Even at the height of US power after WWII, we didn’t do it all ourselves. Our power rested on two pillars: the more time-honored option of overwhelming military force, and the network of alliances and organizations we built after WWII.
We were never in a position in which we could call all the shots ourselves; we were always just the first among equals. Today we live in a world of more asymmetric challenges. National power gives way to everyone from the WTO and the EU to drug cartels and terror groups. And as we learned in Iraq, our military might by itself never counted for as much as we had believed. Likewise, increasing globalization simply means that the international community will need even more international agreements to keep things going.
Thus the need for our aging international organizations and aging allies – a bit frightening. The EU is aging and losing clout; likewise Japan. NATO is under fire from its own members, particularly the French. The Bretton Woods system for international finance is sagging; it was designed in an age in which the U.S. was the only real economic power, and made little provision for trade issues, so we may need Bretton Woods II. The G8 does not yet include the new kids on the block.
The UN is a dinosaur, long overdue for reform, without which it will be irrelevant, if indeed it isn’t already. Obama wants UN reform. Who should be on the UN Security Council, who gets permanent seats, and who gets veto power? Those who don’t get veto power feel as though they are surrendering national sovereignty to a larger body, a concern which plagued U.S. states during the crafting of the Articles of Confederation and the U.S. Constitution, and which dominated the early years of the EU and the WTO.
WTO-- International economic mechanisms are also under fire. Critics claim the WTO just helps the rich get richer; in particular, the developing world hates US/EU farm subsidies which everyone agreed to phase out. They also claim the WTO doesn’t address labor or environmental issues; other battles include intellectual propery, reciprocity, transparency, and dispute resolution mechanisms and enforcement. The WTO embarrassed itself in its latest effort to resolve global trade issues. Another issue is getting Russia in – currently they are only observers.
IMF -- Also showing its age are the IMF and the IBRD, who at times managed things clumsily even in their youth (see Argentina) and may be ready for reform. The IMF is accused of reacting rather than preventing, and of seeing to austerity efforts, tax increases and their own repayments before addressing poverty. Some argue that in the wake of the current fiscal crisis, a new international mechanism should be set up, wherein the IMF acts as an early-warning system for fiscal crises; it might be better for national oversight mechanisms like the SEC to do their jobs in the first place. If we do reinvent the financial system, people like the BRIC countries should be at the table, keeping in mind that the industrialized world and the developing countries see the IMF differently. If we treat the Asians as cash cows and refuse to listen to them, they may take their money off the table and seek other mechanisms such as regional organizations.
These are the tools Obama must work with, to clean up Bush’s mess.