Parts to Wholes: the Socionomic Systems Nexus

State of the World

The new world order: How China sees the world IT IS an ill wind that blows no one any good. For many in China even the buffeting by the gale that has hit the global economy has a bracing message. The rise of China over the past three decades has been astonishing. But it has lacked the one feature it needed fully to satisfy the ultranationalist fringe: an accompanying decline of the West. Now capitalism is in a funk in its heartlands. Europe and Japan, embroiled in the deepest post-war recession, are barely worth consideration as rivals. America, the superpower, has passed its peak. Although in public China’s leaders eschew triumphalism, there is a sense in Beijing that the reassertion of the Middle Kingdom’s global ascendancy is at hand. Before panic spreads, it is worth noting that China’s new assertiveness reflects weakness as well as strength. This remains a poor country facing, in Mr Wen’s words, its most difficult year of the new century. The latest wild guess at how many jobs have already been lost—20m—hints at the scale of the problem.  Far from oozing self-confidence, China is witnessing a fierce debate both about its economic system and the sort of great power it wants to be—and it is a debate the government does not like. This year the regime curtailed even the perfunctory annual meeting of its parliament, the National People’s Congress (NPC), preferring to confine discussion to back-rooms and obscure internet forums. Liberals calling for greater openness are being dealt with in the time-honoured repressive fashion. But China’s leaders also face rumblings of discontent from leftist nationalists, who see the downturn as a chance to halt market-oriented reforms at home, and for China to assert itself more stridently abroad. An angry China can veer into xenophobia, but not all the nationalist left’s causes are so dangerous: one is for the better public services and social-safety net the country sorely needs.

• China Urges New Money Reserve to Replace Dollar
• INTELLIGENCE: The Biggest, The Baddest And The Most Vulnerable
• China Slowdown Stymies Entrepreneurs The bootstrap entrepreneurs who helped build China into the world's factory floor now face emptying order books. Their fate echoes a broader challenge for China itself.

Diplomatic Virtual Reality And while America may want to make the past vanish -- as a nation, we've never been all that keen on foreigners' histories -- alas, the past cannot be changed. The profound differences in psychology, philosophy and policy that have been the central source of friction between the American and Russian governments for the past decade remain very much in place. Sooner or later, the Obama administration will have to grapple with them. Anyone who doubts the truth of this need only look at remarks Lavrov himself made last weekend in Brussels, where he presented a vision of the world utterly unchanged by the events of Jan. 20. Speaking to past and present policymakers -- several of whom had helped dismember the Warsaw Pact and expand NATO in the 1990s -- he offered his own version of those developments, as well as of some more current. Among other things, he said, or implied, that the West lied to Russia; that NATO remains a threat to Russia; that the Organization for Security and Cooperation in Europe should replace NATO as the primary Western security organization; and that, by the way, Russia has plenty of potential clients for its gas in the Far East should its Western clients ever become problematic. As for Russia helping to prevent Iran from developing nuclear weapons -- an Obama administration suggestion -- Lavrov's only comment was that "there is no proof that Iran even has decided to make a nuclear bomb." The transcript of his remarks, and those of other Russians attending the same conference, do not capture their snide tone, or the scorn with which they dismissed suggestions that Russia's neighbors might have wanted to join NATO because they were afraid of Russia. To return to the metaphor: If that is how the Russian government sounds after pressing the reset button, I'm not sure that the technical complications that caused the screen to freeze have gone away.

• Russia Recalibrates After Commodities Downturn
• Simon Sebag Montefiore (Rose: Russia) Highly recommended introduction to current socio-political culture, attitudes and intents and the linkages to the past thru and with a novel written by a foreign/war correspondent.
• Nixon, Khrushchev And A Story Of Cold War Love(NPR) Still, Beyrle says the exhibitions also showed the limits of personal connections. He believes they can't overcome profound misunderstandings between the two cultures. Today, most observers say the level of hostility and distrust toward America and Americans among ordinary Russians is much stronger than it was when Nixon debated Khrushchev 50 years ago.

