Article looks at the consequences of unipolarity for the global political economy and and for the behaviour

and influence of the United States within it. The shift from a bipolar to a unipolar international structure has not altered the behaviour of the United States. US influence has changed however it has decreased. For example, during the cold war the United States dominated international economic adjustment struggles, but in the modern era its ability to replicate this success has been significantly compromised United States has historically been the leader of the free world, liberalising the world economy e.g. free trade. On the other hand however, it has used its privileged position to serve its own ends e.g. placating the domestic population and maintain the central authority of the government over the states on issues such as U.S foreign policy, defence, and macroeconomic policy. It continues to be a system maker and privilege taker To attain this position the United States has required the assistance of other powers, in particular West Germany and Japan. Since the cold war the shift has focussed to Asia. The US has entered into a deal with these countries ensuring the economic and security needs of allies are satisfied. Political arrangement has remained the same absorb the products of its export dependent supporters, and provide security. In exchange they have absorbed and held US dollars which allows the US to maintain its policies without the political tradeoffs that other ordinary nations must i.e choosing between two options when spending its finite resources guns, butter, growth However, they are unsustainable, creating economic imbalances that threaten the stability of the international economic order. The US and its supporters will try to adjust their policies so that the burden of adjustment will be on the other. During the Cold war the US dicated the terms of adjustment because it provided the security of its parterns and there were no viable alternatives. Yet now the US is no longer is a position to determine the outcome of adjustment, because it no longer enjoys the same security leverage and there are a greater range of economic options. Whilst the US may have international military dominance this does not secure it dominant leverage in the economic arena it faces rising economic challengers with their own agendas e.g. BRICS. It can no longer rely on getting its own way Three postwar phases of the US international economic project 1. Constructed liberal economic order 2. Defended order in the face of internal and external challenges 3. Enlarged the order geographically and functionally. During the Cold War the US long had an economic advantage over all other players Soviet Union, China, Western Europe, Japan. To this day, although others players have narrowed the gap, the US continues to be dominant players in economic capabilities.

Because of this dominance the US has been able to shape the world economic according to its values and interests i.e. liberalisation of the international economic order (fewer government regulations and restrictions in the economy in exchange for greater participation of private entities), free flow of goods, services, capital and technology among private rather than state actors. With this power comes international obligations such as serving as an open market of last resort, allowing the use of ones currency as an international reserve and exchange unit, intterening to rescue states in financial distress and providing capital to states with long-term development needs. The post-war US has embraced these obligations, though not always consistently e.g. latin American debt crisis of the 1980s, the Mexican crisis of 1994 Special privileges Robert Gilpin argued that a dominant state is powerful enough to bear the costs of producing international order, but that it is also powerful enough to coerce other states into bearing those costs intead e.g. during the Gulf War the United States collected sizeable financial contributions from other states to finance the war effort. Its large economy can generate surpluses that can be lent abroad, but it also enjoys the privilege of being a safe haven that attracts and absorbs the scarce capital of the outside world. Special privileges also mean they can be exempt from the rules that apply to other states, e.g. special status in the International Criminal Court. This tension between obligation and privilege has been a defining feature of the international political economy during the American era. Americas partners have enjoyed benefits as well accumulating international reserves needed to defend their own economies from future payments crises, gained access to the large open market of the United States and to the flow of vital raw materials guaranteed by the projection of US military power. Security arrangements have also allowed them to devote greater national efforts to the pursuit of economic competitiveness and prosperity. If these have mutual interests why do they break down? They have perceived the balance is skewed against them and they have sought to renegotiate The threat to the world economic from cumulative economic imbalances is too great a risk to endure Financial forces over which governments have no control have the ability to exacerbate the kinds of crises that cooperating governments seek to avoid. Adjustment struggles when instability looms Americas partners have accused it of acting irresponsibly and have urged it to get its domestic house in order. The United States has countered by depicting its partners as ungrateful, free-iding beneficiaries of its burdensome system-sustaining efforts. The US no longer holds the upper hand in these tests. Supporting states now have more options than when the US was the only economic game in town

