On Decline, Relative And Absolute

I read two things this week, and they – between them – nailed what I’ve believed for a long time.

They are about the change in role and position of the United States; one is purely historic, and one prescriptive (note that I’m dubious about the prescription)…

The issue, of course is the decline – certainly in relative and potentially in absolute degree – of the United States. Decline economically, which in turn leads to decline politically and militarily.

One is an instablog over at Seeking Alpha, the investment site, by some guy named Steven Graves. He makes, succinctly, a point that I deeply believe in:

Consider the circumstance of the US at the conclusion of the Second World War:

1) As a result of the enormous arms build up, approximately half of the world’s industrial capacity resided on US soil.

2) We possessed two-thirds of the known gold reserves on the planet.

3) To help fund the war effort 85 million Americans had “saved” $185.7 billion by purchasing bonds (equivalent to Americans saving $2.26 trillion today).

4) A half decade of rationing had pent up an overwhelming reservoir of consumer demand.

5) Our primary economic competitors had all been ravaged by warfare while our infrastructure had thrived.

When had any nation, since the dawn of the industrial age, enjoyed such a staggering advantage over every other nation? It had never happened before and almost certainly never will again, so it is little surprise that such an unprecedented advantage would subsequently translate into a generation of unparalleled growth and prosperity. By the 1970s, however, the world was catching up. US economic hegemony was being directly challenged by rival powers and US industries, many of which had slackened into complacent oligopolies, sluggishly adapted to foreign competition. For their part, US workers, whose wages and benefits had soared during the boom years, were increasingly forced to compete with cheap foreign labor. Add to this the unfortunate fact America’s domestic energy supply had peaked in 1970 and the vine was ripe for stagflation as President Carter urged his fellow Americans to “face the truth” in his infamous Malaise Speech of 1979.

There’s a level of inevitability in this – it would have been virtually impossible to have maintained the kind of economic gap that existed at the end of WW II – as well as a level of virtue – the world is better off with more prosperity wider spread than with less.

We’ve clearly done a bad job with what we were given as well – squandered when we should have invested, raised generations of critical theorists, filmmakers and lawyers when we needed entrepreneurs and engineers. But overall, all it would have done is to have slowed the changeover.

The question, of course, is what that means.

Robert Wright, over at the NYT, has a thoughtful – and I think off-base – article in which he moves from the historic point to a policy one.

People who, like me, raise questions about the value of global military engagement are sometimes called “isolationists.” But that term rightly applies only to people who don’t realize that there are threats to our security out there. If you perceive the threats but realize that they’re collective action problems, you realize that we do have to be involved in their solution.

What form should the involvement take? Funny you should ask! This is my last Opinionator column (maudlin details below, in the postscript), and I just realized that in my year of writing the column I’ve given short shrift to one of my main hobby horses: global governance.

Global governance is the solution to international collective action problems. The problems can range from environmental (it doesn’t make sense for any one nation to cut carbon emissions unless others join in) to financial (as when nations coordinate policy to head off a contagious financial panic). But the most prominent symbol of global governance – the United Nations – was created mainly to deal with the problem under discussion here: keeping the peace. The United Nations Security Council is a mechanism through which threats to peace can be recognized, the military action necessary to deal with them authorized, and the burdens of that military action shared.

That’s gonna work well…

Look, the United Nations is the organization that puts brutal dictators on the Human Rights Commission. The smurfs – the blue helmeted soldiers acting under UN control – consistently fail in their missions, where they aren’t trafficking in underage sex. It is one of the most deeply corrupt and ineffective organizations on the planet, and the notion that we can simply toss them the keys to world security, sit back and open a cold one and then catch a Jets game while the world takes care of itself is flatly ridonkulous. As Joe K frequently mentions his favorite Owen Wilson quote…”What in our history together makes you think I’m capable of something like that?

Look, it’s one thing to make a policy proposal. It’s another to make one so loopily ungrounded in actual history.

Wright wraps up saying

If we’re smart, we’ll use what’s left of this moment to craft instruments of global governance that will assure our security even in a world we don’t dominate … and will also equitably distribute the costs of international security. We’ll show people how to build a world in which we can all, without fear of being attacked, reduce the amount of money we spend on arms.

We do need to craft those instruments. But they will look much more like alliances with Brazil, India, and the Anglosphere than like yielding our authority and power to the control of the UN or one of the existing global agencies.

We need to do something, and we need to start doing it soon. But let’s not confuse something with anything.
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6 thoughts on “On Decline, Relative And Absolute”

  1. Well, I have a problem with Graves’ very first point. To say that our having half the world’s GDP as a result of our military build-up is an odd perspective. More to the point, we had that concentration of relative wealth because Germany, Britain, France, Russia, and Japan– the other major industrial economies of the time– had smashed each other to kindling, and then we set half the kindling on fire. Meanwhile, the 3000 mile wide moat and a few lucky (and a few strategic) breaks in the war prevented the same from happening to us.

