The challenges produced by the present global power shift, combined with rapid technological advance, are daunting for the rising powers no less than for the receding ones. All political systems are in some way experiencing disequilibrium as they seek to adjust to the repeated shocks caused by the transition underway from what we call Globalization 1.0 to Globalization 2.0.
In the decades since the end of the Cold War, American-led globalization – 1.0 – has so thoroughly transformed the world through the freer ﬂow of trade, capital, information, and technology that it has given birth to a new phase – Globalization 2.0.
“In the past few centuries what was once the European and then the American periphery became the core of the world economy,” writes Financial Times analyst Martin Wolf. “Now, the economies of the periphery are re-emerging as the core. This is transforming the entire world . . . this is far and away the biggest single fact about our world.”
Nobel economist Michael Spence reinforces this point. What we are seeing today, he writes, are “two parallel and interacting revolutions: the continuation of the industrial Revolution in the advanced countries, and the sudden and dramatic spreading pattern of growth in the developing world. One could call the second revolution the Inclusiveness Revolution. After two centuries of high-speed divergence, a pattern of convergence has taken over.”4
This great economic and technological convergence that is the consequence of Globalization 1.0 has at the same time given birth to a new cultural divergence as the wealthier emerging powers look to their civilizational foundations to deﬁ ne themselves anew against the waning hegemony of the West. Since economic strength engenders cultural and political self-assertion, Globalization 2.0, above all, means the interdependence of plural identities instead of one model for all. The once regnant Western liberal democracies must now contend on the world stage not only with neo-Confucian China but also with the likes of the Islamic-oriented democracy within Turkey’s secular framework, which has become an attractive template for the newly liberated Arab street. In short, the world is returning to the “normal pluralism” that has characterized most of human history.
Historically, a power shift of this magnitude often ends in collision and conﬂict. But, given the intensive integration that the post-Cold War round of globalization has wrought, it also poses entirely new possibilities of cooperation and cross-pollination across a plural civilizational landscape.
We are thus at an historical crossroads. How we govern ourselves in the coming decades within and among nations will determine which of these paths the 21st century follows.