Thursday, May 3, 2012

Winners and Losers in a Superpower-less World

What will the world look like without a single superpower setting the rules? That's the question that Ian Bremmer, the political risk expert, tries to answer in his new book, "Every Nation for Itself". Bremmer's focus is as much on politics as economics, but I think he has some useful insights about our future prosperity.

For starters, he has excellent timing for a book about the global power vacuum. One of the biggest lessons from the recent financial crisis was that no country had the economic formula exactly right. Attempts at unfettered capitalism ran into problems just as attempts at pure socialism did. That the world knows this is already a big change from the Cold War, where the two economic systems competed to prove their superiority. It's even a big change from the immediate post-Cold-War era, when capitalism's victory seemed complete.

In Bremmer's previous book, "The End of the Free Market", he identified state capitalism of the kind practiced in China, Saudi Arabia, and many other countries as the next great competitor among economic systems. But in "Every Nation for Itself", Bremmer sees an absence of global leadership as the balance of political power and economic might diffuses around the world. Now, nations are freer to choose their own way, mixing and matching pieces of economic systems to fit their interests - or at least their leaders' interests.

This flattening of the global power structure, paired with the disappearance of superpowers pushing economic systems backed by opposing ideologies, truly has left every nation to fight for itself. As a result, Bremmer says, forming coalitions to address problems such as climate change will be especially difficult. When these problems get out of hand, new conflicts may occur, raising the cost of doing business around the world. More