But between the attack on the Twin Towers and the fall of Lehman Brothers, that global order had crumbled. Two factors were crucial. By the end of a decade of continuous warfare, the US had succeeded in exposing the limits, rather than the extent, of its military power. And the neoliberal capitalist model that had reigned supreme for a generation had crashed.
In the late summer of 2008, two events in quick succession signalled the end of the New World Order. In August, the US client state of Georgia was crushed in a brief but bloody war after it attacked Russian troops in the contested territory of South Ossetia.
The former Soviet republic was a favourite of Washington’s neoconservatives. Its authoritarian president had been lobbying hard for Georgia to join Nato’s eastward expansion. In an unblinking inversion of reality, US vice-president Dick Cheney denounced Russia‘s response as an act of “aggression” that “must not go unanswered”. Fresh from unleashing a catastrophic war on Iraq, George Bush declared Russia’s “invasion of a sovereign state” to be “unacceptable in the 21st century”.
As the fighting ended, Bush warned Russia not to recognise South Ossetia’s independence. Russia did exactly that, while US warships were reduced to sailing around the Black Sea. The conflict marked an international turning point. The US’s bluff had been called, its military sway undermined by the war on terror, Iraq and Afghanistan. After two decades during which it bestrode the world like a colossus, the years of uncontested US power were over.
Three weeks later, a second, still more far-reaching event threatened the heart of the US-dominated global financial system. On 15 September, the credit crisis finally erupted in the collapse of America’s fourth-largest investment bank. The bankruptcy of Lehman Brothers engulfed the western world in its deepest economic crisis since the 1930s.
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