When I was an International Relations graduate student in the early part of this decade, we used a volume by Robert Gilpin well known in the discipline called “The Political Economy of International Relations.” Gilpin’s book is a fine text on International Political Economy, and, in fact, despite being now over twenty years old, it retains its status as a dominant book in the field. However, what first strikes the student reading in 2001 (and I suspect today as well) are the multiple references to the US as a declining power that is past its prime, and description of Japan as the rising power that will soon achieve global dominance. In the wake of the 1990s, during which the US experienced high employment, low inflation, and respectable growth and Japan stagnated in a deflationary funk, it is at times a little humorous to read these portions of the book. I say this not to point out the foibles of a particular author, because a.) looking at the data in the 1980s, it was not an altogether unreasonable viewpoint, b.) we are all victims of the unpredictable nature of unfolding events, and c.) it was not just one man’s skewed opinion. The reason I mention it is to acknowledge up front the potential folly of talking about the decline of a great power. It should be noted that I am not predicting an imminent fall, but rather discussing a series of factors that will make it difficult over time for the US to retain hegemonic status.
Some may take umbrage at the notion that the US should ever be surpassed in those measures of dominance for which it is currently unrivaled (i.e. economic size, military power, and entrepreneurial and innovative inclinations.) However, if one detaches from emotional notions of exceptionalism that are part and parcel of a worldview formed of skewed history classes, religious commentary, and populist sentiment, one sees no more reason to think that the US should indefinitely retain its unique status as a superpower than did Rome, Mongolia, or the United Kingdom. For it seems that all great powers, from perhaps before they even reach their summit, are destined to suffer fates which will in some manner bring them back down to earth.
What are these crippling misfortunes to which all great powers are subject? The reference to “fire or ice” in the title intimates that one path is in war and the other is in a cold death by overextension and lack of passion for greatness.
Why should there be a heightened risk of war or conflict for the superpower, and how can this lead to decline for a power that is, by most measures, stronger than any opposition it might face? For a hegemon, its mere existence presents a threat to all others. Because it can ostensibly defeat any other country, those countries must either attach themselves to the hegemon or prepare themselves to combat it. In either case, there are frictions that begin to wear down the great power. If states ally with you, that is likely to lead to the need to go to their defense, or, at least, to incur costs in support of them. Obviously, if states form a coalition to offset the hegemon’s power, that has ramifications for the degree to which it must spend on the military and the likelihood one will end up in war. It all comes down to a catch-22. If the US conveys the fact that it is not a threat to other nations, then, even if it can do so convincingly, it has to worry about attacks against its interests (e.g. attacks on allies or against strategic locales.) It is, of course, not easy to convince others that you mean them no harm, because they may believe that you have an incentive to deceive. If, on the other hand, the US takes a hawkish tone, then it threatens other states and encourages them to plot against it.
Of course, putting the balance of power politics aside, the popularity of a nation itself is, in a way, a threat to its future. As American movies, television shows, firms, and media gain dominance around the world – to the enjoyment of many – they are not welcomed by all. Some will see them as a sign of the deterioration of their own culture or its subjugation to forces of decadence and materialism. This is a source of animosity that has led to attempts to lash out against the US. Some readers may argue that it is just the political interference and, in some cases, military presence to which these people object. Certainly, American dominance in the realms of pop culture and business has positive effects in many cases, but I am by no means convinced that it doesn’t cut both ways. Whether feelings that Americans are responsible for introducing smut into rigidly orthodox religious societies is sufficient justification in itself for individuals to engage in suicide or other costly attacks may be up for contention. It need not be that the majority in foreign countries object to the spreading of American pop culture for a problem to exist, a small minority willing to engage in extreme actions is sufficient.
