The U.S.: Decline or Renewal? Author(s): Samuel P. Huntington Source: Foreign Affairs, Vol. 67, No.

2 (Winter, 1988), pp. 76-96 Published by: Council on Foreign Relations Stable URL: http://www.jstor.org/stable/20043774 Accessed: 23/08/2010 06:20
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Samuel P. Huntington THE U.S.?DECLINE OR RENEWAL?

1988 the United States reached the zenith of its fifth JLn wave of declinism 1950s. The roots of this phenom since the enon lie in the political economy literature of the early 1980s economic the fading American and that analyzed hegemony to identify the consequences of its disappearance. attempted These themes were picked up in more popular and policy of the budget and trade oriented writings, and the combination deficits plus the October 1987 stock market crash produced
the environment for and the spectacular success of Paul the Kennedy's

scholarly
everyone's

historical
mind,

analysis
the

in early
arguments

1988. Decline
of

has been

on

declinists

have

lively public debate.1 of a liberal-leftist hue, declinist Although predominantly and make many reflect varying political philosophies writings
different propositions. claims. In general, however, they offer three core

stimulated

First,
to other clinists

the United
market

States
economy

is declining
countries,

economically
most and notably

compared
Japan but

also Europe
focus

and
on

the newly
economic

industrializing

countries.
on

The

de
tech

scientific, performance to eco related and factors educational nological presumably nomic performance. is the central element economic of a nation's Second, power a decline in economic and hence power eventually strength, the other dimensions of national affects power.

the relative Third, caused primarily by

1 Apart have from

States is economic decline of the United too much for military its spending pur

declinist works international the more academic literature, economy political in policy media include: Walter and the general discussed debates widely P. Calleo, Boston: Russell 1987; David Mead, Mortal Mifflin, Beyond Splendor, Houghton The Rise and New York: Basic Books, American Hegemony, 1987; and, of course, Paul Kennedy, 1500 to 2000, New York: and Military Fall of the Great Powers: Economic Conflict from Change on 1987. In discussing declinist Random ideas, I will rely primarily House, Kennedy's writings on in the United States. since they have had the greatest and statements, impact public debate that been

Samuel P. Huntington at Harvard University. the Annual Conference in 1988.

of The Center for International Affairs isDirector for from a paper prepared is adapted This article of the International Institute for Strategic Studies

THE
poses, which in turn

U.S.?DECLINE
is the of result, in

OR RENEWAL?
Kennedy's to maintain phrase, commit In

77
of this

overstretch," "imperial ments that the abroad respect, Britain, the

to those of previous
France and

problems

country the United

attempting can no States

afford. longer are confronts

similar

imperial
Spain.

or hegemonic

powers

such as

sets forth images of a nation winding Declinist literature down economically, living beyond its means, losing its compet itive edge to more dynamic peoples, sagging under the burdens of empire, and suffering from a variety of intensifying social, economic and political ills. It follows that American leadership
must the recognize to "need and 'manage' acquiesce affairs in these the conditions relative and erosion so that accept of the

United States' position takes place slowly and smoothly, and is not accelerated short-term by policies which bring merely Before one accepts the policy conclusions of the declinists, their basic propositions should be critically examined. however, Does their argument hold water? Is the United States funda a nation in decline? Or is it a nation in the midst of mentally
renewal? advantage but longer-term disadvantage."2

The
problems

declinists
and

point
other

to many
serious if

urgent

if transitory
American

American
weak

nesses. Overall, their argument however, fails; it is seriously weak on both the extent and causes of decline. The image of renewal is far closer to the American truth than the image of decadence purveyed by the declinists. II some exceptions, With declinist writings do not elaborate testable propositions and dependent independent involving a rather broad brush, variables. With they tend to paint an
impressionistic to economic picture trends and of economic performance decline, mixing references growth, pro (economic

long-standing

data (test scores, length of school year), ductivity), educational matters fiscal (deficits), science and technology (R&D expend international trade and capital itures, output of engineers),
flows,

however, they point to three bodies their argument for decline:

2 Kennedy, op. cit., p. 534.

savings

and

investment,

and

other

matters.

In

of evidence

to support

general,

78

FOREIGN AFFAIRS
trade to and fiscal deficits which, system has shown no signs of being

U.S. ?first, mounting date, the U.S. political

able ?second, shares to correct;

and even in U.S. declines continuing accelerating rates in U.S. of economic of and power global areas in of economic growth key performance; research sustained ?third, weaknesses, including systemic and edu and development practices, primary secondary and of scientists and most cation, engineers, production and investment patterns. savings seriously,

Each body of evidence requires separate examination. current account and budgetary deficits Deficits. Escalating most have been the the U.S. important changes affecting in the 1980s. They in the world furnish dramatic position In a few short years the immediacy to the declinist argument. was transformed from the principal creditor States United nation in the world to its largest debtor. The current account balance, which had a surplus of $6.9 billion in 1981 and a small to deficits of almost in 1982, plunged deficit of $8.7 billion States had a net credit in its international investment was a net debtor to the position of $141 billion; by 1987 it tune of $400 billion. Assets in the United States owned by 1982 and 1986 to $1.3 roughly doubled between foreigners trillion. with this growth of U.S. international deficits Coincidental the United
and a

$140 billion in 1986 and about $160 billion in 1987. In 1981

in the vicinity budget deficit. The annual deficit had fluctuated of $50 billion to $75 billion in the Ford and Carter Adminis trations. In 1982 it began to increase rapidly, reaching a peak

major

cause

of

them

was

the

burgeoning

of

the

U.S.