The Mexican Evolution AMERICA’S distorted views can have costly consequences, especially for us in Latin America. Secretary of State Hillary Clinton’s trip to Mexico this week is a good time to examine the misconception that Mexico is, or is on the point of becoming, a “failed state.” This notion appears to be increasingly widespread. It most assuredly will not. First, let’s take a quick inventory of the problems that we don’t have. Mexico is a tolerant and secular state, without the religious tensions of Pakistan or Iraq. It is an inclusive society, without the racial hatreds of the Balkans. It has no serious prospects of regional secession or disputed territories, unlike the Middle East. Guerrilla movements have never been a real threat to the state, in stark contrast to Colombia. Most important, Mexico is a young democracy that eliminated an essentially one-party political system, controlled by the Institutional Revolutionary Party, that lasted more than 70 years. And with all its defects, the domination of the party, known as the P.R.I., never even approached the same level of virtually absolute dictatorship as that of Robert Mugabe in Zimbabwe, or even of Venezuela’s Hugo Chávez. Mexico has demonstrated an institutional continuity unique in Latin America. Our national institutions function. The army is (and long has been) subject to the civilian control of the president; the church continues to be a cohesive force; a powerful business class shows no desire to move to Miami. We have strong labor unions, good universities, important public enterprises and social programs that provide reasonable results. Thanks to all this, Mexico has demonstrated an impressive capacity to overcome crises, of which we’ve had our fair share. They include the government’s repression of the student movement of 1968; a currency devaluation in 1976; an economic crisis in 1982; the threefold disaster of 1994 with the Zapatista rebel uprising, the murder of the P.R.I. candidate for president and a devastating collapse of the peso; and the serious post-election conflicts of 2006. We have overcome these challenges and drawn meaningful lessons from them. We learned to diversify the economy and reduce the state’s financial monopolies, paving the way for the eventual Nafta agreements. Election controversies and the threat of political violence have led to a national acceptance of a peaceful and orderly transition to democracy. Now once again, we face enormous problems. The worldwide financial crisis is intensifying our ancient dramas of poverty and inequality. But the most acute problems are the increased power and viciousness of organized crime — drug trafficking, kidnappings and extortion — and an upsurge in ordinary street crime. This may be the most serious crisis we have faced since the 1910 Mexican Revolution and its immediate aftermath. Washington should support Mexico’s war against the drug lords — first and foremost by recognizing its complexity. The Obama administration should recognize the considerable American responsibility for Mexico’s problems. Then, in keeping with equality and symmetry, the United States must reduce its drug consumption and its weapons trade to Mexico. It will be no easy task, but the United States has at least one advantage: No one thinks of it as a failed state. Nor, for that matter, did anyone ever see Al Capone and the criminal gangs of Chicago as representative of the entire country. For Mexico as well, let’s leave caricatures where they belong, in the hands of cartoonists.

• Nafta’s Promise, Unfulfilled
• Cartels Fueling Violence In Mexico Take Root In U.S.(NPR)
• US official says no danger of failed Mexican state

Brazil’s leader blames white people for crisis Brazil’s President Luiz Inácio Lula da Silva on Thursday blamed the global economic crisis on “white people with blue eyes” and said it was wrong that black and indigenous people should pay for white people’s mistakes.Speaking in Brasília at a joint press conference with Gordon Brown, the UK prime minister, Mr Lula da Silva told reporters: “This crisis was caused by the irrational behaviour of white people with blue eyes, who before the crisis appeared to know everything and now demonstrate that they know nothing.” He added: “I do not know any black or indigenous bankers so I can only say [it is wrong] that this part of mankind which is victimised more than any other should pay for the crisis.” Mr Brown appeared to distance himself from Mr Lula da Silva’s remarks. “I’m not going to attribute blame to any individuals,” he said. Mr Brown was visiting Brazil as part of a five-day tour of Europe, the US and South America in preparation for the G20 summit to take place in London next Thursday. He made a joint appeal with Mr Lula da Silva for the world’s biggest economies to provide $100bn to boost global trade. “I’m going to ask the G20 summit next week to support a global expansion of trade finance to reverse a slide in world trade,” Mr Brown said. Mr Lula da Silva also spoke out strongly against raising trade barriers in response to the global crisis. “I compare protectionism to a drug,” he said. “Why do people use drugs? Because they are in crisis and they think the drug will help them. But its effects pass quickly.” The two leaders’ remarks demonstrate the desire each will have to secure the other’s support during the G20 meeting. Brazil – which has long campaigned unsuccessfully to be given a permanent seat on the United Nations Security Council – will argue for a bigger voice for Brazil and other emerging nations in multilateral organisations such as the International Monetary Fund and the Financial Stability Forum, a group of central banks and national supervisory authorities established in 1999. Brazil is one of many nations calling for increased regulation of global financial markets and greater powers for multilateral regulators. It will also call for a resumption and conclusion of the Doha round of talks at the World Trade Organisation. In return for supporting such initiatives, Mr Brown will expect Brazil to endorse calls for fiscal stimulus in a bid to mitigate the impact of the global crisis, such as the proposed $100bn in trade finance

