Decline of the American Empire?

When two respected American journalists of different political leanings, David Brooks of the New York Times and E.J.Dionne of the Washington Post, agree that the main issue of the 2012 presidential campaign is about how to avoid national decline, Canada needs to pay attention. The US is Canada’s largest trading partner and foreign investor. (The comments were made on PBS’ Lehrer News Hour, Jan. 27, 2012.)

From a front row seat in Canada on political and economic events in the US, the viewer sees the following prospect for or evidence of decline:

1. Large twin US deficits, fiscal and trade related which will require some combination of expenditure cuts and tax increases. These will be strongly resisted by supporters of both political parties, making it difficult to enact necessary policies, thereby leading to prolonged critical conditions.

2. Persistent high unemployment has followed the downturn starting in 2008. Measures proposed to promote employment in the US manufacturing sector may not help that much, as the US economy is now 90% a service economy, and needs to adjust to this change (as does Canada).

3. An estimated 11 million illegal immigrants exist in a country with 12 million unemployed. If the illegals were removed, many industries such as agriculture, construction, tourism and other services would be hard hit. If the unemployed were willing to take the jobs of illegals, perhaps after some retraining, the problem might be alleviated. This possibility is seldom discussed.

4. A population whose composition is changing with a growing percentage of Hispanics and Asians at the expense of Afro-Americans and whites, plus a population which is ageing. Both will require domestic adjustments, and some form of multicultural policy.

5. Growing income inequality due to high earnings by a small percentage of the population and a tax structure which favours the rich. This has given rise to a so-far disorganized “occupy Wall Street” movement. It could evolve into something more serious. In the past, major instances of social unrest have resulted from the poor confronting the rich.

6. A party system in Congress which seems unable to reach compromises on things as basic as raising the debt ceiling so that the government can pay its existing bills. At the moment Congress appears to be dysfunctional.

7. A campaign amongst candidates for the Republican presidential nomination which at times borders on farce, and would likely be considered as such by outsiders if conducted in a developing country. These candidates are providing much ammunition to their Democratic opponents, so that when the time comes to direct their fire outwards, the nomination battle may have been suicidal for the party.

8. The best TV news program, the Daily Show, is broadcast on the Comedy Channel, where each night brings news of fresh disasters.

9. A decision to cut the US defense budget at a time when there are considerable military problems especially in Afghanistan, the Middle East and North Africa. The US remains the sole world superpower, but the cost of maintaining this position is onerous at a time when there are serious domestic economic problems. Its military budget of $687bn in 2010 is 4.7% of US GDP, and equal to the combined budgets of the next 20 countries. Among these, only Saudi Arabia, the UAE and Israel have a higher percentage figure. Canada’s military budget is $20bn, 3% of the US total and 1.7% of Canada’s GDP. Like many other countries, Canada has sheltered under the US military umbrella, allowing the US to provide the global police force. It can no longer afford to do so, thus military budget cuts with consequences for global security.

10. A combination of corruption and inept management has occurred in banking and other financial markets. The conviction of Bernie Madoff marks an extreme case, but there are plenty of other examples in the US and elsewhere. Blatant cases of corruption leading to losses incurred by pension funds could provide further reasons for social unrest.

11. A tax system where corporate lobbyists write the tax code which favours the rich at the expense of the middle class. The Democratic candidate for the 2012 Senate seat in Massachusetts, Elizabeth Warren, reports that 30 large US companies pay more for lobbying than they do in taxes.

The foregoing list reflects observations made by American commentators, and provides a pessimistic prognosis for the US. Events could turn around quickly and may be of little current or historical import. On the other hand, there are examples of other superpowers, which have risen and fallen in fairly short order from a combination of internal and external forces.

Comparing British and American decline

The British Empire was once a superpower. It was named an empire rather than a superpower, although for a period prior to 1914 it appeared to rule the global roost. It was overtaken by the bipolar world of the US and the USSR after WW2, until the fall of the Berlin wall in 1989. This was followed by the demise of the USSR and its division into Russia and a number of states leaving the US as the sole superpower. Today that US appears in a weakened if not terminal condition, thus the suggestion of decline.

In comparing the decline of the British Empire with the US as a superpower, there are a number of differences to note. One is that the Britain ruled a saltwater empire spread throughout the world which became increasingly costly to administer and protect. The US grew first as a group of 13 colonies which revolted against British rule, then acquired lands in North America from the French, Spanish, Mexicans and Russians to form a unified state, in many ways the equivalent of an empire. Its possession of overseas colonies was much more limited than in the case of the British Empire. This is one of the reasons why the nature of the decline of the two empires differs.

Some of the conditions leading to the decline of the British Empire, which may be found in the current decline of the US as a superpower are the following:

1. The foreign debts accumulated by the UK during WW1, WW2 and the early postwar years almost bankrupted the country, forcing austerity at home similar to that experienced through domestic wartime rationing.

2. Britain’s financial ability to maintain its armed forces and overseas possessions was weakened, leading to independence granted to a number of countries and related acts suggesting decolonization. Previous colonies often became members of the British Commonwealth, a club with no imperial control mechanisms.

3. The US used its financial leverage to press for colonial independence from the UK for countries like India. The US’ own previous revolt against what it perceived to be unacceptable treatment by Britain lead it to support those in the same position in the 20th century. Americans with Irish ancestry, for example, strongly supported independence for British colonies.

4. The formation and operation of the GATT after 1943 weakened the trade preferences which Britain had with its dominions and colonies, and subjected it to increased global competition. The foreign investments (assets) which Britain had earlier owned were used to help pay off its foreign held national debt incurred during two world wars.

5. In 1956, British armed forces in alliance with France and Israel were unable to secure the Suez Canal after its takeover by President Nasser of Egypt. Later, it had more success during the Falklands war.

6. At the end of WW2, Britain had a substantial blue water navy but found it hard to finance it in peacetime. At the time of the 1982 war with Argentina over the Falkland Islands, South Georgia and the Sandwich Islands, the UK was barely able to muster a group of ships and planes to defeat, at a great distance, fairly weak military opponents. While having professionally trained armed forces, the UK has not sustained the military dominance it once had.

Economic conditions in the UK following WW1 and WW2, including the depression of the interwar years weakened the country’s ability to administer and protect it imperial interests. It had spent its accumulated assets and was faced with strong political forces favouring decolonization, strongly promoted by its wartime ally the US; it certainly received no help from the USSR which was in the process of building its own empire.

In short time frame, the British Empire dissolved geographically after WW2, although its impact lives on in language, legal and political institutions, customs and other cultural attributes like certain sports. Also, citizens of different parts of the empire have migrated both to the mother country as well as to other parts of the former empire. There are reported to be more Maltese in Australia than there are in Malta.

Conclusion

It will be at least 50 years from now before historians will be able to start assessing whether the American empire is currently in decline. However reviewing current events in the US and globally suggests to me that this may be the case.
A more optimistic forecast is that technological developments are shortly to occur, and the US will be at the forefront of these changes. See “The Coming Tech-led Boom,” by Mark Mills and Julio Ottino, Wall Street Journal, Jan. 30, 2012.

The century since the start of WW1 has seen enormous global political changes with the rise and fall of what were once considered great powers. More such changes are likely to occur probably associated with Asia. Lessons taken from the demise of the British Empire especially in the economic sphere may well apply to the USA today.

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