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The Post-American World
The American political system has lost the ability for large-scale compromise, and it has lost the ability to accept some pain now for much gain later on.
That is from Fareed Zakaria's The Post-American World, a book remarkably full of common sense. It's #7 on Amazon and a good overall guide to globalization and why it matters that America no longer dominates the world, either economically or culturally.
Posted by Tyler Cowen on May 12, 2008 at 07:07 AM in Books, Political Science | Permalink
Comments
Aint' the first book ot it's kind and it won't
be the last. I would really like to read a book
about why America will continue to lord it
over others for a long, long time.
Posted by: sa at May 12, 2008 7:20:38 AM
"The American political system has lost the ability for large-scale compromise, and it has lost the ability to accept some pain now for much gain later on."
Egad, we've become Europe!!
Posted by: Bob at May 12, 2008 8:02:22 AM
saying "egad" was the nail in the coffin. We're Europe.
Posted by: shawn at May 12, 2008 8:30:37 AM
I think most of this sentiment ultimately derives from the mental anguish many thought leaders have suffered with Bush in the White House. If Obama gets in, I expect this sentiment to change 180 degrees.
I remember a friend of mine was actually concerned about Bill Clinton because he thought American was becoming so strong both culturally and economically it was leaving the rest of the world in the dust.
Posted by: Winslow Theramin at May 12, 2008 9:06:18 AM
We haven't lost the ability to compromise, rather, the world has adapted to the 16 year political cycle over which we compromise.
All nations have instability cycles, a result of being square integrable and quantized. The things on the right have to swap positions now and then because they do not have the number of transactions counts for smooth transitions.
Our 16 years cycle was designed by the founders, and we have never really changed it. But, over time, our foreign traders have learned to be countercyclical, with the exceptions of China and the old British Empire, for a time.
Posted by: Matt at May 12, 2008 9:12:56 AM
sa,
You are correct, but this book is different than most of the books of its ilk in that it isn't about the decline of the US, but rather the "rise of the rest." There's nothing alarmist about Zakaria's take; if anything, he wants everyone to enjoy our unparalleled prosperity. The story of Zakaria's book (from what I've seen in the Newsweek snippet) is that of relatively backward nation-states catching up with the European world, thereby lifting hundreds of millions out of poverty, and yes, changing the power dynamics of international policy.
After World War II, the US reaped the economic dividends of being the only industrial power standing. Then Europe rebounded, and competition got tougher. In the last 20-odd years, the world has seen the rise of productive sectors from Japan, China, Bangladesh, Brazil, South Africa, etc.
This diffusion of economic power is what differentiates the "Post-American world" from the previous. As for the book itself, I look forward to reading reviews to see if it delivers much more than the magazine-length feature.
Posted by: Publius at May 12, 2008 9:15:01 AM
When was this ever true about the American political system? Ever hear the New Deal? Smoot-Hawley Tariff Act? The federal government instituted the New Deal to help the economy, and in the end it made things much worse. If Washington just left the economy alone, the Great Depression wouldn't have been so "great".
Posted by: Ed at May 12, 2008 9:25:51 AM
Regarding cultural dominance.
From outside - the sheer number of english books is times more than anything in any other language.
When I started to look in different directions ( sociology, political studies, history etc - I found that most essential works are in english.
And it could not be easily overcome - if no other culture has answers to so many questions - then answers are borrowed from those who produces them and if some culture did not produce those answers for many years - how it will manage to make it quickly.
Seems that promotion of reading device ( like was discussed few days ago ) might restore dominance.
Or take wikipedia - I would most probably read american centered english language article than that in russian - those in russian are just of less quality and less informative.
There could be other ways to leverage informational advantage, so seems it is just a situation when americans should think on how to use those strong ways to restore influence which were not used before.
( BTW american films to my view is not 'culture' though they played a role just few years back ).
