Outlook The Global Gamble:
Washington's Faustian Bid for World Dominance, by Peter Gowan. Verso £13. Reviewed by Andy Kilmister caders of journals such Focus Left Reviero will amiliar Peter writings iciations between Eastern and Western Europe over the last decade In particular, issue 62 of Labour Focus devoted to a detailed account by of the background to the NATO war against Yugoslavia which drew heavily and on empirical studies developed over a number of years.
The Global Gamble sets out that framework in its first half, and uses it to analyse the global strategy of the United States government Reagan, Bush and Clinton presidencies. The second half of the book reprints a number published articles reinforce and apply the developed carlier. emphasis here is predominantiy on Eastern Europe, though there is also a critique of the analysis provided of the Gulf War and of modern Iraq by Western liberals.
Gowan's account is wide-ranging great deal of empir ical evidence. However, the core of his argument very powerful. It is that the central political and driving is cuphemistically termed 'globalisation' over the ast twenty-nive years has been a attempt the United States and entrench its global hegemony.
This hegemony was dramatically 1 by the events leading up to the devaluation of the dollar and the breakdown of the 1944 Bretton Woods system of fixed exchange rates between 1971 and 1973.
Faced challenges at this point from both European capitalism, especially West C Germany, and com japan, and later from East and has responded by inaugurating listinctive international financia regime, the *Dollar-Wall Street Regime' (DWSR).
This has provided the basis for a reassertion of United States economic power, basco crucially on using the opportunities provided down the value of the dollar and on opening up global financial markets in order to provide flows of money which have financed the American government budget deficit and balance of payments deficit.
The most detailed description of this process deals with the sophisticated and aggressive international Clinton administration, and in particular with the response of the USA to the Asian economic crisis of 1997, focusing on South Korea. Gowan's work joins a number of recent accounts written from the left which have reasserted the tion as fundamental to explaining current social upheavals. Notable are Robert Brenner's analysis published by New Left Review last rear (Brenner 1998). his sees the long period of global economic stagnation after 1973 as resulting A series of writings by Robert Wade and Frank Veneroso have highlighted the role of what they refer the 'Wall Streetreasury-M Complex' in exacer bating the economic crisis in Asia Clinton: is he working to a plan for US domination? (Wade and Veneroso 1998).
From a more mainstream ner. spective, the most thorough recent study of the exchange rate between the ven and the dollar sees the risc as the yen both as caused mainly by mercantile pressure from the USA problems of the Japanese economy n the 1990s (McKinnon and Ohno 1997).
This book should thus be T seen in the context of a relations between international economic competition and political strategies However, it is also distinctive in a number of ways. Gowan brings to sense of the political intricacies of relationships between states ing the central importance of particular key crises the Gulf war, the currency crisis in South Korea, the war over Kosovo - - in concentrating identified and resolving the terms on which they will be manUS imperialism Waged following a criHis specific knowledge of Eastern Europe enables him to show in great detail how the cucial strategies and flicts he identifies work ciscises out in a particular case. Last but not least, the real passion and this in turn makes it grip. ping for the reader. There are however a number relating to Gowan's argument which tigation. Three closely linked quesGOnS appear especially They degree to which the United States been SUCCESSIE establishing hegemony, the extent which its strategy for doing so has and the relation of inter-state competiconflicts, that between and labour. I shall look at these in turn. key 13SU6 analysing global inter-capitalist comextent to which the *Dollar-Wall Street Regime' (DWSR) has actually succeeded in economic Gowan's introduction or te concept tenas to stress the control over the world economy which the USA has achieved:
"Since the 1970s, the arrange. ments set in motion by the Nixon 40801494068006 a patterned international regime which has constantly reproduced effects on transnational economic. political and social life and which has been available for use by successive American administrations ment of their economic statecraft." (p.S)
Further. when discussing deregulation of international financial markets in the 1970s, he writes we shall see below how these pro cesses actually strengthen the political power and economic policy freedom of the US" (p.23).
