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Tracy Mayne's avatar

I am glad my father, who fought in the Battle of the Bulge and was awarded 3 Purple Hearts. Is not alive to see what is happening now. There is no coming back from this.

Leon Liao's avatar

Power in the international system does not come from strength alone. It also comes from how dependent others are on you.

At its core, this is a network-effects problem.

For example:

* Why is SWIFT important?

* Why is the U.S. dollar important?

* Why are U.S. Treasury securities important?

* Why is English important?

Because everyone uses them.

The more people use a network, the more valuable it becomes. Its influence grows not only from its intrinsic qualities, but from the fact that it is widely adopted.

However, once alternative networks begin to emerge, those network effects can gradually weaken:

* Local-currency settlement systems;

* Regional payment networks;

* Non-dollar trade arrangements;

* Regional supply chains.

As these alternatives develop, countries begin to learn how to operate with less reliance on the United States.

And once such substitute mechanisms become sufficiently established, the process can become difficult to reverse. Even if future administrations attempt to restore America’s previous role, the world may no longer be as dependent on American institutions as it once was.

In that sense, the United States risks moving from being an essential nation in the global system to becoming a more replaceable nation.

But the deeper question is this:

Why are growing numbers of American voters supporting a political movement that seeks to disrupt the very order that made the United States indispensable in the first place?

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