The BRICS and Beyond

The International Political Economy of the Emergence of a New World Order

Li Xing

• Publisher: Routledge
• Year: 2016
• Print ISBN: 9781138359345
• eBook ISBN: 9781317039990
• Edition: 1
• Topic: Economics
• Subtopic: Political Economy
• Index: Economics

The world is in an era of great transformations. Globalization, transnational capitalism, September 11, the 2008 global financial crises, and the emergence of the 'second world' in general and the BRICS in particular are characterized by a diffusion of power away from the traditional North Western powers and towards the global South. Such great transformations have reshaped the terrain and parameters of social, economic and political relations both at the national and the global levels and have exerted pressure on the exiting international order in terms of both opportunities and constraints. This new era also urges the need for re-conceptualizing the changing world order especially with regard to one of the core conceptual categories and analytical apparatus in the studies of IR and IPE - hegemony. The world will witness a new era of interdependent hegemony, in which both the existing 'First World' and the emerging 'Second World' are intertwined in a constant process of shaping and reshaping the international order in the nexus of national interest, regional orientation, common economic and political agenda, political alliance and potential conflicts. This collection juxtaposes, from different perspectives and approaches, the discussion on the political economy of the emerging world order with a focus on the rising powers.

Chapter 1

Theorizing the Rise of the Second World and the Changing International System

Steen Fryba Christensen and Raúl Bernal-Meza

First, Second and Third World

This chapter aims at providing a theorization of the current world system on the basis of a systemic historical and structural vision.

The chapter focuses on the post-Cold War era from 1989/1991 until the present time, emphasizing particularly the diffusion of economic and political power in the world system towards large semi-peripheral countries such as the BRICS countries, namely Brazil, Russia, India, China and South Africa. This tendency towards diffusion of power in the world system is a challenge from the perspective of the hegemonic power constellation that emerged after World War II and was centered on the United States. The aim is thus to analyze how and to what extent the world system and world order is being transformed. Is the world likely to go through a transition period that will introduce a new hegemonic situation or will the traditional hegemonic structures be maintained, or could it be that a situation of flux and indetermination is the likely outcome in the medium term?

The text is divided into five parts. In the first part, the historical origin of the world system is discussed. This is followed by a short presentation of later tendencies and the emergence of a semi-peripheral layer of countries between the core countries and the peripheral countries, as well as the emergence of a crisis of accumulation in the capitalist system in the 1970s with its impacts on tendencies within the world order. The third part then moves to consider and discuss the consolidation of the capitalist world order from 1991 with the end of the Cold War. Power rivalries related to the strengthening of “emerging powers”, and particularly of the layer of the big semi-peripheral countries of the BRICS coalition, are discussed in the fourth part, while the fifth part emphasizes the acceleration of the rise in relative power of the BRICS countries and discusses the impact of this on developments in terms of world order.

The Origin of the Modern World

The configuration of the First World is structurally and historically unified with the process of construction of the European international society and its global expansion. This process determined the configuration of the axis development-underdevelopment through the impact of the Industrial Revolution and the formation of a “core” and a “periphery” as consequences of it, and the imposition by the hegemony of the United Kingdom of the international regime of free trade during the nineteenth century.

In his extraordinary work, Karl Polanyi (1992 [1944]) explained how his era (he was referring to the first part of the twentieth century) was the result of what he called “the civilization of the nineteenth century”. In his interpretation, the global expansion of the European international society was a result of the conditions provided by the civilization of the nineteenth century which rested on four institutions: power balance, liberal state, free trade and the self-regulating market. However, he stressed that the key to this international system was the laws that ruled the market economy.

Adam Watson (1992; 2004) points out how the European international society, whose global expansion unfolded in the nineteenth century, was the result of European culture and civilization as they developed from the sixteenth century. For Cervo (1997) this international society was a formidable instrument for Europe’s exploitation and domination of the rest of the world.

Nevertheless, differences exist regarding the interpretation of the origin of this “society”. Some authors relate it primarily to the formation of a system of sovereign and autonomous states (Watson, Bull, Cervo, Opello and Rosow, etc.), while others find that the origin of the system of states is derived from the first economic order and thus from the expansion of mercantile capitalism. From this perspective, the global European international society is seen as having been made possible thanks to the development of capitalism and having been sustained by the Industrial Revolution. This is the interpretation of authors within the systemic historical and structural vision of the international system (Braudel, Krippendorff, Wallerstein, Polanyi, and Ferrer, amongst others). Writing from within this last perspective, the authors of this chapter find that both of the views discussed here are valuable and could be usefully combined. The arguments of this last set of authors from within the systemic historical and structural vision of the international system permits us to understand how the expansion of capitalism allowed the creation of one single world in which the form of organization of “autonomous states” and the logics of the European international society became dominant. It is exactly the expansion of capitalism that allows for the establishment of one single world and not the system of states.

