The financial crisis sweeping the world has led many to reconsider the neoliberal premises of the U.S. government. Jae-Jung Suh sits down with sociologist and world systems theorist Immanuel Wallerstein to consider the paradigm shift in global thinking on economic policy and the future of capitalism. This interview originally appeared at Hankyoreh on January 8, 2009.

The economic crisis that currently grips the world will have many consequences, not least for the US. A decade ago during the East Asian crisis, the US lectured East Asian elites on the shortcomings of ‘crony capitalism’ and close business relationships. Such claims look bizarrely anachronistic as the US government finds itself having to nationalise or bail-out large chunks of the domestic economy brought low by an inadequately regulated, predatory, but politically-influential financial sector. It is not just that the material significance of the US economy will be diminished as a consequence of this crisis, however, so will its ideational influence and authority. The Washington consensus centered on the dismantling of state regulation and the unfettered working of the market, had few admirers in East Asia even before the current crisis; [1] the current turmoil will further diminish its appeal and make alternatives more attractive. This diminution of the US's overall ideological and economic importance compounded by its failed wars in Iraq and Afghanistan, is likely to undermine its influence in East Asia and its standing as both a regional and a global power. One consequence of this process may be to strengthen the attractiveness of exclusively East Asian regional organisations—especially if China's economic development continues to cement its place at the centre of an increasingly integrated regional economy. I suggest that the US's hegemonic influence over East Asia is consequently likely to decline and so is the significance of the ‘Asia-Pacific’ region of which it is notionally a central part.

In the early 1990s, the Japanese military adopted a cute mascot by the name of Prince Pickles. He's a little guy with a big head and big eyes who lives in a tranquil country bordering on some pretty dangerous territory. In three action-packed comic books aimed at young people, Prince Pickles overcomes his naïve belief that a land at peace needs no army. He enlists in his own country's forces to defend against the predations of the neighboring Evil Empire. He endures intensive training. He helps with disaster relief. He goes on peacekeeping missions. And of course, after these mini-heroic efforts, Prince Pickles gets the girl, his comrade-in-arms Miss Parsley.

It is becoming clear that the bailout measures of late 2008 may have consequences at least as grave for an open society as the response to 9/11 in 2001. Many members of Congress felt coerced into voting against their inclinations, and the normal procedures for orderly consideration of a bill were dispensed with.

The excuse for bypassing normal legislative procedures was the existence of an emergency. But one of the most reprehensible features of the legislation, that it allowed Treasury Secretary Henry Paulson to permit bailed-out institutions to use public money for exorbitant salaries and bonuses, was inserted by Paulson after the immediate crisis had passed.