The central role of the US has been the reconstruction of economic order after WWII. Belief that economics and security were inextricably linked restoration of economic prospertity would encourage peaceful relations. International economic order reflected US preferences global economic activity organised on the basis of multilateralism rather than on the bass of regional blocs preferred by the economically weaker. However, some compromise of the vision of rapid restoration of a worldwide liberal economy. Originally IMFR was to manage exchange rates but because European recovery took so much longer the US assumed the task of international monetary management GATT was not as far reaching. Essentially US only managed to create the bare foundations of a liberal economic order during the 50s and 60s Bretton Woods received US loans, grants, FDI, enjoyed access to US markets, security protection. The US would benefit from long term investment in advanced industrial states which would eventually provide growing markets and bulwarks against communism. US dollar lynchpin of transatlantic and transpacific deal - fixed value for the dollar in terms of gold dollar good as gold. Allowed war ravaged countries to keep undervalued currencies and allowed US to station troops on US soil, as well as forgo tradeoffs between guns and butter. The United States needed to run a deficit to supply liquidity to the world, but also maintain the dollar as a store of value. Vietnam War financed by allowing the expansion of dollar holdings by foreign banks. Western Nations assisted in supporting the Bretton Woods system, especially Western Germany. Yet France resented this embarrassing devaluations. The United States attempted to adjust the Bretton Woods system without changing its privileged position. It called on its allies to devalue their currencies relative to the dollar rather than devalue its currency. The United States prevailed for two major reasons, first there were no viable alternatives to a dollar-centered monetary system, and secondly forcing the adjustment on Europe would credibly call the US defence commitment into question. In the 1980s Japans dominant economic position threatened to undermine that of the United States. Its state centered model also threatened to spread to the rest of Asia, contrary to US principles of privatisation and liberalisation. US became protectionist in the 70s because of the export led growth of the war ravaged countries. Here we see US privilege taking and system making US installed voluntary export restraints on its allies, and forced them to open markets (Super 301) by adjudicating to be the unfair trade practises of others. 1972 industrial states allowed their currencies to float through informal coordination through G7 summits. 1970s Reagan caused the dollar to rapidly appreciate through a tight monetary policy along with an expansive fiscal policy based on deep tax cuts and expensive rearmament. This drained capital from European banks. 1983 US economy grew, benefitting Western Europe and

Japan they were happy to reap the benefits of an overvalued dollar. Yet soon dollar led to Latin American crisis, resulting in the Plaza Accord of 1985 to intervene in currency markets and ease the dollar down and the mark and yen up. Japanese and West German cooperation was driven by its economic and security dependence on the US. 1987 US forced partners to adjust by asking them to take a series of domestic reflationary steps devalue currency and accept monetary and fiscal adjustment In unipolar era all about preserving US primacy and defence against terrorism, rogue states and WMD. Yet followed market liberalisation more aggressively where there were new opportunities e.g. states that rose out of the Soviet Union. US worked with the world bank and IMF to open financial markets in developing countries. Turn of century US economy flourishing, yet by 2005 the honeymoon was over with huge deficits. September 11 shocked the US economy and was a short term catalyst for the decline in the US fiscal position. Yet it sustained its steady growth and low inflation living beyond its means. China relied on an export led growth strategy buttressed by an undervalue currency. The US was its most important market. They will not upset the international status quo politically or economically as long as they are benefitting. This time the United States may be unable to coerce its partners there is a no longer a security dependence, it no longer as its unique currency position (euro? Renminbi?), and the indispensability of its market has eroded European union, China US will be unable to dictate adjustment outcomes. Dominance allowed to US to shaoe the internation order, the obligation to manage it and the temptation to take advantage of it. This has required to willing and active support of collaborators. Now Allies less dependent. Victim of own success open markets has diminished reliance on US and allowed global markets to grow in size. Support for European integration had facilitated a powerful bloc. Globalisation and resotoration of the liberal world economy has been a success for the US, but its is a double edged sword it will constrain its ability to enjoy the privileged position is it used too.