It has become the new truth of the early 21st century that the western world we have known is fast losing its pre-eminence to be replaced by a new international system shaped either by the so-called BRICs, the “rest” or, more popularly by that very broadly defined geographical entity known as Asia. This at least is how many economists, historians and students of world politics are now viewing the future of the larger international system. This essay does not dispute some self-evident economic facts. Nor does it assume that the world will look the same in fifty years time as it does now. It does however question the idea that there is an irresistible “power shift” in the making and that the West and the United States are in steep decline. Specifically it makes a number of critical arguments concerning the new narrative.
First, it suggests that this story by reasonably focusing on what is obviously changing in the world unfortunately ignores what is not; as a result it underestimates what might loosely be termed the continued structural advantages still enjoyed by the United States and its major western allies. Secondly, while it is true that many new states are assuming a bigger role in the world economy, their rise needs to be looked at more carefully than it has been so far; indeed, when such an examination is undertaken, it becomes increasingly clear that the rise of others – China’s included – is still hemmed in by several obstacles, internal as well as external.
Thirdly, though the Asian region, and China as part of it, is assuming an ever more important role in the wider world economy, this development does not in of itself represent a major challenge to the West as such. Indeed, as I suggest at the end, the shifts which have so preoccupied writers over the past five and ten years might even be viewed less as challenges to the West and more as additions to it.
Memory can often play tricks on even the most historically-minded of individuals, particularly those who have had to live through the last ten turbulent years. Indeed, it is almost impossible now to recall how self-confident so many in the West seemed to be during the decade immediately following that most unpredicted of world shattering events known generically as the “end of the Cold War”. To be fair, some observers did sense that there was something distinctly unreal, possibly temporary, about the new post-Cold War order.
1 A few even forecast that we would all soon be missing the Cold War.
2 But that is not how most commentators viewed things at the time. On the contrary. Having witnessed the speedy collapse of the Soviet project followed by a decade of global market expansion (otherwise known as globalization) most pundits came to believe that a successful marriage between free markets, democratic enlargement and US power would guarantee order well into the next millennium.
3 Certainly, the West at the time looked as if it was definitely in the ascendancy, restructuring once planned economies, opening up previously closed systems, incorporating former enemies, and smashing down political and economic doors that had at one been time been closed.
Admittedly, it sometimes failed to act, as say in Rwanda; and very often it ignored the fact that some actors (who later made their name on 9/11) were clearly not becoming socialized into that fabled entity known as the “international community”. But as one century gave way to another, it appeared as if the western world from the Pacific coast of the United States to the middle of a newly united Europe could look forward to decades of self-confident prosperity and peace.
Nowhere was this mood of optimism more prevalent than in the land of the last remaining superpower. Indeed, the US appeared to be in an especially enviable position. Some continued to wonder whether the „unipolar moment‟ was really an illusion.
4 One or two analysts even speculated about the possible limits of US power.
5 And the occasional maverick continued to repeat the old Paul Kennedy line that the United States was in decline.
6 Few but the most pessimistic envisaged that any other power would likely rise to balance its vast power in the future. On the contrary, after having seen off the USSR, and then having experienced an eight year economic boom of its own, America and Americans could reasonably look forward to another very American century.
7 In fact, so buoyant was the mood by the end of the 1990s, that several writers began to talk of the United States as the new Rome on the Potomac, even a modern “empire” possessing global reach, an infinite surplus of soft power, and a vast military machine to match. For some indeed the US had become the greatest power in history with one very obvious distinguishing feature: unlike its great power predecessors from the Romans to the British, this one would never decline.
8 It is often said that before every great fall there is a period of grace.
So it was perhaps with the last hubristic decade of the twentieth century. But the fall when it came was profound indeed; to such an extent that one American magazine was later forced to concede that the years between 2000 and 2010 had been nothing less than „the decade from hell‟.
9 It began of course with 9/11 and the strategically inept response to this by the Bush administration.
10 It continued with the gradual erosion of economic certainty which finally culminated with the great geopolitical setback of the western financial crisis.