FY 1987 and was modestly higher at about $155 billion in FY 1988. see these deficits as evidence of fundamental weak Declinists nesses in the American economic position. They correctly point out that the massive influx of foreign funds has largely gone and govern not for investment but for private consumption mental spending for defense. Such borrowing will not generate revenues with which it can be liquidated. The United States is living in a style it cannot afford and is imbued with an "eat, are Ominous drink and be merry" psychology. precedents
called to mind. Peter G. Peterson argues:

of $221 billion in FY 1986. It dropped back to $150 billion in

THE
To
...

U.S.?DECLINE
parallel
historical

OR RENEWAL?
the United
when

79
1980s
large

find
we

the proper
look to

historical
those rare

for

States
an

in the

must

occasions

economy's

and its Qpen capital markets .have allowed it size, its world-class currency, sums and to borrow immense for the purpose o? consumption primarily return. The illustrations of deficit without regard to productive lumbering, economies that come most easily to mind are Spain's hobbled, low-growth in the 1780s, and Britain^ in the France's in the late sixteenth century, 1920s.3

In similar fashion, Paul Kennedy warns that "the only other a so increasing example which comes to mind of Great Power in peacetime is France in the 1780s, where the its indebtedness to the domestic political crisis."4 fiscal crisis contributed to disentangle the valid from Several points must be made the invalid elements of these declinist arguments. First, trade and budget deficits were not a major problem This development before 1982. They then mushroomed. may in in some small measure flow from underlying weaknesses and investment, but it cannot primarily savings productivity, result from such causes. If the deficits did come from these causes, they would have developed slowly rather than rapidly and very probably would have manifested themselves before the advent of the Reagan Administration. Instead, the deficits are overwhelmingly the result of the economic policies of the
Reagan Administration: reduction in tax rates,

defense spending, on the assumption be curtailed and

ment, growth and

a strong dollar. These policies were premised that domestic governmental spending could that lower tax rates would stimulate invest
revenues. These assumptions did not prove

expansion

of

to be valid, and the policies that were based on them produced the surging deficits. A different with different administration fiscal and economic would have produced different policies
results. American The deficits economy, stem but from of the

quickly by one set of policies, they can be reversed almost as set of policies. quickly by another that reversal has begun and is likely to intensify. Second, The in policy by the reversal results partly from changes from policies adopted by other Reagan Administration, partly and partly from the workings of the international governments tendencies. economy, which naturally generates equilibrating
s Peter G. Peterson, "The Morning 4 op. cit., p. 527. Kennedy, After," The Atlantic, October 1987, p. 49.

Reagan

weaknesses, economics.

not

of

the

Produced

80

FOREIGN AFFAIRS
to reinforce U.S. policies Bush will probably move to reduce the deficits. Through tight controls on
"revenue enhanc growth, taxes taxes, (luxury gasoline men tax are most frequently

President designed
spending, ments" taxes

is likely to be brought down to a tioned), the budget deficit sustainable level at which it does not pose a threat to long-term economic growth. As it is, the deficit in 1988 is only about half of what it was in 1983 as a percent of gross national product (3.1 percent versus 6.3 percent). The trade deficit began to decrease with the rapid expansion in 1988. Its further reduction will be of American exports increases in manufac facilitated by budget deficit reduction, rose in the 1980s), (which turing productivity significantly on the exchange rate of the dollar and pressure which ceilings
the U.S. government will?and must?apply under the new

of economic promotion new at some and, point, value-added and a general

trade law to open up foreign markets. Cutting the trade deficit will be further enhanced, of course, to the extent that oil prices
do not increase, American wage levels remain below those of

countries' debt the developing the principal U.S. competitors, and foreign economies is contained grow at healthy problem rates. The trade deficit, some analysts predict, will become a trade surplus in the coming decade.5 of curing them both the deficits and the processes Third,
impose stantial costs significant increase?absolute on the American and net?in economy. American The foreign sub in

debtedness means that a larger portion of U.S. gnp will be paid to foreigners in debt service. These funds will not be available
for either

vestment. The future American standard of living will be less than it would have been otherwise. this develop The declinists are absolutely right to highlight ment as the principal effect of the Reagan spending long-term of the trade balance will impose costs not Correction spree. States but also on those other countries only on the United to the U.S. market. Some of "addicted" that have become to these costs are already visible in Japan, which is struggling of which went to the United exports (39 percent de-emphasize
5 Martin Feldstein, James R. Schlesinger, ed., The United 652-53. States the Trade 1987, Deficit," Foreign Affairs, Spring "Correcting inMartin Policies and International "Domestic Capital Flows," of Chicago in the World Economy, Press, University Chicago: pp. 795ff.; Feldstein, 1988, pp.

personal

consumption

or

savings

and

domestic

in

THE

U.S.?DECLINE

OR RENEWAL?

81

In addition, internal demand. States in 1987) and stimulate of the trade deficit might reduction conceivably require a in turn would at least in the United recession States, which the budget deficit. exacerbate temporarily In the coming years both deficits will probably be reduced
to sustainable and

ever, will be around for some while to come. But it is a mistake to bleed away to view them as open sores that will continue American that will heal, although strength. They are wounds
their scars will remain.

nonmalign

proportions.

