The US displays a worrying level of unpredictability, and at its centre is a man behaving like the Red Queen as he shouts “off with his head” at all.
Zillions of articles and hundreds of books have been written focussing on the problem of managing the rise of China. The more urgent problem, it would seem, is managing the decline of the United States. China has been presented and analysed (also damned) as a threat to the world order, as a country that has not been playing by the rules either domestically or internationally, and as a country that should “normalise” but may not do so. Hence the problem, often viewed through a particular prism of history: The failure to manage the rise of Germany a century ago, and its consequences.
It is time to flip the viewing glass and consider the whole thing from a different perspective. We have here the world’s largest economy and dominant superpower thrashing about as it wrestles with its own decline—which is still only relative, and by no means absolute. Confronted with even that limited challenge, it has become everything that China was supposed to be: A threat to the world order, and a country that is not playing by the rules on trade, on climate change, international commitments and nuclear deals. The “exceptional country” displays a worrying level of unpredictability in its conduct, including in its electoral behaviour. At its centre, consequently, is a man not prepared for high office, behaving like the Red Queen as he shouts “off with his head” at all and sundry. When he can’t, he rails at the restraints that the system imposes on him. No one knows what he will do next, on North Korea or Mexico. So, sure, speculate on what Xi Jinping’s search for all-encompassing power means for China, but what about the erstwhile rule-maker becoming the rule-breaker?
Managing decline is more difficult than managing success. Companies have to downsize, get rid of employees and trim costs, or go bankrupt. Rarely does this process produce happy outcomes, or corporate heroes. But what of entire economies? Domestically, the burden of loss (of manufacturing, in the US case) is always borne unfairly, creating social and political pressures that break the mould and pose fresh questions. If good answers are found, the system acquires a new balance. What if not? We get Mr Trump. Economically, the urge to protect primacy has led to the revival of bad old ideas. Internationally, there is a progressive loss of control—as Rome saw. Then as now, decline encourages challengers, like Russia today.
Mistakes have paved the way to this point. China was misread as a country that would normalise (ie, become democratic) as it grew prosperous and acquired a middle class—and on that basis given trade concessions that have come back to bite the US. Beijing played a clever hand, promising a “peaceful” rise, but has started behaving like any other hegemon—a very different kind of normalisation from the one hoped for. Iran was misconstrued as a country that put cause before country, and therefore mishandled. Iraq was a comprehensive botch-up, and Russia might have been more cooperative if the West had honoured its agreements a quarter-century ago, or given it a little space around its periphery. As with companies experiencing hubris, so with countries: The unipolar moment was too heady for diplomatic restraint. Articles in Foreign Affairs were asking what was wrong with an American imperium.
It is not just the US that confronts decline. So do some of its key allies, like Saudi Arabia, which has lost control of the oil market and faces also the regional risk of a rising Iran. It responded first with a stab at regaining control of the oil market through over-production, but that proved self-defeating. Now, as technological developments threaten the decline of oil, and therefore an end to easy Saudi prosperity, it attempts long-ignored domestic reform, but in the personalised way that countries without the required institutional strengths try to manage change. As Gorbachev discovered when he tried to manage Soviet decline without fully comprehending what his proposed changes would mean, success is not guaranteed.
By special arrangement with Business Standard.
America’s decline is a reality.It will continue to do so.Any one, be it an individual or a nation who lives beyond its means are bound to do so.Back in 1963 President Kennedy two weeks before his assassination saw that national debt was 300 billion and told Douglas Dillon his treasury secretary that it was avoidable in peace time.Later presidents,Johnson , Nixon and Ford piled up more debt and by the time Carter became president debt was marching towards trillion.Carter was acutely aware of the danger and tried to control it by fiscal measures.But if Kennedy was assassinated carter was politically assassinated.Later presidents did not care about borrowing more.And innocent people like this reader were given to understand that accumulating debt is a planed to boost economy and it is was good.We did not hear Paul Samuelson or Milton Friedman saying anything otherwise.Come Reagan adventures first Iraq war etc the debt was 4 trillion the debt was 4 trillion.Years and years later we hear that those in the know were aware that America (thanks advent internet) would not be able to repay the debt but would go by servicing it.What a deception.!!When Clinton demitted office it was 5 trillion.And BushJr. ni the wake of second Iraq disaster not did not raise the tax,(as one doses to raise resources for war) but lowered and even boastfully refunded so that as we saw on TV” to enjoy”.Obama took over with 10 trillion debt.It had to grow exponentially and irreversibly for the simple reason that even to service the debt money had to be borrowed even with interest rates held ridiculously low.The final straw, almost, is the election of Trump.With huge reduction in corporate tax,huge increase in defence spending and interests on existing borrowings, statisticians will find it difficult to calculate thew debt by the time Trump leaves.One thing is certain Debt once incurred will have to be payed back.Who and haw all these trillions will pay back is the question.America cannot and will not.America’s decline is complete and fall is inevitable.That is an imperative.Be prepared for that.No measure military strength can avoid it
The emerging parity between China and the United States is something India should factor into its foreign policy choices, over the course of this century. Natural allies is a nice phrase to use sometimes, but it is not easily converted into a durable, mutually beneficial special relationship, of the sort Britain and Japan have had. China’s rise is no longer entirely peaceful. It will not become a democracy by choice. The wise course for India would be to engage with it comprehensively, give more salience to trade and investment, accept the asymmetry that has developed and is largely irreversible, avoid bravado and adventurism.