Particularly after 1945, there was no question as to who was the top dog within the capitalist
world, and that top dog was the United States. But from about the late 1980s through to 2008,
there started to be some challenges to U.S. hegemony, and one of the things that Giovanni
Arrighi concentrated on was a phrase from Braudel which kind of says: the end of a hegemony is
signaled by a strong phase of financialization. And what Arrighi did in his book was to look at
the strong phase of financialization that allowed the transfer of hegemonic power from
the low countries to Amsterdam, the transfer of financial power from Amsterdam to London, and then
the transfer of financial power from London to New York. So, if a phase of financialization precedes
a shifting hegemonic structure, it seems to me that it might be important to look at 2007-2008
and the financial problems that had led up to it which included the East Asian financial crisis,
the bankruptcy of Russia, the bankruptcy of Argentina and places like that leading into
the financial crisis of 2001 which then was briefly overcome by very loose monetary policy
and ultimately culminating in 2007-2008. So in 2008, I kind of said well is this a sign
of a shifting hegemonic condition? And if it is a sign of a shifting hegemonic tradition,
where's the new hegemon likely to be, and this obviously were likely to be in East Asia,
particularly concentrated with the rise of China. And therefore, we had to deal with and look very
closely at what was going on in terms of the financial crisis and what its relationship was
to the radical transformation of Chinese economy and the radical growth of the Chinese economy
to the point where by the time we get to 2020, China is an economy almost as large as the United
States. In purchasing power, parity is larger than the United States in terms of conventional kind of
currency values, it's less than the United States. But about a third of
the world's growth after 2007-2008 was coming from China and from China alone,
so that China was definitely, actually very active in overcoming the crisis of 2007-2008.
And all I said in 2007-2008 was we have to look at this kind of shifting hegemony. And
I used a language about tectonic shifts in power structures in the global economy of this sort. And
I was kind of saying we have to understand the uneven geographical development of capitalism,
the slackening off of the power of the United States after the 1990s onwards and the growth of
Chinese powers being very significant. And it was intriguing to me
that it wasn't only Chinese power. It was also Chinese power relative to the other holders of the
major U.S. debt. U.S. treasuries were very much owned by foreign governments. China was a major
owner of treasuries. Russia was a major owner of treasuries, and Japan was a major owner of U.S.
treasuries. So, they're the ones who actually held the U.S. debt. And the U.S. was heavily involved
involved in the debt, and I pointed this out and said, 'Well, you know, this creates a very,
very complicated situation." Look, we have to understand the geography of all of this,
and the way in which these shifts in hegemonic power are occurring: the rise of China, the
emergence of East Asia as a central configuration. And I started to use this language which
was actually used in the national intelligence report in the United States which was to say
that wealth is gradually accumulating in East Asia. It used to be that we
extracted wealth from East Asia. We're now actually conceding wealth to East Asia.
East Asia understood as a totality of what was going on in the region, which would include
increasingly of course china as a major anchor but then going alongside of it Japan which was [the]
fourth or fifth largest economy in the world and South Korea which had become a major economy
and Taiwan which is a major economy and of course to some degree Singapore. So, if you put
all of that together you would say well maybe that's the configuration of the new hegemonic
configuration. It's not going to be one single state. It's going to be a collection of states.