Is This The End of the American Century?

This site features updates, analysis, discussion and comments related to the theme of my book published by Rowman & Littlefield in 2008 (hardbound) and 2009 (paperbound).

The Book

The End of the American Century documents the interrelated dimensions of American social, economic, political and international decline, marking the end of a period of economic affluence and world dominance that began with World War II. The war on terror and the Iraq War exacerbated American domestic weakness and malaise, and its image and stature in the world community. Dynamic economic and political powers like China and the European Union are steadily challenging and eroding US global influence. This global shift will require substantial adjustments for U.S. citizens and leaders alike.

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Monday, December 1, 2008

Fukuyama: From "The End of History" to "The Fall of America"

Francis Fukuyama, Professor at the Johns Hopkins School of Advanced International Studies (my own alma mater), had a high profile essay in Newsweek in October, boldly titled “The Fall of America, Inc.” Professor Fukuyama addresses the declining global appeal of America’s “brand.” Two “fundamentally American ideas have dominated global thinking since the early 1980s,” he contends. The first of these was “a certain vision of capitalism” accompanied by “pared-back government.” The second idea was “America as a promoter of liberal democracy around the world.”

Fukuyama sees both of these ideas now tarnished and discredited. The U.S. economy “has gone off the rails and threatens to drag the rest of the world down with it. Even worse,

“the culprit is the American model itself: under the mantra of less government, Washington failed to adequately regulate the financial sector, and allowed it to do tremendous harm to the rest of society.”
The idea of American democracy was “tarnished even earlier,” with the freedom agenda of the Iraq War widely perceived around the world as “an excuse for furthering U.S. hegemony.”

In my book The End of the American Century, I make similar arguments about the decline of brand U.S, but I show that this decline started long before the recent financial collapse, and even before the Iraq War. Global public opinion surveys in recent years have shown little enthusiasm for “American-style democracy” and even less support for the American ways of doing business. And while Fukuyama uses the term “brand” as a metaphor, there actually have been marketing surveys of the popularity of “nation brands” among consumers around the world. In one such study, the United States ranked eleventh out of twenty-five countries.

Fukuyama’s Newsweek essay is interesting both for its perceptive insights, but also because of who he is and what he has written and argued in the past. He gained national prominence in 1989 with the publication of an influential and controversial article titled “The End of History?” In that essay, and a following book, he argued that the collapse of European communism and the end of the Cold War marked “the end point of mankind’s ideological evolution and the universalization of Western liberal democracy as the final form of human government.” Later he became a key figure in the neoconservative movement and its Project for the New American Century which, among other initiatives, strongly encouraged the removal from power of Saddam Hussein, even before September 11. By 2002, though, he had turned away from the neoconservatives, and became critical of the Bush administration and the Iraq War.

Much has changed in the world since the Western triumphalism following the collapse of communism. It has become painfully clear, for one, that many people around the world—perhaps even most people—are not so convinced that Western liberal democracy is—or should be—“the final form of human government.” Even so, it is quite startling to see one of the intellectual fathers of the neoconservative movement so frankly recognizing the failure of the American model to take hold in the rest of the world. As Fukuyama concludes his essay,
“the ultimate test for the American model will be its capacity to reinvent itself once again. Good branding is not, to quote a presidential candidate, a matter of putting lipstick on a pig. It’s about having the right product to sell in the first place. American democracy has its work cut out for it.”

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2 comments:

Mark Foley said...

These questions are very wrongly framed, and just as history did not end, America has not fallen. Excuse me? The world is dying for true American leadership, and thankfuly about to get it again.

The Reagan/Thacher model was not, I repeat, not the American model. The very concept that it was is offensive. If there is an American model in world affairs it is Wilson's.

We have had several years of catastrophic leadership and that somehow makes our model wrong? It is true that we did not regulate our financial market but please explain to me how in extremely well regulated Germany the IKB scandal was possible? Are the Chinese banks well regulated, when they give loans for bribes? How much bad debt is covered up there? The European banking sector is in even worse shape than ours. Their subprime is emerging markets, and try having a look at the relative exposures of Austria's banking system (or several others) to that risk. Please.

You refer to dynamic economic and political powers like China. I guess I will have to read your book to understand why they are dynamic. China has been growing fast based on cheap labor, DFI and mercantilism. Is that dynamic? Their political system is based on oligarchic rule and repression. They have enormous problems of national cohesion. Dynamic? I guess you don't mean intellectually.

The E.U. is dynamic? It will be a miracle if they hold their currency together through this storm. Without our military shield Russia would have plundered them long since.

As for the current economic maelstrom, we will be severely hurt, but will be the first and strongest to emerge. In relative terms we look to be much stronger than our so-called dynamic rivals. Moreover 60% of the world's central banks reserves are U.S. dollars. The majority of world trade is done by (majority American) globals with (majority American) globals.

We have a very hard road ahead, but the American road is less perilous than the European or the Chinese roads. When this is over the U.S. will be more dominant, both spiritually and economically.

David S. Mason said...

You raise a lot of good points, Mark. Let me respond to a few of them.

"The world is dying for true American leadership." I agree completely that the last 8 years have been a disaster for the U.S. global image and leadership. But I also think it is unlikely to be restored, at least to the place that it was a decade ago. Basically it is only Americans who think that the world needs U.S. leadership. Public opinion polls around the globe show little enthusiasm for U.S. dominance, masquerading as "leadership" or even for the American economic or political "model." (These polls are reported in my book).

It would be interesting if you could find some evidence of people in other countries expressing their heartfelt desire for U.S. global leadership. I think such instances would be few and far between.

As to the collapse of the U.S. financial system...It is not just a matter of the banks. Indeed, the current crisis has revealed the weaknesses of banks and financial markets in other countries too, as you point out. The big difference is that in the U.S., unlike other developed countries, there has been almost no household savings over the last five years (and very little before that). And the U.S. household savings rate is far below that of other OECD countries. The multiple dimensions of consumer debt in the U.S, in combination with the record government deficits and debts (not to mention the record trade deficits) is unprecedented for a modern economy, and portends a very long and deep slide for the U.S.

Already, we are seeing other countries recognizing the handwriting on the wall, and starting to sell off their dollars for other currencies (like the euro). And many countries are beginning to denominate important export products (like petroleum) in euros rather than dollars.

By China's dynamism I mean that the country's GDP has been growing at about 9% a year for twenty years now--something unprecedented in world history. However, I agree with you that the EU and China have perilous roads in front of them too--in large part caused by the U.S. economic collapse. It is not that one of them will replace or dominate the U.S., but simply that the future will be one of many more-or-less co-equal powers. Indeed, the problems confronting the world--climate change, terrorism, poverty, etc.--demand that countries work together, cooperatively and peacefully, to solve them.