The End of The New World Order
Culture shock... the collapse of
Lehman Brothers ushered in the deepest
economic crisis since the 1930s.
Photograph: Linda Nylind for the Guardian
The end of the New World Order
The upheavals of the early 21st century have changed our world. Now,
in the aftermath of failed wars and economic disasters, pressure for a
social alternative can only grow
The Guardian, Friday 19 October 2012 13.00 EDT
In the late summer of 2008, two events in quick succession signalled the
end of the New World Order. In August, the US client state of Georgia
was crushed in a brief but bloody war after it attacked Russian troops
in the contested territory of South Ossetia.
The former Soviet republic was a favourite of Washington's
neoconservatives. Its authoritarian president had been lobbying hard for
Georgia to join Nato's eastward expansion. In an unblinking inversion
of reality, US vice-president Dick Cheney denounced Russia's response as
an act of "aggression" that "must not go unanswered". Fresh from
unleashing a catastrophic war on Iraq, George Bush declared Russia's
"invasion of a sovereign state" to be "unacceptable in the 21st
As the fighting ended, Bush warned Russia not to recognise South
Ossetia's independence. Russia did exactly that, while US warships were
reduced to sailing around the Black Sea. The conflict marked an
international turning point. The US's bluff had been called, its
military sway undermined by the war on terror, Iraq and Afghanistan.
After two decades during which it bestrode the world like a colossus,
the years of uncontested US power were over.
Three weeks later, a second, still more far-reaching event threatened
the heart of the US-dominated global financial system. On 15 September,
the credit crisis finally erupted in the collapse of America's
fourth-largest investment bank. The bankruptcy of Lehman Brothers
engulfed the western world in its deepest economic crisis since the
The first decade of the 21st century shook the international order,
turning the received wisdom of the global elites on its head – and 2008
was its watershed. With the end of the cold war, the great political and
economic questions had all been settled, we were told. Liberal
democracy and free-market capitalism had triumphed. Socialism had been
consigned to history. Political controversy would now be confined to
culture wars and tax-and-spend trade-offs.
In 1990, George Bush Senior had inaugurated a New World Order, based
on uncontested US military supremacy and western economic dominance.
This was to be a unipolar world without rivals. Regional powers would
bend the knee to the new worldwide imperium. History itself, it was said, had come to an end.
But between the attack on the Twin Towers and the fall of Lehman Brothers, that global order had crumbled. Two
factors were crucial. By the end of a decade of continuous warfare, the
US had succeeded in exposing the limits, rather than the extent, of its
military power. And the neoliberal capitalist model that had reigned
supreme for a generation had crashed.
It was the reaction of the US to 9/11 that broke the sense of
invincibility of the world's first truly global empire. The Bush
administration's wildly miscalculated response turned the atrocities in
New York and Washington into the most successful terror attack in
Not only did Bush's war fail on its own terms, spawning terrorists
across the world, while its campaign of killings, torture and kidnapping
discredited Western claims to be guardians of human rights. But the
US-British invasions of Afghanistan and Iraq revealed the inability of
the global behemoth to impose its will on subject peoples prepared to
fight back. That became a strategic defeat for the US and its closest
This passing of the unipolar moment was the first of four decisive
changes that transformed the world – in some crucial ways for the
better. The second was the fallout from the crash of 2008 and the crisis
of the western-dominated capitalist order it unleashed, speeding up
relative US decline.
This was a crisis made in America and deepened by the vast cost of its
multiple wars. And its most devastating impact was on those economies
whose elites had bought most enthusiastically into the neoliberal
orthodoxy of deregulated financial markets and unfettered corporate
A voracious model of capitalism forced down the throats of the world as
the only way to run a modern economy, at a cost of ballooning inequality
and environmental degradation, had been discredited – and only rescued
from collapse by the greatest state intervention in history. The baleful
twins of neoconservatism and neoliberalism had been tried and tested to
The failure of both accelerated the rise of China, the third
epoch-making change of the early 21st century. Not only did the
country's dramatic growth take hundreds of millions out of poverty, but
its state-driven investment model rode out the west's slump, making a
mockery of market orthodoxy and creating a new centre of global power.
That increased the freedom of manoeuvre for smaller states.
China's rise widened the space for the tide of progressive change
that swept Latin America – the fourth global advance. Across the
continent, socialist and social-democratic governments were propelled to
power, attacking economic and racial injustice, building regional
independence and taking back resources from corporate control. Two
decades after we had been assured there could be no alternatives to
neoliberal capitalism, Latin Americans were creating them.
These momentous changes came, of course, with huge costs and
qualifications. The US will remain the overwhelmingly dominant military
power for the foreseeable future; its partial defeats in Iraq and
Afghanistan were paid for in death and destruction on a colossal scale;
and multipolarity brings its own risks of conflict. The neoliberal model was discredited, but governments tried to refloat it through savage austerity programmes. China's
success was bought at a high price in inequality, civil rights and
environmental destruction. And Latin America's US-backed elites remained
determined to reverse the social gains, as they succeeded in doing by
violent coup in Honduras in 2009. Such contradictions also beset the
revolutionary upheaval that engulfed the Arab world in 2010-11, sparking
another shift of global proportions.
By then, Bush's war on terror had become such an embarrassment that
the US government had to change its name to "overseas contingency
operations". Iraq was almost universally acknowledged to have been a
disaster, Afghanistan a doomed undertaking. But such chastened realism
couldn't be further from how these campaigns were regarded in the
western mainstream when they were first unleashed.
To return to what was routinely said by British and US politicians and
their tame pundits in the aftermath of 9/11 is to be transported into a
parallel universe of toxic fantasy. Every effort was made to discredit
those who rejected the case for invasion and occupation – and would
before long be comprehensively vindicated.
