US leaders, policymakers, journalists and academics seem to be suffering from collective dementia on their understanding of how the US became the leader of a new world order.
There seems to be a collective and misguided belief that the United States is regarded as a global superpower and leader in the post-World War II scenario because of the size of its economy and military and its strategic and technological capabilities. However, it is actually the United States’ responses to underwriting global public goods and its ability and willingness to lead and realize a global response to any crisis that has made it a global leader for the last 75 years.
However, the Covid-19 pandemic is evidence that US global leadership is in crisis. Leadership is tested by emergencies, and friends and allies are the most instrumental factors at the time of a crisis. President Donald Trump’s “America First” policy is leading toward undermining the country’s leadership position in the world and damaging its reputation among its friends and allies.
Although the US is still a superpower in hard-power terms, it has lost its soft power because it failed to assure the world it is doing all it can do to combat the pandemic.
As the pandemic emerged, it was the responsibility of the president of the United States to lead the response at home and abroad, and repeat what its previous leaderships had done. Instead, Trump issued mocking tweets calling the coronavirus that causes Covid-19 a “Chinese virus.” His secretary of state, Mike Pompeo, often calls it the “Wuhan virus.”
The lack of acknowledgment by American leaders and strategists of China’s rise won’t work, now or in the future. Taking responsibility as global leaders will work. A leader’s greatness reflects on how effectively and wisely he or she takes on responsibilities, not during normalcy but when emergencies occur.
Americans should be mindful of how British Prime Minister Winston Churchill made the US leadership aware of its responsibilities and how the Americans then realized and acknowledged their responsibilities. As a result, the US became a global leader during World War II.
While accepting an honorary degree in law, Churchill delivered a thought-provoking speech at Harvard University on September 6, 1943. The address later became famous in the English-speaking world for the adage “The price of greatness is responsibility.”
Churchill delivered the speech to urge president Franklin Delano Roosevelt to end US isolationism and its reluctance to take on the threat posed by Adolf Hitler to the old world order, and thus to play a more significant role in making a new world order a reality. Until December 7, 1941, the US had not been involved in World War II but was forced on that date to engage in the war in the Pacific after Japan bombed Pearl Harbor. Until then, the US involvement had been limited to training British and French soldiers.
Historians believed that Churchill’s speech framed the current global world order. Amid World War II, Churchill reckoned that Britain was no longer able to bear all responsibility as the global leader in the old world order. He thought there should be a partner to reshape the global order.
As Churchill envisaged, the Bretton Woods Agreement was negotiated by delegates from 44 Allied countries from July 1-22, 1944, to establish a new international monetary system. Under the resultant Bretton Woods System, gold was the basis for the value of the US dollar, and other currencies were pegged to the dollar’s value. The critical designers of the Bretton Woods System were British economist John Maynard Keynes and an economist at the US Treasury Department, Harry Dexter White.
Keynes had a plan to establish a powerful global central bank to be called the “Clearing Union.” He envisaged that it would issue a new international reserve currency called the Bancor. On the other hand, White wanted to establish a more significant role for the US dollar instead of creating a new currency, and a modest lending fund for the reconstruction and development of Europe.
Finally, the conference adopted both ideas but leaned more toward White’s designs. This led to the establishment of the gold-based exchange-rate regime, the World Bank and the International Monetary Fund, two key pillars of global governance for development financing and stabilizing exchange rates in the world.
Although the Bretton Woods System in effect came to an end in 1971 when president Richard Nixon announced that the US would no longer exchange gold for US currency in the aftermath of an oil crisis that had triggered stagflation (a condition of slow economic growth and relatively high unemployment, or economic stagnation, accompanied by rising inflation) in the US, the dollar plays a pivotal role in sustaining US leadership in global governance.
The US negotiated a bilateral agreement with Saudi Arabia in 1974 and successfully managed to influence members of the Organization of the Petroleum Exporting Countries (OPEC) to regulate the value of oil sales in US dollars in the aftermath of the gold-exchange-rate regime. Saudi Arabia and other Arab states secured US influence in the Israeli-Palestinian conflict in return for invoicing oil in dollar denominations. In this way, the petrodollar system was born, and this has sustained US political and economic hegemony globally. The US financial system has since benefited from the recycling of the petrodollar.
In the same way, the United Nations was established in 1945 under the leadership of the US and the Allied Powers. The UN is an essential institution in the current global governance system for which the US has been providing not only finances, but also prompt responses to the many crises in the world.
It is my personal belief that Churchill’s address at Harvard was an official handover of global leadership from Britain to the US. It was also a graceful handover of global leadership, though it is also supposed that British global leadership ended in 1956 after a bungled intervention in the Suez Canal by the British.
However, American leaders, strategists, policymakers, journalists and academics have not been able to accept the recent rise of China, and they are hesitant to accept the Chinese role in reshaping the world order in the future. On the other hand, Chinese President Xi Jinping seems to have acted as a responsible global leader by promptly responding to the Covid-19 crisis and offered medical help to NATO allies and European countries as well as poor and developing countries.
Churchill did not mean his statement that “the price of greatness is responsibility” to be mere rhetoric – it was part of his opposition to US isolationism and reluctance to engage the Axis powers during World War II. He was trying to make US leadership mindful that a nation as great as the United States in terms of its tremendous economic clout, the advancement of its military, air and naval capability, along with scientific, technological and educational progress could not ignore the threat created by the Nazis on the other side of the Atlantic.
If a nation is great in terms of economic wealth, technology, military, scientific, educational, values and norms or by any other means, it should use its greatness responsively, rationally and wisely to benefit the poor, less great and less advantaged nations. But “America First” has resulted in the US undermining its position as a global leader in the present and also in the future. It is in stark contrast to American history and values.
American leaders need to revisit the lessons of Churchill and their predecessors throughout history, and the US should join hands with China to combat this global crisis now, and should do the same with other crises in the future.