Week 3: Forever Wars and Economic Crisis 

Forever Wars and Economic Crisis

“How did world politics go from unipolarity to US retrenchment?”

• international doubt based on the erosion of US credibility

• changes in domestic willingness to lead World in 2024

• deep interdependence, and connected ideas/interests o USmainlypayscostsandenjoysbenefits
o butthatcreatessharedvulnerabilities

1991 - unipolarity and the global expansion of US world order Twin crises of the early 21st century:

1. Foreverwars(IraqandAfghanistanafter2001)

• Eroded America’s confidence in itself

• US use of hard power

• The US attempt to create order and exercise the faces of power, created disorder

o Pathdependency-furtheryougoinaparticulardirection,theharderisitto turn back/choices become narrower

▪ TheUSgotlockedintotheirinvasion/attempttobuilda democracy/loss of US troops

o Thelawofdiminishingreturns-theinvestmentsdecreasethelongeryou remain in the process - productivity slows, plateaus, and diminishes

o Bush’sframingduringhisstateoftheunion-notjustaterroristattack, framed as a civilizational battle, call-back to WW2

• Afghanistan and the Impact of 9/11 o 60s,70s-liberal

o 79-89-sovietinvasionandUSproxywar o 91-96-Civilwar

▪ USwithdrawsandAfghanistaninstabilityleadstocivilwar

▪ Talibanemergedasvictor(ruledfrom96-2001)
o October7,2001-OperationEnduringFreedom(beginningofthewaragainst

Afghanistan)
▪ By December, war seemed to be over

• seen as a success for the world, liberation of the oppressed and women, success for local and international development

o 2001-2003-productivedemocracybuildingandreconstruction
▪ USattentionisbeingdivertedtoIraqin2003,despitecounter

insurgency brewing in Afghanistan

• Iraq
o 80s–Iran-Iraqwar

• ▪  USsentarmstoIraq(seentobemorefriendlytotheUS)

• ▪  SaddamHusseinusedchemicalweaponsandtheninvadedKuwait
  (beginning of the Gulf War)

o 2001-US’spotentialtargetsafter9/11=Taliban,alQaeda,Iraq
o 2002-2003-USlooksforUNSecurityCouncilAuthorizationtoallow

intervention
▪ arguedforliberation,democracy,preventionofspreadofweapons ▪ was incredibly divisive – US, UK vs France, Russia, Germany

o 2003-worldwideanti-warrally(causedbypopulardiscontentinternationally and in the US)

o 2003-Bushultimatum,invasionofIraq,defeatofSaddamHussein,and almost immediate factional violence between militant groups, anti-US insurgencies, Iraqi frustration, looting

o 2003-2004-increasedcasualties,insurgency,andtorture(obliteratedUS soft power - people didn’t understand how they could love democracy but use torture)

• Consequences of Forever Wars (by 2008)
o USunderminedtheUN(didn’tapprovetheconflict)andinstitutionalorder o Democracypromotionfailingandsoftpowereroding

2. Globalfinancialcrisis

• Multiple shocks that brought down the global economy

• Global economic order required global cooperation, but the solution to 2008 wasn’t
  universally agreed upon (eroded trust in global economic order)

• Crisis had a gradual build-up
  o 1980s-2000s-economicbooms
  ▪ ledtoderegulationandincreasedsize/powerofthefinancialactors and markets
  o 1980s-1990s–globalfinancesystemsubsumedsovietpartsoftheworld ▪ increased technology, which led to global debt, credit, and instant
  lending/trading
  o 2007-2008-UShousingmarketcollapses

  • ▪  causedbyhugeboomsin90sand2000s,fueledbyunsustainable lending and inability for people to pay mortgages

  • ▪  BanksandinvestmentfundsstartfailinginEuropeandUS o 2008-USbankscollapseorbailedout/stockmarketcollapses

  • ▪  HouseofRepsfailedatbailingthebanksoutandpeoplewere increasingly doubtful of the US government’s ability to help

  • ▪  Duringthe2008presidentialcampaign

• Consequences of Financial Crisis
  o Completelossoftrustinthewesterncapitalorder
  ▪ theUSfederalreservewastheonlyonethatcouldbetrusted(as lender) and had to step in
  o Unemploymentratesrise o Politicalintervention
  ▪ 2008electionwonbyObama,whosignsbailoutpackages-bailedout banks, and private companies to save jobs

• Global political leaders created preventative plans - collaborative bailout pledges, public spending cuts

o Political/socialbacklash-theteaparty(right)andoccupywallStreet(left)

• ▪  Europeanbacklash-Eurozonecrisis-theeconomiesofcountries
  with weaker economies collapse, require separate bailouts from central bank, allow for certain European countries to have a say over others, led to resentment

