The Decline and Fall of the American Empire?

[Edward Campbell]

Here, from today's Globe and Mail, is an interesting Comment from John Crispo who was a well know public intellectual (TV 'talking head' if you like) and later Dean of the Rotman School of Business at the University of Toronto.

http://www.theglobeandmail.com/servlet/story/RTGAM.20050812.wxcocrispo13/BNStory/specialComment/ 

Uncle Sam's puzzling decline

By JOHN CRISPO

Saturday, August 13, 2005 Updated at 12:53 AM EDT
Globe and Mail Update

It is with a combined sense of foreboding, regret and sorrow that I write this article. It is also in the knowledge that I will be accused of being an alarmist and an extremist. I believe we are witnessing more than the beginning of the decline and fall of the United States.

I'm depressed about this prognostication because I don't see hope of a more benevolent world policeman than the U.S. Admittedly, it has made mistakes in recent years. But I only have to think back to the Marshall Plan's critical part in resurrecting West Germany and the rest of Western Europe, and to the U.S. management of the transformation of Japanese society after the Second World War to appreciate how sorely we will miss it as the only real cop on the world beat. Nor do I foresee a reasonable alternative - certainly not the United Nations, which is hopeless, or China, which is frightening.

The manifestations of the U.S. downfall are becoming more and more apparent. Clearly, the U.S. is overextended militarily, bogged down as it is both in Afghanistan and Iraq. One wonders how it could handle another major crisis in the world without resorting to unacceptably drastic measures.

In terms of its fiscal and trade position, the U.S. is running larger and larger deficits, which cannot be sustained. This is setting the stage for what some have described as "the perfect economic storm." If something precipitates a run on the U.S. dollar (one thing saving it right now is the lack of a credible alternative as a monetary store of value), the results would be devastating. In an attempt to protect its falling currency, the Federal Reserve Board would have to raise interest rates significantly, thereby killing its housing boom. In addition, this sharp rise in interest rates would raise the carrying costs substantially for its massive debts, both private and public. Having no savings to fall back on, American consumers would be forced to cut back dramatically on their spending. Investment could take an even bigger nosedive, while how far the stock market would tumble is anyone's guess.

As the U.S. economy staggered, the repercussions for countries like China, Japan and Canada, which depend so much on the U.S. market would be telling, to say the least. Indeed, it's probably the fear of these repercussions that explains why so many countries are so reluctant to dump their U.S. dollar holdings, despite the huge losses they've been taking on them. But this only postpones the inevitable; adjustments will be more severe the longer it is delayed.

Fiscally, the U.S. has been so reckless at the federal level that one must query how much further it could go in deficit financing to try to stem the downward economic tide without running out of credit. And this at a time when it is also facing massive bills for homeland security, infrastructure deficiencies, and virtually all forms of social security. One has to wonder when the well will run dry.

Yet as worrisome as all these major concerns are, they still do not go to the heart of what bothers me most about the U.S.'s economic prospects. There are two other critical developments that are at the core of my concerns - one being the deteriorating state of America's education system and the other its declining research and development (R&D) capability.

To assert that the U.S. education system is failing the country is to put it mildly. By every measure, the performance of U.S. students continues to decline in international comparisons. Just take the number of engineers that the U.S. is graduating as a proxy for its general education malaise. At 60,000 per year, it stands at about one-sixth of China's output. Although there is undoubtedly some quality variation in favour of the U.S., this quantitative difference is bound to prove overwhelming.

The engineering deficiency is reflected in the slipping position of the U.S. when it comes to R&D. Some reports say India, another country that is graduating far more engineers than the U.S., is now generating almost as many patents as the U.S. for multinational corporations.

To stay ahead in a world of rapidly advancing technology, one cannot afford to be falling so far behind in education and R&D. I used to argue that it doesn't matter where the newest technology is invented as long as a country has the capacity to adopt and diffuse that technology as fast as its rivals. But that, too, ultimately depends upon having skilled talent to do so.

I've also been comforting myself by thinking that if the U.S. recognizes its education and R&D gap soon enough, it still has the resources to take on the challenge, much as it determined to conquer outer space and to win the cold war. Now I find myself increasingly questioning whether the U.S. can muster either the will or the means to rise to the challenge soon enough to turn itself around.

