The Future of US Global Power

Delusions of Decline

S. Brown

• Publisher: Palgrave Macmillan
• Year: 2012
• ISBN:
  9781137023162
• Topic: Politics & International Relations
• Subtopic: Trade & Tariffs
• Index: Politics & International Relations

Dispelling the myth of decline, Stuart Brown argues that the US continues to enjoy the economic, political, cultural and military underpinnings befitting a pre-eminent global power. He provides an analytical tour through the major domestic and foreign policy issues that will impact the United States' future position and role in the global system.

Part I

Introduction

Delusions of Decline: US Global Power in a Turbulent Era

Consider the following country in the year 2030: Its overstretched military occupies several populous countries. Innovation and productivity at home have stagnated. Prohibitive trade barriers insulate its beleaguered firms from global competition while few still demand its once formidable currency. The former steady flow of immigrants has dwindled to a trickle; and students migrate elsewhere to train. Unmitigated health care inflation has overwhelmed the national finances while reliance on unfriendly creditors reaches alarming proportions. A proliferation of menacing state and non-state actors underscores the country’s diminished influence and stature.

Now envision a rather different country: Backed by reinvigorated alliances and supported by adroit public diplomacy, economic statecraft and cultural outreach, an unequaled military skillfully confronts the world’s most pressing security threats. The country remains uniquely positioned to lead and coordinate collective solutions to pressing transnational challenges. Aspiring individuals from around the world migrate to its entrepreneurial economy and free-wheeling culture. Buoyant living standards, widespread freedoms and the unwavering optimism pervading this dynamic, multicultural society attract universal envy and respect.

These semi-caricatured portrayals capture two alternative paths for today’s preeminent global actor. Which view offers the more plausible forecast? That virtually universal awe over the scope of US power has dissipated in less than a decade seems striking. Four key events seem to have driven this dramatic shift in perception: (i) the 2003 invasion and occupation of Iraq; (ii) the US-centered financial crisis of 2007–2009; (iii) the rancorous debate and political stalemate over fiscal adjustment; and (iv) stagnation in the median real wage. Each, in its own way, has revived competing visions over issues of social justice and concerns over the US political system’s ability to reconcile them. Simultaneously, such developments have spurred global spectators to re-question the durability and legitimacy of US power.

Reinforcing doubts about US predominance has been a more gradual reconfiguring of global power. The latter has involved re-ascendant states, an expanding influence for various non-state actors and a proliferation of transnational challenges. Such developments have revived perceptions of a re-emerging multipolar world associated with a qualitative diminution in US influence. Although a characteristic resiliency has defied the skeptics over the decades, recent pressures have proven sufficiently pronounced to raise legitimate doubts over the US’s ability to rebound in a similarly robust fashion this time around.

The original inspiration for this book grew out of an article titled the “Overstretch Myth” co-authored with David Levey for the journal Foreign Affairs. Levey and I argued that the implications of running chronic current account deficits – the annual difference between what US residents spend and earn abroad – depend on how one interprets the associated stock and composition of the US’s (net) liabilities to the rest of the world. In response to economist Larry Summer’s quip – “there is something odd about the world’s greatest power being the world’s greatest debtor” – we replied that alarm over US “foreign debt” seemed exaggerated. One sentence elicited particular attention: “If anything, the world’s appetite for US assets bolsters US predominance rather than undermines it” (Levey and Brown, 2005a).

This book sets out to defend the latter statement within a broader context than international trade, capital flows and “dependence on the kindness of strangers” (Levey and Brown, 2005b; Setser and Roubini, 2005). It seeks to identify and challenge core claims underlying a more general presumption of US secular decline. This requires reassessment of the full spectrum of US economic, military, political and cultural power assets: Does the US still enjoy a sufficiently superior global position and influence to justify its status as the predominant actor within the international system? Is any other single player or unified group of actors willing to assume the mantle of global leadership and offer a viable alternative to the US-led liberal world order?

Examining the arguments and evidence advanced in the ever-expanding literature on US decline, this book answers these two core questions with an emphatic yes and no, respectively. The book’s central claim can be stated more definitively: The US retains a qualitative predominance across the principal dimensions of global power. Its state and civil society continue to exert a pivotal influence on world affairs. The US remains, in a word, hegemonic. Under what conditions such hegemony can be maintained is the central theme explored in this book.

In analyzing the rise and fall of the great powers neither Yale historian Paul Kennedy (1987) in his classic account nor most subsequent commentators have distinguished with sufficient clarity between primary and more secondary underpinnings of global power. This book’s effort to systematically differentiate between the (primary) determinants of national decline, on the one hand, and the (secondary) underpinnings of “imperial overstretch,” on the other, supports a more bullish assessment of longer-term US prospects.

In particular, the underlying microeconomic and macroeconomic pillars of US global power remain robust. Owing to a durable dynamism and relatively auspicious demographics, the US appears poised to outperform other developed economies over the longer term. The internal dynamics of US productivity and labor force growth, and their myriad determinants – notably an endemic entrepreneurial spirit of innovation and broad openness to transnational movements of people, capital and ideas – continue to buttress its relative economic prowess. In contrast, any tendency toward military overreach – insufficient boots on the ground relative to the demands of (self-assumed) foreign entanglements, and/or resource over-commitment in foreign campaigns – represents a more reversible phenomenon.