Posted by: Sergey Kurdakov at May 12, 2008 9:34:54 AM
Publius: "In the last 20-odd years, the world has seen the rise of productive sectors from Japan" -- that's a good joke, I'll remember it to use sometime.
Posted by: A Tykhyy at May 12, 2008 10:26:30 AM
Sergey Kurdakov makes a really good point.
In discussing dominance of a country economically and culturally in the world, language is a primary factor: whether it is a leading or lagging factor, whether it helps to maintain or aids the fall, it is deeply connected.
English is the primary language in the anlgo and western world; obviously it is also a secondary language or necessary language for much of the rest of the world, and the cost of learning English for many is a small price for the benefits.
But, it would be wrong to discuss changing dominance of superpowers - especially when it would occur not with violence but with a globalizing economy - without addressing the dominance of the language in conveying information, including technology and human capital.
Posted by: liberty at May 12, 2008 10:59:00 AM
How about this one for those above who love to push their chauvinst views:
The Earth's political system has lost the ability for large-scale compromise, and it has lost the ability to accept some pain now for much gain later on.
Posted by: earth at May 12, 2008 11:11:50 AM
Every two decades or so, starting with Sputnik in the late 1950s, there is a surge of declinist thought about the United States global role. In that first decades, it was all about the missile-gap and Johnny-can't-read fretful worries. In the late 1970s, in the Carter era, the US was said to have lost its super-power status: Raymond Aron, France's leading IR theorist and a pro-American, went so far as to say there was only one super-power left, and that was the USSR! At existing exchange rates, the EU-10 were said to have already surpassed US per capita income. Then, in the wake of the cold war's ending in 1989-90, it was argued that Japan and Germany were the winners of the cold war: their economies, state-guided, were supposedly superior to the US's, were growing much faster (actually Germany's catch-up growth with the US fizzled out in the early 1980s, Japan's in the early and mid-1990s), and were boosted by superior educational systems.
In fact, from 1991 on, Japan and Germany were vying to see which country could register the worst growth performance in the industrial world since the Great Depression of the 1930s. By 1998, in contrast, 75% of the Fortune 500 big companies hadn't even existed before 1975 in the US. There was no change in the equivalent ranks of Japan or Germany (save for SAP, a good and globalized German business software company). In contemporary PPP terms, the US has a per capita lead of about 40-45%, and the gap has continued to grow throughout the current decade. These state-dominated economies --- despite their differences --- continue to stagnate, lack entrepreneurial vigor, and are experiencing a continued erosion of their work ethos . . . especially in Germany and almost all the rest of the EU-15 save for Britain, Ireland, and astonishingly a reinvigorated Sweden and Denmark (well done, guys!)
..........
Zakaria's book has one advantage: he actually knows something about IR theory, and steers clear of a declinist thesis except in "relative terms": the ruse if other possible great-power contenders. So what else is new in international relations history since the agricultural revolution 6000-10,000 years ago and the emergence of territorial states around 5000 years ago?
Only . . . well, to see India and China as wannabee great powers soon to materialize is to exaggerate their technological prowess and to ignore the huge institutional problems, cultural blockages, and pervasive corruption and social conflicts within each. True, India's government is impressively democratic (and about as efficient as the standard-model, thoroughly corrupt Latin American country: Chile the only exception here), and China's is still dominated by a self-righteous, totally predatory and corrupt Communist Party and top-heavy bureaucracy. As for China's economic performance, it is in line with standard catch-up convergence growth theory: once a country has a population capable of working with modern technologies and has carried out some institutional reforms along market-lines --- the key term here is "some" -- it will grow much faster initially than those countries on or near the technological frontier (the US). It has far more investment opportunities, it can import foreign technologies by license, piracy, or multinational implants, it can draw on foreign models for corporate and business organization, and it can experience economies of scale in certain industries by concentrating on exports into rich countries. As it approaches the frontier, though --- exactly as Japan and Germany did starting in the late 1970s and 1980s --- its growth starts slowing down noticeably and it now has to innovate and pay the costs for such innovation on its own.
