Labor
Party conference in October, British Prime Minister Tony
Blair talked innocuously about ''partnership,'' ''the
politics of globalization'' and ''reordering this world.''
Yet the underlying message of that speech was pure Kipling.


There are good reasons to wonder how readily Americans will
assume the Victorian burden, of course. The strengths of
the U.S. economy may not be the strengths of a natural
imperial hegemon. The British Empire relied on an enormous
export of capital and people, but since 1972 the American
economy has been a net importer of capital (to the tune of
15 percent of G.D.P. last year), and the United States
remains the favored destination of immigrants from around
the world, not a producer of would-be colonial emigrants.
Moreover, Britain in its heyday was able to draw on a
culture of unabashed imperialism dating back to the
Elizabethan period. The United States -- born in a war
against the British Empire -- will always be a reluctant
ruler of other peoples. 

But reluctance isn't the same as renunciation. And the
obvious lesson the United States can draw from the British
experience of formal empire is that the world's most
successful economy can do a very great deal to impose its
preferred values on less technologically advanced
societies. It is nothing short of astonishing that Great
Britain was able to govern about a quarter of the world's
population and land surface -- and to control nearly all of
its sea lanes -- without running up an especially large
defense bill (an average of just 3 percent of net national
product between 1870 and 1913, lower for the rest of the
19th century). And today the United States is vastly
wealthier relative to the rest of the world than Britain
ever was. In 1913, Britain's share of total world output
was a shade over 8 percent; the equivalent figure for the
United States in 1998 was just under 22 percent. Nor should
anybody pretend that, at least in fiscal terms, the cost of
expanding the American empire -- even if it meant a great
many little wars like the one in Afghanistan -- would be
prohibitive. Last year, American defense spending stood at
just 2.9 percent of G.D.P., compared with an average for
the years 1948-98 of 6.8 percent. 


I have not yet raised one trend, much commented on -- the
supposedly inescapable ''clash'' between a democratic West
and an intolerant Islam. From this viewpoint, Sept. 11 was
a moment of revelation rather than redirection, as America
belatedly woke up to a struggle the Muslim world has been
fighting for years. I don't buy this. 

Primarily that's because the most striking features of
modern Islam are its amazing heterogeneity and geographical
dispersion. Violence between ethnic or religious groups is
not dividing the world into great blocs. As we have already
seen in the Balkans (where we were inclined to side with
the Muslims, don't forget), the tendency is for existing
political units to fragment. So any clash of civilizations
will occur not on conventional battlefields but in the
streets of multicultural states like Bosnia -- or even
cities like Bradford in England, where gangs of Muslim
youths rioted last summer. 

Think of it as deglobalization: for one of the great
paradoxes of our time is that the economic integration of
the world has coincided with its political disintegration.
Excluding sub-Saharan Africa, there were 64 independent
countries in the world in 1871. Forty-three years later, on
the eve of World War I, imperialism had reduced the number
to 59. But since World War II, there have been sustained
increases. In 1946, there were 74 independent countries; in
1950, 89. By 1995, the number was 192. 

In this context, the main significance of movements like
Islamic fundamentalism may lie in their centrifugal as
opposed to centripetal effects. Rather than anticipating a
clash between monolithic civilizations, we should expect a
continued process of political disintegration as religious
and ethnic conflicts challenge the integrity of existing
multicultural nation-states. Civil war has, after all, been
the most frequent kind of war since 1945: something like
two-thirds of all postwar conflicts have been within rather
than between states. From Yugoslavia to Iraq to
Afghanistan, what the United States keeps having to
confront is not a united Islam but a succession of
fractured polities, racked by internecine war. (The same
could be said about Somalia, Sierra Leone and Rwanda.) 

Why has economic globalization coincided with political
fragmentation in this contradictory fashion? One possible
answer is that globalized market forces increase regional
inequalities within traditional nation-states. Another is
that the superficial homogenization of popular culture --
through Hollywood, the pop-music industry and the
Anglicization of technical communication -- promotes an
accentuation of parochial identities as a kind of a
reaction. But the best answer may be that as more and more
ethnically heterogeneous countries adopt (with American
encouragement) the combination of economic openness and
political democracy, their rationale simply falls away.
Central government loses its legitimacy as the planner of
the economy, and ethnic minorities vote for separatist
parties. 


These, then, are the four deep trends shaping the early
21st century. First, the globalization of terrorism.
Second, the approach of a second energy crisis. Third, the
formalization of American imperialism. And finally, the
fragmentation of the multicultural polity. 

What are the implications for the world of Sept. 11, 2011?
With the caveat that this is only one of a number of
possible futures, let me repeat my earlier predictions.
Terrorism will be a part of everyday life. Meanwhile,
American troops will be patrolling both Kabul and Kosovo.
And the divisions between ethnic and religious groups in
the United States -- indeed throughout the world -- will be
even more pronounced. So much for the bad news. The good
news? There will be fewer S.U.V.'s clogging up the streets.


Let me conclude with a fifth prediction. Most people will
regard all of these things as direct consequences of the
terrorist attacks 10 years before. Indeed, The New York
Times Magazine will carry an article saying that Sept. 11,
2001, was one of the great turning points of modern
history. 

Wrong. The unpalatable truth is that it would all have
happened anyway. 



Niall Ferguson is a professor of political and financial
history at the University of Oxford. He is the author of
''The Cash Nexus'' and a contributor to ''The Age of
Terror,'' to be published this month by Basic Books.

http://www.nytimes.com/2001/12/02/magazine/02TENYEARS.html?ex=1008229814&ei=1&en=79ab4f87b181d547



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