Written by established authors from around the world, Global Vantage Point will offer expert insight and commentary that goes beyond the daily headlines for in-depth international perspectives on issues ranging from conflict and diplomacy, to globalization and domestic political debates, to economic and financial matters.

More than 60 years ago, the United States forged a new order from the ashes of World War II. Unlike the anarchy of the 1930s, which unleashed the horrors of fascism, this postwar world order was organized around three liberal principles: freedom of the seas, the superior legitimacy of democratic governance, and the primacy of free trade.

For most of the postwar era, the liberal international order was confined primarily to the West. But with the fall of the Berlin Wall and subsequent disintegration of the Soviet Union, it became truly global in scope. The high-water mark of the liberal international order was the 1990s, with pundits and politicians in the United States proclaiming the universal triumph of democracy and capitalism and the advent of a borderless world. This declaration was premature.

The postwar system constructed by the United States was erected on three pillars: American predominance, a resurgent Western Europe, and an economically buoyant Japan. Ironically, the “victory” of the liberal international order in the 1990s coincided with the emergence of new trends that have since undermined it. As the decade progressed, the “rise of the rest” — the ascendance of nations throughout the developing world — began to gather steam, foreshadowing a relative decline of U.S. power in the century ahead. Western Europe expanded into a European Union with a single currency, but this geographic enlargement brought about an inward turn. And Japan’s bubble economy burst, casting it into a deflationary spiral.

Cracks in the foundation of the liberal international order have now widened into yawning fissures. Economic growth has transformed China, India, Brazil, Turkey, Indonesia and South Africa into powers with regional and even global influence. Meanwhile, the financial crisis that originated in the United States still reverberates across the Western world. This has hastened the relative decline of American power and has also further diminished Europe and Japan, the other two pillars of the postwar liberal international order.

Dangerous Parallels

The unraveling of today’s liberal international order has parallels in the first half of the 20th century that underscore the dangers ahead for the United States.

Great Britain’s international order, founded after victory in the Napoleonic Wars, was in decline by the turn of the 20th century. With the ascent of the United States and Imperial Germany onto the world stage, the era of Pax Britannica that had ushered in a remarkable boom in global trade and investment was steadily being eclipsed.

Two dangers emerged. The first was purely a British concern: financial exhaustion. Although Great Britain’s share of the world’s economic and military resources was falling, it continued to shoulder the burden of upholding international order. The financial cost was considerable, and threatened to eventually bankrupt the nation.

The second danger was military competition between Great Britain and the rising powers. In the case of the United States, shared democracy, a common language and ethnic solidarity fostered mutual trust, and happily for all involved, prevented an Anglo-American arms race. However, none of these ties existed to reassure Great Britain and Germany of each other’s intentions. To the contrary, Germany’s growing naval capabilities sparked mistrust. A maritime arms race ensued, and the two countries started down the long road leading to the catastrophic violence of World War I.

The next unraveling of international order occurred during the Great Depression. The Versailles Treaty that ended World War I created “Pax Britannica light,” a world managed by Great Britain working with France and other democratic members of the League of Nations. The Great Depression shattered this arrangement. Their economies reeling, European democracies — the pillars of the Versailles order — turned inward and pulled apart.

The danger that emerged as the Versailles order crumbled was the disjuncture between the challenges facing the international community and its capacity to respond to them. Neither Great Britain nor any other nation acting alone could restore the global economy or prevent Nazi Germany, Fascist Italy and Imperial Japan from pursuing expansionist ambitions. Coordinated action might have revitalized the Versailles order before its decline became irreversible. Instead, the democracies dithered while the depression continued and authoritarian states gobbled up their neighbors.

Historical analogies are always imprecise, but the dangers manifested in the unraveling of past international orders are present today.

Like Great Britain before it, the United States confronts the danger of financial exhaustion, as the cost of sustaining the liberal international order rapidly increases. In the past, the United States could focus on a single foe — the Soviet Union. Now it must navigate a world rife with challenges: an ascendant China, an Iran bent on acquiring nuclear weapons, a nuclear-armed North Korea entering a period of leadership transition, an Afghanistan still beset by Taliban insurgents, a fragile Pakistani state, transnational terrorist networks, global warming — the list goes on and on.