In Europe, Rage Over Crisis Hits Executives Vandals attacked the Edinburgh home of Sir Fred Goodwin, former chief executive of the now state-controlled Royal Bank of Scotland Group PLC, in a sign that public outrage over the financial crisis could be taking a dangerous turn. The vandals broke windows at the front of Sir Fred's villa early Wednesday morning, and wrecked a side and back window of his black Mercedes, which was parked in the driveway, according to Edinburgh police. A group claiming responsibility sent emails to at least one newspaper, the Edinburgh Evening News. "We are angry that rich people, like him, are paying themselves a huge amount of money, and living in luxury, while ordinary people are made unemployed, destitute and homeless," the email, reviewed by The Wall Street Journal, read. "This is a crime. Bank bosses should be jailed. This is just the beginning." The attack reflects a virulent strain of social unrest that is appearing across Europe. Workers at a factory operated by the U.S. industrial conglomerate 3M Co. held their boss, Luc Rousselet, captive for more than 24 hours to protest planned layoffs. He was released on Thursday after a deal was reached, according to Reuters. Mr. Rousselet left his office early on Thursday morning to boos from about 20 workers. Sir Fred has faced sharp criticism for refusing to give up a pension package that pays him £693,000 ($1 million) a year, after overseeing a period of rapid expansion at RBS that culminated in the bank's near collapse last year and the largest annual loss in U.K. corporate history. The bank has since been all but nationalized as part of a broader bailout to which the U.K. government has committed hundreds of billions of pounds in taxpayer money.

• Topolanek toppled The European Union frets over the collapse of the Czech government
• Gyurcsany goes A deepening economic crisis forces out Hungary’s prime minister
• French Bosses Besieged as Worker Anger Rises
• "Hurt, Frightened and Very Angry:" Risk of Social Unrest Rising, Says FT's Martin Wolf

The Death of De Gaulle The mother of all Gallic temper tantrums is over -- and a mere 43 years to the month after Charles de Gaulle booted the American GIs who liberated France, and the NATO alliance that kept it free, out of the country. Next week, President Nicolas Sarkozy formally brings France back into the alliance's integrated military command and co-hosts the North Atlantic Treaty Organization's 60th anniversary summit. In so doing Mr. Sarkozy will start to bury de Gaulle's spirit and the legacy of "French exceptionalism." In practice, the reversal of de Gaulle's March 7, 1966 order merely puts French officers back inside NATO military headquarters. But as one of the few European countries with a military able to project force, France has taken an active part in NATO missions in Afghanistan and the Balkans. The symbolic import of Mr. Sarkozy's decision is lost on neither the French left nor some in his own Gaullist camp, who loudly opposed it. From the moment de Gaulle gave allied troops and NATO headquarters few weeks' notice, forcing the quick relocation to an abandoned hospital in Brussels, France's raison d'être has been to trip up American power while standing under its security umbrella. Jacques Chirac, born before the war, practiced what the General preached, most memorably in 2003 in the trans-Atlantic spat over Iraq.

Will China and America Save Us? The first G20 meeting, last fall, appropriately took place in Washington. But holding this second conclave in Beijing would have signalled a clear recognition that the Washington-Beijing axis is the most important relationship in the world today; it is the X factor in the quest to rescue the global economy. If the two powerhouses work together, the world may yet emerge prosperous and stable. If they work at cross purposes, the world's future will be as grim as the gloomiest doomsayers forecast. Can they do it? Some look at the relationship and see only complications, worrying that if China sells off or stops buying U.S. bonds, the American economy could sink even deeper, leaving us like England at the end of War World II, a broke and broken hegemon, dependent on an upstart power. The parallel overlooks one critical difference: Today, China needs the United States as much as the United States needs China. This isn't codependence; it's interdependence, especially since the rest of the world needs both of them equally. For Beijing and Washington to pull the world out of this Great Recession, they must overcome both mutual suspicion and self-perceptions that are quickly losing validity. China is no longer as poor as it claims; the United States is no longer as rich as it acts. This transition will be tough for both. China is a bit like a newly muscular adolescent; it is gaining power but doesn't yet know how to wield it or to what purpose. As for Washington, it must learn to use muscles it hasn't stretched for many years, muscles that are adept at collaboration rather than dictation, that are flexible rather than simply big.

A World in Need of a New Order Future historians might look at the collapse of the Soviet Union as the end of the 20th century, and at the current financial crisis as the beginning of the 21st. Remarkably, these two macro events have a common root, which is also the root of globalization: the revolution of Information Technologies. In the 1970s, the IT revolution accelerated the arms race; the Soviet Union proved unable to follow the United States. Ultimately, the Marxist-Leninist system and ideology vanished. The financial and more generally the managerial revolution occurred in the 1980s. The world economy embarked on a strong and stable upswing. In the 1990s, many could believe that democracy and market economy had won an irreversible victory and would quickly spread everywhere. The “international community,” led by the United States, seemed to be on the way to universal peace and prosperity. It was a dream. History came back under the presidency of George W. Bush, starting with 9/11 and ending with the burst of an unprecedented asset bubble. The institutional framework of world governance erected since World War II proved a failure. What the international community can and must demonstrate now is a willingness to undertake a full reconstruction The G-20 summit would be a great success if it could achieve just that, in addition to agreeing on credible immediate economic and financial measures. Any attempt to rebuild governance must recognize that the new international system must be multipolar, heterogeneous and global. Multipolarity means that although the United States will remain the only superpower for the foreseeable future, it can no longer pretend to lead the world alone. This is why we need a relevant group of permanent members for the U.N. Security Council, which would potentially include at least the following five natural “poles” — the United States, Japan, China, Russia and European Union. The members of this group should recognize they collectively share responsibilities for a politically sustainable globalization process, including such issues as climate change.