.
China's economy looks, on the surface, technologically advancing rapidly. In fact, virtually all the advanced technologies are those established in China by foreign multinationals (obliged under CHinese rules to find a Chinese partner and share R&D) --- Taiwan's, Singapore's, Korea's, Japan's, the US's, and the EU countries'. A good 65-70% of the exported goods that fit this description of advanced technologies derive from the foreign multinational operating there. In effect, they use China's hard-working labor force as a cheap export-finishing launching pad to the rest of the world. Meanwhile, Chinese entrepreneurship and innovation are choked off by corruption, lack of clear property rights, lack of intellectual property protection, lack of an effective legal system (a few changes, no more), bureaucratic stifling, and a fragmented domestic market among regions.
In the end, there is no way for a country dominated by a CP monopoly, with a huge statist control over the economy (despite what some misled observers have argued: there is a shrinking of state-owned firms, not state control), a state-run banking system that is bankrupt, and constant controls over free intellectual discourse to make it into a world of advanced, post-industrial, knowledge-based economic life WITHOUT the CP monopolists --- all getting rich in an orgy of corruption and family and crony connections --- doing what no powerful clique in control of a state has ever done: self-immolation.
.............
One further set of observations, and that's enough for today. At no point has the US ever DOMINATED the world culturally, politically, diplomatically, or economically. Whoever uses that as a benchmark is a weak-headed, self-deceived observer. What the US has enjoyed for decades, and especially since the end of the cold war, is a clear lead in technological innovation, entrepreneurial start-ups, university and non-university research, military technology and prowess --- which does not guarantee at all the ability to transform any country into an image of a stable democracy (especially in the Arab or wider Muslim world) --- and mass-media communications. The latter is very intrusive. Its popularity in the world among the masses, and hatred among right-wing and left-wing radicals and others, is not the same as dominance. It never has been. The French are free to require 40-50% of all music to be French in their media; the Spanish, 60% of all films (the percentage may be lower now). The French government can fight "franglais" and punish those who use too many English words or phrases, but it is the average Frenchman who will decide this, not the French bureaucrats and politicos.
...
One final point: the dollar. Why people, including many economists, think that the nominal exchange rate is a sign when the dollar is high of some pre-eminent hegemonial status and, oppositely, when it's down a sign of decline, strikes me --- a political scientist with a Ph.D. in both economics and political science --- as outright simplemindedness. I won't say anything theoretical about this. Only . . . well, by 1981, the dollar had lost over 50% of its value in terms of the DM and would soon lose about the same vis-a-vis the Japanese Yen. Then the dollar soared until 1985 it had regained most of the lost value, only to have the Japanese, German, and US central banks intervene in exchange rate markets to reduce the dollar's value again. It fell about 60% against those two currencies by 1991. It then soared throughout the 1990s until roughly 2002, since which time it has fallen again. And we are told each time it falls --- reflecting market forces (exports and imports of goods, services, and investment capital0 --- that the US economy is in danger, its status in the world being torpedoed, and Americans humiliated.
Huh?
........
Michael Gordon AKA, the buggy professor. Click here: http://www.thebuggyprofessor.org (where, on that site, I have discussed these issues at length in 2005 and 2006)
Posted by: gordongordo at May 12, 2008 12:09:02 PM
I'm looking forward to a world where the US is not dominant. I'd like us to be just one of hundreds of rich, successful countries exchanging trade, technology, and culture. Kind of like the 50 rich, successful United States.
Posted by: Mr. Econotarian at May 12, 2008 2:05:29 PM
...but with us just a lil' richer. Come on, admit it.
Posted by: at May 12, 2008 2:49:07 PM
"Kind of like the 50 rich, successful United States"
Well, except Mississippi. ;)
Posted by: econ2econ at May 12, 2008 3:24:17 PM
This single sentence is completely groundless. I think the book might be fine, but if this sentence is typical, then the book is trite.