The most frightening aspect of this challenge is how little recognition there appears to be of it. There is debate in the U.S. about its overstretched military and about its rising fiscal and trade deficits. But there is precious little discussion of its education and R&D shortcomings, which in the end make other problems pale by comparison.

The consequence of our neighbour's prospects will be devastating for Canada. But worse still, in my judgment, will be the ramifications for the world at large - economically, militarily, politically and socially. Those who resent America's pre-eminent position in the world and cannot wait for it to end should be thinking more than they do about the alternatives. If they did, they might conclude as I have that we have a tragedy in the making. I wish somebody could convince me that I am wrong.

John Crispo is dean emeritus of the Rotman School of Management, University of Toronto.

© Copyright 2005 Bell Globemedia Publishing Inc. All Rights Reserved.​

A couple of important points (important to me, anyhow):

"¢ Crispo is ruminating with an appropriate long view, his Decline and Fall must be the work of decades;

"¢ Historically, all the mighty (countries, empires, dynasties) fell, without fail.  This was the same for Egypt and Babylon, the Qin and the Romans, the Mongols and Moguls and the British, too.  I see no sign of a divine hand in any of the empires of history and I suspect, therefore, that none will prop up America, either; and

"¢ Crispo offers no solutions,

I have no solutions for America's inevitable Decline and Fall but I do have some thoughts on what Canada should do to protect and promote its vital interests, before during and after the process.

We must do whatever we can to:

1. Slow the rate of American decline; and, simultaneously

2. Reduce our exposure.

How can we do this?

First: we must help America to retain its pre-eminent place and, later to share that place with China.  There are two things we can do:

"¢ Help America to build and maintain a loose but loyal coalition of like-minded, law abiding, constitutional democracies, beginning with the Anglosphere: Australia, Britain, Canada, New Zealand, Singapore and the United States.  I need to emphasize that this cannot and should not be a formal alliance which cements the US leadership role.  Very often highly formal multi-national constructs like the UN and NATO are crippled or, at least, hobbled by their formal structures.  That lack of formality does not mean that the alliance is any less real or strong.  The strength of the loose alliance will be based upon real, current self interest - and that always trumps fancy formal declarations; and

"¢ Start, now, to negotiate a comprehensive free trade arrangement with China - an arrangement which permits the free flow of goods, services, capital and jobs.

There are things America can, and I think will do for itself:

"¢ Shore up its existing alliances - the Bush administration's foreign policy has been helter-skelter to say the least.  It is not clear, to me, that this administration - despite the presence of a large number of real, certified intellectual heavy weights - has a coherent world view.  My personal opinion is that President Bush has a 'Gott mit uns' world view (and no, I'm not making any comparison with any German person or any German administration) which does not serve him, or America well.  I repeat: that's my personal opinion.  America is the pre-eminent global power - the hyper-power for the moment, but it does not have the capacity to do everything, especially not at once, and not even if none of the major powers object.  America needs friends and allies and I'm afraid that Romania is not a good replacement for Canada and El Salvador's support does not counterbalance France's opposition.  Coalitions of the willing are not effective substitutes for formal alliances, based on shared principles;

"¢ Obey the rules to which it agreed - not only with Canada in NAFTA, but with all of its traditional friends in a whole host of fields.  The WTO is chock-a-block full of actions which friends are bringing, and winning, against America because this American administration appears to have decided that manifest destiny exists (it never did, it doesn't now, it never will).  This one act will do as much as anything else to smooth the way for shoring up alliances.  The various and sundry Pew opinion surveys are consistent - most of the world, including most of the people who are America's friends consider the United States an ill informed global bully, a caricature of the classic school-yard bully.  True or not, it is a devastating opinion.  More and more it appears that, in multilateral matters, the elder Mrs. Bush is saying, "Oh, there's my boy George W.  Look!  He's the only one in step."

"¢ Slow public spending - the American deficit does matter.  It cannot be self sustained.  China, not Wall Street or the Fed, is setting interest rates, for now.  China can be trusted to protect and promote its self interests and they are not coincident with America's; and

"¢ Restore America to a top rank position in education and R&D - I agree with Crispo that these are the really important leading indicators of American decline.

The last two apply, in spades, to Canada.  Our public spending has been out of control for 35 years.  It must be reigned in.  Canadians cannot have their cake and eat it too, not for much longer.  That does not mean that we cannot have universal health care: France does and it spends only 2/3 of what Canada does on health care.  (Those who follow my ramblings in army.ca will know that I am no fan of France or, especially, its governments but in some things the French are better than us: health care is one of those things.)  It means that we spend prudently, and wisely, for the greatest 'good' (which is different from 'benefit') for the greatest number.

