Many respond to nation states’ failure to cooperate satisfactorily by favouring benign US imperialism over UN ineffectiveness, in a move often cited as neo-conservatism at its most revolutionary. Reluctantly drawn into WWI, the US popularised nation statehood as an alternative to imperialism, which it found as distasteful as communism. The world had always been managed by overt imperialists, like the British, and nation statehood remains a foreign concept to the UK, where four nations have retained their identities despite the absence of their own states. (A common anti-Euro myth is that nationhood requires statehood, yet no state has succeeded in crushing nationalism, short of genocide.)
As Robert Kagan points out, sovereignty of states, a founding principle of the UN, made humanitarian intervention in Kosovo illegal and as Jonathan Lockhart says, it makes international law unenforceable and meaningless.
Anyway. Reluctant covert US imperialism depends on a range of economic structures, not least of which is the dominance of the dollar. Being the world’s reserve currency keeps demand for, and so the value of, the dollar high. But with the US consuming so much more than it produces, and so importing ever more, a trading deficit has emerged that scares the markets. And US policymakers refuse to put them at ease.
A devalued dollar helps the US economy by making imports expensive and so boosting domestic industry. There’s evidence this is helping to bring unemployment under control, but making others worry about the value of the dollars in their reserves.
The Chinese who’ve quietly sold dollars have today told the US to put its house in order, while Russia is considering selling its oil in euro, as Iraq did just before the war. Iran and Saudi Arabia are also considering the move which would almost certainly crash the dollar and see US oil prices soar, while remaining stable in the eurozone and somewhere in between for the UK. If the US policy of ‘benign neglect’ continues to make dollars a bad investment, that could happen surprisingly quickly. But whatever way it happened, the benign imperialism of the neocons would crash with the dollar.
UPDATE: Dollar to crash Monday
Robert Kagan ref, via Harry’s Place……Jonathan Lockhart is the director of policy at the right-wing New Party