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Magazine / foreign affairs

The End of the American Interlude

The Cold War ended 20 years ago on Christmas, beginning an era dominated by the United States. Now that period is over. But it’s not clear that the international system can survive in a leaderless world.

Authorship: The world’s monetary management system was born in Bretton Woods, N.H.(AP Photo/Abe Fox)

photo of Michael Hirsh
December 15, 2011

Cannes, France, is a Riviera playground best known for sun, sea, and celebrities. Not the sort of place where big historical stuff generally happens. But this schmoozing site for film stars and other glitterati—along with, less dramatically but more consequentially, the leaders of the G-20 nations last November—may well hold the distinction of marking a major moment in the post-Cold War world. You might call Cannes the place where American dominance finally came to an end, by consensus.

The Germans, the strongest power on the Continent, considered President Obama’s appearance at Cannes last fall to be a “disaster,” in the words of one senior German official. The president spent most of his camera time blaming the Europeans (read: Berlin) for the euro crisis that could cost him his presidency. “Who did he think he was?” the official asked. “We don’t lecture you about your budget problems.” Who indeed. The Harvard-educated Nobel Peace Prize winner was no longer—in that overused Cold War appellation—“the leader of the free world.” He was just another poor player with his own parochial concerns.

The Cannes conclave was hardly the first evidence that the American president has become just one of many G-20 leaders who come and go without getting what they want. At the summit in Seoul, South Korea, a year earlier, Treasury Secretary Timothy Geithner had proposed a plan to limit the trade deficits and surpluses of G-20 nations. Not only did participants contemptuously swat down Geithner’s idea, but some also said that it set back the discussion—at least until South Korea, a nation that was once little more than an American protectorate, swooped in with a milder set of unenforceable “indicative guidelines.” The outcome delayed, yet again, any serious decisions on trade imbalances, but at least it preserved the appearance of consensus.

 

Welcome to the future. What we are witnessing, at G-20 meetings and elsewhere, is the emergence of a leaderless world that is dangerously adrift. Often foretold in books such as Niall Ferguson’s Civilization: The West and the Rest, the phenomenon is now occurring on the ground. And not just in the economic realm: NATO’s recent intervention in Libya was the alliance’s first major military effort conceived and led by Europeans. Meanwhile, troops are leaving Iraq, the last large-scale unilateral exercise of American hard power that the world is likely to see for a long time, if ever again. A campaign that began wishfully as “shock and awe,” a demonstration of America’s righteous might, had little impact abroad. (The Arab Spring took inspiration from a self-immolating fruit seller, not a democratically elected Iraqi parliament.) The United States remains, technically, the world’s only superpower. But in the past decade, we have spent trillions of dollars deploying this vast military superiority—and to what end? Neither Iraq nor Afghanistan offers a clear victory.

Mostly what has been achieved, it seems, is to expose our economic and military vulnerabilities. The success of insurgents in both countries demystified U.S. power in the eyes of the world. “Whatever Washington thought it wanted when it invaded Iraq in 2003, it was not the establishment of Shia religious parties with links to Iran in power in Baghdad,” wrote one British critic, Patrick Cockburn of The Independent, this month. “Similarly, in Afghanistan, a surge in U.S. troop numbers and the expenditure of $100 billion a year has not led to the defeat of 25,000 mostly untrained Taliban fighters,” he wrote. “Great powers depend on a reputation for invincibility and are wise not to put this too often to the test. The British Empire never quite recovered in the eyes of the world from the gargantuan effort it had to make to defeat a few tens of thousand Boer farmers.”

The problem is much bigger than the United States. If Washington is no longer the agenda-setter it once was, can a leaderless world continue to enjoy peace and stability? Can the “international system” as we know it today survive without its father in the driver’s seat? The question is as important for America’s future as, say, détente versus confrontation was during the Cold War, or isolationism versus engagement during the rise of fascism. “I don’t know how this is going to play out over time,” says a senior U.S. official who helps direct the U.S. agenda at G-20 meetings. “The Europeans have quite adroitly used the relative international diminution of stature of the U.S. in this crisis as way to get themselves back in the driver’s seat.” But Europe has its own existential crisis, which means that it, too, is unlikely to lead.

If history is any guide, a global system of open trade and peaceful relations cannot survive under such conditions. Through most of recorded history, and in every region of the globe, an international power vacuum has meant a ruthless jostling for military might, empire- and alliance-building, and sometimes worse. The fall of Rome ushered in the Dark Ages. The Congress of Vienna that imposed European order after the Napoleonic wars broke down in terrible conflicts by the late 19th century. The end of European empire precipitated World War I.