11 And it went from bad to worse in some eyes when it became increasingly clear that the West itself was facing a massive challenge from other non-western players in the world capitalist economy. When Goldman Sachs launched the idea of the „BRICs‟ in 2001, only economists (and not many of them) took the idea very seriously.
12 But as the years passed, and the economic data began to flow in, it began to look as if the author of the original notion, Jim O‟Neill, had been brilliantly prescient.
13 Indeed, his core idea based on careful economic study – namely that the future economic order would be less dominated by the West than it would be by giant economies like Brazil, Russia, India and China – seemed to provide irrefutable proof that the world was in the midst of a global revolution.
14 The causes of this were multiple. But one thing was obvious. The axis of the international system which had for several centuries revolved around the Atlantic was moving elsewhere – either towards Asia as a region,
15 or more generally towards something vaguely referred to by the influential columnist, Fareed Zakaria, as the “rest”.
16 Nor was this Zakaria or O‟Neill‟s view alone. In 2004 the then editor of Foreign Affairs had warned the West that there was a potentially disturbing “power shift in the making”.
17 A few years on and one of the more influential liberal writers on world politics made much the same point. It was no longer a question of whether wealth and power were moving away from the West and the North, according to John Ikenberry.
That much was self-evident. The big question now he continued was “what kind of global political order” would emerge as a consequence.
18 The less liberal Niall Ferguson concurred. But in his view it was not just the once “app-laden” West that was in retreat.
19 So too was his adopted country of choice. The “hyper-power” was hyper no more.
20 America’s best days were behind it. The empire was on the slide.
21 Unsurprisingly, these seismic alterations generated much intense debate around the world: nowhere more so than in the West itself.
22 Here opinion veered between the deeply pessimistic – all power transitions it was assumed could only lead to intensified global conflict
23 – through to those who insisted that the new emerging economies could only add to the stock of the world’s wealth by bringing more states within the fold of the world market. It was the rise of China however that occasioned the greatest discussion of all, and for very sound material reasons as Robert Art has observed.
24 In fact, almost overnight, it seemed as if everybody had something significant to say about China.
25 Opinion differed sharply with one or two writers claiming that China was fast becoming a responsible stakeholder in international society,
26 a few that its rapid economic expansion was the only thing standing between the West and a global depression, others that it constituted a real threat to US hegemony,
27 and many more that if it continued to grow while the West lurched from low growth to no growth at all, it might soon be running Asia
28 or possibly even the world.
29 But however one assessed China, one thing looked startling obvious. This “restless empire”
30 had at last been aroused from its slumber following a relatively uneventful decade (one writer in 1999 even suggested that we should not be taking China too seriously)
31 and was now set to take its seat at the top of the world‟s table. A gravity shift was taking place
32 – or so it was argued – and whether or not one viewed China‟s economic rise as a foregone conclusion,
33 necessary corrective to its nineteenth century period of humiliation,
34 worried about its impact on the global economic and political order,
35 or assumed that its rise was bound to lead to increased „intense security competition‟,
36 one thing was certain: the international system was undergoing what even western governments now believed was a transformation that would alter the world for ever.
37 In what follows I want to address the issues raised by what many are now assuming to be irreversible changes in the world order. I do so not by asking what all this means, if anything, for IR theory (this has been done elsewhere)
38 but rather by wondering whether the now popular argument that we have moved into a “post-western world” is in fact true.
39 Clearly I do not dispute some self-evident economic facts.
40 However, as Carr noted many years ago, the facts do not always speak for themselves; and even if some seem to think they do, they can still be arranged in a certain way to paint a less than complete picture of the modern world.
Several arguments in what follows.
One is that this modern story, exciting and interesting though it is, tends to focus almost entirely on what is rapidly changing but says little about what is not – and what is changing much less than some are now suggesting is America’s position in the world.
41 There has also been a confusion about terms. Nobody serious would want to deny that there have been measureable changes in the shape of the world economy over the past few years. However, too many writers have either assumed that a shift in economic gravity is the same thing as a power shift (it is not);
42 or, they have concluded that as these economic changes continue, they will either lead to a transfer of power from one hegemon to another (this is questionable),
43 or to the creation of something now regularly (and dubiously) referred to as a new “Asian Century”.