Our public education system is a mess; it, not just smuggled guns, is what we have an epidemic of gunplay in some Toronto neighbourhoods.  The public education system - Kindergarten to graduate school - has failed Canada and Canadians, especially young black men in Canada.

Anyway: something to chew over.

 

[a_majoor]

Many of these observations are far too true, and I suspect most of it can be traced back to the failure of the public school system since the 1960s. several generations have been raised to adulthood without any holistic view of how things work, hence the short term expediency of foreign and economic policy in both Canada and the US.

While there is some recognition about looming problems, realistic solutions such as private social security accounts in the US or privatizing Canadian healthcare are fought tooth and nail by people interested or benefiting from the current status quo, without reference to future developments or trends. The general public does not have the ability to understand the current problems; and here in Canada (and to a lesser extent the US) they are easily sucked into the paradigm of "More Government programs/spending" as the solution to various problems, simply compounding the underlying economic problems.

I wonder what might happen if the fear mongering about trade of currency deficits unleashes a panic stricken buy or sell off of assets. The last great depression was lengthened and deepened by the "New Deal", as constantly shifting regulation and confiscatory taxes stifled capital formation and job creation, I don't think this crop of politicians know enough to take their hands of the wheel of the economy. If we get away from fear mongering, most of these capital overhangs will correct themselves in time (Chinese investors will not want to loose the value of their investments after all). On the other hand, China does not seem interested in "free trade" with the United States or minor players like Canada. She is certainly interested in gaining access to our resources, though.

Edward's observations about the need for the Anglosphere to pick up the slack from failed institutions like the UN or time expired ones like NATO are quite correct. The only sad note is the "New Anglosphere" will probably be England, Australia and India, since Canada is choosing to sit out on the world stage, New Zealand seems to have done a "Canada" in the southern hemisphere and the other "Anglo" nations like the Carribean islands have very little resources or clout to add.

America does have one thing that previous Empires have lacked; a flexible social fabric. So long as people of true ability can rise to the tops of their chosen professions (people as varied as Andrew Grove or Dr Condolezza Rice), then there is still hope of new and unusual solutions being created and implemented. Nothing is forever, but I suspect America can last longer than most.

 

[LF(CMO)]

"America does have one thing that previous Empires have lacked; a flexible social fabric. So long as people of true ability can rise to the tops of their chosen professions (people as varied as Andrew Grove or Dr Condolezza Rice), then there is still hope of new and unusual solutions being created and implemented. Nothing is forever, but I suspect America can last longer than most."

Thanks for the above.  Dr. Rice will be 'on the ticket' in the next election as the Pres or as the Vice with John McCain.  That's why the US of A is a long way from dead yet!!

 

[Monsoon]

well far be it from me to disagree with you on any of your points, the US has always made sure that countries had access to its markets, contrary to CDN or any other talking heads.  If it wasn't so free with trade do you think there would be such a large trade defecit?

That's an interesting take on things.  Have you heard about the softwood lumber dispute?

I would like to add is that it is rather telling since 40% of another country's population (Mexico) would move to the US, I wonder if the same percentage would move to China? 

Probably not.  But I expect that that has more to do with proximity and language similarity than with any manifest destiny.

One final thing....there is a commodity than no other "EMPIRE" ever had and that is freedom.....

The British Empire was so free that it granted independence to all its overseas holdings.

besides most of us in the US don't want to be the World's policemen....we want everyone to carry there own weight!

...in fulfilling the US' wishes.  How generous.

And before anyone accuses me of being anti-American, I'm not.  But I think a little more honesty from our friends to the south about why they pursue the foreign policy they do would be in order.

 

[Jascar]

Probably not.   But I expect that that has more to do with proximity and language similarity than with any manifest destiny.

Proximity and language barriers are not the issues here. I suspect most Mexicans would rather move to the US where there are labour laws, a minimum wage, and a high standard of living. Or these Mexicans could go to China and work as virtual slaves in a factory where they'll likely be stuck for most of their lives, barely earning enough to feed themselves. I do believe that's what they're trying to escape in Mexico. This was a minor point in your argument but come on, who are you kidding trying to convince us that people actually want to emigrate to China?

