Is America in Decline?

IS AMERICA IN DECLINE? A RESUBMISSION

By Paul Kennedy

[This article published in: Blatter fur Politische und internationale Politik 8/2007 is translated from the German on the World Wide Web, http://www.blaetter.de/artikel.php?pr=2627. Paul Kennedy is a distinguished professor of history at Yale University and author of “The Rise and Fall of the Great Powers” (2000) and “The Parliament of Man: The Past, Present and Future of the UN” (2006).]




The headlines about America’s current problems are familiar now. Far away in Iraq, the land sinks in a war that it cannot win. Congress and the public regret they initially supported this adventure. America’s ground troops suffer under over-reach. The budget deficits worsen every year. The foreign trade balance has alarming imbalances. Other superpowers (China, Russia, and India) show their trump cards. America itself was never as unpopular worldwide as today, according to international opinion polls.

Nevertheless unconcerned about all these developments, the White House orders a “forward strategy” in Iraq even without adequate ground troops for a successful campaign. Many neoconservatives have left the Bush administration or intend to resign as though leaving a sinking ship. The prospects seem dismal.

Is America now definitively in decline? The nearer the 20th anniversary of the first edition of my “decline” book “The Rise and Fall of Great Powers,” the more intensively I am bombarded with this question. The idea of America’s decline seems fascinating to foreign journalists and radio or television actors.

Since this debate may increase in intensity with the approach of the US presidential elections in 2008, it seems only appropriate to strike a few lanes in the thicket and make a very complex confusing subject more accessible.

First of all, the fundamental structural changes occurring on our planet – the irreversible developments – should be distinguished from those processes damaging America’s power and influence in global power relations but which are entirely reversible when someone wiser governs in Washington.

The first and most important element is the most obvious (even if most US politicians do not understand it these days): the fact that power relations permanently change in this world. Some regions or countries have grown economically faster than others at different times for reasons that cannot be completely explained here. Where this happens, power and influence grow fastest because economic strength is converted into political and military strength.

Power politics (cf. the recent bestseller of journalist Thomas L. Friedman, “The World is Flat,” 2006 according to which globalization only has winners). There are always winners and losers. Most actors of world politics know this simple truth. During the last 100 or 150 years, what Lenin called “the law of uneven development” has always worked to America’s advantage.

As soon as the United States controlled – continent-wide! – the steam engine and electricity, they inevitably surpassed smaller countries like England, France, Germany and Japan while the US could profit from the economic backwardness of large countries like Russia/ USSR, China and India. At the time of the First World War, half of worldwide industrial production fell to the United States. In 1945 the US with four percent of the world’s population produced 50 percent of world production.

Whoever has no suspicion of the change of tides in history could believe this state would continue for ever. The world has turned. Europe has recovered from its self-inflicted wounds, joins forces to a compact trade federation and plays a role comparable to the Americans on the chessboard of the world economy. Even more significantly, Asia’s giants, China and India, are growing at a speed causing the balances of world production to shift faster than ever. Both countries face enormous internal problems. However their international weight will grow substantially if they do not plunge in catastrophes.

The United States (and probably also Europe) will have less weight than today. According to serious prognoses, China’s gross domestic product could surpass the American GDP within a generation. No one can predict what this will mean exactly. What is involved is a further chapter of the ancient history of the relative rise and decline of great powers. In view of the fact that Rome and Carthage fell, Rousseau remarked: What state is immortal? American exceptionalism’s arts and graces will inevitably collide with global forces that are stronger.

RELATIVE DECLINE AND ITS MANAGEMENT

Does this mean the American superpower must go rapidly downhill? When the changing tides of history turned against them, some superpowers have shown remarkable powers of adjustment and resistance. Catastrophic crashes or a sudden collapse as in the case of Napoleonic France, Hitler-Germany or Leonid Brezhnev’s doomed USSR are actually rare.

The Spanish Empire lasted for a hundred years (and left behind a world in which more people learned Spanish than English). Habsburgers, Osmanians and Brits were all equal to the task of “managing” relative decline. They did not have the power resources commanded by the United States today.

Thus the question is not whether America will pass through a – relative – decline as a result of the global shifts of productive forces. This will obviously happen. The real question is whether America is capable of a policy that moderates the effects of a sweeping secular trend, fully plays out its undeniable enormous power and avoids actions that only weaken it at the end. SMART RELATIVE DECLINE is crucial – however contradictory or inconsistent the idea may sound.

To what extent will present US policy (the White House and the Congress together with their accomplices in the media and the general public) lose itself in actions that ultimately only weaken America? For reasons of space, I will only discuss two examples in which our policy is strikingly foolish.

THE FAILURES OF THE BUSH ADMINISTRATION

First, the disregard of the budget hole and the closely connected foreign trade deficit should be underscored. Both deficits reinforce each other to an extent unseen since the times of Philip the Second of Spain or France’s last Bourbon king. We have not kept our house in order and this affects the international pecking order or hierarchy of power.

The gap between the state revenues and spending of the United States is covered by floating monthly protective transfers. In recent times, foreign (especially Asian) state treasuries acquired these securities. None of our economists and bankers invoking freedom of the market will convince me regardless of their many addresses that the increasing dependence of a sovereign country on foreign owners of securities (each one calculating whether holding or unloading the dollar is more profitable) is a good thing. Reducing this dependence means that Americans must bite the sour apple and close the gap between federal spending and federal revenues. This inevitably means higher taxes – which the White House hates and the Congress fears.

This problem is combined with the excessive entanglement of the present administration in Iraq and in the whole Middle East. Some readers know I considered the Iraq war as a mistake from the beginning. However that is not the point here. This Mesopamian expedition weakens the United States in at least three ways. It aggravates its state indebtedness because the war is financed on credit and not by taxes. This causes an alarming exhaustion of the ground troops of our land, particularly the regular units of the army and the National Reserves. It has seriously undermined America’s soft power, its ability to win other countries to approve American projects.

This brings us to two conclusions. There are signs that the economic balances of the world are shifting, transferred from some regimes to others as in the past. As a result, the share of Americans in the global “cake” will turn out smaller in 50 years even though Americans will be richer (perhaps much richer). The same is true for its hard power.

This will not be a catastrophe if the American republic manages to adjust to this drastic trend instead of falling in a panic, mobilizing its own enormous resources and distancing itself from its foolish fiscal and military policy.

An America whose state budget is halfway balanced with a stable balance of payments and a rational relation between its military commitments and possibilities could be the most important player by far on the world political stage for many years. Should we refuse this chance?