In the Indian Ocean: Beyond Pirates, an India-China Rivalry  ... a drama with more far-reaching geopolitical consequences may be brewing in the Indian Ocean, involving two of the nations that have sent warships to fight the Somali buccaneers: longtime rivals India and China. New Delhi has had at least one ship in the Gulf of Aden since October, and late last year, with great fanfare, China deployed two warships to the same area. The ships have been active in interdicting pirates and coming to the aid of commercial ships in apparent distress - though they are not part of the U.S.-led Combined Task Force 151 (usually comprised of 14 to 15 vessels from several nations), which coordinates its activity with the dominant naval force in the Ocean, the U.S. 5th Fleet based in Bahrain. But the presence of the Chinese and Indian warships underlines Beijing's and New Delhi's intense economic and strategic interests in the world's third largest ocean.The potential for confrontation is fueled by China's historical nostalgia. In the 15th century, the Chinese sent seven massive naval and commercial expeditions into the Indian Ocean to extend the prestige and power of the relatively new Ming dynasty. There had not been anything quite like it in history, and the Chinese were recognized as the masters of the ocean. But a change in emperors and national policy curtailed the expensive naval forays after 1433 and China turned inward. As if to declare that centuries-old era over, Beijing staged elaborate celebrations in 2005 to mark the half-millenium anniversary of the first expedition. The Ming voyages are now an inextricable part of Chinese nationalist lore - and its populist claim on the Indian Ocean. Overheated daydreams about history can be dangerous. Nevertheless, at least one analyst believes that, while there is potential for conflict, there is also the possibility of a new order for the Indian Ocean - with a central role for the U.S. In the March/April edition of Foreign Affairs, Robert Kaplan envisions the United States managing the rival ambitions of India and China into a workable security continuum, even as Washington's ability to project naval power recedes.

Prioritizing World Growth at the G-20 Tomorrow, for the second time in only five months, the leaders of the world's top 20 economies will meet to seek a joint response to the unprecedented global economic crisis. Since this crisis began, I have argued that when we are faced by a challenge of this magnitude, cooperation is a necessity, not an option. In September, I called upon the world to rally together with a response based on coordination and cooperation. Brought forward in concert by the European nations, that initiative led to November's Group of 20 meeting in Washington, where we laid the foundations for far-reaching reform of the international financial system. Tomorrow's summit must enable us to put into practice the principles we established. The world expects that we will speed up the reform of the international financial system and rebuild, together, a better-regulated form of capitalism with a greater sense of morality and solidarity. This is a precondition for mobilizing the global economy and achieving sustainable growth. This crisis is not a crisis of capitalism but the breakdown of a system that drifted away from capitalism's most fundamental values. In November, we agreed on four principles that would guide our response: enhanced coordination and cooperation; the rejection of protectionist measures; the strengthening of regulatory systems in financial markets; and a new global governance. On the first two points, we have made a good deal of progress. We have managed to hold off the specter of protectionism, and many nations have injected massive support for their economies, undertaking ambitious stimulus programs. Countries that offer their citizens a high level of social protection, such as France, have also significantly increased their levels of crisis-related welfare spending. Overall, the world's leading economies have made comparably gigantic efforts to combat the crisis. This week we must attach the same sense of urgency to the regulation of financial markets. World growth will be all the stronger for being sustained by a stable, efficient financial system and by the kind of renewed confidence in the markets that would enable resources to be better allocated, encourage lending to pick up again and foster the return of private investment capital to developing countries. I remain convinced that the world can emerge from these troubled times stronger, more united and with a greater sense of solidarity, provided we have the will to do so. We cannot achieve radical change overnight, and much remains to be done. We may need future meetings to implement the reforms undertaken in London. I am certain of two additional things: We must achieve practical results beginning with tomorrow's summit. And failure is not an option.

• Obama tries to rally world to cope with downturn, Obama Gets Down To Business Before G-20(NPR)
• G-20 Site: "A Cesspool, Bubbling With the Foul Products of Decomposition"
• G-20 London Summit Website
• Economy Dominates G-20 Summit(NPR)