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Harold James: Recession Geopolitics

[Harold James is Professor of History and International Affairs at Princeton University and Marie Curie Professor of History at the European University Institute, Florence. His most recent book is The Creation and Destruction of Value: The Globalization Cycle.]

The news that China has overtaken Japan as the world’s second largest economy did not come as a surprise. This is the major geo-political outcome of the Great Recession of the early twenty-first century – one that carries both economic hope and political fear.

First, the good news: the economic side of the case. China’s response of to the world economic crisis is the central reason why the financial turbulence that emanated from the US sub-prime debacle did not completely destroy the world economy and lead to a repeat of the 1930’s Great Depression....

The global hegemon [however] has never been loved by its neighbors. But the US gradually, if imperfectly, built up trust through multilateral institutions. Europeans did much better at reconciliation with their neighbors after WWII, in part because the malign and evil conditions of Nazi rule made it necessary to talk about the past in terms of moral categories rather than power politics.

In contrast to America’s engagement in multilateralism, or Europe’s search for reconciliation through a plethora of common institutions, power politics is much more a part of Asia’s twentieth-century legacy. The real challenge for China’s leaders will be to develop a coherent view of the world that does not scare the people just across the border.
Read entire article at Project Syndicate