by Seumas Milne
19 October 2012
This is an edited extract from
'The Revenge of History - the
Battle for the 21st Century'
by Seumas Milne, published by
Culture shock ... the
collapse of Lehman Brothers
ushered in the deepest
economic crisis since the 1930s.
Photograph: Linda Nylind for
The upheavals of the early 21st
have changed our world.
Now, in the aftermath of failed wars and
pressure for a social alternative can only grow
In the late summer of 2008, two events in quick succession signaled the end
the New World Order. In August, the US client state of Georgia
was crushed in a brief but bloody war after it attacked Russian troops in
the contested territory of South Ossetia.
The former Soviet republic was a favorite of Washington's neoconservatives.
Its authoritarian president had been lobbying
hard for Georgia to join Nato's eastward expansion. In an unblinking
inversion of reality, US vice-president Dick Cheney denounced Russia's
response as an act of "aggression" that "must not go unanswered".
Fresh from unleashing a catastrophic war on
Iraq, George Bush declared Russia's "invasion of a sovereign state" to be
"unacceptable in the 21st century".
As the fighting ended, Bush warned Russia not to recognize South Ossetia's
independence. Russia did exactly that, while US warships were reduced to
sailing around the Black Sea. The conflict marked an international turning
point. The US's bluff had been called, its military sway undermined by the
war on terror, Iraq and Afghanistan.
After two decades during which it bestrode the
world like a colossus, the years of uncontested US power were over.
Three weeks later, a second, still more far-reaching event threatened the
heart of the US-dominated global financial system. On 15 September, the
credit crisis finally erupted in the collapse of America's fourth-largest
The bankruptcy of Lehman Brothers engulfed the
western world in its deepest economic crisis since the 1930s.
The first decade of the 21st century shook the
international order, turning the received wisdom of
global elites on its head - and 2008 was its watershed. With the
end of the cold war, the great political and economic questions had all been
settled, we were told.
Liberal democracy and free-market capitalism had
triumphed. Socialism had been consigned to history. Political
controversy would now be confined to culture wars and tax-and-spend
George Bush Senior had inaugurated a
New World Order (below video), based on uncontested US military
supremacy and western economic dominance.
This was to be a unipolar world without rivals.
Regional powers would bend the knee to the
new worldwide imperium. History itself,
it was said, had come to an end.
But between the
attack on the Twin Towers and
fall of Lehman Brothers, that global order had crumbled.
Two factors were crucial.
- By the end of a decade of continuous
warfare, the US had succeeded in exposing the limits, rather than the
extent, of its military power. And the neoliberal capitalist model that
had reigned supreme for a generation had crashed.
It was the reaction of the US to 9/11 that
broke the sense of invincibility of the world's first truly global
The Bush administration's wildly
miscalculated response turned the atrocities in New York and Washington
into the most successful terror attack in history.
Not only did Bush's war fail on its own terms, spawning terrorists
across the world, while its campaign of killings, torture and kidnapping
discredited Western claims to be guardians of human rights. But the
invasions of Afghanistan and Iraq
revealed the inability of the global behemoth to impose its will on
subject peoples prepared to fight back.
That became a strategic defeat for the US
and its closest allies.
This passing of the unipolar moment was the first of four decisive
changes that transformed the world - in some crucial ways for the
- The second was the fallout from
the crash of 2008 and the crisis of the western-dominated
capitalist order it unleashed, speeding up relative US decline.
This was a crisis made in America and deepened by the vast cost of its
multiple wars. And its most devastating impact was on those economies
whose elites had bought most enthusiastically into the neoliberal
orthodoxy of deregulated financial markets and unfettered corporate
A voracious model of capitalism forced down the throats of the world as
the only way to run a modern economy, at a cost of ballooning inequality
and environmental degradation, had been discredited - and only rescued
from collapse by the greatest state intervention in history.
The baleful twins of neoconservatism and
neoliberalism had been tried and tested to destruction.
The failure of both accelerated the rise of China, the third epoch-making
change of the early 21st century. Not only did the
country's dramatic growth take hundreds of millions out of poverty, but its
state-driven investment model rode out the west's slump, making a mockery of
market orthodoxy and creating a new centre of global power. That increased
the freedom of maneuver for smaller states.
China's rise widened the space for the tide of
progressive change that swept Latin America - the fourth global
Across the continent, socialist and
social-democratic governments were propelled to power, attacking economic
and racial injustice, building regional independence and taking back
resources from corporate control. Two decades after we had been assured
there could be no alternatives to neoliberal capitalism, Latin Americans
were creating them.
These momentous changes came, of course, with huge costs and qualifications.
The US will remain the overwhelmingly dominant
military power for the foreseeable future; its partial defeats in Iraq and
Afghanistan were paid for in death and destruction on a colossal scale; and
multipolarity brings its own risks of conflict. The neoliberal model was
discredited, but governments tried to refloat it through savage austerity
China's success was bought at a high price in
inequality, civil rights and environmental destruction. And Latin America's
US-backed elites remained determined to reverse the social gains, as they
succeeded in doing by violent coup in Honduras in 2009.
Such contradictions also beset the revolutionary
upheaval that engulfed the Arab world in 2010-11, sparking another shift of
By then, Bush's 'war
on terror' had become such an embarrassment that the US
government had to change its name to "overseas contingency operations".
Iraq was almost universally acknowledged to have
been a disaster, Afghanistan a doomed undertaking. But such chastened
realism couldn't be further from how these campaigns were regarded in the
western mainstream when they were first unleashed.
