Tuesday, November 8, 2011

Reliving British Decline?

History may repeat itself, but it never does so exactly, one reason why historical analogies often mislead. (Consider, for instance, what scholar Jeffrey Record has to say about the "Munich" analogy in American policymaking.) Yet, the same can be said of just about any intellectual tool used improperly – or disingenuously.

The analogy so often drawn between today's United States and the British Empire is no exception to the pattern. Certainly the analogy has often been misused – in recent years, by the neoconservatives in particular. Yet, the parallels between their trajectories are well worth considering nonetheless, and one way of making such a comparison more useful might be (as I suggested in a previous posting) to not simply ask whether the U.S. is comparable to Imperial Britain, but, remembering how both have evolved, to ask which point in British history parallels the present moment.

Given the renewed prominence of declinism in current debates, it makes sense to start with the moment in which the United States was most prominent internationally. This is generally recognized as having been about 1945. At that time, like Britain after the Napoleonic Wars, it was the victor in a conflict that established it as the global hegemon, putting it in a position to shape the international order (politically through the United Nations, North Atlantic Treaty Organization and other American-led institutions, economically through the Bretton Woods system). In part because its economy had boomed while Europe and East Asia were savaged by the conflict (another parallel with Britain circa 1815), its economy is widely reckoned to have accounted for a third of world output. Additionally, its armed forces enjoyed (until 1949) a monopoly on nuclear weaponry, as well as a preponderance of air and sea power, and unmatched power projection capabilities (much as the Royal Navy ruled the waves through the nineteenth century).

Just as Britain continued to prosper in subsequent decades, enabling it to recover from the staggering debt it had accumulated (268 percent of GDP by 1822, according to Niall Ferguson's The Cash Nexus), the United States enjoyed a generation of rapid growth after World War II (an amazing 4 percent a year from 1950 to 1973), sharply reducing the burden of the debt it had amassed winning its war (which shrank from 121 to 32 percent of U.S. GDP between the end of World War II and 1980).

Nonetheless, the Cold War, which is so often thought of as an unalloyed triumph for the American system, started to take its toll from right after World War II. Massive U.S. expenditures on the conflict accelerated the running down of the Bretton Woods economic system (inevitable given the rebuilding of Europe and Asia, and the spread of development beyond these regions). This led to the suspension of the gold standard in 1971 (ending the convertibility of the dollar to gold, just as Britain did with the pound in 1919). The U.S. entry into the Vietnam conflict with large forces (1964-1973) resulted in a protracted, costly, confidence-shaking trauma (arguably paralleling the Boer War in many respects). The U.S. defense build-up of the 1980s contributed powerfully to the quadrupling of the U.S. national debt in twelve years, and the U.S.'s prioritization of its defense sector came at the expense of its broader economy, not so well-served by military Keynesianism as had once been the case. And in the course of it all, the U.S. lost its industrial edge, all but ceding critical sectors to foreign competitors (like machine tools), while shortsightedly concentrating on finance, just one way in which it reflected vested interests rather than the interests of the nation as a whole (a tendency common to great economic powers in decline, Britain included). Unsurprisingly, the U.S. from the 1970s on began its pattern of running trade deficits year in and year out, and the American dollar weakened substantially against the yen and the mark, leading to the currency devaluation of the 1985 Plaza Accord (a parallel to the devaluations that have marked British decline as a hegemon), and made the U.S. the world's largest international debtor (such as Britain became as a result of World War I).

It might be suggested, then, that by the end of the Cold War the position of the U.S. was not unlike that of Britain in 1918, when it had defeated its principal rival, Germany (and even extended its empire, mainly through the acquisition of former Ottoman territories), but at great cost to itself. After World War I, it seemed that Britain was due to pass the position of international leadership to another power, the U.S. (which declined to assume such a role), while in the late 1980s and early 1990s, it seemed that the U.S. was likely to cede world economic leadership to Japan or a German-led Europe (though neither actor proved able to take on that role).

Just like the 1920s were for Britain, the experience of the 1990s and early 2000s was an ambiguous one for the United States where its direction was concerned, ambiguous enough that the idea of American decline (and indeed, substantive debate about the U.S.'s direction) was marginalized after 1995, not least because of the economic boom the U.S. enjoyed in the latter part of that decade. Additionally, the aftermath of the terrorist attacks of September 11, 2001, made talk of global American empire newly popular (with the recent boom making such a course seem economically bearable to those optimistic about such a path).

Still, as the memory of the boom of the '90s receded and the economy returned to its earlier, mediocre performance, and the costs of the War on Terror (particularly the occupations of Iraq and Afghanistan) mounted, and the old problems(deindustrialization, debt, etc.) worsened; as the distribution of international economic power continued to change, shifting away from the U.S. to China, and in less dramatic ways, to the European Union and to oil exporting countries like Russia, change reflected in the continued weakening of the dollar; such a stance increasingly seemed unrealistic, opening the door to new questions. Is the 2008 financial crisis analogous to the Wall Street crash, the global economic crisis that followed an analog to the Great Depression, many wondered? Is the War on Terror, so often compared to World War II by pundits, taking a toll on the U.S. comparable to that which the Second World War took on Britain? For the time being, this is rather less clear, but perhaps we are in some ways reliving Britain's experience in the 1930s, or the 1940s – or even, as Dan Goure of the Lexington Institute suggests, the 1960s.

Of course, even assuming that this is the case, there is plenty of room for disagreement about the implications. Those anticipating a repeat of the 1930s might wonder about the prospect of a new round of great power warfare with fascist revanchists or others of their ilk. This seems to me rather unlikely now, and I find myself instead thinking about the disparity between British resources and foreign policy ambitions in those times, the preoccupation of much of its elite with unrealistic fantasies of the empire's continuation - and the country's need to get its house in order. Simply put, the most pressing security threats at the moment, and through the foreseeable future, are not the traditional ones, making the need to focus on the latter the really relevant lesson for our time.

An "East of Suez" Moment?
10/27/11

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