Their

effects,

how

Declining
by Paul

Shares. This
"The

argument
U.S.A.'s

has been put most

share of total gnp,"

explicitly
he says,

Kennedy.

"of world manufacturing has national efficiency

has world suffered "relative not production,

output, and of many other indices of States The United steadily declined."
industrial only as measured decline, in older manufactures against as such

and basic chemicals, but iron and steel, shipbuilding, it is far less easy to judge the final outcome of also?although combat?in this level of industrial-technological global shares textiles,
of robotics, aerospace, automobiles, machine tools, and com

has also declined. The decline agriculture puters." American in the U.S. share of world gnp was "natural" after 1945, but it "has declined much more quickly than it should have over the last few years" and the decline has become "precipitous."6
These propositions need serious qualification. Various esti

mates exist of global and national gross products for various times. All have to be used with caution. Virtually all, however,
show a common pattern.

40 to 45 percent of the gross The United States produced in the late 1940s and early 1950s. That share world product declined rapidly, reaching the vicinity of 20 to 25 percent of world product by the late 1960s. That is roughly where gross
it has remained.

It certainly has not declined more rapidly in the past two two decades. Figures decades than it did during the previous on Competitiveness of the U.S. Council is to (whose mission voice alarm about declining U.S. competitiveness) and from
other sources show, for instance, that:

b "Does America New Perspectives Need Perestroika?" op. cit., p. 525; Kennedy, Kennedy, to the House submission of Representatives, 1988, p. 6; and his written Quarterly, Spring on Committee Defense and International Affairs Task Force, June 21, 1988, Affairs, Foreign p. 2.

82

FOREIGN AFFAIRS

?between

1970 and 1987 the U.S. share of the gross world varied between and most 22 and 25 percent product recently was 23 percent; ?the U.S. share of world exports was 12 percent in 1970 in 1987, and varied between nine and 14 and ten percent in the years between; percent
U.S. share of the exports of the seven economic

?the

in 1970 and 23 percent summit countries was 24 percent in 1987, varying between 20 and 25 percent in the inter vening years; ?in for 27.5 percent of States accounted 1965 the United of technology-intensive this world exports products; to a low of 22.9 percent in 1980 and was back at dropped in 1984.7 25.2 percent States accounts for 22 to 25 percent of the United Overall, the major forms of global economic activity and has done so for twenty years or more. The declinists are fairly consistently clearly right in saying that this ismuch less than the U.S. shares to the same indices during the decade after World according War II. A situation in which one country accounted for up to action was clearly a tempo 50 percent of the global economic of the war. The ending of that imbalance was a rary product major and successful goal of U.S. policy. The shift from 40 45 percent of global economic activity to 20-25 percent had the late 1960s. It is an increasingly occurred by generally
remote historical event. For about a quarter-century U.S.

shares
relatively

in global
narrow

economic
range.

activity

have

fluctuated

within

economic the 1980s U.S. improved performance During to that of other leading countries. Between markedly compared States ranked 15th out of 19 1965 and 1980 the United in terms of economic growth; industrialized market economies between 1980 and 1986 the United States ranked third out of 19. The most notable decline in gross domestic product growth
rate was that of Japan: its average annual growth rate between

1980 and 1986 was 58.7 percent of what it had been between the U.S. average annual growth 1965 and 1980. In contrast, was 110.7 percent rate in 1980-86 of what it had been in
on Index: Trends, Background Data, and Method Competitiveness Competitiveness, to U.S. Leadership in High The Challenge D.C, 1988; Rachel McCulloch, ology, Washington, Mass.: Its Lead? Should It Try?), Cambridge, Industries (Can the United States Maintain Technology 2. Bureau of Economic National 1988, Table Research, Working Paper No. 2513, February 7 Council

THE 1965-80.8
Japanese

U.S.?DECLINE

OR RENEWAL? (1983-87)
the same

83 and
the

During
economies

the past five years

grew at almost

the U.S.
rate, with

United States leading in three of these years. In all five years The that of the European Community. U.S. growth exceeded has been getting bigger, absolutely and rela biggest economy that the United States has suffered tively. Declinist arguments in recent years and that the locus of eco decline precipitous to Japan are simply is shifting dramatically nomic production not supported by the facts.
TABLE i

AVERAGE ANNUAL GROWTH RATES OF REAL GNP

United States Japan

European Community

1961-1965 1966-1970 1971-1975 1976-1980 1981-1985 1986-1987 1983-1987

4.6 3.0 2.2 3.4 2.6 2.9 3.8

12.4 4.9 11.0 4.6 4.3 2.9 5.0 3.0 4.0 1.5 3.1 2.5 3.8 2.3

source: Annual Report of the Council of Economic Advisers, Government Printing Office, 1988. Based on Table Bill, p. 374.

in Economic Report of the President, Washington: U.S.

in Table The decline in Japanese economic growth manifest 1 was to be expected: no country will grow indefinitely at ten
percent or more per year. normal As the for

tured
rently

its growth
be considered

rate has approximated

Japanese

economy

has

ma

that which
modern

may
economies.

