Historically, the world has witnessed several transitions of major currencies. Portugal dominated the global reserves until 1530 when Spain became the stronger global power. The Dutch and French currencies dominated world trade for most of the seventeenth and eighteenth centuries until the emergence of the British Empire, whereupon the pound sterling became the gold standard currency in the world. Next emerged the U.S. dollar as American political and economic power reigned supreme in the world.
Today, Washington is conducting its foreign policy virtually wearing blinders, willfully ignoring the signs showing that its global power is slowly yet steadily declining. The Ukraine crisis, coming in the aftermath of the Iraq and Afghanistan wars, has more or less reinforced the nearly global view that the world is better served with multipolarity and multilateralism. By splitting the world into three broad camps, the Ukraine crisis, as prosecuted by NATO, has moved the “neutral camp” to inch closer to China and Russia. Whereas Washington made supporting Ukraine against Russian aggression a fundamental foreign policy priority, many neutral countries and China have seen the world eye-to-eye. They have seen the rising costs of the war on all socio-economic, political, military, energy, popular levels rise toward global implosion. Whereas the leadership of the West seeks justice against Putin and Russia, irrespective of the popular view, the leadership of the non-Western world seeks peace. The problem is that justice can never be achieved at the expense of peace. That’s seemingly the lesson Washington never learned from Iraq and Afghanistan: the plans for punishment came first; the plan for the day afterward came later, if it ever came at all. As a result, peace was fleeting.
Most importantly, by leading the camp of seeking justice regardless of the consequences, Washington is paving the way for its own decline by encouraging multipolarity. In this respect, it’s plausible that the yuan will become an alternative to the U.S. dollar in a “multipolar” world in a matter of years, not decades or centuries. This will deal a severe blow to American economy and global position that Washington may not be able to recover from.
Robert G. Rabil is a professor of political science at Florida Atlantic University. He can be reached at @robertgrabil.