America the fallible

The US seems oblivious to signs of relative decline — its friends outside have to pitch in and help....

Written by Kishore Mahbubani | Published:August 20, 2010 12:24 am

The goal of these Indian Express columns is to make the reader feel uncomfortable. Why? Because the world that is coming will be a world outside our comfort zones. And if we stay in our comfort zones,we will not be ready for the new world.

Let me cite one example. Indians,like most Asians,are inclined to worship America. So did I. Don’t get me wrong. I have not become anti-American. Indeed,I want America to succeed,not fail.

But the steady accumulation of strategic errors by the US has left me feeling pessimistic. Hence,the best thing that friends of America can do is to wake their American friends up to the uncomfortable new world that is coming.

 Some key facts have not changed. America remains the single strongest economic and military power in the world. America also remains,in many ways,the most successful society in the world in its ability to create new,miraculously successful entrepreneurs,especially in information technology. Twenty years ago,Microsoft and Google,Apple and Facebook barely existed or did not exist at all. Now they are all global household names. No other country has shown the capacity to do this. Hence,it would be a mistake to write off America.

 But there are also some new uncomfortable facts the US will have to live with. Its power in the international system has peaked. In absolute terms,US power may or may not decline. In relative terms,it inevitably will.

It took two centuries of underperformance for China and India to fall from their natural position of providing the two largest economies of the world. This era of underperformance is ending. Normal performance multiplied by population will naturally lead to China and India once again developing the world’s largest economies.

There is one even more uncomfortable fact for America. With China’s and India’s economic performances improving,it should be looking for ways and means to improve its own economic performance. Instead,sadly,it is doing the opposite. One does not have to be an economic genius to forecast that if the US continues its present economic policies,it will inevitably cause grief for its own population.

 Where does one begin in describing these economic follies? US budget deficits are clearly unsustainable. Its population is sustaining its standard of living because the rest of the world is continuing to Americans them money at low interest rates. Most US treasury bills are bought by foreigners,especially Asian governments like China and Japan,India and Singapore. What would happen if foreigners stopped buying US treasury bills? Believe me,this is a nightmare we don’t even want to think about. The question is: why is America continuing to depend on foreign purchase of US treasury bills when it creates a dangerous dependence for America?

 Sadly,US budget deficits are not being used for intelligent long-term spending. Instead of investing in the future,America is undertaking long-term debts to pay for current consumption. This is strategic folly. It is not even investing in its own infrastructure. Clyde Prestowitz,in his new book,The Betrayal of American Prosperity,points out how dismal America’s infrastructure has become. He notes that the American Society of Civil Engineers estimate that more than one in four of the nation’s bridges are structurally defunct or fundamentally obsolete. And he adds,“US airports always look and feel so awful when you return from the bright airy halls of Singapore’s Changi Airport”. Paul Krugman wrote recently: “America is now on the unlit,unpaved road to nowhere.”

 The economic mismanagement goes beyond the domestic sector. Why is the US continuing to accumulate expensive military toys (like aircraft carriers and new fighter jets) while losing wars in Iraq and Afghanistan? The real answer is that American decision-making has become dysfunctional. When the US Congress prepares and approves US budgets,it does not do so on the basis of a long-term strategy to rejuvenate America’s economy or standing in the world. Instead,its budget is determined by the need to pander to the wants of influential congressional districts and to play the divisive game between knee-jerk political slogans. And so long as a sufficient number of congressional districts have a vested interest in an expensive but useless weapon system,that weapon system will be made. If this continues,the United States may well repeat the Soviet Union’s strategic folly: spending money on useless weapon systems while ignoring long-term economic competitiveness. Sadly,when I wrote an article entitled ‘Can America fail?’ in The Wilson Quarterly,few Americans paid heed.

 Now the US has more pundits per capita than any other country in the world. When I travel around the world and pick up local newspapers in Argentina or Australia,Dubai or Mumbai,I will inevitably find a reprint of a New York Times or Washington Post column. American columnists have global influence. This creates a great global illusion that America has more than enough domestic critics who can wake it up to painful new realities.

Sadly,this is not true. These columnists are engaged in an incestuous,self-referential and,often,a self-congratulatory discourse that inevitably includes the line “America is still the greatest country in the world”. Yes,this line may well still be true today. The big question is whether it will still be true tomorrow. And an even bigger question is whether US policies of today are designed to strengthen or weaken the America of tomorrow. Most friends of the US outside it can see its strategic follies clearly. Most Americans,including its pundits,cannot. The time has therefore come for friends of America to send it a wake-up call.

 

The writer is dean,Lee Kuan Yew School of Public Policy,

National University of Singapore,and has written ‘The New Asian Hemisphere: the Irresistible Shift of Global Power to the East’

canasiansthink@expressindia.com

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