The myth of America’s decline

By Michael Moran
April 12, 2012

This is an excerpt from “The Reckoning: Debt, Democracy and the Future of American Power,” published this week by Palgrave Macmillan.

For all the doom and gloom about “American decline,” the United States looks nothing like the twilight empires to which it’s often compared. For one thing, in this age of globalization, a far greater swath of the planet – including some surprising nations like China and Saudi Arabia – wish America well, albeit for their own, selfish reasons. Why would either country, in spite of what it may think of American culture or foreign policy, want to upset a status quo upheld, at great expense, by American power that enriches them more each and every year? From the US perspective, this should be an advantage. It creates stakeholders all over the planet that genuinely hope Washington can solve its current fiscal problems. With the exception of the British Empire, which had a relatively benign replacement lined up when it ran out of steam, history offers no other example of a waning empire whose most obvious potential rivals – China, India, the EU, to name but a few – all have good reasons to want to help arrange a long, slow approach to a soft landing.

“I have no objection to the principle of an American Empire,” writes Niall Ferguson, the Oxford historian. “Indeed, a part of my argument is that many parts of the world would benefit from a period of American rule.” Ferguson and others like him recognize the importance of the role the United States has played, a role that “not only underwrites the free exchange of commodities, labor and capital but also creates and upholds the conditions without which markets cannot function – peace and order, the rule of law, non-corrupt administration, stable fiscal and monetary policies – as well as public goods.” Ironically, many would-be topplers of American hegemony no doubt feel the same way.

Another key difference from the decline of Europe’s imperial powers is that while America’s relative decline is underway, the United States hardly looks likely to sink quickly to second-class status. In other words, the current trajectory would see the United States settle into a kind of parity with emerging powers. In instances where the changing of the guard occurred with amazing speed – Spain after Philip II, the Dutch after the Napoleonic wars, France after World War I, and Britain after World War II – the declining powers were exhausted, attempting to cling to far-flung colonies because their imperial economic models depended on extracting every last ounce of labor and resources to prop up the home country. The United States has something none of them ever enjoyed – the world’s largest domestic consumer market, as well as a commanding lead in many of the disruptive technologies that still drive product innovation. So absolute decline appears only a distant prospect – unless Americans badly fail at the polls, inviting another decade just like the one just finished.

Relative decline for the United States is hardly the worst possible outcome, if Washington and its allies can fashion a post-hegemonic system as resilient as the US-dominated one launched by Roosevelt and Truman in the mid-1940s. And Americans may find that, after decades of superpower headaches, they kind of enjoy being mortal again.

But this will require some serious repair work, and not just to the national balance sheet. Americans are right to take pride in their country’s achievements, but at times this pride looks, from the outside, a lot like arrogance or even racism. “Brazil, China, India, and other fast-emerging states have a different set of cultural, political, and economic experiences, and they see the world through their anti-imperial and anticolonial pasts,” says G. John Ikenberry, a Princeton professor of international relations and former State Department official. “Still grappling with basic problems of development, they do not share the concerns of the advanced capitalist societies. The recent global economic slowdown has also bolstered this narrative of liberal international decline. Beginning in the United States, the crisis has tarnished the American model of liberal capitalism and raised new doubts about the ability of the United States to act as the global economic leader.”

Removing the stain of financial fundamentalism should be a priority of US foreign policy, too, and I believe it to be achievable. In spite of the financial charlatanism that prevailed in the first decade of the century, the American economy is sputtering but not crumbling. American innovations still drive progress in many fields of science and technology, even if some of its most innovative software – Facebook, Twitter, the Internet generally – occasionally undermine its own interests abroad. American manufacturing, recently written off as a legacy of a bygone age, is mounting a comeback as the costs of labor in the emerging world rise, along with the costs of transporting products back to the home market. At some point, the political risks of a factory in China or Bangladesh might just outweigh the incremental labor cost savings. For these and other reasons, then, the United States is hardly a “spent” power. A more apt word might be winded, like an aging runner who ate, smoked, and drank too much over the Christmas holiday. The United States struggles today to call up the old reserves of strength that seemed to power growth and job creation effortlessly through the preceding two decades. This is partly because the “steroid” of the housing bubble that fueled its irrational exuberance during many of those years has turned into a weight around its neck in the form of slow, excruciating deleveraging of household debts. But the runner lives and still has a few marathons left in him.

This is the time for America and its friends to face reality. These may not be the best of times, but with some planning and hard work, they do not have to become the worst of times, either.