Multiple challenges impose new resource demands at a time when America’s long-term finances are already under strain. As the baby-boom generation retires and enters old age, social security and Medicare expenses will spiral upward. So too will interest payments on a burgeoning national debt. The cost of maintaining the liberal international order will not, by itself, bankrupt the United States, but together with domestic spending, it will create an unsustainable fiscal burden.

The emergence of new powers raises a second danger — destabilizing military competition between the new powers and the current upholder of international order, the United States. Fortunately, the overwhelming majority of today’s rising powers are democracies. This does not preclude friction between them and the United States, but shared forms of governance and the regularity, transparency and receptivity to outside influence that democratic institutions generate will reduce mistrust and prevent arms races.

The same cannot be said for China, the only rising power in the 21st century with a one-party political system that lends a degree of unpredictability to its behavior, obscures its long-term intentions, and renders it less susceptible to outside influence. China’s authoritarian regime amplifies the anxieties that would, in the best of circumstances, accompany the advent of a new superpower. Concerned nations — the United States foremost among them — have taken military steps to hedge against China’s rise. These steps are necessary, but undoubtedly appear provocative when viewed from Beijing’s perspective. Conditions are accordingly ripe for a cycle of mistrust, reaction and counter-reaction culminating in a full-blown U.S.-China rivalry.

Another danger is the growing disparity between the array of 21st-century challenges and the world’s ability to deal with them. The United States lacks the capacity to singularly cope with the challenges before it, while Europe and Japan can offer little additional assistance given their economic troubles. Further, some challenges, by their very nature, require solutions encompassing far more than the traditional pillars of the liberal international order.

Coordinated action with today’s rising powers is essential yet difficult in practice. The rising powers are keen to address regional and global challenges in their own way rather than in lockstep with the United States. This can lead to coordination failures, where the United States and the rising powers work at cross-purposes despite having similar objectives.

A case in point is Brazil and Turkey’s attempt in May 2010 to broker a nuclear deal with Iran. The two rising powers were trying to achieve a solution to one of the knottiest problems the world confronts, which was commendable, but their initiative was poorly timed with U.S. efforts to impose additional sanctions on Iran, and would not have adequately addressed international concerns about Iran’s capacity to develop nuclear weapons.

Coordination is a two-way street. The United States must be open to innovative ideas emanating from the rising powers. If these ideas offer greater leverage over the major problems of the 21st century, the United States should adopt them, even if this means jettisoning its own approach. This is a hallmark of good leadership.

Charting a Course

Today’s liberal international order is under stress, but its demise is not inevitable. The United States can still chart a course that will strengthen the liberal order and sustain it for the 21st century.

This course starts at home with renewing American power. The most critical pillar of the liberal international order has always been American predominance. While the United States cannot reverse the “rise of the rest,” it can refocus on the oft-neglected foundations of its power: an immigration system that attracts and retains foreign talent, world-class infrastructure, and an educational system that prepares its citizens to excel.

Restoring these wellsprings of American power will increase the resources the United States can bring to bear against multiplying global challenges and mitigate the danger of financial exhaustion. Additionally, an America that retains the world’s most dynamic economy will serve as a powerful antidote to authoritarian models of development, putting to rest claims that societies must choose between freedom and prosperity.

But renewing American power is not enough. With Europe and Japan in relative decline, the United States must shape some of the rising powers into new pillars of the liberal international order. The rising democracies — India, Brazil, Turkey, Indonesia and South Africa — offer the best prospects.

Democratic governance in these rising powers creates unique opportunities for the United States to shape them. Unlike China, their political systems, though beset by all the typical flaws of any democracy, empower numerous groups and individuals. Through a systematic and patient engagement strategy, the United States can develop influential networks in the rising democracies, networks that will ultimately propel them to become pillars of the liberal international order. This is a long-term process, one that will invariably be marked by short-term frustrations as rising democracies from time to time fail to meet U.S. expectations — and vice versa.

About the Author

Dr. Daniel M. Kliman is a visiting fellow at the Center for a New American Security, where he contributes to the Asia-Pacific Security Program and other initiatives. He is also completing a book on how to navigate the rise of new powers.