Saturday, April 30, 2011

The Libyan War, American Power and the Decline of the Petrodollar System

The confusion in Washington, matched by the absence of discussion of an overriding strategic motive for American involvement, is symptomatic of the fact that the American century is ending, and ending in a way that is both predictable in the long run, and simultaneously erratic and out of control in its details.

I conclude from all this confusion and misrepresentation that America is losing its ability to enforce and maintain peace, either by itself or with its nominal allies. I would submit that, if only to stabilize and reduce oil prices, it is in America’s best interest now to join with Ban Ki-Moon and the Pope in pressing for an immediate cease-fire in Libya. Negotiating a cease-fire will certainly present problems, but the probable alternative to ending this conflict is the nightmare of watching it inexorably escalate.America has been there before with tragic consequences. We do not want to see similar casualties incurred for the sake of anunjust petrodollar system whose days may be numbered anyway.

At stake is not just America’s relation to Libya, but to China. The whole of Africa is an area where the west and the BRIC countries will both be investing. A resource-hungry China alone is expected to invest on a scale of $50 billion a year by 2015, a figure (funded by America’s trade deficit with China) which the West cannot match.27 Whether east and west can coexist peacefully in Africa in the future will depend on the west’s learning to accept a gradual diminution of its influence there, without resorting to deceitful stratagems (reminiscent of the Anglo-French Suez stratagem of 1956) in order to maintain it.

Previous transitions of global dominance have been marked by wars, by revolutions, or by both together. The final emergence through two World Wars of American hegemony over British hegemony was a transition between two powers that were essentially allied, and culturally close. The whole world has an immense stake in ensuring that the difficult transition to a post-US hegemonic order will be achieved as peacefully as possible.