Posted by: rod at May 12, 2008 8:04:38 PM
A Tykhyy, is it the "in the last 20 years" part that you find comical, or the general notion that there are productive sectors in Japan? I know that many who deal with Japan question the latter after experiencing the inefficient bureaucracies, numerous layers of unnecessary management, and the glacial decision-making processes. I am sometimes among them. But surely they are doing something right. Despite the "lost decade" of near-zero growth, Japan is still quite rich - and it became that way surprisingly quickly.
Posted by: bcw210 at May 13, 2008 2:36:19 AM
buggy professor fair points all, but
your chosen 50 year time horizon is not very big if we are talking about the "rise and fall of great powers"
what you say about China and India's economies and technology is a useful corrective to other more breathless commentaries but even catch-up growth by these two with their massive populations, and others will change (has already changed) the world order
it is true that the US even at the height of its power in the 60s could not "dominate" even one medium sized developing country (Vietnam)
in terms of the US's "clear lead in technological innovation, entrepreneurial start-ups, university and non-university research" it is interesting to see who is doing a lot of that good work - it is not primarily Americans, though whether that is a strength or weakness depends upon your point of view, I would see the attractiveness of your universities to the world's best talent as a great strength
Posted by: Ben at May 13, 2008 3:59:01 AM
That was an excellent analysis, Prof Gordon.
Posted by: Ali Choudhury at May 13, 2008 6:48:38 AM
Interesting footnote: Zakaria's comments in Post American World on Israel's stock market going up after the Hezbollah 'war' as proof of a more tolerant world, or at the very least a positive development, is in sharp contrast to 'The Shock Doctrine' premise that the same event (Israels' stock market rising) is proof that war has become far more profitable, especially as practiced under King Bush the Lesser. One of these theorists has got it wrong and I tend to go with the Shock Doctrine conclusion. T
Posted by: tim ryan at May 13, 2008 3:13:59 PM
On my web-site, I have refined and added to the original posting here. Not least, I've distinguished between three key concepts mangled by all declinist theoreticians, including (surprisingly) Zakaria, who has a Ph.D. in political science from Harvard:
1) control over a country and its policies --- that sort of control requires colonization and imposing a government over the society, which is simultaneously pacified. The government can be directly ruled by the imperial colonizer or through collaborating elites. Think of the ancient Roman and Persian empires, the medieval Chinese empire (or modern one in Tibet and over the Muslim outer layers of China's territory, the Aztec and Inca empires, the British empire, and the Soviet empire (over non-Russian peoples with the USSR and over East Europeans between 1945 and 1989)
-- Since the Mexican war of the 1840s and the Spanish-American war at the end of the 19th century --- when the US annexed the Philippines (with a commitment, carried out in 1946, for full independence and home-rule) --- the US has never had any territorial demands on other recognized sovereign states. It certainly hasn't since 1945, awarding full sovereignty to Japan and West Germany in 1949 (in Germany with Britain and France). Its failure to pacify Afghanistan or Iraq in this decade, despite military occupation, is nothing new --- either for it or previous official empires, such as Britain's inability as the imperial power over the Indian sub-continent to occupy and control Afghanistan.
2) dominance: Here a great power has to be able to resist successfully policies carried out by another country's government that it dislikes or, alternatively, usually get that government to do what the great power wants. The US never had that power even in Central America in the 1970s and 1980s, until --- with the help of local proxy anti-Sandinista forces (Indians and others) --- it was able to pressure the Sandinistas to hold free elections at the end of the 1980s. The Sandinistas lost in every electoral district and fell from power. In Chile, at the end of the 1980s, it did succeed in pressuring Pinochet to hold free elections, and his dictatorship fell too, as did a couple of years earlier the Marcos regime.