467 comments

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/

Hmmmmmmm. Maybe so. Seems to be a “doldrums” kind of decade though. If I am one of the “average guys” on the street, and I talk to others, we all seem to conclude that if somebody is benefiting from everything happening, it ain’t us. When the opportunity to “have” opportunity goes away, hope fades. I think that is where we are in the US of A–not despair, but the sick feeling that opportunity that clearly isn’t around, won’t be coming around either. And, there’s nothing we can do about it. Washington? What a joke. I’d be ashamed to show up in any social gathering and admit I am a congress person. If we worked for them as well as they work for us … they’d have fired us a long time ago.

Posted by WouldChuk | Report as abusive

The power elite in the USA clearly has the good wishes of almost all rivals of the American People. This is because it would be very hard to our rivals to implant a regime less friendly to the well being of the vast bulk of the American population. And it would be difficult to install a less “democratic” election or representation system. Our ballots have no real choices, and any true alternative to current policies is not allowed on the ballot or on the media.

Of course the USA is in steep decline. Just ask almost anyone born here who has looked for a job in the past 5 years. The “American” aristocracy, many born in other countries, still rules without serious challenge. So what? They share very little commitment to the American people. They are our rulers for the moment, and will never be dislodged by the political mechanisms now in effect. Our elections are sham elections.

You cannot maintain an Empire structured on the progressive degradation of you primary population. Empires degrade other populations, not their own. Our power elite looks more like an ever growing parasite.

Posted by txgadfly | Report as abusive

Is this guy serious? First of all he contradicts himself ¬–China wishes America well…and then he quotes a guy who says they see the world through their anti-imperial and anti-colonial pasts. What blows my mind about this so called writer is Saudi Arabia wishing America well as he suggests they would never want to upset our economic balance – has he not heard of the 1973 oil crisis? He talks about a non-corrupt American administration, really? Maybe he is speaking of an America that exists in another dimension. Going on he explains America will land softly in some sort of parity with other emerging nations ¬–does this guy have any clue how big the US military is and how it has been used? He talks about America strength as a consumer market, is this guy serious…how can you consume if your income continues to decline. Then he goes on to talk about failing at the polls, you can’t seriously think we have honest elections in America, The Federal Reserve and the powers that shaped it on Jekyll Island make all those decisions. He talks about –absolute decline as a distant prospect when earlier in his article it is a soft landing, again this guy is all over the map with this propaganda. Truman resilient? They bankrupted Japan before Pearl Harbor then dropped atom bombs on them, is he serious? He says the American economy is sputtering but not crumbling, maybe he should get out and take a drive through a middle class neighborhood or even the ghetto sometime, people have lost hope, real unemployment is twice what the government actuaries suggest. American manufacturing mounting a comeback, I just cannot take this guy seriously, it is obvious he has been put up to this by some agenda for which he serves, this article and this book is appalling and deceiving.

Posted by chrismartin | Report as abusive

i agree with his theme. we’re not nearly in as dire of a shape as most people believe.

we have problems for sure, but hand-wringing seems to be overdone. we have a lot of debt (this is a problem) but we mostly owe ourselves this debt.

we’re still the #1 or #2 manufacturer in the world (ranking depends on whose data you believe) and we’re far more productive that china who by some rankings are ahead of us in manufacturing.

we get ourselves all worked up over the demise of the middle class, but the reality is that the % of households in the lower and middle classes has fallen over the long term and the % of households in the upper income groups has grown over the long haul, i.e. we’re becoming more prosperous.

folks like to point to china or india as kicking our butt economically. look at where they were 20 years ago. they couldn’t go down, the only direction they had was up. china and india are like teenagers with big feet and tall parents, all they can do is grow. to compare us to them is to compare a start up company to a fortune 500 company.

yes, we have problems, but i dont think we’re nearly as bad-off as many people want to believe. for whatever reason, people like to wallow in bad news.

Posted by jambrytay | Report as abusive

Jambrytay boy… “puke!” What planet are you on?

Posted by WouldChuk | Report as abusive

Banners may change but the one at the top of the page now advertises a “High Yield” savings acct … 0.75% … what more needs to be asked before even a really stupid somebody would reply, (like Yosemite Sam might…) “Boy, I say boy, I say, if that yield is what you call ‘high’ sumpthins really wrong in ‘River City,’ just saying.

Posted by WouldChuk | Report as abusive

Sorry woodchuck, I know facts aren’t as much fun as hype.

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