 

[Monsoon]

Proximity and language barriers are not the issues here. I suspect most Mexicans would rather move to the US where there are labour laws, a minimum wage, and a high standard of living. Or these Mexicans could go to China and work as virtual slaves in a factory where they'll likely be stuck for most of their lives, barely earning enough to feed themselves. I do believe that's what they're trying to escape in Mexico. This was a minor point in your argument but come on, who are you kidding trying to convince us that people actually want to emigrate to China?

I didn't mention China in my argument for a reason.  My point was that proximity and language play a greater role than an abstract notion of "freedom" or "greatness".  Obviously prosperity and a decent standard of living plays the largest part, but I think you would find that if Canada had a large Spanish-speaking population and were situated next to the Mexican border instead of the US, 40% of Mexicans would want to move to Canada.  The point is that there's nothing particularly special about the US in that regard, beyond language and proximity.

 

[48Highlander]

Guatemala and Belize are just as close, and have a higher percentage of Spanish speaking individuals.  I don't see 40% of mexicans wanting to move there though....ESPECIALLY prefering to move there instead of to the US.  I don't get how you can claim that location and language are the main factors.  Individual freedoms and the economic situation are much more important.

 

[Jascar]

The point is that there's nothing particularly special about the US in that regard, beyond language and proximity.

Why are thousands of Mexicans trying to sneak into the US and not the other way around? Do you think 40% of Americans would move to Mexico? Surely the USA must have something special to offer other than language and proximity.

 

[Kirkhill]

the repercussions for countries like China, Japan and Canada, which depend so much on the U.S. market would be telling

his

This is the reason that I don't think the Yanks are going to shuffling off the scene any time soon.  Too many countries, and corporations, and people, and politicians (no they are not a subset of people) have got a vested interest in keeping them afloat.  There is no current alternative to the Dollar.  The Euro was a run at it but it is looking kind of wobbly these days as well.  The Brits are planning on issuing new coins for the first time since 1971 - if they were expecting to join the Euro sometime soon its unlikely they would be doing that.

Many countries could likely take down the international monetary system but in the absence of an equally strong competitor the outcome is likely to be closer to anarchy than change of regime.  Countries like India, China, Russia, the US and even Canada would likely be more susceptible to fragmentation.

While Osama may like that outcome, and even work towards it, he not only has to fight the US but all other countries with something to lose.

It is kind of the principle if you owe the bank 100,000 dollars the bank owns you.  If you owe the bank 100,000,000 dollars you own the bank.  (Inflation has taken its toll - I first heard that aphorism as 1000 and 1,000,000)

Now in 50 to 100 years, maybe even 25, the world may look different but people have been predicting the demise of the Yanks ever since they played "The World Turned Upside Down" at Yorktown.

Still waiting.

 

[Monsoon]

Guatemala and Belize are just as close, and have a higher percentage of Spanish speaking individuals.  I don't see 40% of mexicans wanting to move there though....ESPECIALLY prefering to move there instead of to the US.  I don't get how you can claim that location and language are the main factors.  Individual freedoms and the economic situation are much more important.

Sigh.

Why are thousands of Mexicans trying to sneak into the US and not the other way around? Do you think 40% of Americans would move to Mexico? Surely the USA must have something special to offer other than language and proximity.

I see the disingenuity crowd is out in force tonight.

Yes.  As I mentioned before, the major factor is prosperity and quality of life.  Neither of these qualities, you'll agree, is unique to the US in any way.  What is unique to the US is proximity and language, in addition to prosperity and quality of life.  While Guatemala or Belize enjoy close proximity to Mexico, they lack prosperity and quality of life.  While Canada and Great Britain enjoy prosperity and quality of life, they lack proximity and language.  That is why 40% of Mexicans would choose to live in the US, according to the uncited statistic mentioned above.

Or does anybody want to insist that it's just a matter of inherent greatness?

 

[48Highlander]

:

So, a good economy, high quality of life, a multiculutural population, and conviniet placement do not equal "inherent greatness" eh?

I'm really confused about what you're trying to prove....

 

[MTAB]

I think EMPIRE is a difficult thing to define these days with the global contributions of all countries.  However (with tongue firmly planted in cheek) l'll take a stab at it.

Empires:

All roads lead to....
The sun will never set on the....
Every where the sun rises will be......
Damned if you do, damned if you don't......