The G-20 was created in 1999 and ignored for a decade. It won a battlefield promotion during the financial crisis.

Some experts, such as Princeton University’s John Ikenberry in his new book Liberal Leviathan, argue that institutions like the United Nations and the World Trade Organization—and the overall benefits of trade, democracy, and openness—are now so well entrenched that the global system can prevail on its own. In rebuttal, political “realists” cite the overnight demise of the pre-World War I era of globalization, a halcyon period of free trade that had seemed almost as promising as today’s U.S.-designed system. The skeptics point to catastrophically wrong predictions like that of Norman Angell, whose 1911 book, The Great Illusion, argued that economic interdependence would prevent another major war.

Indeed, a similar breakdown of international order might already have occurred if Washington had reverted to its traditional isolationism after World War II. A resurgent Japan might have become a nuclear power and competed against China for regional hegemony. Europe would have devolved into age-old wars and rivalries. Lacking the annealing structure of the postwar Atlantic alliance, the Continent might never have achieved monetary union. Russia would have bid for Eurasian dominance, as it has since the 17th century. Most important of all, the trading system, which the United States virtually reinvented after World War II, would almost certainly have broken down, killing globalization in its infancy, reinforcing all the above developments. A major war of some kind would have been much more likely—and, despite the nuclear era, it might not have remained cold.

SIGNS OF DECAY

Already signs are emerging that, absent American leadership, the seams are unraveling. Recent G-20 outcomes have been close to incoherent: The world’s major governments didn’t just fail to devise a coordinated strategy for avoiding double-dip recession. In Washington and European capitals, they have embraced policies (for varying domestic political reasons) that most economists argue are the opposite of what is needed. They are pursuing austerity, in other words, when the world needs a concerted stimulus. The 50-year effort to strengthen rules for open trade—so integral to global stability since the General Agreement on Tariffs and Trade began in 1947—is also badly adrift; the 10-year-old Doha Round of talks has been at an impasse since negotiations broke down in 2008.

In fact, the only real evidence of global economic coordination in recent months has come from unelected central bankers, as seen in the coordinated rate cut of early December. And while Europe’s economic troubles will probably have more impact than any other factor on America’s economic health (and on the 2012 presidential contest), senior U.S. economic officials have found that they possess just one voice among many—and not even a major one—trying to bring the 17 eurozone countries and 27 European Union nations to consensus.

America also seems helpless to affect the outcome of the revolutions in Egypt, Syria, Tunisia, and Yemen. At first, these seemed consonant with the spread of democracy that Washington has always favored. But now, if any outside force is shaping events, it’s the autocratic and brutally repressive regime in Saudi Arabia. Why? Because U.S. and European actions are being guided, more and more, by the decisions of the Gulf Cooperation Council and the Arab League, both of which are ever more dominated by the Saudis. As columnist David Ignatius wrote recently in The Washington Post, “Saudi Arabia has increasingly replaced the United States as the key status quo power in the Middle East, a role that seems likely to expand even more in coming years as the Saudis boost their military and economic spending.” And a top Saudi prince recently told U.S. officials that Riyadh wouldn’t depend on U.S. security reassurance in the region, saying that the threat from Iran and Israel means that Saudi Arabia must consider building its own bomb. “They no longer trust us,” says a former senior U.S. official who visited the kingdom in December.

Russia, too, is in turmoil, and all the world can do is watch, wait, and hope. Twenty years ago this Christmas, when the Soviet Union (more or less) peacefully disbanded, U.S. economic advisers almost immediately began dispensing advice on what was then called democratic transition, and the Russian elite listened eagerly. Now, nuclear Russia appears on the verge of another revolution, and Vladimir Putin is telling the United States to keep its nose out.

Most unnerving of all, perhaps, is the rising global role of China. Beijing could choose to be a rogue power that routinely flouts trade rules, manipulates its currency, and steals intellectual property—leading to an ultimate breakdown of the global trading system. U.S. officials for years have pressed Beijing to become a responsible “stakeholder,” but the Chinese may have no incentive to listen if that system’s very survival is in doubt.

These problems will shape the world in which our grandchildren grow up. Yes, the United States has no military rival, even on the horizon. Maybe, 50 years on, the world map won’t look very different. It could be, in other words, a world of occasional wars and political flare-ups, but one where trade and international relations continue largely as they are, especially if the United States and Europe stay on the same page. Or, given today’s rudderless environment and current trends, it could also become a much more violent, uncertain world with rival, duopolistic spheres of influence run by Washington and Beijing. Or it could even become an ugly multipolar world dominated by “the United States of Europe,” Moscow, Washington, and Beijing—one where vicious mercantilist trade and occasional proxy wars (or something far worse) define the contest.

