
The US fears competition. Its status as head of the global order must now be rethought
- American pre-eminence was sustained by a grand bargain: it could sit at the top if it did not abuse its position – or it kept its abuse to bearable levels
- Now that it no longer wants to behave responsibly, a more multipolar world which works for the benefit of all must be devised, argues Chandran Nair

America’s military edge has also been weakened. With the rise of China and exhaustion from its endless wars, the US can no longer project power globally as easily as it could even just a decade ago.
All that’s left is its position at the head of the global order, underpinned by the global use of the dollar. The current administration is ready and willing to use this position to pursue its own interests, no matter the collateral damage. This is untenable and the world needs to act with urgency.
American pre-eminence was sustained by a grand bargain: the US could sit at the top, yet would not abuse its position – or, at least, keep its abuse of the system at bearable levels. The US clearly benefits from its position as the sole superpower, and when it built this order after World War II, no other country was really in a position to dictate terms.
When faced with the risk calculus of trying to create a different system, most governments probably felt the effort and conflict with the US wasn’t worth it. American meddling was mostly kept within tolerable levels, and usually targeted at countries on the periphery of the global system – and the US-led system provided enough benefits that countries decided to tolerate it.
Washington’s recent actions against China, however, reveal that the US is now willing to pursue what it sees as its national interest against any major economy it deems to be a competitor.
There are those within the current US administration who understand that certain actions should not be taken. At one point, for example, the White House reportedly considered trying to break the Hong Kong dollar’s peg to the US one – only to be convinced otherwise by panicked aides worried about destroying the entire dollar-based system.

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In some ways, it doesn’t matter what the outcome of this year’s election will be: even if the US does go back to being more restrained – and it won’t in practice when it comes to several countries – no one can dismiss the worst-case scenarios any more.
It has to return to its core values and be willing to compete so that it can earn the right to lead. No country has the right to lead by breaking all the rules and sowing the seeds of instability across the world. So what happens now?
The fundamental flaw in the global system is that it relies on one country behaving responsibly – or, at least, responsibly enough for people to tolerate it. It should be clear to all that this simply cannot go on.
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The answer is not in hoping that there will be more enlightened US leadership, but instead in creating a multipolar world with the US, China, Europe and two or three regional blocs like the African Union.
Whatever system replaces the current one must avoid being reliant on one country. But an alternative is desperately needed. That means a greater presence for non-American voices. European governments are key to this and need to step up and take responsibility, and not settle into their comfortable role following the US.
And the US needs to be willing to let go of its sole leadership role, which, in truth, has had its own negative effects on ordinary Americans.

They should examine two critical options. The first is to allow the US dollar to retain its current position, but with a complete overhaul of the conditions attached so that the US is restricted in its ability to “weaponise finance” as part of its foreign policy.
The second, more challenging, option is to design a system that does not allow any one country to abuse it for that country’s own ends, replacing it with a different structure based on something like a basket of currencies.
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This will be a painful and messy transition as Americans will find it difficult to accept that they are not the only game in town. The world must be united and prepared in anticipating their angry reaction, but also in enduring the pain of the transition to another system.
This transition is necessary, if the world is to have a more resilient global system that cannot be hijacked by any one country’s national interest. There is opportunity here, the likes of which has not been seen for decades, and it must be seized to bring the world together and address the existential threats facing humanity in the 21st century.
We must not shy away from it just because it has never been done before. Perhaps it will even be supported by a more enlightened US leadership, as part of a new road map to “making America great again”. ■
Chandran Nair is the founder of the Global Institute for Tomorrow and a member of the Club of Rome. He is also the author of The Sustainable State: The Future of Government, Economy and Society