cur

In similar fashion, just as Japan has lost its edge in growth, so In 1970 also has the United States lost its lead in productivity. of Japan. By 1986 the gap between the two had almost disap is little reason why the Japanese economy as a peared. There and should grow much faster than the U.S. economy whole is little reason why an individual U.S. worker should be there more productive than a Japanese worker. On such significantly
indices of economic performance, one should expect long-term productivity in U.S. manufacturing was more than twice that

complex

8 The World Bank, World 1988, Table 2, pp. 224-225.

Development

Report

1988,

New

York:

Oxford

University

Press,

84

FOREIGN AFFAIRS
among countries at similar levels of economic

convergence

development
Convergence

and with

economies

of comparable

complexity.
stability

in economic

can be of economic in the distribution activity. The argument in the past two that has emerged that the gnp pattern made
decades is, in some sense, the historically "normal" pattern,

performance

reinforces

that existed before the distribution roughly approximating of the 1970s was, as Thorold II. The world World War the U.S. still preem Masefield put it, "a world restored?with
inent if not

some developing countries, Apart from the rapid growth of to change drastically in the future. is unlikely this pattern to one estimate, for instance, the United States had According of a total of 15 major 44.1 percent of the gross product in 1950, 31.6 percent of this total in 1980, and will countries In that have a projected 29.2 percent of the total in 2010. to this estimate, the U.S. gnp of $7,859 billion year, according (in 1986 dollars) will still be twice that of China ($3,791 billion), ($2,873 billion).10 Japan ($3,714 billion) and the Soviet Union means having 40 percent or more In short, if "hegemony" Britain never remotely of world economic activity (a percentage its hegemonic hege years), American during approximated If hegemony means producing 20 mony disappeared long ago. as much as any to 25 percent of the world product and twice
other
cure.

pre-dominant."9

individual

country,

American

hegemony

looks

quite

se

cited by declinists Systemic Failures. A third set of phenomena be termed consists of what might systemic failures. These of America's involve the sustained society and its inability
to function economy or at levels presumed either at the levels to necessary sustain societies of comparable role the American

in the world. Since systemic characteristics have, by definition, to been present for a long period of time, their contributions im stem from their cumulative decline presumably American declinists point to the poor other deficiencies, pact. Among and secondary education of American (mani primary quality students in fested, for instance, in the low scores of American
9 the Developed and Co-security?Managing Thorold World," Masefield, "Co-prosperity Illusion and Reality," 'Decline': "America's International 1989; Charles Wolf, Affairs, Winter The Wall Street Journal, 12, 1988, p. 22. May 10 The Future Environment Future Report Security Environment: Working Group, Security of Defense, on to the Commission August Department Strategy, Washington, Integrated Long-Term 1. 1988, Chapter

THE

U.S.?DECLINE

OR RENEWAL?

85

tests of mathematics and reading skills), the small comparative in the United numbers of scientists and engineers produced to the high production of law States (particularly compared and the complexity and inefficiency of American govern yers), mental policymaking processes. The most heavily emphasized
weakness, systemic ment rates. Americans clearly however, save less concerns than most low savings and invest

other

the 1970s and 1980s U.S. gross savings as a proportion of gdp varied between 14.8 and 19.1 percent. During this period Japanese savings varied between 27.1 percent and 32.9 percent of gdp. In 1970 the Japanese savings rate was more than twice in 1987 it that of the United States (32.9 versus 16.1 percent);
was almost other twice the U.S. rate (28.2 versus 14.8 percent).

people.

During

Throughout
the major

these years U.S.

industrialized

savings
democracies.

lagged behind

those of

Similar differences to disposable

the U.S. rate

existed in the relation of personal savings income. During the 1960s and 1970s personal
averaged about six percent; those of Germany

14 percent and 20 percent respectively. In and Japan averaged even the 1980s the already low U.S. savings rate dropped 3.7 percent of disposable income in 1987. In further, reaching 1987 net national savings were only 2.2 percent of gnp, com 1949 and 1981. pared to an average of eight percent between
As one might expect, similar patterns across countries exist

with respect to investment. Between 1965 and 1984 U.S. gross fixed capital formation varied between 17 percent and 19.8 of gnp. That for Japan varied between 27.8 percent percent and 35.5 percent of gnp. The oecd average, less the United
varied States, of investment between yield 21.6 comparable and measures Other percent.11 rates the U.S. results: tend 26 to

more than half those of Japan and perhaps 75 slightly of those of the other major industrialized democracies. percent of these differences in savings and invest The significance ment can be debated, and mitigating factors may explain and be
compensate performance for some low U.S. not to have rates. seems In addition, the poor affected U.S. noticeably U.S. eco

nomic
1'

growth

as yet. Nonetheless,

clearly

the declinists

are

See Annual of the Council Report U.S. Government President, Washington: "International Flows and Domestic Capital in the World Economy, op. cit., pp. 606-614.

of Economic in Economic Advisers, Report of the A. Frankel, Office, 1988, p. 100; Jeffrey Printing Economic in Feldstein, Policies," ed., United States