Along with other advanced countries, the US faces formidable budgetary challenges and a macroeconomic imperative to progressively delever. Critical to macroeconomic stability therefore will be broad public support for the sacrifices needed to restore longer-term fiscal solvency alongside healthier household and financial institution balance sheets. Forestalling the onset of decline will require summoning a systemic capacity to surmount the current political gridlock over national resource allocation priorities. Still, Americans have met momentous challenges before; and some encouragement can be taken that the country’s upward debt trajectory has been thrust to the center of public policy debate. In the meantime, the book argues that much of the current handwringing over the dollar’s diminishing status and the role of US macroeconomic policy in driving global economic imbalances reflects misinterpretation or hyperbole.

An underlying theme of this book concerns the enhanced stability and prosperity, and hence legitimacy, garnered through leadership in the provision of global public goods. Such services provide core benefits to the world community while consolidating the leading state’s position atop the global power structure. For example, the US Navy secures the strategic sea lanes and chokepoints through which key commodities like oil flow to all regions of the world.¹ The US has also led in the creation and reinvigoration of institutions that promote and safeguard multilateral trade and finance. Meanwhile, in key strategic regions the US presence as a counterweight to aspiring regional hegemons is tolerated if not always enthusiastically embraced. Although Americans have heretofore shared in the economic and security benefits, will tightening resource tradeoffs and growing insecurities at home render the country less willing to tolerate international free riding of (largely) US-financed global services?

Powers that are perceived to export insecurity or exploit other nations tend to spur the formation of countervailing coalitions to clip the leading state’s wings. In this context, for example, the invasion of Iraq and the squandering of moral stature in locations like Guantanamo and Abu Ghraib have dealt a blow to US prestige. Such setbacks, however, have not translated pari passu into any broad-scale repudiation of US liberal and democratic values. Nor, as this book will attempt to argue, can any other single development be persuasively claimed to pose an insurmountable challenge to the US’s overall global position. Despite much scholarship that predicts concerted state balancing against the US, the evidence marshaled to date has proved underwhelming (Brooks and Wohlforth, 2008). Moreover, no viable alternative to a US-based liberal trading and security order has been on offer, nor does any other actor or even group of actors appear to offer a comparable assemblage of assets for projecting global power.²

Notable among the structural developments buffeting US power today is the relative shift in the locus of economic and geopolitical gravity from the “West” to emerging Asia. Alternatively, one can characterize this shift as North to South, favoring a more geographically diverse set of emerging states, anchored by the so-called BRICs (China, India, Brazil and more controversially Russia) but supplemented by other important regional players, such as Turkey, Mexico, Poland, Indonesia and South Africa. Meanwhile, are we migrating from a world of multilateral rules and institutions, where the US has stood as the ultimate arbiter and guarantor, to one of competing regional economic blocs and spheres of influence?

The unprecedented pace of economic growth in China in particular raises a central geopolitical issue – how can China’s decisive re-emergence on the global stage be accommodated without subverting the existing international “rules of the game”? That China’s re-ascendancy and the takeoff experienced within the emerging world more broadly would have been unimaginable without globalization may be cause to celebrate US influence. But such acknowledgment glosses over the palpable anxiety, in advanced and developing economies alike, over competition from emerging countries, particularly those featuring pervasive state direction of the economy.

As the champion of a progressively integrative and liberal global economy, particularly one encompassing formerly semi-autarkic but still largely dirigiste economies, it seems reasonable to ask whether the US has unwittingly created a Frankenstein that threatens the future well-being of American workers. As discussed in succeeding chapters, the specific policy response to foreign economic statecraft (and more generally, foreign country success under US-led globalization) is integral to the broader debate over hegemonic decline.

The more general diffusion of power to other state and non-state actors raises equally fundamental questions about the residual scope of US influence. The challenge of asymmetric warfare to the US’s conventional military prowess, for example, has been vividly displayed on the hot and dusty battlefields of Afghanistan and Iraq. The nuclear ambitions of an aspiring regional hegemon like Iran, and the limitations of US-championed sanctions to materially slow its march, raises doubts about the enduring utility of US hard power assets. Can US and allied power be wielded to preclude the acquisition of nuclear materials by al Qaeda and fellow travelers? Can the US consistently galvanize collective action to ring fence a capricious North Korea? More generally, does the world still look presumptively to the US for leadership that meets the material and security needs of the global community? And once again one needs to pose the question in reverse: Do Americans perceive sufficient benefits from the more secure order delivered largely at their expense; or is the burden of US global activism increasingly perceived as exceedingly exorbitant (Mandelbaum, 2010)?

