A Post-American World?
Ross Douthat has pretty negative take on Fareed Zakaria’s argument that “The world has shifted from anti-Americanism to post-Americanism.” I agree, and think it’s important to amplify why.
Zakaria claims that the last twenty years has seen the rise of the rest of the world relative to the United States. He says:
We are living through the third great power shift in modern history. The first was the rise of the Western world, around the 15th century. It produced the world as we know it now—science and technology, commerce and capitalism, the industrial and agricultural revolutions. It also led to the prolonged political dominance of the nations of the Western world. The second shift, which took place in the closing years of the 19th century, was the rise of the United States. Once it industrialized, it soon became the most powerful nation in the world, stronger than any likely combination of other nations. For the last 20 years, America’s superpower status in every realm has been largely unchallenged—something that’s never happened before in history, at least since the Roman Empire dominated the known world 2,000 years ago. During this Pax Americana, the global economy has accelerated dramatically. And that expansion is the driver behind the third great power shift of the modern age—the rise of the rest.
I am always suspicious of these three-part schemes of historical epochs, the three parts of which seem to contract precipitously in length as we approach the current day. According to Zakaria, the first of these phases lasted abut 400 years, the second lasted about 100 years, and we’re now in one that has, at least in large past, happened in 20 years.
Zakaria goes on to say that this “This will not be a world defined by the decline of America but rather the rise of everyone else.” But the only way that sentence makes sense to me is if it means relative American decline.
Here’s the only problem with Zakaria’s thesis:
US share of global economic output (on a purchasing power parity basis) has declined very slightly over the past twenty years – from about 21% to about 20%. But what has really happened over this period has been the rise of China and the rest of non-Japan Asia at the relative expense of Western Europe and Japan.
At the start of each of the last two recessions there has been a lot of hand-wringing about whether current problems are symptomatic of terminal US decline. Zakaria in his article tells a story of how twenty years ago Indians were culturally fixated on the US, but are now more inward-looking. He goes on to cite recent economic growth rates for China and India, and makes the point that if we were to extrapolate these out for some decades the world would be a very different place. Just replace China and India with Japan and Korea, and this is an almost a word-for-word recitation of the kinds of articles you could find every week in every major American newspaper and magazine twenty or twenty-five years ago.
What Zakaria misses is that the relative decline of the US is real, but that it already happened. US share of world GDP in 1945 is estimated to have been about 50%; this more than halved between 1945 and 1980. The US economic crisis of the 1970s was largely the result of this decline. I’ve argued at length that the Reagan economic program was a creative and successful response to that crisis that has prevented the US economy from going the way of Europe. This program was focused on two things: sound money and deregulation, broadly defined. It’s ironic that, despite the rhetoric, Reagan’s program was premised on a very clear-eyed recognition of relative American decline. (It’s interesting, by the way, to see Reagan’s take on foreign policy commitments in this light.)
The ability of the US economy to defy historical gravity for the past 25 years has not been automatic: it was earned in a set of pivotal political battles that were pretty much complete by 1984. The next twenty years were, within the American economy, a Twenty Years War to implement this less-regulated system that has now reached maturity. We live in the new economy that it has created. The danger of misdiagnosis of our current situation is that we will fail to understand the sources of our advantage and unwittingly throw them away.
( cross-posted at The Corner )
Two points:
1.) Doesn’t it make sense that the duration of historical epochs would contract as the pace of technological and industrial change accelerates?
2.) I think a country’s relative share of global GDP is a pretty suspect measure of global influence. The EU’s diminishing portion of total economic growth, for example, is probably offset by an increase in the continent’s cultural influence and greater political and diplomatic cohesiveness. Russia’s disproportionate presence on the international stage is a result of factors like a large nuclear arsenal and massive energy reserves, not a thriving domestic economy.
When scholars like Paul Kennedy were predicting the decline and fall of the United States 20 years ago, our economic competitors (Europe and Japan, primarily) hadn’t translated their latent economic strength into the political and military tools necessary to challenge American hegemony. The Soviet Union also provided a huge incentive to bandwagon with the United States.
Emerging powers like China and India are not only economically ascendant, they’re also more politically assertive than their European and Japanese predecessors. The EU has also become more confrontational and self-confident (witness the run-up to the Iraq War). Your assessment of America’s relative economic health is well-taken, but I’m not sure if that refutes Zakaria’s broader point.
