To debtors, creditors can be like dictators. Governments in financial trouble often turn to the International Monetary Fund as supplicants, and acting at the behest of its own major creditors, the IMF often imposes tough conditions on them. After the Asian financial crisis of the late 1990s, Mickey Kantor, U.S. trade representative under President Bill Clinton, called the organization "a battering ram," because it had served to open up Asian markets to U.S. products. During the 1956 Suez crisis, the United States threatened to withhold financing that the United Kingdom desperately needed unless British forces withdrew from the Suez Canal. Harold Macmillan, who, as the British chancellor of the exchequer, presided over the last, humiliating stages of the crisis, would later recall that it was "the last gasp of a declining power." He added, "perhaps in 200 years the United States would know how we felt."
Is that time already fast approaching, with China poised to take over from the United States? This is an essential question, and yet it has not yet been taken seriously enough in the United States. There, this central conceit still reigns: the United States' economic preeminence cannot be seriously threatened because it is the United States' to lose, and sooner or later, the United States will rise to the challenge of not losing it. China may be on its way to becoming an economic superpower, and the United States may have to share the global stage with it in the future. But, the argument goes, the threat from China is not so imminent, so great, or so multifaceted that it can push the United States out of the driver's seat.
Thus, the economist Barry Eichengreen concludes in his recent history of different reserve currencies, Exorbitant Privilege, "The good news, such as it is, is that
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