by Bill O’Grady
Since the election of Donald Trump, there has been much discussion about the demise of the “Liberal International Order,” or LIO. Several books on the topic have been published recently and the general tenor is that the U.S. is giving up global leadership and the world is in trouble. We have been making this argument as well for a rather long time. However, there is an alternative viewpoint, which is that the U.S. isn’t giving up global leadership but is ending the LIO for something different.
What we may be seeing is not a retreat from the world but a significant change in management style, hence the title of this week’s report. We have dubbed this new style “The Malevolent Hegemon,” as opposed to “The Benevolent Hegemon” or the LIO, which describe how the U.S. managed the world from 1945 until 2008. We argue that the LIO began to wane under the Obama administration but a replacement model wasn’t evident. The Trump administration does appear to be creating a new model of hegemony.
In Part I of this series, we will begin with the basics of hegemony. From there, we will describe the unique model of U.S. dominance, Pax Americana, with the U.S. as a benevolent hegemon. Part II will discuss why the U.S. has become jaded with this role, which has spawned the search for another model. Part III will analyze what appears to be the emergence of a new model, which we describe as the malevolent hegemon. We will discuss the differences between the two models. With this analysis in place, we will examine the possible outcomes from this shift. At the conclusion of the series, we will discuss potential market ramifications.