As leaders of the G-8 industrialized countries gather at Camp David later this week, there will be much talk of global leadership -- and of its importance for our crisis-prone world. In a world where so many challenges transcend borders -- threats to the stability of the global economy, climate change, cyberconflict, terrorism, and risks to reliable supplies of food and water, to name just a few -- the need for international cooperation has never been greater. Yet, cooperation depends on leadership. Only global leaders have the leverage to coordinate multinational responses to transnational problems, as well as the wealth and power to persuade other governments to take actions they would not otherwise take. They provide services no one else will pay for and resources that others cannot afford. On issue after issue, leaders set the agenda.
Unfortunately, for the first time in seven decades, the world lacks leadership. In the United States, mounting federal debt, a feeble recovery from the Great Recession, and Washington's political paralysis have stoked fears that America can no longer afford its postwar leadership role. Across the Atlantic, a debt crisis has shaken confidence in Europe, its institutions, and its future. In Japan, reconstruction following 2011's triple disaster of the earthquake, tsunami, and nuclear fallout has proved much easier than recovery from two decades of political and economic malaise, a paralysis that has left Japan's government less willing and able to contribute to international projects where others do the heavy lifting.
A generation ago, these were the world's powerhouses. With Canada, they made up the G-7 -- the group of free market democracies that powered the global economy forward. Today, they are struggling to find their footing.
Yet the world's most promising emerging states are not ready to fill this vacuum. China's leaders are focused as never before on foreign-policy plans with important implications for the next stage of their country's domestic development. However, like their counterparts in Brazil, India, and Russia, they are far too preoccupied with complex challenges at home to accept the risks and burdens that come with assuming a much larger share of international leadership.
Nor are multinational institutions likely to step into the breach. The expanded group of leading powers known as the G-20 includes members with such a broad divergence of economic and political values that it can only produce coherent, substantive solutions for problems that have already become crises -- and only then when each of its most powerful members is threatened at the same moment. The World Bank and International Monetary Fund do not have the political or financial leverage they once did, and rivalries within the U.N. Security Council have rarely allowed for purposeful cooperation. In short, international politics and the global economy have entered a period of transition, one that I call a "G-Zero" order. Today, there is no single power, or alliance of powers, capable of providing consistent international leadership.
Yet, nature abhors a vacuum, and this period of transition cannot last indefinitely. Governments will not accept new costs and risks until they believe they have to -- and until they become convinced that others will not do it for them. Just as it took World War II to generate a new international financial order at the Bretton Woods conference, lifting the United States to superpower status, it will most likely take some form of calamity, or the credible fear that one is imminent, to give birth to a new uncertain global order.
But what comes next, and who will lead this new world?
The answers to two crucial questions will define the post-G-Zero balance of power. First, will the problems generated by the leadership vacuum force the United States and China to act as partners, or will those problems push them toward confrontation? No political and commercial relationship is more important for 21st-century peace and prosperity than relations between Washington and Beijing. If U.S. companies continue to earn large profits inside China, they will have a stake in China's success and in stable relations with Beijing -- pressing the White House and U.S. lawmakers to avoid unnecessary friction. On the other hand, if Chinese companies use their growing influence within China's bureaucracy to craft new rules that sharply tip the competitive playing field in their direction, U.S. companies will push the two governments toward more aggressive political competition.
There are dozens such scenarios that could encourage collaboration or stoke hostility between the world's two premier powers. A shock that sends oil prices sharply higher might give U.S. and Chinese officials a powerful common interest in reducing their dependence on hydrocarbon energy, for example, but a major cyberattack launched by one side against the other might provoke a politically reckless response.
The second crucial question: Will China and the United States dominate geopolitics, or will global power instead be broadly divided among several established and emerging states? If the European Union's core and peripheral economies can harmonize policies and re-establish confidence in the eurozone, Europe will remain a force to be reckoned with. If Japan can reinvigorate growth and develop a political system that inspires greater public confidence, perhaps it would become a more active and assertive international actor. If India can further liberalize its economy and manage an accelerating flow of migrants from the countryside into its cities, it can counterbalance China's influence in Asia. If Brazil's government can keep inflation in check and wisely manage development of the country's natural wealth, this Latin American power can greatly expand its influence. If Turkey can avoid a showdown that pits the ruling Justice and Development Party against determined secularists within the business, media, and military elite, its government too can become a formidable regional power broker. And so on.