Several principles guide the analysis throughout the book: First, as a rule, competitive markets represent a superior mechanism for economy-wide resource allocation and wealth creation. Capital misallocation will still periodically recur. The sub-prime bubble, for instance, exposed long-incubating systemic distortions, incenting reckless risk-taking by an inadequately regulated financial sector. “Unfettered” markets guarantee neither efficiency nor equity, especially when economic and political control becomes concentrated or corrupt and where markets de-anchor from core societal moorings. The recent economic crisis likewise confirms the critical role of the state, the decisive intervention of which can limit wider fallout from incipient instability.

While the constituent categories of “market failure” – where market prices and social costs diverge – make a presumptive case for governmental intervention,³ against this must be weighed the prospect of governmental failure.⁴ Striking the right balance between the market and government thus involves a delicate balancing act, and reasonable people can agree to disagree over the efficacy of specific government correctives to private decision-making. Yet, some tradeoff appears to exist between the scale of governmental redistribution and intervention in markets, on the one hand, and economic dynamism on the other.

Second, while interstate cooperation is usually preferable, a disparity of capabilities among states, differences in national values, a proclivity toward “free-riding” and obstacles to effective coordination suggests a predominant state may sometimes be required to take the lead in “putting out fires.” Collective action may either not occur or materialize too slowly in the absence of an activist, leading power.

Just as “corporate social responsibility” is not mainly about altruism, the provision of core global public goods serves to reinforce hegemonic legitimacy while upholding national economic interests.⁵ Meanwhile, predominant states can be vulnerable to a hubris that encourages an injudicious application of power (Beinart, 2010). Whether inciting opprobrium or praise, periodic unilateral action in response to perceived crisis significantly defines what it means to be hegemonic. While some are anxious to transcend such a system in favor of a more progressive post-nationalist world, for now the hierarchical distribution of state power continues to matter.

Finally, in terms of the principles guiding the analysis, hegemony transcends the confines of the state. It involves releasing the creative energies of households, non-profits and corporations domiciled in the leading state, allowing them not only to transact internationally but also to transfer financial resources, skills, ideas, norms, technologies and security (and undoubtedly, sometimes insecurity) globally.⁶ In addition to its policymakers and the organs of government, a hegemonic power, by definition, features a broad array of such influential, globally oriented non-state actors including philanthropies, foundations and religious charities, professional associations, transnational non-governmental organizations, universities and corporations. Their collective impact and ability to contribute to the solution of pressing global problems can often rival that of the state itself (Brown, 2012).

This book offers neither a partisan political perspective nor does it seek to defend a specific ideology.⁷ As much as possible it avoids normative categories; thus, for example, no systematic effort is made to weigh the impact of the US on global “welfare.” Moreover, this is not another book on US foreign policy. Rather, through a critical synthesis of debates in the economics and international relations literatures, the book strives to offer a template for evaluating the state of US power and the prospective challenges to it. The book’s core remit thus lies in outlining objective preconditions for sustained US primacy versus secular decline. It is hoped that non-Americans as much as Americans will find much here that stimulates new ways to think about the evolving nature and exercise of global power today.

My first encounter with concerns over US decline came growing up in suburban New Jersey. My father, a salesman of computer-controlled machine tools – sophisticated presses, lathes and grinders required to produce the country’s advanced manufactured products – would regale the family at the dinner table with tales of US technological superiority. Years later he would speak with resignation about stiff competition from cheaper imports. Much has changed with the structure of the US economy and with the world writ large since the late 1960s and 1970s. Successive waves of pessimism and optimism concerning US “competitiveness” and influence have accompanied this revolution. Against the backdrop of today’s turbulent pace of economic and geopolitical change, are the latest claims of waning US power more on target than similar, prior claims? Against the rapidity and complexity of global developments, is it quaint to continue to view the world through the lens of US hegemony? If not, for how much longer and under what circumstances? These are the main questions this book explores.

Part II

Global Power: Key Issues

1

US Power: Past and Prologue

Evidence for US primacy used to be less contestable. Financial and strategic support from the US notwithstanding, Europe and Japan required decades to rebound from the devastation of World War II. Their later economic “challenge” eventually would succumb to the US revolution in information and communication technology (ICT), in the one case, and a protracted economic stagnation in the other. While sleeping giants India and China had self-selected out of global capitalism, US-headquartered transnational corporations roamed the world uncontested even as US manufacturing exports boomed. Systemic defects spelled, first, implosion, then dissolution, for the US’s main strategic rival, the former Soviet Union. As long as a looming threat from Islamist extremism remained beneath the radar, the Western state-centered international system appeared unassailable. The US seemed to straddle this world like a colossus – militarily, economically, politically and culturally. Yet the world, and the US’s position within it, looks rather different today compared to 1950, 1991 and 2001. Do recent shifts in the global syst...

Table of contents

• Cover
• Title Page
• Copyright
• Contents
• List of Illustrations
• Acknowledgments
• Part I: Introduction
• Part II: Global Power: Key Issues
• Part III: Material Underpinnings of Global Power
• Part IV: Global Public Goods and the Re-ascent of China
• Part V: Domestic Constraints on US Power
• Part VI:
• Notes
• Bibliography
• Index