Henry Kissinger calls for a New World Order

Surprising? No. Distressing? Yes. The "new world order" has been touted as a conspiracy theory since the Second World War, but now we are seeing it revealed openly.*

In a commentary published in yesterday's International Herald-Tribune, Dr. Kissinger argues that the global economic collapse resulting from that of the financial markets presents a unique "opportunity" arising from a disconnect between a global economy and national political institutions.

"In the end, the political and economic systems can be harmonized in only one of two ways: by creating an international political regulatory system with the same reach as that of the economic world; or by shrinking the economic units to a size manageable by existing political structures, which is likely to lead to a new mercantilism, perhaps of regional units. "

The remainder of the piece discusses the problems of the United States, Europe, and China in resolving their economic problems in the absence of such a system. Dr. Kissinger, of course, advocates that one be created.

Only one problem, and it's a big one. History has shown that, the larger the political structure, the more fatal it is for individual liberty. Instead of growing the "political regulatory system" to have the same reach as the global economic system, we actually need to do the reverse: actually shrink the economic units to a size manageable, not by existing political structures, but by even smaller ones.

Dr. Kissinger is afraid that this will lead to a new "mercantilism" by "regional units." Mercantilism is defined as:

"an economic system ... to unify and increase the power and especially the monetary wealth of a nation by a strict governmental regulation of the entire national economy usually through policies designed to secure an accumulation of bullion, a favorable balance of trade, the development of agriculture and manufactures, and the establishment of foreign trading monopolies."

In a world of large nation-states, this theory makes sense. However, the world may soon contain several hundred smaller nations, following a trend that started in 1991 with the collapse of the Soviet Union, and will accelerate following the collapse of the United States. In this world, mercantilism need not be a concern, because few nations will have the power to carry out mercantilist policies; and the smaller nations that would be impacted by those policies will have many alternative sources for the goods and energy they need.

We don't need a global economy or a global polity. We need economic and political structures that are small enough for people to understand and work with, and small enough to enable the people to maintain a free society.

* President George H. W. Bush let slip another open reference to the "new world order" in 1991 in a speech discussing the challenges of the post-Cold War world.

Virtual buckeye to Sebastian Ronin at Novacadia Alliance.