THE ESSENTIAL NATION?

Great powers typically decline very slowly. It took years before the world realized that Great Britain was an imperial corpse in the mid-20th century, sapped of its strength by two world wars. In 1947, a quick passing of the baton took place. The United States would now fill Britain’s role and become the central, stabilizing power in the West. The rest of the world, perhaps, didn’t realize how lucky it was to have such an orderly and seamless handoff.

The Cold War also ended quietly (though many had expected a big bang). For four decades, two ideas of social and political organization waged a titanic battle with apocalypse at stake. Then—on Dec. 25, 1991—Mikhail Gorbachev officially handed over his powers to Boris Yeltsin, and the Soviet Union ended its existence. The United States became, by accession, the world’s “hyperpower,” as French Foreign Minister Hubert Védrine described it at the time, reaching rhetorically for some new level of awesomeness not quite covered by the term “superpower.”

The ensuing 20 years at first seemed a time of triumph for the United States. After all, it had so clearly outperformed the Soviets, outspent them, and exposed their system as an ideological and economic fraud. Washington did some things right: Coaxing most of the former Soviet bloc states and allies, and many East Asian nations, into the Western system. But we never developed a new strategy. We tried “democratic enlargement” (Bill Clinton), “assertive multilateralism” (Madeline Albright), “the Bush Doctrine” (don’t ask), and now Obama’s no-doctrine presidency.

Instead, this 20-year era has been a kind of lost generation of diplomacy and errant war—a time, mostly, of confusion. No one calls the United States a hyperpower now. Given the paralyzed state of American politics; the indefinite state of indebtedness (especially to China); and the “rise of the rest,” especially China, India, and Brazil, this era is looking more like an interlude. The British maintained their imperial power for two centuries through a savvy (and somewhat ruthless) system of taxes and colonization, but Americans spent recklessly in the service of ideology—both through supply-side-inspired tax cuts and neoconservative pretensions about the projection of American power—and we stopped paying attention to how we were financing it all. Partly as a result, partly because they are enjoying their own success within the system, other nations have stopped taking our advice very seriously. It’s not that the so-called Beijing consensus is replacing the Washington consensus. Instead, there simply is no new consensus out there.

One problem we have in sketching out a future course is that no one has really done a good job of defining the present system—in other words, how deeply entrenched the international system is in our world, or how it might differ from the past.

Like Princeton’s Ikenberry, I have argued (in a 2003 book, At War With Ourselves: Why America Is Squandering Its Chance to Build a Better World) that the current network tying together markets, governments, and peoples is far broader and deeper than any of its predecessors, including what existed before World War I. Today, for the first time ever, most of the world is democratic, and most nations embrace similar ideas of open-market capitalism. In the security realm, the powers that could cause America the greatest headaches—China and Russia—are motivated to keep at least one foot inside the system because they’re both proud permanent members of the U.N. Security Council.

No country, not even would-be rogues such as Iran, has yet found a way around these iron operating laws: In order to be influential or powerful, a nation must be prosperous; in order to be prosperous, it must engage the international system of open trade (rather than conquer territory, as it might once have done); and in order to engage, even countries with dramatically different political and social systems, like America and China, must act according to the set of norms governing trade and conflict (if not yet, sadly, human rights). There seems to be no other choice. So the system has an internal logic that should give it natural life outside of U.S. dominance. As Obama put it on a trip to China in 2009, the American and Chinese economies are so integrated that to disentangle them would mean a kind of “mutual assured destruction.”

This is all to the good. But many political scientists insist that American global power remains the essential glue to this system. Charles Kupchan, a former Clinton administration official teaching at Georgetown University, argues that it’s almost impossible to keep the rules of the world system intact without an enforcer that guarantees global security. Until now, that has been American hegemony, not least because the U.S. has used its military dominance to amass scores of allies around the world. But how supportive will those allies be at a time of waning U.S. power, with China and other rising nations buying their own influence?

Perhaps no better augury of this future world exists than the G-20 meetings. The Group of 20 was created in 1999 by Europe and Canada and largely ignored for the next decade. But Beijing, which never wanted to join the U.S.-dominated G-8, found a home there because it seemed to be a more level field, with more natural allies among developing countries. “The formation of the G-20 is a Catch-22 of sorts, in the sense that the advanced industrialized nations had to enlarge the circle because the post-World War II order was anachronistic,” Kupchan says. “But when you’ve got 20 countries around the table, that’s a lot of cooks in the kitchen.”