Michael Gove, now a Tory cabinet minister, poured vitriol on the
Guardian for publishing a full debate on the attacks, denouncing it as a
"Prada-Meinhof gang" of "fifth columnists". Rupert Murdoch's Sun damned
those warning against war as "anti-American propagandists of the
fascist left". When the Taliban regime was overthrown, Blair issued a
triumphant condemnation of those (myself included) who had opposed the
invasion of Afghanistan and war on terror. We had, he declared, "proved
to be wrong".
A decade later, few could still doubt that it was Blair's government
that had "proved to be wrong", with catastrophic consequences. The US
and its allies would fail to subdue Afghanistan, critics predicted. The
war on terror would itself spread terrorism. Ripping up civil rights
would have dire consequences – and an occupation of Iraq would be a
The war party's "experts", such as the former "viceroy of Bosnia" Paddy
Ashdown, derided warnings that invading Afghanistan would lead to a
"long-drawn-out guerrilla campaign" as "fanciful". More than 10 years
on, armed resistance was stronger than ever and the war had become the
longest in American history.
It was a similar story in Iraq – though opposition had by then been
given voice by millions on the streets. Those who stood against the
invasion were still accused of being "appeasers". US defence secretary
Donald Rumsfeld predicted the war would last six days. Most of the
Anglo-American media expected resistance to collapse in short order.
They were entirely wrong.
A new colonial-style occupation of Iraq would, I wrote in the first week
of invasion, "face determined guerrilla resistance long after Saddam
Hussein has gone" and the occupiers "be driven out". British troops did
indeed face unrelenting attacks until they were forced out in 2009, as
did US regular troops until they were withdrawn in 2011.
But it wasn't just on the war on terror that opponents of the New World
Order were shown to be right and its cheerleaders to be talking
calamitous nonsense. For 30 years, the west's elites insisted that only
deregulated markets, privatisation and low taxes on the wealthy could
deliver growth and prosperity.
Long before 2008, the "free market" model had been under fierce attack:
neoliberalism was handing power to unaccountable banks and corporations,
anti-corporate globalisation campaigners argued, fuelling poverty and
social injustice and eviscerating democracy – and was both economically
and ecologically unsustainable.
In contrast to New Labour politicians who claimed "boom and bust" to be a
thing of the past, critics dismissed the idea that the capitalist trade
cycle could be abolished as absurd. Deregulation, financialisation and
the reckless promotion of debt-fuelled speculation would, in fact, lead
The large majority of economists who predicted that the neoliberal model
was heading for breakdown were, of course, on the left. So while in
Britain the main political parties all backed "light-touch regulation"
of finance, its opponents had long argued that City liberalisation
threatened the wider economy.
Critics warned that privatising public services would cost more, drive
down pay and conditions and fuel corruption. Which is exactly what
happened. And in the European Union, where corporate privilege and
market orthodoxy were embedded into treaty, the result was ruinous. The
combination of liberalised banking with an undemocratic, lopsided and
deflationary currency union that critics (on both left and right in this
case) had always argued risked breaking apart was a disaster waiting to
happen. The crash then provided the trigger.
The case against neoliberal capitalism had been overwhelmingly made on
the left, as had opposition to the US-led wars of invasion and
occupation. But it was strikingly slow to capitalise on its vindication
over the central controversies of the era. Hardly surprising, perhaps,
given the loss of confidence that flowed from the left's 20th-century
defeats – including in its own social alternatives.
But driving home the lessons of these disasters was essential if they
were not to be repeated. Even after Iraq and Afghanistan, the war on
terror was pursued in civilian-slaughtering drone attacks from Pakistan
to Somalia. The western powers played the decisive role in the overthrow
of the Libyan regime – acting in the name of protecting civilians, who
then died in their thousands in a Nato-escalated civil war, while
conflict-wracked Syria was threatened with intervention and Iran with
And while neoliberalism had been discredited, western governments used
the crisis to try to entrench it. Not only were jobs, pay and benefits
cut as never before, but privatisation was extended still further. Being
right was, of course, never going to be enough. What was needed was
political and social pressure strong enough to turn the tables of power.
Revulsion against a discredited elite and its failed social and economic
project steadily deepened after 2008. As the burden of the crisis was
loaded on to the majority, the spread of protests, strikes and electoral
upheavals demonstrated that pressure for real change had only just
begun. Rejection of corporate power and greed had become the common
sense of the age.
The historian Eric Hobsbawm described the crash of 2008 as a "sort of
right-wing equivalent to the fall of the Berlin wall". It was commonly
objected that after the implosion of communism and traditional social
democracy, the left had no systemic alternative to offer. But no model
ever came pre-cooked. All of them, from Soviet power and the Keynesian
welfare state to Thatcherite-Reaganite neoliberalism, grew out of
ideologically driven improvisation in specific historical circumstances.
The same would be true in the aftermath of the crisis of the neoliberal
order, as the need to reconstruct a broken economy on a more democratic,
egalitarian and rational basis began to dictate the shape of a
sustainable alternative. Both the economic and ecological crisis
demanded social ownership, public intervention and a shift of wealth and
power. Real life was pushing in the direction of progressive solutions.
The upheavals of the first years of the 21st century opened up the
possibility of a new kind of global order, and of genuine social and
economic change. As communists learned in 1989, and the champions of
capitalism discovered 20 years later, nothing is ever settled.
This is an edited extract from The Revenge of History: the Battle for
the 21st Century by Seumas Milne, published by Verso. Buy it for £16 at
Thanks to: http://americankabuki.blogspot.com