America's Obvious Decline in Power

Paul Kennedy’s 1987 book, The Rise and Fall of Great Powers, caused quite a stir at the time, predicting the relative fall in power of the United States. I’ve always thought the thesis obvious; the alternative hypothesis, that Americans should expect the U.S. to sustain the high level of relative power it attained in the aftermath of the devastation of World War II, seemed little more than a straw man.

Identifying a trend depends critically on one’s starting point. If we measure U.S. economic and military power starting in the 1950s, with Europe and Japan still recovering from the war, and Britain and the Soviet Union wrecked even though victorious, it seems obvious that U.S. power would need to decline relative to other nations. Even if U.S. military and economic power continued to increase, the rate of increase could not be expected to match the extremely high rate of increase of nations reconstructing their economies from war time destruction. Therefore “relative” to the power of other nations, just about any measure would show decline, even if the absolutely power of the U.S. continued to increase.

To be sure, U.S. supremacy in the 1950s was not quite as obvious in the 1950s itself as it was in the 1980s. The Soviet Union continued to wield significant military might, and the perception at the time was that as the Soviet Union reconstructed from the war, it would become an economic colossus that would, as Soviet premier Nikita Khrushchev predicted in 1956, “bury” the West. We forget, as the film Hail Caesar so humorously reminded us last year, that many Western intellectuals truly believed Marxism as a scientific theory that predicted the fall of capitalism and the rise of communism.

As European nations recovered from the war, as lesser developed nations began to develop, they would necessarily catch up in many ways to the United States, and so measures of relative power would necessarily show U.S. decline. The notion that U.S. power in the 1950s could be sustained in the long-run, which was the counter to Kennedy’s hypothesis (although he never stated it), seems so obviously fanciful that Kennedy’s hypothesis ranks little better than a truism.

At the time liberals cheered Kennedy’s book. Many wanted to take the lesson that the U.S. should simply settle into its inevitable loss of relative power, and embrace a role akin to many of the Western European nations of the time. The policy implications of Kennedy’s argument contrasted sharply with the military buildup pursued by President Reagan during the 1980s, and with his goal to topple the Soviet Union rather than seek peaceful coexistence with it.

There seem, however, to be other implications of Kennedy’s argument that might be useful to revisit. (Recall I don’t think Kennedy was wrong; my criticism is that he pointed out the obvious.) The relative decline of U.S. economic strength over the last generation also predicts the economic stagnation of the U.S. working class relative to workers in other countries. (In relative terms, Kennedy’s hypothesis actually predicts the relative economic decline of U.S. workers.) Neither liberals nor conservatives, understandably, wish to accept this outcome with equanimity. But it is not clear what national-level policies could, or can, be pursued to reverse the trend. The trend Kennedy’s hypothesis identified was bigger than national policy.

But in the face of policy impotence, perhaps a political implication of Kennedy’s hypothesis would be an expectation of growing economic populism among US workers in reaction declining relative status.

So, too, populist-style America Firstism might also be a prediction of the loss of relative power. Mancur Olson and Richard Zeckhauser‘s 1966 Rand paper argues that, in alliance systems, larger nations will naturally bear disproportionately larger share of alliance costs (because of the public goods nature of alliance security, and resultant free riding). Recall Kennedy’s thesis that the U.S. would have an increasingly smaller portion of power relative to other nations; it would be relatively smaller economically. If the U.S. contribution to alliances (and to global security in general) stayed roughly the same, but the relative size of the U.S. economy decreased, then the U.S. contribution would have indeed become increasingly disproportionate, i.e., “unfair,” over the last forty years. Indeed, the relative rise of China’s military strength does not herald an absolute decline in U.S. military strength. But it does suggest a relative decline.

To be sure, Americans do not necessarily need to rejoice in the relative decline in U.S. economic power, and the increasing disproportion of resources needed to maintain military power over the last generation. Nonetheless, if we take American economic and political strength in the 1950s as our starting point, it is impossible to think that the U.S. could have sustained its fantastically high level of relative power it had at the time. And no one, neither Kennedy, nor average citizens, should have thought otherwise.


Trump Xi

What to Do About China?

Is it really in America’s long-term economic interest to disengage from a market of 1.4 billion people and one of the world's largest economies?