[The Editors' Verdict] When the US-Centered World Order Collapses, Where Do We Stand?

Kim Kyung-soo, Professor Emeritus at Sungkyunkwan University

"America is under attack," the anchor shouted urgently. Unable to sleep due to the time difference, the TV turned on in the middle of the night felt like watching a movie. Three years later, I visited Ground Zero through the World Trade Center building I had visited just before 9/11. Looking back, this tragic event was a prelude to the world of the 21st century that would unfold thereafter.

Recently, The Economist published an article under the theme "The Future Power of America." British historian N. Ferguson compared the chaos in Afghanistan?symbolizing America's decline after the longest war in history, which began immediately after the 9/11 attacks and ended with a hasty withdrawal?to interwar Britain nearly 100 years ago. Just as Britain was then, neither progressives nor conservatives are particularly interested in maintaining America's hegemonic status responsible for the world order. Ferguson warned that retreating from hegemonic status is never a peaceful process and that the world could be drawn into regional conflicts.

Francis Fukuyama, once the intellectual pillar of neoconservatism, viewed the Afghanistan situation not as the end of the American era but as a matter entirely dependent on domestic governance. Internal issues have led to changes in foreign policy, resulting in the collapse of the US-led international order. American society is now in a polarized era where it is difficult to find consensus on almost every issue, from abortion to cultural identity. External threats like COVID-19 should have been opportunities for Americans to unite, but social distancing, mask-wearing, and vaccination became politicized issues, causing even greater division.

President Joe Biden was elected by defeating the incumbent who had thrown away the liberal world order based on international norms built by the US over 70 years. President Biden declared to the international community that "America is back." However, unless the structural problems facing American society?namely polarization?are overcome, America cannot easily return.

As America's liberal hegemony wavers, geopolitical risks have already intensified in many places. Especially, the rise of China and the resulting US-China conflicts have increased risks in East Asia, negatively affecting the region's prosperity. As American influence declines, China's core interests clash with neighboring countries, leading to reduced investment and fewer resources for growth due to rising defense expenditures. Moreover, the global value chains (GVC) of key industries are being reorganized, causing supply-side bottlenecks and increasing inflationary pressures.

The book "The Size of Nations" (2003), co-authored by the late Alberto Alesina, explained the near quadrupling of UN member states from the original 51 in terms of the appropriateness of nation size. The size of a country is determined by balancing the benefits and costs of economies of scale and heterogeneity. Larger countries have bigger markets and can enjoy economies of scale in producing public goods like national defense, but cultural, religious, linguistic, and regional disparities intensify conflicts among members over public policy priorities. Under the postwar US-led liberal order based on international norms, international trade expanded, many countries emerged, and the Four Asian Tigers, including South Korea, turned opportunities into prosperity.

According to their hypothesis, in the Leviathan era of 21st-century US-China rivalry, the number of countries should decrease. From another perspective, this hypothesis suggests that small open economies must secure overseas markets to respond to increasing geopolitical risks. This reduces their dependence on the markets of major powers; otherwise, they must constantly watch the major powers' eyes. In hindsight, Japan, which revived the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)?a high-level multilateral agreement suitable for the 21st century that the US once led but abandoned?was truly clever to an enviable degree.

Kyungsoo Kim, Professor Emeritus, Sungkyunkwan University

This content was produced with the assistance of AI translation services.