In Box

After America

How does the world look in an age of U.S. decline? Dangerously unstable.

Not so long ago, a high-ranking Chinese official, who obviously had concluded that America's decline and China's rise were both inevitable, noted in a burst of candor to a senior U.S. official: "But, please, let America not decline too quickly." Although the inevitability of the Chinese leader's expectation is still far from certain, he was right to be cautious when looking forward to America's demise.

For if America falters, the world is unlikely to be dominated by a single preeminent successor -- not even China. International uncertainty, increased tension among global competitors, and even outright chaos would be far more likely outcomes.

While a sudden, massive crisis of the American system -- for instance, another financial crisis -- would produce a fast-moving chain reaction leading to global political and economic disorder, a steady drift by America into increasingly pervasive decay or endlessly widening warfare with Islam would be unlikely to produce, even by 2025, an effective global successor. No single power will be ready by then to exercise the role that the world, upon the fall of the Soviet Union in 1991, expected the United States to play: the leader of a new, globally cooperative world order. More probable would be a protracted phase of rather inconclusive realignments of both global and regional power, with no grand winners and many more losers, in a setting of international uncertainty and even of potentially fatal risks to global well-being. Rather than a world where dreams of democracy flourish, a Hobbesian world of enhanced national security based on varying fusions of authoritarianism, nationalism, and religion could ensue.

The leaders of the world's second-rank powers, among them India, Japan, Russia, and some European countries, are already assessing the potential impact of U.S. decline on their respective national interests. The Japanese, fearful of an assertive China dominating the Asian mainland, may be thinking of closer links with Europe. Leaders in India and Japan may be considering closer political and even military cooperation in case America falters and China rises. Russia, while perhaps engaging in wishful thinking (even schadenfreude) about America's uncertain prospects, will almost certainly have its eye on the independent states of the former Soviet Union. Europe, not yet cohesive, would likely be pulled in several directions: Germany and Italy toward Russia because of commercial interests, France and insecure Central Europe in favor of a politically tighter European Union, and Britain toward manipulating a balance within the EU while preserving its special relationship with a declining United States. Others may move more rapidly to carve out their own regional spheres: Turkey in the area of the old Ottoman Empire, Brazil in the Southern Hemisphere, and so forth. None of these countries, however, will have the requisite combination of economic, financial, technological, and military power even to consider inheriting America's leading role.

China, invariably mentioned as America's prospective successor, has an impressive imperial lineage and a strategic tradition of carefully calibrated patience, both of which have been critical to its overwhelmingly successful, several-thousand-year-long history. China thus prudently accepts the existing international system, even if it does not view the prevailing hierarchy as permanent. It recognizes that success depends not on the system's dramatic collapse but on its evolution toward a gradual redistribution of power. Moreover, the basic reality is that China is not yet ready to assume in full America's role in the world. Beijing's leaders themselves have repeatedly emphasized that on every important measure of development, wealth, and power, China will still be a modernizing and developing state several decades from now, significantly behind not only the United States but also Europe and Japan in the major per capita indices of modernity and national power. Accordingly, Chinese leaders have been restrained in laying any overt claims to global leadership.

At some stage, however, a more assertive Chinese nationalism could arise and damage China's international interests. A swaggering, nationalistic Beijing would unintentionally mobilize a powerful regional coalition against itself. None of China's key neighbors -- India, Japan, and Russia -- is ready to acknowledge China's entitlement to America's place on the global totem pole. They might even seek support from a waning America to offset an overly assertive China. The resulting regional scramble could become intense, especially given the similar nationalistic tendencies among China's neighbors. A phase of acute international tension in Asia could ensue. Asia of the 21st century could then begin to resemble Europe of the 20th century -- violent and bloodthirsty.

At the same time, the security of a number of weaker states located geographically next to major regional powers also depends on the international status quo reinforced by America's global preeminence -- and would be made significantly more vulnerable in proportion to America's decline. The states in that exposed position -- including Georgia, Taiwan, South Korea, Belarus, Ukraine, Afghanistan, Pakistan, Israel, and the greater Middle East -- are today's geopolitical equivalents of nature's most endangered species. Their fates are closely tied to the nature of the international environment left behind by a waning America, be it ordered and restrained or, much more likely, self-serving and expansionist.