Yet later in the anaissis Gowar highlights the continuing threats faced by the USA despite the porary successes of the DWSR, notably the "financial-monetary the develon ment of the euro and the "new productive centre threat" posed by Japanese and other East and South East Asian cconomies (pp. 73-6).
rie shows viviasy now Japanese attempts to take the lead in dealing through an Asian Monetary Fund were headed off by the USA and the aggressive attempts by the United States to use the crisis in South norca to reshape toe Aorcan cconory.
But, as Gowan points out, these attempts were to a considerable degree unsuccessful. Faced with a dramatic fall in the value of the Indonesian rupiah and the threat of a default by South Korca on its pridebt, the US Treasury and the IMF were forced to agree 38088880 South Korea without the domestic Treasury's climh down in fact, a stunning defeat" (p.113)
It is of course true. as Gowan savs. that US companies have been able to buy up South Korean companies cheaply as a result of the crisis, but Japanese companies, thereby intensifying possible future rivalries between the US and Japan.
The DWSR has also, according to Gowan, had detrimental effects on the domestic United States economy: "the DWSK had offered a was out from the hard, domestic task of raising productivity levels and savings and productive investment in the US cconomy" d (p.118)
As a result by 1998 the US coonomy was inflated by very large and ocially all-pervasive distortions: he stock exchange despite the falls in 1998, remains ine central intarca Duboie (p.19) This The edented expansion of per bubble is fuelled sonal and household debt, so that "the entire US cconomy now locked into the bubble" (p.119). It is clear then, that if the DWSR has worked to strengthen US hegemony, this is a very particular kind of hegemony. which remains immensely vulnerable, at least in terms of its economic basis.
M ore fundamentally, it is not entirely clear just how the DWSR works to entrench this hegemony. The DWSK appears to have three mait components, according to Gowan -foating exchange rates, an internatonal role for the dollar and derceulated international financial markets. The second of these arcady existco unace the preccaing Bretton Woods system. Gowan lays some stress on "dollar seigniorage" (pp.25-6), the ability of the USA to evade any constraint result of the acceptability of the dollar as an international currency. Ter this neia coually for toe Bretton Woods system, with the added problem for America's trading partthat, with nixed exchange rates, if the USA printed dollars to Pay 888959 this simply exported" inflation to them.
With floating exchange rates, any attempt to exploit seigniorage to finance an import boom will either drive the value of the dollar down by increasing its supply, or will require a corresponding ncrease in foreign lending to the USA to soak up the newly created dollars. A constantly depreciating currency or a rising level of foreign debt are both surely an expression of US economic weakness rather than It is here that the other two clements of the DWSR come into play. While for Brenner it is the ability of the US to push down the value with Germany and Japan, which is crucial, for Gowan the key effect of floating exchange rates is increased It is this volatility which has led to ine massive growin of the inter national financial markets and of Wall Street, particularly in the area of derivatives.
Coupled international financial deregulaled to a succession of financial crises across the glohe which in turn have further entrenched US financial dominance as capital flows back to "One of the paradoxes of the DWSR is that such financial crises in the South do not weaken the regime: they actually strengthen it. funds tend to flee from private wealth-holders in the state cerned into Wall Street" (p.35).
They also entrench US political of the IMF in reshaping social relations in the countries concerned.
as onster able force. Yet exchange rate volatility has also brought considerable probThe long-term downward trend in the dollar relaand the mark has after all, reduced the wealth of the USA compared to its main eco. nomic rivals, though it has also made American exports more comThe sharp rise in the dollar, however, in the carly 1980s, based in as Gowan points out, fundamentally increase the dependence of the North, through the mechanism of debt. However, it also had a dratrial competitiveness, leading to the up of a balance of payments deficit which persists to this day. There is some uncertainty Gowan's account as to the extent to which the developments which he outlines have actually been planned by the USA. There is no doubt, as