44 As I will seek to show, these assertions contain serious analytical flaws. Equally flawed, I would insist, is the idea that we can make bold predictions about the where the world will be in the future. But as Dan Gardner has convincingly shown, getting the future right has in the past proven to be a fool’s errand.
45 This I would want to argue, has important lessons for those now confidently predicting a major power shift over the coming decades.
46 The “rest” may now be growing fast while the US and the EU languish. However, as more sober analysts have pointed out, the crisis in the West may not last for ever, while the many problems facing some of the rest – including India
47 and China
48 – could derail their apparently irresistible rise up the economic league table. Nothing of course endures for ever. And a new world might indeed be in the making. But it might not be the one now being talked about so feverishly around the world today.
American economic decline?
As we have already suggested, a large part of the case in favour of the notion that a “power shift” is underway rests on the assumption that the leading western player – the United States of America – faces an irresistible economic decline that will, if it continues, either allow others to take advantage of its weakness or reduce its ability to lead. Certainly many ordinary Americans, and those who comment on the United States today, believe this to be the case.
49 Of course, the story can be, and has been, told in very different ways. For some the process is likely to be slow and can be managed rather easily, “politely” even.
50 For others, it is bound to have enormous consequences, not only for the conduct of US foreign policy but for the world at large. Certainly, if one accepts the theory of hegemonic stability (and believes that the hegemony is now in decline) then the future of the world looks very problematic indeed.
51 Either way, with its share of world trade falling, China rising economically, its debt increasing, its economy in slowdown since 2008, and its dependency on foreign purchasers of its debt on the rise, it looks to many analysts at least as if the United States will either “need to retrench”
52 or, more problematically, pass on the baton to other more capable powers.
53 The debate about US economic decline is hardly a new one.
54 Indeed, ever since the late 1960s, one pundit after another has been forecasting dire things for the United States on the grounds that it was becoming, as one writer put it in 1977, a very ordinary country.
55 A decade later Paul Kennedy made much the same point,
56 as did Immanuel Wallerstein in 2002,
57 and then David Calleo a few years later.
58 In fact, there has hardly been a point in time since the late 1960s – with the possible exception of the “unipolar moment” in the 1990s (and not even then) – when there has not been speculation about America’s economic future
But this time, we are reassured, the decline, is for “real”. With an education system no longer fit for purpose, a middle class in retreat, a and a political system in gridlock, the United States according to one recent study (written by a British journalist) is in free fall with little time left to recover.
59 There can of course be no doubting America’s many economic problems. Nor should there any doubt either that in simple its share of world GDP is much less today than it was, say, twenty five year ago, let alone at the end of the Second World War when it was the only serious player in the world capitalist system.
60 But this is hardly the same thing as suggesting that the US is in irreversible economic decline – now a common view – or that China has now overtaken it – an equally popular view. Even on the simplest of GDP measures the United States is still well ahead of China. Thus whereas China with a population of around 20% of the world’s total generates something between one seventh and one tenth of global GDP, the United States with only 6% of the world‟s population still manages to produce between twenty and twenty five per cent. Indeed, by a simple GDP measurement, the US economy remains more powerful than the next four biggest economies combined: that is to say China, Japan, Germany and the UK. Comparisons between average living standards around the world reveal an even greater gap, especially when the comparison is made with the BRIC countries. Clearly life is improving for many millions of people in these countries; poverty is falling; and a new middle class is being created. Still, in each of the BRICs (India and Brazil most obviously) there are still vast pools of poverty. Furthermore, in terms of living standards, the USA continues to be ahead by a long way with an overall average four times higher than that of Brazil, six times higher than that in China, and as much as fifteen times higher than in India.
61 Now none of this would come as any great surprise to a developmental economist. Oddly though it would come as something of a shock to the American public who by 2012 had come to the somewhat bizarre conclusion that the United States had been economically overtaken by China, and would, presumably, fall further and further behind its great economic rival on the other side of the Pacific.