Predictably, the G-20 has become a cacophonous convocation with no conclusion. For decades, American leaders at international gatherings have been first among equals. At the United Nations, NATO, and the WTO, Washington has usually enjoyed a baked-in-the-cake dominance, at least in setting the agenda. The president of the United States acted as a kind of informal president of the world—the quarterback of a sort of open-ended global game of nations and interest groups, whether the issue is free trade, geopolitics, or terrorism. This happens less and less. “It’s relatively hard to have a conversation,” the senior U.S. official says. “People take stylized positions that make it tougher to get a consensus agenda.”

But the G-20 won a battlefield promotion during the financial crisis of 2008, when government leaders elevated it by common consent to semiannual summit status—because it included China, South Korea, and other important creditor nations—and turned it into the world’s preeminent economic forum, eclipsing the G-8. This unwieldy group came of age amid U.S. weakness and culpability, with Wall Street as the chief culprit in the Great Recession. As a result, U.S. proposals have, if anything, gotten less attention because they emanate from Washington. At Cannes, for example, German Chancellor Angela Merkel quite publicly repudiated the Obama administration’s idea for putting hard bands around trade imbalances. “To set political limits on trade surpluses and deficits is neither economically justified nor politically appropriate,” she said—although a year later Merkel herself would propose, in an effort to save the euro, “political” limits on budgets of the E.U. nations. Not coincidentally, that plan appeared to emerge without any American input at all.

DARK FUTURE

Of course, some prominent thinkers, including Obama, still dispute the idea of American decline. Like every other president, he calls America the “greatest nation on earth” as blithely as he breathes. Europeans and many East Asians—especially those thinking about the rise of China—say that U.S. power is as essential as it has ever been. Some longtime scholars of the international system, such as former Deputy Secretary of State James Steinberg, say that the United States has staying power. “If you unpack it, the favorable views of the U.S. in Latin America are at historically high levels now,” he says. “Views of the United States in East Asia are extremely high. Views of the United States in Russia and Europe are extremely high, in historical terms.” Although it’s true that a deficit-hampered America is spending a huge amount on defense—more than the rest of the world combined—it may pose no problem. “Our share of global defense spending has risen, but it’s still a very minor share of [gross domestic product] so as long as the economy is growing,” Steinberg says. “The country has sustained dramatically higher defense spending than this. If we’re under 4 percent of GDP for defense spending, that’s sustainable over an indefinite period.”

So far, none of the major powers—the European Union, Japan, Russia, even China—has orchestrated a major military buildup in a bid for global power. Scholars going back to Thucydides argue that economic power inevitably tries to convert to influence on the world stage. So theoretically, countries like China, Japan, and new hybrid structures like the E.U. should be trying to convert their economic strength into military and strategic power. They all occasionally make noises about doing so, but their defense spending has remained steady and, even in China, not terribly aggressive. All of this has helped the global system survive terrorist attacks (which didn’t provoke a clash of civilizations) and a slew of financial crises (which didn’t herald the return of protectionism).

But the United States will find it extremely difficult to exercise its military dominance in the future, whether in counterinsurgency wars or more-traditional ones. Inside the Pentagon, officials are debating how to handle the rise of China, and the focus is shifting from Army-led counterinsurgency toward an Air Force and Navy kind of war-fighting strategy called “AirSea Battle.” The United States is not likely to ever again be as dominant as it was during the brief period of “smart bombs,” when the world stood in awe: Long-range and precision missiles are being commoditized, and the Chinese are developing their own. U.S. strategists, in response, are refining a doctrine of “assured access” to East Asia that means Americans would have to take the fight, in a hypothetical war, farther and farther inland in China to prevent those long-range missiles from being used. But critics say that’s an impossible task, especially with the budget knife now hitting the Pentagon. It is a standoff that could leave the world, again, without a clear leader or even a stable balance of power.

Meanwhile, China is throwing its weight around Asia, seeking to strong-arm Australia and Southeast Asian nations into alignment on geopolitical issues. Russia bullies members of the old Soviet sphere by punishing them with gas shutoffs or by supporting pro-Russian separatists inside their borders. In the Middle East, U.S. power is declining more rapidly than in other places, inspiring countries such as Saudi Arabia and Iran, vying for influence with Israel, to develop their own nuclear weapons. In an environment with no strong leadership on global trade and integration—where mistrust and new destabilizers such as cyberwarfare are rising—conflict is much more likely.

The world system has entered the dark rapids of the future—of changes whose consequences could be huge but remain utterly unknown. What eurozone leaders and Russian voters decide in coming months will be one guide. What American voters decide in 2012 will be another. The role of the G-20 may also be crucial. But given the conflicting interests and disparate levels of development, such forums could remain chaotic and indecisive. If so, will they eventually fall apart, leaving the world once again in what political realists have so long described as its default position: chaos?

History is not a hopeful guide.

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