In The Global Credit Crisis as History, Professor Barry Eichengreen (Berkeley) asserts that the rest of the world has not reacted as proactively as the U.S. due to a pre-existing “American” narrative regarding the importance of government intervention in preventing the Great Depression. He reaches for some interesting historical parallels – on Asia, and the emerging dynamics between Japan, China and the U.S. he writes:

It is tempting to draw an analogy between China’s reluctance to top up the financial resources of the IMF and the refusal of the United States to join the League of Nations after World War I.  Pushing this further, there is the parallel with Charles Kindleberger’s interpretation of the interwar depression – that it resulted from the inability of the declining power, Great Britain, to exert leadership and the unwillingness of the rising power, the United States, to do so.  In fact this comparison is overdrawn.  China’s economy is still less than a quarter the size of that of the United States at market exchange rates… In contrast, the United States had already surpassed Britain in absolute economic size in the 1870s… But China is not yet in the position to exert the kind of leadership that could be reasonably expected of the United States in 1929…

… But whichever route is taken, not accommodating the rising power by giving it a seat at the table and a voice in key deliberations is a recipe for disaster.