For decades, Europe has served as a steward of the post-war liberal order, ensuring that economic rules are enforced and that national ambitions are subordinated to shared goals within multilateral bodies. But with the United States and China increasingly mixing economics with nationalist foreign-policy agendas, Europe will have to adapt.
PARIS – Imperialism, Lenin wrote a century ago, is defined by five key features: the concentration of production; the merging of financial and industrial capital; exports of capital; transnational cartels; and the territorial division of the world among capitalist powers. Until recently, only dyed-in-the-wool Bolsheviks still found that definition relevant. Not anymore: Lenin’s characterization seems increasingly accurate.
A few years ago, globalization was assumed to dilute market power and stimulate competition. And it was hoped that greater economic interdependence would prevent international conflict. If there were early-twentieth-century authors to refer to, they were Joseph Schumpeter, the economist who identified “creative destruction” as a driving force of progress, and the British statesman Norman Angell, who argued that economic interdependence had made militarism obsolete. Yet we have entered a world of economic monopolies and geopolitical rivalry.
The first problem is epitomized by the US tech giants, but it is in fact widespread. According to the OECD, market concentration has increased across a range of sectors, in the US as well as in Europe; and China is creating ever-larger state-backed national champions. As for geopolitics, the US seems to have abandoned the hope that China’s integration into the global economy would lead to its political convergence with the established liberal Western order. As US Vice President Mike Pence crudely put it in an October 2018 speech, America now regards China as a strategic rival in a new age of “great-power competition.”
PARIS – Imperialism, Lenin wrote a century ago, is defined by five key features: the concentration of production; the merging of financial and industrial capital; exports of capital; transnational cartels; and the territorial division of the world among capitalist powers. Until recently, only dyed-in-the-wool Bolsheviks still found that definition relevant. Not anymore: Lenin’s characterization seems increasingly accurate.
A few years ago, globalization was assumed to dilute market power and stimulate competition. And it was hoped that greater economic interdependence would prevent international conflict. If there were early-twentieth-century authors to refer to, they were Joseph Schumpeter, the economist who identified “creative destruction” as a driving force of progress, and the British statesman Norman Angell, who argued that economic interdependence had made militarism obsolete. Yet we have entered a world of economic monopolies and geopolitical rivalry.
The first problem is epitomized by the US tech giants, but it is in fact widespread. According to the OECD, market concentration has increased across a range of sectors, in the US as well as in Europe; and China is creating ever-larger state-backed national champions. As for geopolitics, the US seems to have abandoned the hope that China’s integration into the global economy would lead to its political convergence with the established liberal Western order. As US Vice President Mike Pence crudely put it in an October 2018 speech, America now regards China as a strategic rival in a new age of “great-power competition.”