This essay is adapted from the author’s new book “Balance: The Economics of Great Powers from Ancient Rome to Modern America.”
Hard power. Soft power. Smart Power. Superpower. This is the language of foreign affairs, full of meaning but empty of measurement. Vagueness is, of course, purposeful in the hands of skilled diplomats and politicians, but it can signal shallowness, ignorance or worse. Lacking clear metrics for power, the U.S. national security establishment speculates about possible rivals while being led astray by trendy catchphrases.
The “emerging foreign power” is a rotating special guest in the narrative of the American century. That role was taken by the Soviet Union during the Cold War, was filled by Japan for a decade and now stars China. Yet Beijing does not threaten to counterbalance U.S. power as gravely as America’s economy threatens to become unbalanced on its own.
To get a better understanding of the world’s “balance of economics,” we developed a new measure of economic power. What it shows is that U.S. power has declined from its peak in 2000 by roughly one-fourth, yet remains unrivaled. China is surging, to be sure, but has just one-third of the economic power of the U.S. Europe is sluggish, while Japan, South America’s big three economies and India are not even close to their potential.
The U.S. remains the dominant economic power in 2010
GDP per capita ($)
Ratio to U.S. 100% 73% 40% 15% 7% 6%
The problem with growth