In the era past World War II, America established itself as one of two superpower nations. With the Soviet Union providing counterbalancing power, America waged a diplomatic war (Cold War) to assert and spread its ideological content. This ideological confrontation manifested in two forms: 1. between communism and liberal democracy, 2. between socialism and capitalism. The former belong in the realm of political systems while the latter belong to the realm of economic organization. But even while balance of power existed between the two superpowers, American ideological imposition on the global stage was gaining ground. By the start of 1970s, currents of change were detected in the global economic order, with nationalism and protectionism being replaced by neo-liberalism and free flow of capital. Even as American elites promoted this new economic order, the process was facilitated by respective participant elites from nations across the world. The irony lies in the fact that communist China was at the forefront of the global neo-liberal program, despite claiming its socialist credentials. If the ideological gates of the authoritarian and highly protectionist China could be broken open for free-market capitalism, then it was only a matter of time and strategy before other power bastions of the world are broken through. And this is precisely what had happened. With the collapse of the Soviet Union in the late 1980s and the shift in policy framework of several developing countries, the nature and complexion of geo-economics has taken a different form. Needless to say, America’s position as the sole superpower has been strengthened by this change. The unsavory aspects of this sweeping change include “the appearance of a nearly feral form of entrepreneurship in which black marketers, drug barons, arms merchants, rackets bosses, Mafiosi, and other profiteers are emerging as the economic and political leaders of the social transformations underway in their respective societies.” (Buchanan, 2000, p.1) Before embarking on answering the essay question, understanding what neo-liberal globalization truly entails:
“Globalization is a short form for a cluster of related changes.(1) Economic changes include the internationalization of production, the harmonization of tastes and standards and the greatly increased mobility of capital and of transnational corporations (henceforth “transnationals”). Ideological changes emphasize investment and trade liberalization, deregulation and private enterprise. New information and communications technologies that shrink the globe signal a shift from goods to services. Finally, cultural changes involve trends toward a universal world culture and the erosion of the nation-state.” (Laxer, 1995, p.287)
What is more relevant to this essay, though, is the mode and manner in which this grand transformation in global economics was brought about. It was not as if that different regimes across the world saw the merits of neo-liberal capitalism and assented to join in the party. The truth is much more complex and far less pretty that what propaganda has projected. It is reasonable to say that American military might had been the primary factor in bringing about this transformation. Either the threat of forceful action or direct military involvement has been a coercive factor in the global economic order (the ongoing occupation of Iraq is a prominent recent example). (Grondin, 2005, p.228) There is also the interests of regional elites, who saw the benefits of aligning with the mighty at the cost of disregarding democratic considerations. Now into its fourth decade, neo-liberal capitalism seems to have strongly entrenched, and it is difficult to see how its march could be stopped. It is in this context that the topic question of this essay has to be pondered upon.
The essay topic can be broken down into two components. First, we need to ask if neo-liberal capitalism at the global stage should be accepted without question or challenge. Second, we need to ask if American hegemony (in political and economic realms) is of any good; if so, for whom? And finally, we can synthesize and answer the whole question, namely, “Do we need American hegemony in the global economic system to build and maintain the liberal global capitalist economic order? The rest of this is an endeavor to answer these questions.
One of the points often raised against neo-liberal capitalism is its affect on workers and consumers. Some believe that under this system, workers become helpless pawns of their capitalist masters, compelled to sell their labor power at sub-optimal costs. The only theoretical alternative they have to evading this exploitation is to become destitute, which is a far greater misery. Multi-national corporations (MNCs), which are the facade of the liberal economy are perceived as coercing citizens to unwillingly participate in the capitalist market system, while also leaving consumers with no choice but to buy their products. In the book titled Telling the Truth about History, author Joyce Appleby traces how MNCs came to be the dominant institutions of our age. Here, the author makes some scathing observations about the nature of capitalist enterprise:
“One of the distinguishing features of a free-enterprise economy is that its coercion is veiled. . . . The fact that people must earn before they can eat is a commonly recognized connection between need and work, but it presents itself as a natural link embedded in the necessity of eating rather than as arising from a particular arrangement for distributing food through market exchanges….” (Joyce as quoted in Levite, 2002, p.32)