— Will · May 7, 08:08 PM · #
I think that last paragraph needs to be fleshed out a bit. One could argue (and many do) that, rather than the success of the Reagan revolution, what has permitted the US to defy historical gravity has been the willingness of the rest of the world to finance US consumer spending. One could also argue that the “maturity” of our less-regulated economy has reached the point where significant additional regulation is required, particularly in the financial sector, to correct the less salutory effects of that less-regulated system. I’d be interested in your take on that in a subsequent post.
— Steven Donegal · May 7, 08:43 PM · #
Will:
1. Yes, all else equal, but I think this effect is swamped by the human inclination to over-emphasize the importance of what is happnening now to me.
2. Incomplete, certainly.
The EU’s diminishing portion of total economic growth, for example, is probably offset by an increase in the continent’s cultural influence and greater political and diplomatic cohesiveness.
Hard to measure, but for me, hard to believe.
Emerging powers like China and India are not only economically ascendant, they’re also more politically assertive than their European and Japanese predecessors.
I agree, and this is central (in my view) in how we ought to look at the world.
Steven:
One could argue (and many do) that, rather than the success of the Reagan revolution, what has permitted the US to defy historical gravity has been the willingness of the rest of the world to finance US consumer spending.
This is surely a factor, though I think one needs to ask why they have been willing to do that.
One could also argue that the “maturity” of our less-regulated economy has reached the point where significant additional regulation is required, particularly in the financial sector, to correct the less salutory effects of that less-regulated system.
The US financial sector is not well-regulated. I think that rationalizing regulation without over-regulating a crucial sector of the economy in a manner that causes the US to become less competitive will be key. I did an article last year on a relevant examnple: Sarbanes-Oxley. Ungated version here: http://www.thefreelibrary.com/A+pox+on+Sarbox:+the+unintended+and+rotten+consequences+of+the…-a0162833862
Will/ Steven:
Reading through my post, I can see how it might come across as more of a “screw you, we’re still #1” message than I intended. I meant what I said when I wrote: “the relative decline of the US is real, but that it already happened.”
In my view the political leadership class (of both parties) in the US is drunk with power. They believe that we can stand astride the world and order it to our liking. This was reasonaby true in 1946, but hasn’t been true for a long time. The implications of victory in the Cold War were misinterpreted. It wasn’t the end of history; in addition to many, many good things that made victory, on balance, a great thing, it removed the rationale for the alliance structures that had masked some aspects of this relative decline in power.
— Jim Manzi · May 8, 12:32 AM · #
“In my view, the political leadership class (of both parties) in the US is drunk with power. They believe that we can stand astride the world and order it to our liking.”
The most important question in this election, from my perspective, is whether Barack Obama could deliver a more sober assessment of our relative position (as his more realist supporters believe) or whether Daniel Larison is right and Obama is as bad (or worse) than what we’ve already seen on this score.
I’m more favorably inclined than Larison is right now on this question, which is one reason I’m more favorably disposed towards Obama than he is. But I consider it far from a settled question.
— Noah Millman · May 8, 01:03 PM · #
Something that you are missing about the relative decline of the American share of GDP since 1945 is the WWII had just gotten over. Europe was in shambles, Japan occupied China, and the U.S. was the only option for goods and services. So, obviously America’s share in GDP would be around 50%. If it were not for a global war that would not have been the case because the rest of the world would be been producing more. So, I do not find it fair to use the percentage of GDP in 1945 in this argument.
— Shane Gordon · May 8, 03:00 PM · #
Something that you are missing about the relative decline of the American share of GDP since 1945 is that WWII had just gotten over. Europe was in shambles, Japan had occupied China, and the U.S. was the only option for goods and services. So, obviously America’s share in GDP would be around 50%. If it were not for a global war that would not have been the case because the rest of the world would be been producing more. So, I do not find it fair to use the percentage of GDP in 1945 in this argument.
— Shane Gordon · May 8, 03:01 PM · #
Shane:
I agree that this was obviously the cause, but it did occur. Many patterns of economic organization and habits of thought were established in the 20 – 30 years or so where this unsustainable siutation obtained. In my view, we are still living in some denial – especially in the political process – about this. To your point, barring emerging unscathed form another world war with the rest of the world in ruins, that situation isn’t coming back.
— Jim Manzi · May 8, 03:58 PM · #