Attitude Adjustment

A Twitter mate wrote me that the “Collapse” meme was strong on the internet today. “Collapse of what?” Of the US empire, of course. I myself had fed the meme earlier in the day by ReTweeting a reference to Otto Scharmer’s blog post from earlier this month where he wrote how stark the decline in the US appears after returning from a summer of visiting more vibrant nations overseas. (Otto Scharmer is a Senior Lecturer at MIT.) Scharmer also referenced the arguments of Johan Galtung, who predicts the fall of the US empire by 2020.

I think the evidence is pretty clear that the US is in a period of economic decline relative to much of the world–we’re just not growing as fast as they are. The US, which accounted for 50% of the world GDP immediately after WWII, accounts for something like 20% today, and as long as other, very large economies such as India, China, and Brazil continue to grow at 2 to 3 times the US rate, our share of the world economy will decline further. The Congressional Research Service in 2007 cited statistics that by 2025, the Chinese GDP would be 50% bigger than that of the US, although its per capita income would still only be about 40% of the US level.

This need not have any significant impact on US prosperity; in fact, overall growth in the world economy, if we manage it responsibly and sustainably, should be a good thing for everyone.  But it will change the dynamics of the world economy in ways we cannot fully anticipate today. World capital flows will change, US foreign investment patterns will change, other economies will become centers of world-class innovation and education, human talent will flow in different directions, and world investors will have many more stable options to park their long-term funds.

It’s harder to tease out exactly how these changes will alter US ability to project power, but the strong sense is that they will, even if, and this is important, countries such as China, India, and Brazil never have a bad word to say about the US. Leaner defense budgets are in our future. And I also suspect that, as these other countries emerge as world economic engines, the mantle of economic and diplomatic leadership will at first imperceptibly but eventually steadily slip off US shoulders. As China becomes the EU’s largest trading partner, for example, it will only be natural for Bonn and Paris to worry more about what Beijing thinks. Again, this need not be a horrible thing.

But we can certainly turn it into a horrible thing. That’s the problem with all this “collapse of empire” talk. It tends to feed the tendency of Americans to think we’re on the road to ruin and that therefore drastic measures are necessary to reverse the dynamic. Now that would indeed be unfortunate, because it is exactly this kind of overreacting that could lead to a messy denouement. Grandstanding and puffing out our depleted pectorals will only divert us from what we need to do, which is to begin to shift money away from military-oriented spending to investments in human and societal development that will allow us to compete effectively in a more balanced world. (And by the way, I don’t think it’s up to government to do all the investing.)

Generally I’m bullish about the US capability to do well in this competition. But one not so small thing gives me pause. America’s mental shortcuts for thinking about the rest of the world are not very helpful, and these shortcuts unfortunately spring from our founding legends and myths. So as Americans we learn that:

  • We were founded by people who wanted to escape the messy ways of bickering nation-states and it’s best to remain independent from them and Self-Sufficient.
  • Almost all problems scale to individual solutions. At worst, maybe every once in a while Americans have to voluntarily form a small group to tackle something difficult. (The only real exception to this is the military) So essentially we believe Complexity is Un-American.

So let’s stop writing about the collapsing empire–and please don’t bring in the comparison to Rome, which after all occured like 2000 years ago. I’m tired of it already and it’s just applying old vocabulary and concepts to describe a world dynamic that will be new, different, and exciting. And let’s concentrate on what really matters–a long overdue Attitude Adjustment.

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3 responses to “Attitude Adjustment

  1. Great post…it is a dangerous notion that the US can somehow is use its privileged position to maintain or protect that privileged position. It is somewhat analogous to the corporate monopolist that thinks it can protect itself by turning further inward and refusing to embrace innovation. In both cases this behavior may delay the fall but the fall will eventually come regardless and will be all the more abrupt and disruptive.

  2. Always the economist, aren’t you, Carmen? 😉 I agree with you that this collapsing empire stuff is meaningless, and I’m not quite sure what the American empire is, anyway. But if it’s what I think it is, I don’t think we bought it–I think we, or more accurately the so-called “Greatest Generation” and the generation before that one, earned it as the result of aggressive international political and military activity that succeeded in the wake of an increasingly introspective Europe that was only really willing to use economic influence internationally. I don’t think any of the rising economic empires have the will to play in others’ ballparks like we do. So yes, we want economic self-sufficiency, but that does not mean isolationism in practice, whether the country is run by Republicans or Democrats. And yes, we want to simplify according to our own rules and expectations. I guess we haven’t been an empire long enough to know any better.

  3. I just came across a piece by James Traub that converges with your views: http://www.foreignpolicy.com/articles/2010/09/24/wallowing_in_decline

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