86
right
temic

FOREIGN AFFAIRS
in highlighting
weaknesses that not

savings and
require all,

investment

as long-term
if economic

sys

correction

growth when

is to be maintained. Many, although declinists go wrong, however,

for poor U.S. performance. they identify They for military purposes crowds out argue that overexpenditure investment for economic growth and hence leads to economic decline. Decline flows from imperialism and militarism. This argument has little to support it, especially as applied to the United States. Kennedy's historical examples themselves onerous that the burden of empire usually becomes suggest
when product. it amounts Defense, to ten however, percent takes or only more six of to seven the society's of percent

the reasons

gnp. The declinists' American thesis is clearly more relevant to the Soviet Union, which apparently (Soviet officials them selves claim they do not know for sure) spends 17 to 18 percent or more of its gnp for military purposes. a Is this, however, cause of Soviet decline? Its military sector is widely held to be the most technically efficient sector of the Soviet economy, and it is the only sector that is able to compete internationally. to suggest More generally, there is little comparative evidence
are a on economic expenditures necessarily drag have that defense Some indeed, argued development. analysts, One does not economic stimulates growth. necessarily spending to to in order have its opposite. that argument reject buy a In fact, of course, invests is influenced how much country that military

it spends on defense. by, but not determined by, how much close to three times as much of its The Soviet Union spends
gnp on defense of Soviet as does the United States. It also invests more

of

its gnp

than does

the United
In among make

States.
theory,

This
a

occurs

at the
can

expense cate its resources investment.

consumption. as it wishes countries

In fact,

allo country defense and consumption, and the different choices,

countries exactly
Soviet

with the three that. It is difficult

and market

largest economies to get comparable

economy countries,

in the world do figures for the

and the portions a

Union show

of government
always up

spending

which

are

in fact

investment

do not
rough

in national

accounts.

Nonetheless,

allocation of gnp for the three largest economies prototypical as follows: might be ?U.S. consumption (private and public) at about 78 percent of its gnp, Japan's at 67 percent, and the Soviet Union's 56 percent;

THE
?U.S. Japan's percent; ?U.S. investment defense about

U.S.?DECLINE
at about percent, roughly and

OR RENEWAL?
seven the percent Soviet of gnp, of

87
its gnp, 18 at

spending one at

Union's

17 percent

Japan's

about
percent. In short, invests.

30 percent
the Soviets

of
arm,

its gnp,

and

the Soviets'
States consumes,

about

26

the United

Japan

At present, efforts are being made in each of these countries to alter these patterns. General Secretary Mikhail Gorbachev in to limit Soviet military is attempting spending apparently
order to increase

to to attempt effort and is beginning panding In the United States it is widely recog increase consumption. cannot be allowed to rise and investment nized that defense How at the expense of consumption. should be expanded successful any of these efforts will be remains open to question. its defense
In some measure, allocations to investment, defense and

consumption

and

investment.

Japan

is ex

are a product of government policies and can be consumption those policies. Almost 75 percent of the changed by changing
U.S. come, federal government's interest including revenues on savings. come By from taxes on in contrast, the Japanese

government gets only 40 percent of its revenues from income taxes and until recently did not tax interest on 70 percent of
Japanese codes exists also that personal reflect levels savings. national of arms Changes in tax codes can Much deep affect the

investment/consumption

balance
values

in both
and culture.

countries.
have and causes.

Yet
evidence roots

tax
in

expenditures

national
reflect patterns

cultures,
only are external

religion

and history
shaped by

and do not necessarily

consumption

threats.12

Investment similar

States In any event, even if half the resources the United uses for defense were shifted to investment, the American investment ratio would still lag behind the ratios of Japan and If the United States is to increase its invest the Soviet Union.
ratio significantly, not from that the less increase will have to come committed

undoubtedly

ment

marily

from

the 75 percent

or more
than

of
seven

the GNP devoted

percent

pri

to

to defense. If the United States falters economically, it will not be because U.S. soldiers, sailors and airmen stand guard on the and the 38th parallel; it will be Elbe, the Strait of Hormuz
12 See James L. Payne, Why Nations Arm, to be published in 1989 by Basil Blackwell.

consumption,

88

FOREIGN AFFAIRS
U.S. comforts men, of women the good and children overindulge not life. Consumerism, themselves militarism,

because in the

is the threat to American strength. The declinists have itwrong; it right: "Republics end with luxury; monar got Montesquieu
chies with poverty."13 ill

The

predominant
rather of than

view among
internal This nations.

declinists
argument

points
as the runs

to external
cause to a

expansion of the decline

stagnation

principal counter

tradition of political thought going back to Plato and Aristotle which focuses on the internal ability of a society to renew itself. to modern of this view, a society formulations According
declines when bureaucratic stagnation, monopoly, caste, hier

archy, make
societies dominant.

social rigidity, organizational and adaptation innovation

age, these characteristics

obesity difficult
tend

and arteriosclerosis or impossible. As

more pre

to become

In his sophisticated
the declinist mainstream,

theoretical
Mancur

analysis which
Olson argues

departs
this point

from
per

suasively, of vested
economic whose destroyed

the decline of nations by the development explaining coalitions" interests or "distributional that reduce
and war, constrain and political revolution economic structures or growth.14 are Societies substantially grow

efficiency economic social, through

other

upheaval

coalitions develop distributional rapidly. Over time, however, wanes. Although Olson does not economic and dynamism case of an discuss it in his book, the prototypical contemporary to a halt because of the constrictions im economy grinding the Soviet of course, distributional is, coalitions, posed by
Union under Brezhnev. societies, structure of in contrast, societies are will those that find ways Successful The

short of their own destruction

youth. such

to sustain the dynamism

presumably

of their
encour

age competition, mobility, fluidity, that prevent a society all qualities network of collusive deals in which
one's disadvantage.
The Spirit of the Laws, of Nations,

pluralism and openness? in a from becoming mired benefits to every everyone

13 Baron de Montesquieu, VII, p. 98. 14 Mancur The Rise Olson, 3 and 4. especially Chapters

New New

York: Haven:

Hafner, Yale

1949,

Vol. Press,

I, Book 1982,

and Decline

University

THE Viewed to decline

the openness

U.S.?DECLINE

OR RENEWAL?