• ▪  Anti-EU sentiment - Brexit, anti-EU parties

• 2008+ (Forever Wars and Financial Crisis)
o largesttransferofpublicwealthtoprivateinterestsinworldhistory(probably

prevented a worse fate should the economy have collapsed entirely) o USinterventionalcreatedsocialorderbyrestoringthestatusquo

o 2008-2016-Obamapledgestoendforeverwarsbutinsteadexpandedthem (expanded US hard power for ‘liberation/democratization’ reasons)

o 2015-Riseofanarchiczones,ISIS(alQaedasplintergroup),andarefugee crisis

o 2016–Trump
o 2020–US-Talibanagreement
o 2021–USwithdrawalsfromAfghanistan

• Over 20 trillion dollars towards wars and bailouts, 940,000 people killed in direct violence

• Led to the creation of the ‘America First’ movement

Reading 1: Malkasian

• What is this about?

• The reading examines the failure of U.S. efforts in Afghanistan, highlighting corruption in the Afghan government, Pakistan’s influence, and the cultural significance of resistance to occupation that fueled the Taliban’s resurgence.

• Why does it matter?

• It underscores how mismanagement, strategic missteps, and cultural disconnects can undermine military interventions, prolong conflicts, and lead to high human and financial costs without achieving lasting peace.

• How does it fit?

• The war in Afghanistan demonstrates the challenges of nation-building and counterinsurgency in a deeply interconnected world, showing how local dynamics, regional rivalries, and global counterterrorism shape modern conflicts and their outcomes.

Reading 2: Lefler, 911 and the Roots of the Iraq War

• What is this about?

• How the 9/11 attacks influenced President George W. Bush’s decision to invade Iraq, largely motivated by fears of terrorism and weapons of mass destruction.

• Why does it matter?

• The invasion resulted in immense human and financial costs, destabilized the region, and revealed significant flaws in U.S. intelligence, planning, and leadership. The end of US-led order?

• How does it fit?

• It underscores the challenges of fear-driven decision-making in global governance and demonstrates the far-reaching consequences of U.S. military interventions on international stability and its own credibility.

Reading 3: Crashcourse, The Economist

• What is this about?

• The causes and impacts of the 2008 financial crisis, highlighting irresponsible lending, regulatory failures, and global economic imbalances as key factors.

• Why does it matter?

• The crisis caused a global economic downturn, massive financial instability, and long-lasting effects on economies worldwide, emphasizing the need for stricter oversight and better financial regulations.

• How does it fit?

• The crisis revealed vulnerabilities in interconnected global markets, reshaping economic policies, prompting international regulatory reforms, and intensifying debates about the role of government in managing financial systems.

Slides:

• Question:

• How did world politics go from unipolar moment to US retrenchment?

• Answer:

• Failures eroding credibility of US power

• Implication:

• Is this the end of the US-led world order?

Two decades from Hell

• 940,00 killed from direct violence

• Afghanistan 2001-2021:

• $2.313 trillion

• Iraq 2003-2023: $2.9 trillion

• $17 trillion in US bailouts

Is this global order worth the costs?

Polarity

• Distribution of power

• Who has power and who doesn't?

• Unipolarity: one great power example (1991, post cold war, Pax Americana)

• Bipolarity: two great powers

• (soviet union and US, cold war) Two international states

• Security competition 

• Tripolarity: three great powers 

• Multipolarity: More than three great power

• (1914-1917)

Hegemony

• Preponderance of power

• Regional hegemony (US in 1900s)

9//11

The Question

• How did the 9/11 attacks lead to two decades of war?

The Answer

• Path dependency; diminishing returns

The Implications

• US attempts to create order has resulted in disorder

Path Dependency & Diminishing Returns

• The further you go, the narrower your choices become; investments stop paying off after a while

US as leader & lender of last resort

• 2008-2010 the US was the only trustworthy lender in the global system

Different kinds of economic inequality

• Inequality and its cause are different depending on where you look

Two decades of hell:

1991:

• Unipolarity

2001:

• War in Iraq and Afghanistan 

2008:

• Global Financial Crisis & Inequality

2016:

• Backlash & the Rise of Trump

2020s:

• Pandemic & US dysfunction

Financial Crisis

The Question

• What happened in 2008?

The Answer

• Multiple shocks bring down the global economy

The Implications

• Cooperation preserves global economic order. But reinforces inequality; erodes trust in global order

Financial Crisis

• Finance goes global after Cold War

• Computer tech enables instant trading

• Global debt, credit, lending at light speed

• 2007-2008: things fall apart

• US banks bailed out, collapse of the stock market, housing crisis.

Received major criticism

• Is this the end of a US-led Order?