Old sentiments in America about the nation’s decline were re-kindled with the disastrous wars in Afghanistan and Iraq, and the economic collapse which has been the Great Recession, whose only outcome may very well be a lost millennial generation.
At first glance, a tangible exit from global influence and an underperforming economy will indicate the end of the United States’ role as a dominant power. While America’s relative position is becoming weaker, we must construe it not as a decline, but a transition towards a global political society and economy of unprecedented complexity and size, of which America is a key component. In other words, the “unipolar” world of 1991-2009 is giving way to a multipolar arrangement, where Washington will split a table with Beijing, New Delhi, Moscow and in the longer term, other-up-and-coming influential countries.
The 21st century is a unique time in our recorded history, when, in short, everything is bigger, the turnaround of capital and information is extremely rapid. For this reason, our systems will be different qualitatively as well. Using economic metrics to measure the relative share of the American economy in that of the world is a murky business, as PolicyMic writer Dave Beitelman has shown in his article that different methodologies can yield different results and no absolute picture is possible of whether America keeps its status quo position or is in decline relative to the rest of the world. This is why adopting a perception of America in a transitory state is a better idea.
A multilateral world does not propose a clear political, economic or military leader. Right now, America, China, and Europe form the poles of global economic might, with South America and the Middle East likely to become such regions in the medium term. In the long term, economic strength and vitality will gradually move south.
The fact that there are 7 billion people on Earth presupposes different thinking about how we conceptualize systems of interdependence and integration. It is mind-numbing to think about how much power global financial flows can hold and the effects they can have — far beyond my ability to understand, but the nominal value of the global derivatives market is estimated to be between $600 trillion and $1,4 quadrillion. In such terms, what exactly is decline, or growth — a global domino effect or likely something far more complex? The size of the global economy by GDP measure is a “mere” $74 trillion (PPP). In effect, America’s position as one of the world’s financial centers has a direct correlation to what kind of influence Washington exercises in the world, because it marshals (or is marshaled) by financial interests at least 10 times the size of the global economy. The quantitative factor that finances represent is not yet fully internalized in a narrative of power and may require a re-definition of the concept entirely.
We must think beyond aircraft carriers, number of bases or GDP figures when we talk about American “decline.” American economic share is declining, because its nominal size is becoming a part of an unprecedented global economy that is simply growing faster. That does mean less political influence in classical terms, but also an opportunity to explore new formats of multilateralism and cooperation — an avenue where America can be strong, not in the severely limited realist sense, but in the way of ideas, cooperation and global governance regimes.
Finance will be a crucial variable in all of this. Its scale and complexity means that it is not likely anyone has a full picture or comprehension of how it works, exactly. Around the crisis, we have seen already expired arguments about the financialization of the economy, how evil Wall Street is, and similar populist sentiments from the left and right. The idea is to understand the finance is crucial not only to understanding, but controlling the processes affecting global financial and economic forces – effectively, are they in control of us, or we of them? And how does America precisely fit in this picture, as one of the global economic poles?
It is the uncertainty of our unprecedented historical reality that make American “decline” difficult to define. Personally, I reject thinking in armored tanks, fighter jet, and GDP to understand it and offer the complex interdependence understanding inherent in a multipolar world that will give America new opportunities, rather than let it stew in delusions about decline. My own lack of knowledge prevents me from offering a more concrete picture, which may in turn be frustrating to the reader. But, there is some solace – we will live, we will see.
Photo Credit: james_gordon_los_angeles