As history has shown, nothing lasts forever

V/R
MTAB

 

[tomahawk6]

The United States is not an empire. Part of the reason for the failure of other empire's was their inability to fund their military to maintain control of their far flung colonies. In an empire you have colonies that are rich and others that are poor. The rich colonies subsidize the poor ones.

The US economy is the strongest economy in the world. Job growth is the best of any industrialized world. Taxation is conducive to investment and job growth. The trade deficit isnt important. The democrats decried Bush's tax cuts. Yet those tax cuts have fueled the rebound of the economy. We have a true free market economy and as long as those policies are in force the US will enjoy a very strong economy. But one thing I can guarantee, if the US economy collapses so will the world economy as we are so intertwined. Remember the great depression was world wide.

 

[Monsoon]

So, a good economy, high quality of life, a multiculutural population, and conviniet placement do not equal "inherent greatness" eh?
I'm really confused about what you're trying to prove....

The original post I was responding to suggested that 40% of Mexicans want to move to the US because of "freedom".  I was observing that there are many countries in the world with as much (or even more) freedom than that enjoyed by a Mexican in the US.  The specific reasons that Mexicans want to move to the US have to do with the Mexican domestic economy as compared to the US economy, and the fact that that better economy is immediately next door.

This point is pretty well done to death (and I made a number of other points that I guess no one disagrees with) so I'm going to stop making it now.

 

[Mojo Magnum]

While I hold no degree in economics or global politics,

I did sleep at a best Western last night,

I suspect things are far more fragile on the world stage than any of us would like to think.

If the United States continues down the road of conisdering "illegal military action" as a viable diplomatic tool, labeling entire nations as "Evil", and insisting on forcing their American version of freedom on anyone they choose,


We may find that little things like China and Russia performing military training operations together is more relevant than any of us would like.


or,

maybe that was a travel lodge I stayed at....

 

[tomahawk6]

If the United States continues down the road of conisdering "illegal military action" as a viable diplomatic tool, labeling entire nations as "Evil", and insisting on forcing their American version of freedom on anyone they choose,

The invasion of Iraq WAS NOT illegal. This is a lie spread by the anti war crowd. Second, 60% of the population was under the heel of the Sunni's who comprised 20% of the population. Now the Sunni's are fighting to prevent majority rule.

 

[Mojo Magnum]

Dude,

The United States and it's coalition did not obtain approval from the United Nations Security Counsel for the invasion of Iraq.

It was illegal.

 

[Infanteer]

Dude,

This has been discussed in depth before, and we've blown that statement out of the water.   Since when does the United Nations decide what is legal and what is not?   If we go by your measurement, Kosovo was illegal and Canada violated international law by participating in the bombing of Belgrade.

 

[Kirkhill]

Tomahawk:

While I agree that the invasion of Iraq was not illegal, in fact it was not just not illegal it was justifiable on a whole bunch of levels ranging from humanitarian grounds to geopolitical and strategic grounds, I disagree that America is not an Empire.  America is an empire.  But before you get your hackles too high Canada too is an empire. 

Empires are just governments that control a variety of geographically dispersed communities.  The government maintains order, enables commerce and, as you suggested, redistributes wealth.  That was true of the Brits, the Romans and the Egyptians.  It also describes the relation between Canada West, Canada Center, Canada de l'est and Ottawa, between Vancouver, Montreal, Toronto and the Hinterland.  I think it also describes the relationship amongst New York, Los Angeles and Portland, Rochester, Modesto and Yakima, red and blue.

The US and Canada are empires.  Canada, like Russia, is a contiguous empire.  It has no dispersed colonies.  America is a primarily contiguous empire but it has some dispersed colonies. Some of those colonies are places like Guam and Hawaii and Puerto Rico that are various attached to the body.  In other instances there are cities that are dependent on the empire for their livelihood. Some embrace the fact an would like to become part of the empire, some wish to keep their distance and some resent their dependence.  Some parts of the contiguous empire resent their dependence.

Empires break up when more people, more colonies resent the empire than benefit from it and when they no longer see themselves represented in the governing structure.

If America faces a threat it is likely the same threat that Canada faces - the threat of dissolution.  And if that happened it would likely come as great a shock, and surprise, to the Chinese, Russians and Indians as it would to those in Europe and Canada that are constantly harping about America's faults.

 

[Mojo Magnum]

but guys,

what about international law?