The New World Economy

So the G20 met over the weekend, and if there was any doubt before, there should be none now: the financial balance of power is shifting. China, Brazil, even Japan can all claim more sound economies than the United States, and they collectively let it be known that they would no longer take marching orders from the Washington consensus. They expect a voice, and they are not asking permission.

Yet, the leaders of those countries are not blind to the interdependence of the world. However much they may secretly take some pleasure from seeing the United States humbled, they know that the global system demands a stable and strong America for the foreseeable future. They recognize that we are all in this together, that recriminations may provide some satisfaction but do nothing to solve problems.

Yes, it was startling to hear Henry Paulson admit on CNBC that "We have in many ways humiliated ourselves as a nation with some of the problems that have taken place here." One could take that as a positive step, in that acceptance is part of the road towards recovery, or so they say. It was also a symbol that the United States can no longer snap its fingers and expect that the rest of the world will jump and ask how high - not with China holding trillions in U.S. debt, not with Brazil holding reserves in excess of $200 bill, or Saudi Arabia with its billions and Russia to boot. For the first time since the end of World War II, the United States is confronting a world that it needs more than a world that it commands.

In truth, we have always needed the global system, but with overarching power came the temptations of that power, and hubris. We lost sight of the mutual dependence that was the source of so much of our strength, and instead succumbed to the comforting illusion that we could command the heights and lead alone. Now, the rest of the world arrived in Washington to sit next to a lame duck and lamed president and remind him and us with some dignity that the system has gone off the rails and only joint effort will put humpty dumpty back together again.

We will soon have a president who recognizes that leadership is not dictating; it is not being the decider. It is instead a recognition of who we are and what the world now is, a willingness to take responsibility, and to sit down and allow others the voice they have rather than fleeing into cultural narcissism where the only sound heard is the comforting delusions of one's own perspective. It's only a shame that we must wait until January.