Sense of decline (February 5, 2010)

The centre of gravity of capitalism is shifting eastwards

By Swapan Dasgupta

For the past two decades, the conference in Davos has emerged as the annual stock-taking exercise of global capitalism. This year was no different. However, discerning observers detected a subtle but significant change in the mood of the gathering. A columnist for Financial Times described it as the end of the “old Davos consensus”. Underlying the change was the belief that the West had become ‘dysfunctional’, that free trade was no longer entirely beneficial to the powers that had championed it for a century and that the future belonged to Asia, particularly China. “The analytical difficulty,” he noted by way of a caveat, “however, lies in working out which of these trends will have staying power — and which will turn out simply to reflect the ephemeral mood of the moment.”

The caution is warranted. From the time the Comintern detected the “final crisis of capitalism” in the wake of the Great Depression of the 1930s, obituaries of capitalism have proliferated and competed with those who have, with astonishing certitude, prophesied the end of the world either from a nuclear holocaust or Climate Change. Yet, capitalism has demonstrated resilience and a remarkable ability to renew itself.

The compelling needs to rescue Western civilization — built on the bedrock of capitalism — from itself and the world economy from being subsumed by the robotic mercantilism of China are ideas whose time, unfortunately, have not come. The popular mood in both the United States of America and western Europe is distinctly downbeat — a condition that the combative Pope Benedict XVI has attributed to a moral decay arising from the excesses of secularization. The protectionist populism that President Barack Obama fell back on in his State of Union speech was a reflection of the retreat. More telling, however, were the proceedings of last week’s conference on Afghanistan in London.

A feature of the beleaguered capitalist consensus was the constant willingness to fly the flag, and uphold the ‘free world’. The notion of the ‘civilising mission’ and the ‘White Man’s burden’ may well be the subjects of unconcealed denigration in today’s post-colonial world but they also reflected a muddled desire to save the world from the forces of ‘darkness’ — whether they appeared in the form of the Mahdi in Sudan or the Führer in Germany. One of the enduring contributions of post-war statesmen such as Winston Churchill, Harry Truman, Dwight D. Eisenhower, Konrad Adenauer, Margaret Thatcher and Ronald Reagan, to name but a few, was to stubbornly refuse to accept the permanence of the Iron Curtain. Without their uncompromising faith in the superiority and universality of the ‘free world’, the ‘evil empire’ wouldn’t have crumbled and China wouldn’t have re-defined its destiny by embracing a variant of the market economy.

Another beleaguered feature of the ‘old consensus’ was the spirit of service and sacrifice. The West dominated the world for three centuries not merely on the strength of its ability to innovate and improve but because economic muscle was unceasingly complemented by the sense of a larger mission. Generations of schoolchildren were brought up on stirring tales of the heroism of General Wolfe, Dr Livingstone, Gordon “Pasha” and Lord Kitchener in places far away from home. What Rudyard Kipling called the “White Man’s burden” was indubitably an anthem of racial superiority but it was also a celebration of the spirit of adventure, enterprise and emotional commitment to a decent and enlightened world. Over the decades, the Empire project of the Victorians has been modified and its rough edges blunted by contemporary sensitivities such as national sovereignty, human rights, racial equality and, above all, justice. But it’s important to grasp the simple truth that globalization didn’t begin with the Bretton Woods agreement; its roots go much, much deeper.

The sense of outrage against Osama bin Laden and his Taliban hosts that triggered the US-led military intervention in Afghanistan after 9/11 was shaped by impulses that were moulded by history. Long before moral relativism sought to end the hierarchy of moral codes, there were simple notions of what constituted ‘right’ and what was clearly ‘wrong’. The Taliban regime in Afghanistan violated all the moral codes. The sheer magnitude of the 9/11 attacks, particularly the killing of civilians in New York, would have inevitably invited retaliation. But the military campaign assumed the character of a “good war” — an Obama phrase to distinguish it from the ‘bad war’ in Iraq —because the Taliban stood for a social order and a way of life that were completely at odds with even the most permissive values.

The rationale of the Afghan war wasn’t one of colonizing Afghanistan to facilitate the easy availability of watermelons, dried fruits and exquisitely hand-crafted carpets. Nor was the military expedition dictated by the need to ensure the passage of pipelines that would link the gas fields of Central Asia to the energy-hungry markets of India. The Taliban regime fell below the base line of acceptable human conduct. It was on par with Idi Amin’s Uganda and Pol Pot’s Cambodia. Worse, the regime wasn’t content to remain a ghetto of darkness. It consciously sought to emerge as a springboard for a dogma-based expansion to the wider neighbourhood and even beyond; it was committed to the expansion of evil. Today, there is an attempt to distinguish between the orthodoxy and fundamentalism of the Taliban and the promotion of global terrorism by al Qaida. In actual fact, the distinction was purely notional.

That the war in Afghanistan hasn’t gone according to initial calculations is indisputable. After an initial period of retreat, the Taliban has successfully regrouped, capitalizing on the shortcomings of the Hamid Karzai regime and the ham-handedness of the US and North Atlantic Treaty Organisation forces. The recovery has been facilitated by a Pakistan anxious to recover its ‘strategic depth’ vis-à-vis India. The arduous war has also sapped Western morale and prompted the conclusion that the conflict is unwinnable. Confronted with its own sense of decline, the West has lost the will to undertake its ‘civilizing mission’. It now wants to get the hell out of the godforsaken land and hope for the best. The London conference marked the first Act of the disengagement drama and both the Taliban and its sponsors in Pakistan have realized it gleefully.

The London conference signals an important point in what Churchill may have called the “end of the beginning”. The centre of gravity of global capitalism has been shifting eastwards towards India, China and Southeast Asia. Yet, the drift hasn’t been accompanied by an orderly transfer of heritage. India is still resolving its own confusions to have any meaningful global vision; and China’s perspectives lack humanity and enlightenment. It’s this impasse that has created the conditions for the rise of Islamism as an alternative system that is implacably hostile to everything the human race has achieved so far.

In 1992, the Islamists notched up their first success when, with the backing of the US, they defeated a declining Soviet Union. Today, and with every passing day, Islamism senses the impending humiliation of a declining West in Afghanistan. The triumphalism of victories over two superpowers and two very different systems is certain to be heady. Hitler didn’t stop after gobbling up Austria and Czechoslovakia; for Islamism, a victory in Afghanistan is certain to make the whole world a very dangerous place. It’s this larger foreboding that escaped the attention of a retreating West in London last week.

The Telegraph, February 5, 2010