This is not a G-20 world. Over the past several months, the expanded group of leading economies has gone from a would-be concert of nations to a cacophony of competing voices as the urgency of the financial crisis has waned and the diversity of political and economic values within the group has asserted itself. Nor is there a viable G-2 -- a U.S.-Chinese solution for pressing transnational problems -- because Beijing has no interest in accepting the burdens that come with international leadership. Nor is there a G-3 alternative, a grouping of the United States, Europe, and Japan that might ride to the rescue.
Today, the United States lacks the resources to continue as the primary provider of global public goods. Europe is fully occupied for the moment with saving the eurozone. Japan is likewise tied down with complex political and economic problems at home. None of these powers’ governments has the time, resources, or domestic political capital needed for a new bout of international heavy lifting. Meanwhile, there are no credible answers to transnational challenges without the direct involvement of emerging powers such as Brazil, China, and India. Yet these countries are far too focused on domestic development to welcome the burdens that come with new responsibilities abroad.
We are now living in a G-Zero world, one in which no single country or bloc of countries has the political and economic leverage -- or the will -- to drive a truly international agenda. The result will be intensified conflict on the international stage over vitally important issues, such as international macroeconomic coordination, financial regulatory reform, trade policy, and climate change. This new order has far-reaching implications for the global economy, as companies around the world sit on enormous stockpiles of cash, waiting for the current era of political and economic uncertainty to pass. Many of them can expect an extended wait.
THE OLD BOYS’ CLUB
Until the mid-1990s, the G-7 was the international bargaining table of greatest importance. Its members shared a common set of values and a faith that democracy and market-driven capitalism were the systems most likely to generate lasting peace and prosperity...
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