Note that here the US didn't force those regimes out of power, it brought its diplomatic influence to oblige free elections (it did the same with the Paraguayan dictatorship in the late 1980s too.
Otherwise, at no point could the US oblige either allies in NATO or neutrals or hostile pro-Soviet governments to stop doing harmful behavior to the US's friends by means of prolonged military intervention as in Korea in 1950 or Indochina from the late 1950s until the mid-1970s. The first outcome reflected a stalemate; the second a loss. What exactly is new in 2007?
3) Influence. THe US has mainly economic influence --- thanks to its huge rich domestic economy (larger in GDP than the EU-25 and far more open to mfg. imports from Asia, the reserve role of the dollar, and the indifference of its economic policymakers (the Fed, the Treasury --- which remains passive on the exchange rate of the $ in currency markets --- and the President and Congress) to running current account deficits. Since every other industrial or rising industrial country in the world wants export-led growth --- this is true even of the very rich Germans and Japanese --- the US has to run a current account global deficit to accommodate their interests.
.............
What follows? US influence mainly shows up as the world's first non-imperial hegemonial economic power, which serves as the world's central banker of last resort and the import economy of first and last resort. Its influence, moreover, shows up mainly by upholding the rules of the WTO, World Bank, and IMF, though exactly like all other major economic powers in the world it will occasionally ignore the rules (as Bush did in 2004 with temporary import-limits on steel).
Should the dollar lose its dominant reserve currency status, say to the euro (which could share, say, the role with the dollar), US policymakers could no longer remain indifferent to current account deficits. The US$ would then obviously fall, as it has in currency markets --- only more so --- much to the benefit of the US economy, itself switching then to export-led growth . . . at any rate to the point of balancing its current account and, more likely, running up surpluses to reduce its debtor obligations to others. The downside? So far, despite a steady decline against the euro since 2002 and more recently against the Yen and Yuan, the US economy has not experienced any inflationary upsurge or seen interest rates fall (on the contrary) as capital flees is supposed to for most economists. There have been only advantages, not disadvantages . . . what with US exports booming and helping to keep the US economy out of recession. Moreover, the longer the dollar stays low relative to other major currencies, the more likely foreign manufacturers like Japanese auto firms will invest more in their multinational outlets in this country . . . just as, similarly, US firms operating abroad are reaping huge profits in dollar terms.
.........
Who then will be harmed by all this if it continues?
Not the US. Rather, the rest of the world --- especially the EU countries, Japan, the East Asian small dynamos, and China.
One final point. There is a lot of bad journalism that has been alarmist and declinist in the US for decades, mainly because of the kind of simple-minded, non-theoretical, and usually left-wing hokum that underscores it. Or by historians who have no theoretical grasp of the complexities of great power behavior. Or by wishful-thinking Europeans or Japanese or Chinese or what have you. Zakaria's work is better and more even-handed, but deficient on the scores I've set out.
The US, today, is far safer, far richer, far more advanced compared to others in technologies at the frontier, and about 40-45% richer GDP per capita (adjusted for PPP) than Germany, France, Britain, or Japan. In fact, if any of those four countries joined the US Federal Union, each would rank among the poorest 5 US states: Mississippi, Alabama, West Virginia, Oklahoma, and Montana . . . all sparsely populated and non-industrialized. China's per capita income is, even in PPP terms, about 20% of the US level, and even then it is probably exaggerated, what with the continued underestimation of real inflation in China . . . a problem criticized by the World Bank back in 1991. In fact, every few years, the World Bank suddenly discovers 200-300 million very poor Chinese that it overlooked in its previous GDP estimates. That happened just two years ago.
Michael Gordon, AKA, the buggy professor: click here: http://www.thebuggyprofessor.org
Posted by: gordongordo at May 13, 2008 9:06:18 PM
GDP per capita ignores:
income distribution
transfers
externalities -- positive and negative
black market/criminal activity
Posted by: Jen at May 14, 2008 3:54:10 AM
