Is the United States in Decline? By Christoper Layne.
In the last decade, China has displaced the United States as the world’s leading manufacturing power. In 2014, according to the World Bank, China passed America as the world’s largest economy (measured by purchasing power parity). In 1980, the United States accounted for about 25 percent of gross world product. Today it accounts for around 18 percent. Some analysts have come up with clever arguments to discount the importance of these economic trends. They are unconvincing. But the reality of U.S. decline is more than just a matter of numbers; it is also evident in Washington’s diminishing ability to manage the international economy and in the growing challenges to many legacy institutions of Pax Americana.
A strain of thinking called hegemonic stability theory holds that a liberal, open international economy requires an overarching power to manage and stabilize the system by creating a political and security order that permits economic openness. The United States filled this role for half a century, from 1945 until the Great Recession. The world’s economic hegemon must provide public goods that benefit the international system as a whole, including: making the rules for the international economic order; opening its domestic market to other states’ exports; supplying liquidity to the global economy; and providing a reserve currency. Having declined to grasp the mantle of leadership during the 1930s, Washington seized it decisively after World War II. Johns Hopkins professor Michael Mandelbaum has argued that, following the Cold War, the United States essentially acted as a de facto government for the international system by providing security and managing the global economy. …
During the Obama administration’s first term, the United States was unable to persuade China to allow the renminbi to appreciate to Washington’s preferred level (which the United States hoped would reduce China’s export surplus to the United States while simultaneously boosting American exports to China).
U.S. economic and fiscal troubles have contributed significantly to the fraying of Pax Americana’s institutional global framework. …
Pax Americana was the product of a unique post-World War II constellation of power. As scholars such as Kennedy and Gilpin have pointed out, when World War II ended the United States accounted for half of the world’s manufacturing output and controlled some two-thirds of the world’s gold and foreign exchange. Only America could project air and naval power globally. And, of course, the United States alone had atomic weapons. America used its commanding economic, military, and political supremacy to lay the foundations of the post-World War II international order, reflected in such institutions as the United Nations, NATO, the International Monetary Fund, the World Bank, and the General Agreement on Tariffs and Trade (which has morphed into the World Trade Organization). Additionally, the United States kept the Soviet Union at bay until that artificial regime collapsed of its own weight. …
The global elite is blinkered:
For many American scholars and policy makers the notion of a “liberal, rules-based, international order” has a talismanic quality. They believe that rules and institutions are politically neutral and thus ipso facto beneficial for all. Many proponents of “lock-in” have constructed a geopolitically antiseptic world, one uncontaminated by clashing national interests. In this world, great power competition and conflict are transcended by rules, norms, and international institutions.
The problem is that this misconstrues how the world works. Great power politics is about power. Rules and institutions do not exist in a vacuum. Rather, they reflect the distribution of power in the international system. In global politics, the rules are made by those who rule.
hat-tip Stephen Neil