89

from this perspective, than any other major

of its economy,

the United country.

and

States is less likely It is distinguished by

Its engines of

are competition, mobility and immigration. to monopoly, both public and and opposition Competition are hallmarks of American States The United society. private, to institution in attempting led the way in the modern world renewal
alize antitrust and antimonopoly practices in business. Govern

society

politics.

ment bureaucracy in the United States divided against itself than bureaucracies
tries. societies. Labor State-owned go Small, unions enterprises bankrupt?on new companies have never are rare. created?and

is weaker and more in most other coun

New

bulk of the twenty million

new jobs created

been strong

are companies a scale unknown in European for the have been responsible

in the past decade.

and are

it has been argued, American universities, world because of the intense competition
faculty, students and money.15 Secondary

are the best in the them for among

education, it might

declining.

a public monopoly be noted, is, in contrast, overwhelmingly considered for and is inferior as a result; widely proposals schools for it are to introduce competition among improving
students and state support.

to other In comparison is and vertical, horizontal than elsewhere, American and down the income scale, move from region People
rate they do in European compared

individual mobility, both Far more high. extremely rapidly workers shift from job to job, up in and out of the poverty brackets. to region at about three times the societies,
With the notable

countries.

of race,
relatively

ascriptive
minimal

obstacles flow of

to upward
to other

exception

mobility

have

been society

societies.

The
reflects newal. have enter

continuing
the

immigrants
it offers and

into American
to

contributes opportunities firstand second-generation Historically, a in American been force society. dynamic

its re

immigrants Under the

Immigration
the

Act
United

of

1965,

about
year.

600,000
Thousands

legal

immigrants
more enter

States

each

renew the pools of cheap labor, newcomers illegally. These talent and driving ambition skill, intellectual entrepreneurial to succeed. Thirty-six of the 114 American citizens who won between 1945 and 1984 Nobel prizes in science and medicine
15 See Henry 13-14. Rosovsky, "Highest Education," The New Republic, July 13 and 20, 1987, pp.

90

FOREIGN AFFAIRS

were born elsewhere. In the 1940s and 1950s American sci life was tremendously entific and intellectual enriched by Jew ish refugees from Hitler and the children of East European Jewish immigrants before World War II. Today Asian-Ameri cans sweep the intellectual honors. (About two percent of the 14 percent of the 1988 fresh total population, they make up
man class also means at Harvard.) In that the American the coming population decades, immigration to grow, will continue

unlike relatively

those

of many European countries young, unlike that of Japan. IV

and will

remain

test of a great power is its ability to renew its ultimate and immigration character power. The competition, mobility States to meet this enable the United istic of American society The
test to a far They present. greater are extent the than central any other power, great sources of American past strength. or

are supplemented They in international position

First, in comparison

by three affairs.
to other

aspects

of

the American
American

major

countries,

Mao Zedong is peculiarly multidimensional. report strength said that power grows out of the barrel of a gun; the edly In see power coming out of a belching smokestack. declinists
comes influence in various and international forms fact, power sources. can stem from The it has Soviet Union, very different its interna is a one-dimensional often been said, superpower,

on its military might. tional position resting almost exclusively affairs influence Saudi Arabia has in international Whatever reserves. Japan's influence has come first flows from its oil
from its manufacturing resources. of financial Countries dependent performance upon a single and then from of its control how

source

power,

to degradation of the particular ever, are highly vulnerable type of power in which they specialize, opec's power drops with by the rise of falling oil prices; Japanese power is challenged Soviet power is re and Thailand; Taiwan, Korea, Singapore In addition, countries duced by the Reagan defense buildup. on a single source can exercise influence only in dependent
arenas where that

does not cut much of a figure Japan does not sway the military
Countries power into can, of course, and another, attempt economic

type

of power

is relevant.

The

Soviet

Union

in international finance and in the Middle East. balance

to power transform ismore one fungible type of than

THE
others. There are,

U.S.?DECLINE
very real

OR RENEWAL?
limits to the extent ranks

91
to ex eco

however,

which

conversion high

is possible, in almost
size and

and it can be a very costly process.

the United natural States

In contrast

to other

countries,

traordinarily
power:

all the major

education,

sources

of national

population

resources,

nomic

development, strength, ideological arena while

other

social cohesion, appeal, diplomatic

able no

political stability, military alliances, technological

to sustain reverses in any a mul

achievement.

one
from

It is, consequently,

maintaining
At present,

its overall
country

influence
can mount

stemming

sources.

to the United tidimensional States, and with one challenge no country seems likely to be able to do conceivable exception
so in the relevant future.