To return to what was routinely said by British and US politicians and their
tame pundits in the aftermath
9/11 is to be transported into a parallel universe of toxic
fantasy. Every effort was made to discredit those who rejected the case for
invasion and occupation - and would before long be comprehensively
Michael Gove, now a Tory cabinet minister, poured vitriol on the
Guardian for publishing a full debate on the attacks, denouncing it as a
"Prada-Meinhof gang" of "fifth columnists".
Rupert Murdoch's Sun damned those warning
against war as "anti-American propagandists of the fascist left".
When the Taliban regime was overthrown, Blair
issued a triumphant condemnation of those (myself included) who had opposed
the invasion of Afghanistan and war on terror.
We had, he declared, "proved to be wrong"...
A decade later, few could still doubt that it was Blair's government that
had "proved to be wrong", with catastrophic consequences. The US and its
allies would fail to subdue Afghanistan, critics predicted. The war on
terror would itself spread terrorism. Ripping up civil rights would have
dire consequences - and an occupation of Iraq would be a blood-drenched
The war party's "experts", such as the former "viceroy of Bosnia" Paddy
Ashdown, derided warnings that invading Afghanistan would lead to a
"long-drawn-out guerrilla campaign" as "fanciful".
More than 10 years on, armed resistance was
stronger than ever and the war had become the longest in American history.
It was a similar story in Iraq - though opposition had by then been given
voice by millions on the streets. Those who stood against the invasion were
still accused of being "appeasers". US defence secretary Donald Rumsfeld
predicted the war would last six days. Most of the Anglo-American
media expected resistance to collapse in short order.
They were entirely wrong...
A new colonial-style occupation of Iraq would, I wrote in the first week of
"face determined guerrilla resistance long
after Saddam Hussein has gone" and the occupiers "be driven out".
British troops did indeed face unrelenting
attacks until they were forced out in 2009, as did US regular troops until
they were withdrawn in 2011.
But it wasn't just on the war on terror that opponents of
New World Order were shown to be right and its cheerleaders to be
talking calamitous nonsense. For 30 years, the west's elites insisted that
only deregulated markets, privatization and low taxes on the wealthy could
deliver growth and prosperity.
Long before 2008, the "free market" model had been under fierce attack:
neoliberalism was handing power to
unaccountable banks and corporations, anti-corporate globalization
campaigners argued, fuelling poverty and social injustice and
eviscerating democracy - and was both economically and ecologically
In contrast to New Labour politicians who
claimed "boom and bust" to be a thing of the past, critics dismissed the
idea that the capitalist trade cycle could be abolished as absurd.
Deregulation, financialization and the reckless
promotion of debt-fuelled speculation would, in fact, lead to crisis.
The large majority of economists who predicted that the neoliberal model was
heading for breakdown were, of course, on the left. So while in Britain the
main political parties all backed "light-touch regulation" of finance, its
opponents had long argued that City liberalization threatened the wider
Critics warned that privatizing public services would cost more, drive down
pay and conditions and fuel corruption. Which is exactly what happened...
And in the European Union, where corporate privilege and market orthodoxy
were embedded into treaty, the result was ruinous.
The combination of liberalized banking with an
undemocratic, lopsided and deflationary currency union that critics (on both
left and right in this case) had always argued risked breaking apart was a
disaster waiting to happen. The crash then provided the trigger.
The case against neoliberal capitalism had been overwhelmingly made on the
left, as had opposition to the US-led wars of invasion and occupation. But
it was strikingly slow to capitalize on its vindication over the central
controversies of the era.
Hardly surprising, perhaps, given the loss of
confidence that flowed from the left's 20th-century
defeats - including in its own social alternatives.
But driving home the lessons of these disasters was essential if they were
not to be repeated. Even after Iraq and Afghanistan, the war on terror was
pursued in civilian-slaughtering drone attacks from Pakistan to Somalia.
The western powers played the decisive role in
the overthrow of the Libyan regime - acting
in the name of protecting civilians, who then died in their thousands
in a NATO-escalated civil war, while conflict-wracked Syria was threatened
with intervention and Iran with all-out attack.
And while neoliberalism had been discredited, western governments used the
crisis to try to entrench it.
Not only were jobs, pay and benefits cut as
never before, but privatization was extended still further. Being right was,
of course, never going to be enough. What was needed was political and
social pressure strong enough to turn the tables of power.
Revulsion against a discredited elite and its failed social and economic
project steadily deepened after 2008.
As the burden of the crisis was loaded on to the
majority, the spread of protests, strikes and electoral upheavals
demonstrated that pressure for real change had only just begun. Rejection of
corporate power and greed had become the common sense of the age.
The historian Eric Hobsbawm described the crash of 2008 as a,
"sort of right-wing equivalent to the fall
of the Berlin wall".
It was commonly objected that after the
implosion of communism and traditional social democracy, the left had no
systemic alternative to offer.
But no model ever came pre-cooked. All of them,
from Soviet power and the Keynesian welfare state to Thatcherite-Reaganite
neoliberalism, grew out of ideologically driven improvisation in
specific historical circumstances.
The same would be true in the aftermath of the crisis of the neoliberal
order, as the need to reconstruct a broken economy on a more democratic,
egalitarian and rational basis began to dictate the shape of a sustainable
Both the economic and ecological crisis demanded
social ownership, public intervention and a shift of wealth and power. Real
life was pushing in the direction of progressive solutions.
The upheavals of the first years of the 21st
century opened up the possibility of a new kind of global order, and of
genuine social and economic change.
As communists learned in 1989, and the champions
of capitalism discovered 20 years later, nothing is ever settled.