The Reality of American Decline

08 FEB 2012

by: Edward Luce, FT.com

Something puzzling just happened in Washington: a liberal American president who opposed the invasion of Iraq endorsed one of its chief neoconservative advocates. By embracing Robert Kagan’s essay, "The Myth of America's Decline", Barack Obama has done the author a turn. The essay is excerpted from Mr Kagan’s book, The World that America Made, which comes out later this month.

"America is back," Mr Obama said in his State of the Union address 10 days ago. "Anyone who tells you America is in decline or that our influence has waned, doesn’t know what they’re talking about." Mr Obama "loved" the Kagan essay, Tom Donilon, the national security adviser, later revealed on the talkshow presented by Charlie Rose. The president had gone over it point by point at a White House meeting.

Mr Kagan, who also wrote Americans are from Mars, Europeans are from Venus, the provocative post-Iraq book, has written a clear and powerfully-argued essay. But Mr Obama might want to scan it more closely. Start with its economic facts. Mr Kagan says that in 1969 the US had "roughly a quarter" of the world's income. "Today it still produces roughly a quarter," Kagan wrote. "America's share of the world's GDP has held remarkably steady."

That would seem pretty conclusive. Here are more precise measures. In 1969, the US accounted for 36 percent of global income at market prices, according to the International Monetary Fund's World Economic Outlook. America's share had fallen to 31 percent by 2000. Then it started to plummet. By 2010, the US accounted for just 23.1 percent of world income. In one decade America lost 7 percent of world share. More than half that loss occurred before the Great Recession.

China's economy, meanwhile, was barely an eighth the size of the US’s in 2000. Today it is 41 percent – and that is based on current exchange rates. Were Beijing to float the renminbi, China's economy could be valued considerably higher. Far from being "remarkably steady", the shift over the past decade has been uniquely rapid by any historic measure. Another decade like that and America’s pre-eminence will look very shaky. Indeed, as Arvind Subramanian writes, China would surpass the US within 12 years even if its growth slowed to 7 percent a year and the US hit an unlikely annual pace of 3 percent.

But the book's real subject is American exceptionalism. Mr Kagan believes that it is largely up to Americans to decide whether their country's dominance will continue. In a clear echo of the author’s criticisms of Bill Clinton in the 1990s, Mr Kagan fears the US is losing its will for muscular world leadership. "In the end, the decision is in the hands of Americans," he writes. "Decline, as Charles Krauthammer [a commentator] has observed, is a choice."

And here we arrive at the book's main puzzle. Mr Kagan denies America is in relative decline – and mistakenly insists there is no economic evidence for it. Yet he argues that America’s decline is being actively willed by unnamed "politicians and policymakers". They are "in danger of committing pre-emptive superpower suicide out of a misplaced fear of declining power."

It is a tension that runs through the book. If America isn't declining, who cares? If, on the other hand, America is willing its decline, who are these lemmings exactly? One clue would be Mr Obama. Here is an even richer clue from Mitt Romney (to whom Mr Kagan serves as a senior foreign policy adviser): "Our president thinks America is in decline," the Republican frontrunner recently said. "It is if he [Obama] is president. It is not if I am president."

It would be only a mild exaggeration to take Mr Romney’s following words as a summary of Mr Kagan's core thesis. "President Obama believes America's role as leader in the world is a thing of the past," Mr Romney said in Florida last week. "I will insist on a military so powerful no one would ever think of challenging it."

In practice, Mr Obama has negotiated a modest, and arguably illusory, trim to the US defense budget – 8 percent in the next decade from a generous baseline. US military spending will still be far higher after the cuts have gone through than it was on the eve of September 11. Mr Romney promises to reverse them.

Mr Kagan believes America’s future will hinge largely on taking a very different turn to the one in which US foreign policy and the Pentagon is apparently headed. The continuation of the international liberal order depends on the presence of a strong and active US, he argues.

Imagine a scenario where China became the top dog, he says. Would it uphold the system that got it there? Mr Kagan answers by way of a fable. A frog agrees to carry a scorpion on his back across the river on the promise he will not be stung. "How can I sting you when I would also drown?" asks the scorpion. As the frog drowns, it asks why the scorpion broke its word: "Because I am a scorpion," comes the reply.

With that Mr Kagan pretty much dismisses two generations of China strategy. The wealth China has earned by global integration, and the numbers lifted from poverty, may in the end count for little against its true nature, he suggests. Which brings us back to the main quandary: the book's real target is American declinists; yet America’s declinist-in-chief loves its thesis. Who knows, perhaps it is one of those instances of co-option at which presidents excel. In which case, it is fair to ask who is carrying whom?.[presstv]

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