Second, U.S. influence also flows from its structural position in world politics. The United States benefits from being geo most major areas of world conflict, distant from graphically from having a past relatively free of overseas imperialism, from an economic and political philosophy that is anti espousing to other peoples, statist and, hence, less likely to be threatening net from being involved in a historically uniquely diversified
work than of more alliances and from of recently, having identification a sense, with stronger universal in the past interna

tional institutions. These factors pull the United States into a leadership role in and disputes. They help dealing with international problems
create a demand for the American presence overseas. Slogans

but in many headlines, go home!" may command the underlying fear is that the United States might just regions do that. Neither Germans, French, Dutch nor (some say) the Soviets are eager for the United States to pull out of Europe. the bases removed from Many Filipinos act as if they wished
their country, and some may

of "U.S.

withdrawal from many others worry deeply that an American Southeast Asia would leave them to the tender mercies of the Soviets and the Japanese. relations Long before diplomatic existed between Washington and Beijing, China supported the
American presence in

actually

want

that

to

happen,

but

In similar fashion, the United States is called upon to play a leading role in the resolution of regional conflicts (Middle East, to balance and mediate southern Africa), between regional rivals (Greece, Turkey) and to assist other powers (Britain) or international in resolving institutions (the United Nations)
other conflicts (Zimbabwe, Iran-Iraq). American involvement

Japan

and

Korea.

92
protect

FOREIGN AFFAIRS
generally
powers

in a region

tends
from

to stabilize
the regional

the status quo and

leviathans. The

to
ex

weaker

ception to this pattern the Caribbean?where

derant local power.

is the one region?Central America and the United States itself is the prepon

power, with one possible hegemonic Finally, no alternative seems likely to emerge in the coming century. A exception, short while ago, of course, itwas widely thought that the Soviet Union would perform that role. Mr. Khrushchev talked confi
dently about the U.S.S.R. overtaking the United States eco

of Western capitalists playing nomically and the grandchildren under red flags. seem not just forlorn but bizarre hopes. The Soviet These still has the resources, size and military Union strength of a but it has lost out economically, and superpower, ideologically reforms could start the Gorbachev Conceivably, diplomatically. a process that would put the Soviet Union back into competi
tion to become the number-one actor on the world stage, but

at the moment the success of his efforts is in doubt and the of the reforms, if they are successful, will not necessarily impact
enhance Soviet power.

the choice of the declin the popular choice?and Currently, the United States is, the country that will supersede ists?for
of of course, the Japan. "The is the all due American Century of is over," as a former

U.S.

official

has said. "The big development

emergence respect to

in the latter part

power."16

century With

osition

will

not hold
military

up. Japan
strength,

has neither

a super Japan major this prop Prestowitz, Clyde affiliates nor,

the size, natural

most

resources,

diplomatic

important,
superpower.

the

ideological

appeal

to be a twentieth-century

In a world of instant communication, widespread literacy a superpower has to stand for an idea and social mobilization, In recent history the United its borders. with appeal beyond the message States and the Soviet Union have done this. Today in part is tattered and apparently rejected, of the Soviet Union own leadership. The appeal of the American message of by its liberalism has never been and economic political democracy to could also develop a message stronger. Conceivably, Japan in the world, but that would changes require fundamental
Japanese
16 Clyde

culture

and

society.
4, 1988, p. 28.

Prestowitz,

Time, July

THE

U.S.?DECLINE

OR RENEWAL?

93

In addition, most characteristics strength and weakness. American

competition encourage innovation

of a society impart both and individualism, mobility

but weaken cooperation,

to broader institutional community loyalty and commitment to The American constitutional system, well designed goals. to minimize and maximize government liberty, is ill designed action to deal with serious sustained and coordinated produce
long-term sus and drive. In Japan hierarchy, corporatism, problems. relation the close spur business-government a social same such the At however, time, consen its export structure

combined
collusion,

with a mature
corruption and

economy
stagnation. Even

could be peculiarly
In a worst-case

prone
scenario?

to

improbable
nevian era

but not
in

inconceivable?Japan
without that

could

face a Brezh
Mr.

its future.

development,

as to which century belongs to which Prestowitz's prediction is likely to be less accurate than that of Seizaburo Sato: country
"The twentieth twenty-first century will be century was the American century. The the American century."17

to this prediction could come The most probable challenge a united European Community. The European Commu from if it were to become politically cohesive, would have the nity, and potential military power of strength to be the preeminent the 21st century. Japan, the United States and the Soviet Union in investment, and have specialized respectively consumption arms. Europe balances all three. It invests less of its GNP than Japan but more than the United States and possibly more than It consumes less of its GNP than the United the Soviet Union. more than Japan and the Soviet Union. It arms less States but than than the United States and the Soviet Union but more
Japan. population, resources, economic wealth, technology and actual

It is also quite possible to conceive of a European ideological one. Throughout to the American the appeal comparable line up at the doors of American consulates world, people line up at the seeking immigration visas. In Brussels, countries door of the Community of seeking admission. A federation
democratic,

would

scene. If the next be a powerful force on the world century is not the American century it ismost likely to be the The baton of world leadership that passed century. European
17 Seizaburo Sato, The Economist, Aug. 13-19, 1988, p. 30.

wealthy,

socially

diverse,

mixed-economy

societies

94

FOREIGN AFFAIRS
twentieth later. century

across the Atlantic in the early westward could move back eastward a hundred years V