A faltering United States could also find its strategic partnership with Mexico in jeopardy. America's economic resilience and political stability have so far mitigated many of the challenges posed by such sensitive neighborhood issues as economic dependence, immigration, and the narcotics trade. A decline in American power, however, would likely undermine the health and good judgment of the U.S. economic and political systems. A waning United States would likely be more nationalistic, more defensive about its national identity, more paranoid about its homeland security, and less willing to sacrifice resources for the sake of others' development. The worsening of relations between a declining America and an internally troubled Mexico could even give rise to a particularly ominous phenomenon: the emergence, as a major issue in nationalistically aroused Mexican politics, of territorial claims justified by history and ignited by cross-border incidents.

Another consequence of American decline could be a corrosion of the generally cooperative management of the global commons -- shared interests such as sea lanes, space, cyberspace, and the environment, whose protection is imperative to the long-term growth of the global economy and the continuation of basic geopolitical stability. In almost every case, the potential absence of a constructive and influential U.S. role would fatally undermine the essential communality of the global commons because the superiority and ubiquity of American power creates order where there would normally be conflict.

None of this will necessarily come to pass. Nor is the concern that America's decline would generate global insecurity, endanger some vulnerable states, and produce a more troubled North American neighborhood an argument for U.S. global supremacy. In fact, the strategic complexities of the world in the 21st century make such supremacy unattainable. But those dreaming today of America's collapse would probably come to regret it. And as the world after America would be increasingly complicated and chaotic, it is imperative that the United States pursue a new, timely strategic vision for its foreign policy -- or start bracing itself for a dangerous slide into global turmoil.

Simon Willms/Stone/Getty Images

In Box

Epiphanies from Austan Goolsbee

President Obama's former economic advisor speaks out.

As chairman of the Council of Economic Advisers and a cabinet-level aide to fellow Chicagoan Barack Obama, Austan Goolsbee had a rarefied perch in Washington for an academic trained to write about recessions, not steer the country through one. He couldn't wait to leave. "There was a lot of yelling," Goolsbee says. Now safely back at the University of Chicago, he talks to Foreign Policy about the inside-the-administration fights, tired Republican trickle-down economics, and what he would do if he woke up one day as China's central bank chief.

We had the most successful financial system rescue ever. It didn't end up costing any money. Normally, a financial rescue of that magnitude costs about 5 to 10 percent of GDP, an astoundingly big number. But in the U.S. they paid the money back. That hasn't stopped it from being massively unpopular, and it hasn't prevented the worst recession in our lifetimes for the real economy.

The U.S. is still in a pretty good spot, especially relative to other advanced countries. The aging of our population is not as pronounced as almost anyone else's. We start from a debt-to-GDP ratio that's below most other advanced countries. Our tax and spending levels are pretty low. And we continue to be a highly entrepreneurial culture with a great deal of innovation. It's not to say everything is perfect, but I'm pretty optimistic. Cautious but, medium to long run, heavily optimistic.

The primary reason it's been such hard, slow, tough work to get out of this recession is that we fundamentally can't go back to what we were doing before the recession began. There's 6 million vacant homes now, so we're not going to go back to massive construction rates driving economic growth. In several quarters in the 2000s, if you added up all the private savings of everyone in the United States, it was less than nothing. You can't sustain that as a driver of growth.

You can understand why people are pissed off. The Occupy Wall Street crowd put on the table an issue, which is a pretty glaring one in the data, that hadn't really been on the agenda: income inequality, tax policy, and whether the focus of our policies should only be saving corporations. And if you look at the Romney or Perry economic plans, they're just in the same old trickle-down playbook.

Would I dump the dollar [if I were China's central banker]? I don't know. Look, if you accumulate $2 or $3 trillion of foreign reserves, you're in a tough spot. George Stigler, a Nobel laureate here at the University at Chicago, used to wake up every day and give himself a D. But that made him feel good because he gave everyone else an F. For every criticism of the U.S. economy, whenever people go into a panic, they look around and say, "That's the cleanest shirt I have. So I'm putting it on."

I'm pretty happy not to be an insider anymore. There's just no common ground. I don't know if it's distrust or that the politics is substantially more partisan than the public. But there's no pressure to make a grand bargain on fiscal matters, on growth, on anything. The Republicans were like the East German judge at the Olympics: The president lands a triple flip, but they've already given him a 2.

Joe Ciardiello