Susan Strange
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Potential solutions to the world financial crisis are considered and rejected. This in turn raises the prospect that world economic recovery will be a long time in coming. And in that case more of the same is going to mean that the system survives more or less intact, but that the costs of adjusting to a smaller shrunken credit structure are predominantly borne by the politically weak and the economically dependent, both within the industrialized countries and in the international system. Many developing countries are going to have their IMF missions around for a long time to come. Awareness of the high price of regaining the confidence of foreign bankers is going to grow. Either, government becomes stronger and thus more repressive of opposition, more authoritarian and militarist – in which case the prospects of peace, democracy or of free economic enterprise diminish. Or, government remains weak and unstable; foreign confidence in the country flags, leaving it in a continued state of debt, depression and disorder. This too holds little attraction for the still prevailing Western liberal cast of mind.

In the short term, the United States could, it is true, continue to enjoy certain privileged immunities through the use of its considerable bargaining power as military protector (or interventionist) and as trading partner. But in doing so it would risk a dangerous alienation of large areas of the world economy. In the long term this would damage its own economic future no less than the rest of the system.

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