Watson presents the distinction between a system of states and an international society. According to Bull (in his book The Anarchical Society), the network of pressures and interests bring states to take each other into consideration in their calculations and decisions. The international society ties the system together with a set of common rules, institutions, models of behavior, and values that are shared and agreed by the states (Watson, 2004: 31). Each system fixes rules, institutions and common values that serve as guides for action and condition the behavior of the member states. It is true that the rules of functioning of the interstate system were not established consensually, but were the result of the will or capacity of the most powerful states to impose these restrictions, first on the weaker states and later on their mutual relations (Watson, 2004: 55).

The states were inserted in a power hierarchy whose very existence constituted the main limit on the autonomy of action for each of them. This corresponds to a principle of realism that is sustained on the idea that states are essentially similar, but that realism obliges states to accept the dominance of the most powerful.

The Global European Society

According to Watson, the Europeans “during the nineteenth century” brought a single network of economic and strategic relations to the whole world for the first time. They managed to create this world-wide unification which put down the foundation of our current global system by spreading the European system, while continuing the development of the rules of the system (2004: 369). From that moment on there would be no abrupt barrier or revolutionary divisory line between the European states system and the actual global system (Ibid.: 385–6). In his conception, this new global society also incorporated almost all the rules and practices that had been developed in the European great republic, including its international legal system and its diplomacy, as well as the basic assumptions of sovereignty and legal equality of the states that were recognized as independent members of this society (Ibid.: 392).

The global international society established a process of systemic integration in which “Western values”, a form of cultural imperialism as Watson says, played an important role. Two categories of elements qualify as an international society: on the one hand, specific principles and practices of international politics and, on the other hand, the common culture that gives them unity. The international society therefore reflects the dense interactions between communities and states that behave according to specific rules and values (Cervo, 1997: 68).

Following the great wars that affected the European international society, the congresses came that revised the common rules and institutions of an international society kept together by common values and a common civilization. This practice, according to Watson, was no longer possible after World War II. The end of the Cold War, which opens up to a transition in world order, was also not followed by a world congress that established or revised the norms and institutions, and this, in our opinion, is one of the main factors behind the questioning of the current order and also justifies the demand of rising powers such as China, India and Brazil to participate in the global management.

The rules and formal institutions of the European international society were based on the European culture (Watson, 2004: 361), later called the “Western culture”. Western culture is represented by a model of society, modernity, industrialization and the development of national societies that represent the “capitalist Western powers”. And this model of society, as well as Western culture, is today questioned in parts of the Second World.

The capitalist economic system imposed by the Western civilization promoted a reordering of national and regional economic structures. Watson points out that the resulting economic order was administered by the management, or leadership, of great economic powers (2004: 423–4). It is exactly in the economic field that the leadership falls most easily in the direction of the North Americans, until China transformed itself into the second-biggest economic power in the world. The new economic order after World War II was administered by the economic institutions known as the Bretton Woods institutions, the International Monetary Fund (IMF) and the World Bank being the central pieces, along with the General Agreement on Tariffs and Trade (GATT).

It is exactly in the dimension of the world economy that we now see the power of this European-North American international society declining, most clearly due to the rise in power of China and other emerging economies that have placed themselves in the top-eight economies of the world (China, Brazil, India).

Summing up, at the moment we could conclude that we are in a phase in which the dominant tendencies point towards the reconfiguration of a European-North American society, based on the European-Western tradition, under the hegemony of the world view of the United States. From the middle of the twentieth century, the European international society is consolidated thanks to the hegemony of the United States, and from this time on, the European international society became the “Western international society”. But this order, which represents the First World, is what is being questioned due to the emergence in the semi-periphery and the periphery of the world system of states, cultures and nations that do not accept this hegemonic configuration of the First World.

The Characteristics of the Current World System

The current world system is characterized by a combination of four factors: the crisis of the capitalism of the “core” countries, the rise of new powers, the challenge to the hegemonic North American order, and the questioning of the foundations of the Western international society dominated by North America and Europe.

In the last decades of the twentieth century a set of processes that started to transform the structural characteristics of the world system emerged. Amongst these changes were the changes in the international economy with the acceleration of the processes of economic globalization and regionalism, and in the political realm those that marked the rise and decline in the pyramid of world power. Amongst the political tendencies, China’s positioning as a regional power and its emergence as a world power became noticeable, based on its extraordinary economic growth, its growing insertion in the global economy, and the strengthening of its military-strategic power.

The re-emergence of China as one of the key actors in the economic and political world order since the late 1970s has been acclaimed throughout the world as one of the most-important events of modern world history. In a sense, China’s role is increasingly becoming comparable to the old role of the United States as an “indispensable country” (Li, 2010). This affirmation carries in it the seed of world competition: which state will be the next to take on the condition of being “indispensable”?

According to some estimates, China will be the biggest economy in the world before 2020. What preoccupies the Western powers is not China’s economic rise, because, clearly, other countries could benefit from its growth and development by associating themselves with its economic expansion. What preoccupies them is the political component, and the impact that this change in status implies. This gives reason for preoccupation, since changes in the distribution of power have historically led to great instability that have often resulted in great conflicts and affected alliance patterns.

A change in global power implies a certain implicit or explicit change in the existing world order. As a result, it is assumed that emerging powers demand more decision-making power in world affairs, and that the established powers have difficulties adapting themselves to the demands. The possible consequences of these transformations are not easy to predict.