Current declinism is, as noted, the fifth such wave since the in 1957 and 1958 as a result of 1950s. The first occurred Soviet missile launches and the Sputnik. The Gaither Commis and other groups warned that the sion, advising the president, in United States was falling seriously behind the Soviet Union and future military The Soviet science, technology capability. Union was said to have a growth rate 50 percent higher than that of the United twice as States, to be spending probably and to be well on its much as the United States on armaments an unchallengeable to establishing lead in missiles while way U.S. strategic forces were increasingly vulnerable. The Soviets were producing thousands of scientists and engineers many while American education was lagging. A second declinist surge came at the end of the 1960s. President Nixon and his national security adviser took the lead in announcing the end of the bipolar world. The United States and the Soviet Union were losing their primacy and a "penta into existence. These predictions gon of power" was coming were that the supplemented by academic warnings quickly in which the United States and the Soviet Union military power
excelled was

power, the hallmark of Europe and Japan, would ensure the of the latter as at least the equals of the two previous emergence A third declinist scare followed thereafter, trig immediately of course, by the opec oil embargo of 1973 and the gered, theN increase in oil prices. The West and increasingly dramatic on Persian Gulf oil; United States were highly dependent the economic life of the West whoever controlled oil controlled to be the dominant and hence had the means influence, eco and politically, world. Saudi Arabia the throughout nomically was seen as the new superpower as the huge flow of funds into in U.S. bonds, factories and real Arab hands was recycled
estate. superpowers.

rapidly

losing

its usefulness

and

that

economic

In the latter 1970s the Soviet Union again became the focus of fear in a fourth declinist surge. The U.S. defeat in Vietnam, the expansion of Soviet power in Angola, Mozam Watergate, and eventually Afghani Ethiopia, Nicaragua bique, Yemen,
stan, and the continued development of Soviet nuclear forces

THE
that rendered U.S. States as

U.S.?DECLINE
strategic forces

OR RENEWAL?
increasingly vulnerable,

95
all

generated
the United

the feeling

that the Soviet

the world's

Union

was
power.

supplanting
Feelings

number-one

reinforced of decline and malaise, by another oil price hike currents that brought the political and inflation, generated to power in 1981. Ronald Reagan These earlier decline scares were triggered by Sputniks and missiles, pressure on the dollar, oil embargoes and price hikes, SS-18s and Angola. The fifth wave has been largely triggered and by budget and trade deficits and the seeming competitive financial threat from Japan. It thus bears certain resemblances to the second wave of the late 1960s and early 1970s, and In 1972 President Nixon pre familiar themes are repeated.
dicted the emergence of "an even balance" among "a strong,

States, Europe, Soviet Union, China, Japan." healthy United In 1988 Professor Kennedy argues that we are "moving very a swiftly" into "multipolar world" with five centers of economic and military power: "the U.S., the Soviet Union, China, Japan his prediction and the EEC."18 It remains to be seen whether more rapidly than President Nixon's. will be realized any
The declinist waves often, not

American There is a certain fin d'administra administrations. one to suspect that people want to tion air to them which leads In this respect, they may be believe in decline at that moment. better indications of American than of American psychology that might otherwise be power. Indeed, many developments as evidence of strength or progress are pointed to interpreted as symptoms of decline. Current declinists, for by declinists
instance, ufacturing make much of the industry. Fifteen disappearance earlier, years of American however, man a substan

always,

come

at

the

end

of

tial group of social theorists, including Daniel a widely accepted niew Brzezinski, articulated
relative decline of manufacturing industry was

Bell and Zbig thesis that the

a sign of pro

or technetronic gress from industrial to post-industrial society, and the United States was leading the world in that direction.19 in short, may be in the eye of the beholder. Decline, The prevention of decline, however, requires that it be there. In all its phases declinism has predicted the imminent shrinkage
18 Richard Nixon, 19 See Daniel Bell, Brzezinski, Zbigniew 1970. Press, Viking Time, Jan. 3, 1972; Kennedy, The Coming of Post-Industrial Between Two Ages: America's New op. cit. Perspectives Quarterly, 1973; and Society, New York: Basic Books, in the Technetronic Role York: Era, New

96

FOREIGN AFFAIRS

of American power. In all its phases that prediction has become that shrinkage. Declinism is a theory that central to preventing to be invalidated. Given the openness of its has to be believed of its economy, and the competitiveness the United politics States is unlikely to decline so long as its public is periodically convinced that it is about to decline. The declinists play an indispensable role in preventing what are predicting. to Professor Kennedy, the more they Contrary Americans worry about the health of their society, the healthier
they are.20 The current wave will serve a useful historical

if it encourages function take prompt and effective gurate

investment.

longer-term

to the new president and Congress actions on the deficits and to inau to promote policies designed saving and perished,"
forever?"21

"If Sparta and Rome

can hope to endure

asked Rousseau,
The obvious

"what State
is "no

answer

state" and that may be the right answer. The United States is not immortal and American is not inevitable. Yet, preeminence some states endure for extraordinary lengths of time, and little
reason decline exists are to assume more accurate that recent than prophecies ones. earlier of American Every reason

to encourage belief in such prophecies in order exists, however, to disprove them. Happily, of Ameri the self-renewing genius can politics does exactly that.

20 most perceptive One of Kennedy's Rise and Fall, critics, op. cit., pp. 529-30. Kennedy, a similar argument, of History," "The Use N. Haass, makes Richard Misuse) (and Mainly is a real risk that predictions of decline could become Orbis, Summer 1988, p. 419: "There self-fulfilling." 21 Jean-Jacques XI, p. 73. Rousseau, The Social Contract, London: J. M. Dent, 1947, Book III, Chap.