So having answered the question of why hegemony radically increases a nation’s exposure to conflict, we may now get into the question of why such threats will lead to a decline. This need not take too much arguing as those following events in Iraq and Afghanistan will not require too much convincing that even an exceptionally well-trained, well-equipped, and well-funded American force can face adversity when confronting a foe that, while inferior in conventional measures of power, is willing to take a beating over an indefinite time period and who can achieve some measure of success in terms of surprise and secrecy. Despite considerable resources, it is exceedingly expensive to maintain a prolonged war, or wars, halfway around the world. Furthermore, even in victory in war the costs of victory in peace are substantial. Acquiring a favorable opinion of the locals may require huge outlays for the financing of repair or rebuilding of infrastructure, schools, and places of worship. Failing to purchase this goodwill may mean high costs in terms of casualties incurred as the lash back transpires. It is not just in our war zones that we spend substantial amounts abroad. We spend a great deal to achieve a preponderantly favorable disposition toward our country. One theory of the fall of the Roman Empire has it that, as wealth was spread about throughout Rome’s dominion to achieve loyalty, the inflationary forces became too great to bear.
However, there are issues well outside the security domain that threaten the superpower as well. Can a nation that has achieved a level of wealth never before seen, maintain the fire in the belly needed to dominate entrepreneurially, or will it succumb to a desire for comfort and opulence? We often hear jokes about the comparatively weak work ethic of Europeans, but are they just further down the same track as ourselves in this regard? I don’t know the answer. However, there may be reason for concern that America does not have a particularly great ethic for studiousness. We graduate a lot of individuals who can not differentiate a simple function, conjugate common verbs, or appear on a show called “Are You Smarter Than a 5th Grader?” without appearing buffoon-like. Then we convince these students that they must have a college degree (or, increasingly, a graduate degree), only causing classes to slow to a crawl. This condition benefits neither those students less disposed to academia who might have both a more enjoyable existence and higher incomes if they entered the workforce and/or developed their tradecraft, or the unchallenged students who are educated at a level designed not to leave behind those who are just clock-punching toward a degree. At any rate, there is no reason to think that a17th century Puritan work ethic will maintain the nation’s dominance when it is too easy to just sit it out on the couch.
The US also faces some systemic economic challenges. The US has been running trade deficits for quite some time, and this means that a lot of dollars are going out the door into foreign hands. Can we expect that there will indefinitely be adequate demand for dollar assets, or, is it more likely that Chinese holders of US debt reduce their demand for US debt or even begin to sell it off? Certainly it is not in China’s best interest to conduct a massive sell-off on a whim because they will suffer greatly as a result (presumably driving down the value of the assets they hold and hurting their export position.) Even if they don’t sell off, but just reduce demand such that higher interest rates are required to induce the purchase of this debt it will have adverse effects. However, the point is: Why should we expect that this debt accumulation can go on forever and ever without consequences.
A second economic threat involves a penchant for running government budget deficits. It seems our government has become accustomed to having their cake and eating it too when it comes to maintaining excessively high spending while keeping taxes low enough to appease voters. The problem is exacerbated by the run away freight train that we can see looming on the horizon, but for which there is not will to contend. This freight train is called entitlements, and the reason it is out of control is that we have a rapidly declining number of workers per retiree and a pay-as-you-go benefit system. Pay-as-you-go means that the money that comes out of your check today is paid out to someone else’s grandmother today. This kind of system, like the con scheme of Charles Ponzi, works like a charm as long as there is a growing population or sufficiently growing income levels, but fails catastrophically in the case of neither (as we may soon see.) The longer we delay, the bigger the shortfall between what is promised and what is received will become, and, barring a massive influx of workers, the problem will become unsustainable.
These economic issues are by-and-large domestic issues, and one may wonder why I bring them up in an essay on the difficulties of a hegemonic power. America’s unique status has, in deed, contributed to these problems. Because of the status of the US dollar as a kind of reserve currency, American money has been in high enough demand that the US could run persistent debt without running up the untenably high interest rates that might serve to keep things in check. Also, while entitlements may dwarf other budget items, the fact that the US has had such high spending rates on defense cannot be ignored as contributing to our fiscal woes, and clearly our role in the world (or at least the way in which it has been interpreted by the leadership over the course of my lifetime to date) has contributed to defense spending which, even as a percentage of GDP, is considerably higher than other developed nations. We have a defense budget of over half a trillion dollars (i.e. about the size of Argentina’s Gross Domestic Product [GDP]) not to mention intelligence and homeland defense entities.
I don’t know what the future holds for the US, but it seems that the present course is unsustainable. In order avoid dire consequences, American leaders need to rethink their approach to international security, correct debt-building trends, avoid imperial overreach, and never rest on laurels.