According to the opinion and analysis of Li Minqi, the rise of the European capitalist world economy to world dominance in the nineteenth century coincided with the decline and disappearance of the Chinese Empire’s historic dominance. The interesting question then is if China’s new rise as a world power will come to coincide with the decline and disappearance of the capitalist world economy dominated by Western hegemony that now reaches its global dimension by including the last economy opposing the capitalist model of accumulation. The spectacular emergence of China as an economic world power after 1980 was, in part, an unplanned consequence of the neoliberal turn of the advanced part of the capitalist world. The transition of China towards capitalism has played an indispensable role in the triumph of global neoliberalism (Li Xing, 2010). According to this interpretation, China is the last paradise on earth for the geographical expansion of the capitalist world economy which will reach its final limit. This last argument follows Rosa Luxemburg’s classical theory of imperialism, according to which capitalism, in order to thrive, needs to incorporate new geographical territories. It is debatable if this hypothesis or theory holds true, but clearly China’s integration into the capitalist world system through its reform policies since the late 1970s has played a major role in the dynamics of the economic world system and its parts.

Following Wallerstein (1997), the rise of China can be interpreted as part of the rhythmic cycles of the evolution of the world system, but it continues to be limited by the fundamental logic of the capitalist system of accumulation and the competition and rivalry that this implies. This is why a China completely integrated in the capitalist world economy intrinsically constitutes a new competitor for global hegemony.

On the other hand, the disintegration of the most powerful contender, the USSR, and the adoption by China of market economy demonstrated that the imposition of an alternative system of accumulation on a global scale turned out to be an impossible task. This reflection leads to the hypothesis that, as long as the capitalist model of accumulation is dominant, all states will be integrated in the capitalist world system. Therefore, changes in hegemony can only occur within the world capitalist system.

Which Factors Characterize this Process of Changes?

The Current Phase of Crisis of the Core of the Capitalist System

What we are seeing is a crisis of the existing model of accumulation. What we today identify as “globalization” is the most-recent phase of historical capitalism in which the globalization of capital coincides with a system of ideas that did not exist in earlier phases and that was made possible by the systems of information, telecommunication and informatics generated by the technological revolution which followed the crisis of capitalism in the decade of the 1970s. This crisis was reflected in the questioning of the Fordist model of production and the welfare state, and introduced a new phase of historical capitalism where finance capital gained strong influence in the historical block of power centered on the hegemony of the United States (Bernal-Meza, 1996, 1997 and 2000). We have discussed this process in more detail elsewhere (Bernal-Meza and Christensen, 2012: 16–17). What is relevant to highlight here is that the new phase of historical capitalism led to the gradual strengthening of neoliberal ideology with its emphasis on the desirability of free markets, economic deregulation, and privatization of state companies that allowed these companies to enter into the circulation and ownership of private capital through the figure of transnational companies and finance capital. This new phase of internationalization or globalization was dominated by the historical block of power of the leading industrial powers centered on the United States along with European states and Japan (Christensen, 2013: 44).

The neoliberal approach to development gained further strength with the demise of the USSR and the end of the Cold War, leading to the consolidation of capitalism now including basically all of the former planned economies in the sphere of interest of the USSR. Similarly, neoliberalism gained a stronghold in other world regions including Latin America, where the United States pursued a “neo-Monroeist” strategy of Pan-American integration under its leadership. In 1994, the North American Free Trade Agreement, NAFTA, between the United States, Canada and Mexico came into force, and the US proposed the Free Trade Area of the Americas, FTAA, in the same year and found great receptiveness in the region at the time with the partial exception of Brazil. By the early part of the twenty first century, however, Argentina and Venezuela had also become strongly opposed to the FTAA after negative development experiences that were seen to be an outcome of the neoliberal development strategies of the 1990s. In the area of the international security regime, the end of the Cold War led to the introduction of a new norm of “humanitarian intervention” supported by the United States and its support coalition in the North Atlantic Treaty Organization (NATO). This new norm was explicitly designed to make national so...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of Figures and Tables
• Notes on Contributors
• List of Acronyms
• Introduction: Understanding the Hegemony and the Dialectics of the Emerging World Order
• 1 Theorizing the Rise of the Second World and the Changing International System
• 2 Constructing and Conceptualizing “Interdependent Hegemony” in an Era of the Rise of the BRICS and Beyond
• 3 BRICS and Bilaterals: Synergies and Contestations
• 4 From Boulders to Ashlars – BRICS of a New World Order: Hierarchies of Power and Degrees of Freedom in the Emerging World System of the Twenty-first Century
• 5 G20 and C2: Sino-US Relations as an Institutional Cooperation Game?
• 6 China in Africa: Cool Cash or a New World Order?
• 7 A “New Silk Road” Between China and the Arab World: A Problem for the US or the EU?
• 8 “Chineseness” as Socialization: China and the ASEAN in East Asian Regionalism
• Conclusion: The BRICS and Beyond: New Global Order, Reorder and/or Disorder? Insights from “Global Governance”
• Index
• Series List