Decline of the West

One of the very few positive outcomes of this economic meltdown may be the inevitable decline of Western power in the world and the waning of its previously overbearing reach over less developed nations. While it used to be the case that through its powerful institutions, such as the International Monetary Fund and the World Bank, the West could place entire economies under strict surveillance and dictate the ways in which these countries would structure their economies. All in return for loans. No more.

Brazil's President da Silva might have come dangerously close to racism when he proclaimed that the crisis was caused by "white blue-eyed" people, but the general point of this statement is correct: the Western powers, particularly the United States, shaped the post WWII world in accordance with their visions which they self-righteously declared was the only prescription for growth.

As the Berlin Wall fell in November 1989, Western style, Reaganesque capitalism seemed vindicated. Eastern European and postcolonial countries rushed to dismantle the carefully constructed social programs while they tore down their borders, inviting foreign capital to wreak havoc on their previously closely regulated markets. The new members of the EU were promised life-long prosperity as the IMF dictated the terms of the loans to the newcomers who were drunk on capitalist fervor. Well it turns out, to quote the Brazilian President again "they [the West] have demonstrated that they know nothing about economics."

The G20 summit in London represents a tectonic, once-in-a-generation shift in economic power in the world. For the first time, countries that had been previously treated like unruly school children (Brazil, Argentina, Saudi Arabia, India, China) are invited to the big table. In return for their cash donations to the IMF, they will obtain extensive voting rights at the G20, while the previously country club-like Financial Stability Forum in Switzerland will also include 10 new members (emerging markets), including Argentina, Brazil, South Africa, and China.

It is not an exaggeration to say that we are truly witnessing the disappearance of the idea of "the West" itself.