    There was absolutely an inevitability to the ebb of that particular flow: The only possible way to maintain it would have been to try to actively prevent anyone else from developing. And that’s just not what we’re about. Yes, there was an angle of self-interest in helping the West and Japan rebuild and re-industrialize (to contain Soviet Russia) but we’ve also always been a nation of traders, and trading with the wealthy is more lucrative than trading with the poor.

    You think we’ve done badly, but in a real and important sense, I think we’ve done well at promoting growth around the world instead of trying to stomp it flat. The necessary consequence of that, though, is a diminution of relative wealth.

    I do think you’re right, though, in that the way to provide global leadership is to actually lead, and that said leadership is going to look like taking right actions with whoever will join us, than trying to get everyone on board– that’s just not going to happen.

  2. I think the central problem with the UN is assuming that we all have the same goals in mind. When there was a central enemy, this made some sense. Since I wasn’t politically active (or alive) for almost all of USSR’s history, I’ll assume the UN worked somewhat better then. Now, it’s a laughable proposition.

    The problem is that the UN doesn’t have a reason to exist. If it’s to bring democracy, you can’t have known dictators at the table (who are clearly working against it). If your goal is to set a series of international rules, you can’t invite those who have clear stakes to create those rules. Ditto if the UN is intended to judge those rules… the judge must bet set apart from the process.

    When the UN has been remotely successful, it’s been successful because individual groups (primarily us) have spent enough power to make it successful. But there clearly is a period coming where we are not THE BIG DOG, or not the ONLY BIG DOG at the table. And that changes everything.

    We’re going to need better alliances than the UN gives us. Ideally, reforming the UN should be easier than scrapping the whole thing, but I don’t see that happening. The loons at the top are too full of themselves to realize they have little worth.

  3. I’m always bemused by posts like this. Having a more prosperous, healthier, freer world, less divided into armed camps and more dependent on cooperateive, voluntary trade with each other is a good thing.

    Basic economic theory is that lagging countries will catch up over time, if they govern themselves more or less reasonably. It’s a good thing the US is declining in relative strength if that decline is an absolute improvement in the quality of life abroad.

    As to how do we proceed in a more powerful, prosperous world… I don’t see why that’s a reason for a panicked need to “do something”. How about we just enjoy the fact that our neighbors are now better off, more willing and able to trade with us, and less poor, desperate, and stupid. Because the latter category of folks… poor, desperate, and stupid, are the ones that are generally greater threats to peace. I don’t worry so much about not having a world governance structure in place to protect me from countries that are relatively well off and have much to lose from violent conflict.

  4. Agree completely Alchemist.

    I’d like to add on to that by pointing out that the original author predictably skips entirely over the minor detail that global governance implies global law which in turn implies global lawmakers. Who precisely is going to make these laws and where does their legitimacy derive from? It’s always odd that this subject never seems to come up even though it seems like THE basic civics 101 issue for this entire issue. The complete lack of legitimacy on the part of the UN and hence the complete lack of accountability the UN has so thoroughly demonstrated seems like it ought to be germane somehow…

    These discussions always remind me of “this classic Dilbert.”:http://dilbert.com/strips/comic/2004-04-17/ I’d take the proposals a lot more seriously if the proponents of said proposals took the proposals a lot more seriously.

  5. Because the latter category of folks… poor, desperate, and stupid, are the ones that are generally greater threats to peace. I don’t worry so much about not having a world governance structure in place to protect me from countries that are relatively well off and have much to lose from violent conflict.

    Yes, because if history proves anything it is the idea that prosperous well off nations never threaten each other.

    Even the very idea of three of the most prosperous nations in the world, say, England, France, and Germany, ever going to war with each is other is clearly crazy talk.

  6. _Even the very idea of three of the most prosperous nations in the world, say, England, France, and Germany, ever going to war with each is other is clearly crazy talk._

    Today it is, since they depend too much economically on each other.

    The big wars in Europe during the 20th century were simply a sign that the nation+empire structure cannot cope with the rising of new nations, since there were not enough colonies for each one to have their own “empire”.

    Nevertheless, I don’t think the fight is over, but simply, as terrorism compared to traditional war, continues at other levels.

    Regarding the main issue of this post, you have talked about the big era of prosperity after WW II and the UN, but not about the “economic agreements”:http://en.wikipedia.org/wiki/Bretton_Woods_system that made that possible. A right set of rules seems to achieve better results than any _world_ governing body…

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