62 Indeed, the gap between perception on the one hand, and the facts on the ground on the other, was cleverly illustrated in a recent study by The Economist. In this the authors challenged the „declinists‟ not by comparing the United States with other national economies, but comparing other national economies with specific states within the Union. The results were telling. To take one example: California. In GDP terms it alone remains slightly more wealthy than Brazil and Russia respectively, and almost twice as wealthy as both Turkey and Indonesia (two economies now discussed in increasingly glowing terms). The Texan economy meanwhile is nearly as big as Russia‟s and just slightly smaller than India‟s.
63 This hardly sounds like an economy on the wane.
If the United States is hardly the declining economic superpower portrayed in much of the literature today, it also continues to be able to do things that others can only dream of. In part this a function of its size; in part a function of geographical luck (the US possesses enormous quantities of oil, gas, coal, and food); and in part a function of its embedded position in the wider world economic system. As Carla Norloff has recently shown, despite a gradual economic decline since the end of the World War II, the United States still possesses critical features that give it what she calls “positional advantages” over all other states.
She even challenges the now fashionable view that America’s hegemonic burdens are outweighing the benefits. She suggests otherwise: Washington actually reaps more than it pays out in the provision of public goods.
64 The United States also has one other, very special, advantage: the dollar. As Doug Stokes has convincingly argued, this particular form of “financial power affords the US a broad range of privileges”, a by-product, in the last analysis, “of others willingness to purchase, hold and use the dollar”. They do this of course not because they especially love Americans, but in order to hold up an economic system upon whose health their own prosperity continues to depend. Furthermore, as Stokes goes on to argue, even the financial crisis has not weakened the position of the US anywhere near as much some have assumed. Indeed, in a world where uncertainty reigns (most obviously in the European Union) “money” in its purest form has fled to safety, and nowhere is regarded as being as safe as the United States. To this extent the financial crisis, ironically, has only affirmed US financial power rather than weakened it.
65 We also have to judge economic power not just in terms of the size of an economy but by the qualitative criteria of „competitiveness‟. Economies like China, India and Brazil are undoubtedly large, and will no doubt get larger over time. But this does not necessarily make them competitive in relationship to most western countries or the United States. In a recent survey, the United States came fourth in the world in a group of fifteen countries. Moreover, eleven within the fifteen were definably western, while the other four included Japan, Taiwan, Hong Kong and Singapore – countries all closely tied to the West and to the US. As for the BRICS they came well down the list. Thus China came in at twenty seven, India at fifty one, Brazil at fifty eight, and Russia at sixty three.
66 Other studies have arrived at not dissimilar conclusions concerning the qualitative gap which continues to exist between a number of the “rising” economies and many of the more established ones, the United States in particular. In terms of cutting edge research in science and technology the US continues to hold a clear lead.
Thus in 2008 the United States accounted for 40 percent of total world R&D spending, and 38% of patented new technology inventions. More significantly, scientific research produced in the US accounted for 49% of total world citations and 63% of the most highly cited articles. The United States also continued to employ around seventy of the world’s Nobel Prize winners, and could lay claim to two thirds of its most-cited individual researchers in science and technology.
67 Innovation is also an American strength.
68 Other countries are clearly beginning to catch up. The United States however is still a country that continues to innovate across the board. Critics would no doubt point to the fact that the US is slipping down the league table. However, it still ranks 4th in the world. China meanwhile only came in at 54th in 2009, India at 56th, and Brazil and Russia even further behind. Of course, this does not take account of change over the longer term, or of the fact that a country like China is making a concerted effort to build a more innovative economy.
69 But as even the Chinese would accept, it still has very long way to go. Indeed, in spite of official efforts to encourage what is termed in China a “capacity for independent innovation”, there remain several weaknesses in the Chinese political economy. Amongst the most significant, it has been noted, are “poor enforcement of intellectual property rights, an educational system that emphasizes rote learning over critical thinking, and a shortage of independent organizations that can evaluate scientific progress”.
70 There is also wider political restraint as well. Innovation usually requires open debate, a capacity to challenge established truths, and incentives to think the unthinkable; and none of these, to be blunt, are much in evidence in modern China today.