Declinist Pundits

See J.M. Berger on how extremists won the recession.

There is a simple three-step secret to success in political punditry: Identify a trend that is already happening, predict it will continue, and then, as the trend progresses, proclaim success. Of course, you have to make sure that you identify a real trend, not a cyclical change following which things will revert to the norm. If you make that mistake, you wind up with egg on your face and have to hope that people forget. So it is with "declinists," one of America’s great renewable resources.

Recessions are cyclical. Some are deeper and last longer than others, but eventually the cycle turns. Elementary logic, however, did not prevent many from proclaiming that the Great Recession was evidence of the decline of the United States. For example, in 2008, Russian President Dmitry Medvedev said the crisis showed that U.S. global leadership was ending, proclaiming that "the times when one economy and one country dominated are gone for good." Germany’s finance minister made a similar pronouncement, as did many Chinese leaders. A Harvard University historian even wrote in 2010 that America was like Greece and the dollar was at risk of imminent collapse. Writers from both the political right and left have inundated the remainder bins with tomes predicting the sad collapse of American power.

As James Mann describes in his recent book, The Obamians, "In those few countries where the financial crisis did not hit so hard, such as China and Germany, there was a newly acquired sense of superiority to the American economic system." Today, with the precarious state of the euro and a slowing of Chinese growth rates on the eve of a political transition, that superiority is less clear. Rather than collapse, the dollar has strengthened lately, reflecting the market’s view that, dysfunctional as America’s politics may be, the United States is still a relative haven. In the meantime, China’s hubristic foreign policy has worsened its relations with nearly all its neighbors and reinforced the U.S. position in the Asian balance of power.

Why do so many pundits get it so wrong? Decline is a misleading metaphor that assumes there is an organic life cycle for countries as there is for individuals. We know little about the life cycle of states. It took three centuries for the Western Roman Empire to decline from its apogee to collapse. After Britain lost its American colonies in the 18th century, writer Horace Walpole lamented that Britain was reduced to the insignificance of Sardinia. He missed the fact that the Industrial Revolution was about to produce Britain’s greatest century. Put simply, we do not know where the United States is in its supposed life cycle.

Moreover, the term "decline" confuses two quite different processes: absolute and relative decline. Absolute decline is what happened to ancient Rome: An agrarian economy with little productivity eventually succumbed to internecine warfare and hordes of barbarians rather than to the rise of a competing empire. While the United States has very real problems, its economy remains highly productive. America remains first in the world in total research and development spending, first in university rankings, first in Nobel prizes, and first on indices of entrepreneurship. According to the World Economic Forum, the United States is the world’s seventh-most competitive economy, following Switzerland, Singapore, Finland, Sweden, the Netherlands, and Germany. China ranks 29th. This is hardly a picture of absolute economic decline.

Relative decline refers to the gap between the leading country and others. The narrowing of the gap does not necessarily mean that others will surpass the leader, and it could more accurately be described, as journalist Fareed Zakaria once put it, as simply "the rise of the rest." When it comes to the future of American power relative to China, much will depend on the often underestimated uncertainties of China’s political system and whether and how it will change. Given the size of China’s population and its impressive rate of economic growth, it will almost certainly pass the United States in total GDP within a decade. But size is only one indicator of economic power; the composition of an economy is also important, and that is better measured by per capita income. On that measure, China will not equal the United States for decades, if ever. Projections of U.S. decline relative to China also ignore America’s enduring military and soft-power advantages, as well as China’s geopolitical disadvantages. As India, Japan, and others try to balance Chinese power, they will increasingly welcome an American presence.

Is the United States in decline? The honest answer is that no one knows. At my age, I can only bet with near certainty that I am in decline. As to whether the United States has reached the apogee of some life cycle, I would bet not. And despite the American mistakes that contributed to the Great Recession, I would certainly not use the cyclical events of the last decade to set the odds.

See Tyler Cowen on how cheapskates, pessimists, and food trucks won the recession.