46.Why 9/15 changed more than 9/11 By Gideon Rachman

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Why 9/15 changed more than 9/11

By Gideon Rachman

Published: September 13 2010 22:26 | Last updated: September 13 2010 22:26

America commemorates two grim anniversaries this month: 9/11 and 9/15. Almost a decade has passed since hijacked aircraft flew into the twin towers, killing nearly 3,000 people and transforming America’s relations with the world. Two years have elapsed since the collapse of Lehman Brothers triggered a global financial crisis and provoked fears of a new Great Depression.

The two events took place within a few miles of each other in Manhattan. Each of them changed the world profoundly. But when the history books are written, which will seem more important?

My guess is that it will be the financial crisis that ends up looming larger. That might seem a strange judgment. To many Americans, 9/11 definitively marked the end of an era. A decade of Gatsbyesque good times between the collapse of the Soviet Union and the attack on the US had come to a horrific end. Two wars, in Afghanistan and Iraq, flowed directly from 9/11. The US launched into a struggle with militant Islamism and a “war on terror” that continue to this day.

By contrast, the worst fears provoked by the collapse of Lehman Brothers were not realised. There was no Great Depression. Growth has returned to the economy. Globalisation – the mega-trend of the past 30 years – was not put into reverse. Nonetheless, I think it is the financial crisis that will turn out to be the bigger turning point – not just in economics, but in geopolitics. That is because it was 9/15, not 9/11, that truly marked the end of the “unipolar moment”.

The attacks on New York and Washington in 2001, horrifying as they were, did not shake US dominance of the global political and economic system. On the contrary, they led to a dramatic reassertion of American power. Two governments on the other side of the world were toppled in short order. In the immediate aftermath of the Iraq and Afghan wars, the White House of George W. Bush and its supporters felt more confident of US power than ever before. Charles Krauthammer, the conservative columnist who coined the phrase “the unipolar moment”, greeted victory in Iraq by hailing a “world dominated by a single superpower unchecked by any rival”.

By 2008 it was clear that initial military victories in Iraq and Afghanistan had given way to something much more inconclusive and frustrating. But America’s economic prowess still seemed to provide a reliable basis for the country’s global political position.

The financial crisis has changed that assumption, almost certainly forever. In its aftermath, the US is much more conscious of the limits to its own power. Even as he announced that he was sending more troops to Afghanistan, Barack Obama, US president, fretted that: “We simply cannot afford to ignore the price of these wars.” Defence cuts are on their way.

America is not only more conscious of the limits to its own power. It is also much more aware of the strengths of potential rivals. In the early months of the economic crisis, the conventional view was that the world would slide into a synchronised downturn. In the event, China and emerging Asia bounced back much faster than the US and the wider western world.

The financial crisis has made Americans realise that the “China challenge” is not something for the distant future – it is happening here and now. While the date at which the Chinese economy becomes larger than that of the US is probably still 15 years or more away, in some important respects China is already pre-eminent. It has the world’s largest currency reserves. It is the world’s largest exporter. It is the largest producer of steel and of greenhouse gases. It is the biggest market for motor vehicles. It is now the largest trading partner of other significant emerging economies, such as India and Brazil.

For the moment, America remains the dominant power, even in China’s Pacific “backyard”. But a Chinese challenge to US hegemony over the Pacific is likely to emerge in the coming years. This new sense of rivalry is already increasing US-Chinese tensions – witness the current effort to push protectionist legislation through Congress.

The upheavals of 9/11 and 9/15 revealed different sorts of challenges to American power. Violent Islamist militancy still has the potential to do enormous damage. But the idea that the big geopolitical trend of the next century will be the creation of a global Islamic caliphate – while a popular notion in Waziristan and on American talk radio – is a fantasy. It is hard to think of a philosophy that is worse adapted to dealing with modernity than the fundamentalism of Osama bin Laden. Indeed, one ironic consequence of 9/11 is that it may have persuaded the US to spend a vital decade pouring resources into combating the wrong threat.

By contrast, it seems entirely plausible that, just as the 20th century was the American century, so the 21st century will be the Asian century. The economic transformation underpinning this shift in power was well under way before the global financial crisis. But the crisis is likely to go down as the moment that both revealed and accelerated the erosion of western dominance. That is why 9/15 may ultimately matter more than 9/11.

gideon.rachman@ft.com

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