End of The American Century

I have wondered for a long time if the American Century has come to a close, and if so, when. On the face of it, given the military and economic power that the US wields today, it is hard to imagine that the US may ever cease to dominate the world. In addition, the soft power of the US is considerable: American culture is a major export.

It is quite likely that no power has ever had so much dominance in either the hard power sense or the soft power sense over the rest of the world. Some time ago, I quoted historian Paul Kennedy about the overwhelming preponderance of American military power, as evidenced by its thirteen aircraft carrier groups. Very few other countries, something like five, have even one carrier.

Similarly, in science, engineering, business and finance, too, America bestrides the world like a colossus. An American specialty is the harnessing of large amounts of resources and choreographing men and materials in complex projects. The paradigm I have always thought of is American football, with its overwhelming use of force, tightly scripted, to defeat the enemy.

Americans are also past masters at the selling of dreams. Put these together, and you have Hollywood, McDonalds, the venture capital industry, and the innovation engine that has brought so much prosperity to the country. I think this is the core competency of the Americans.

For years, I have been intrigued by the core competency of nations. When I used to travel frequently to Germany, I used to ask my hosts about what they considered their strength. The answer was "precision engineering". That is, the great German brands like BMW and Mercedes, Carl Zeiss, Leica, Rollei, Siemens.

The sad fact, though, is that the world doesn't need precision engineering except in niche markets. Yes, there will always be demand for BMWs and Porsches. But look at what happened to the expensive German cameras of old. Japanese firms like Nikon, Canon, Olympus deposed the Germans because they were able to meet customers' needs with computing, not as much precision mechanical engineering. Or cost. Take Siemens: they make rock-solid PCs that last 10 years, but people are looking to junk them after 2 years.

Similarly, I have asked Britons what their core competency is: and the answer is, "financial skills." The City of London is still perhaps the world's most important financial center. Besides, they have plenty of capital that they, er... borrowed, notably from India. Just to take a small example, Robert Clive declared his fortune in 1770 at 400,000 pounds. By the miracle of compound interest, at a 6 percent discount rate, that amounts to $477 billion today. Fairly serious money, roughly the same as India's GDP, and that is just one man's loot.

The small Ugandan kingdom of Bunyoro has demanded reparations of 3.7 trillion pounds sterling based on British loot and brutality, resulting in the claimed death of 2.4 million people in the 1890s, according to a report in the UK Telegraph dated March 13th. This claim is only for 'the cattle, food, ivory and salt taken, [not] the land that was stolen from the people or for all the people killed. [That] could be ten times the amount.'

Financier friends of mine have calculated that India could, with justification, demand a reparation of over $10 trillion for the primary loot alone, never mind the secondary effects of damage to industry and to the intricate system of irrigation canals, and the school system; and forgoing the truly incalculable damage done to human resources, traditional knowledge, the thirty million Indians who died of avoidable famine, etc. If anyone is aware of further research in this area, kindly email the information to me. Yes, I do have Mike Davis' Late Victorian Holocausts.

Paul Kennedy again, from India Today, March 29, 2004: 'It is impossible to exaggerate the importance of the Industrial Revolution. Before steam power in 1750, Britain and India had the same per capital level of industrialization. But by 1900, the scene had been transformed.' Yes, the Industrial Revolution, for which the venture capital came from looting the rich provinces of Bengal and Madras, after the Battle of Plassey, 1757.

But I digress. The point is that it is time to wonder if America has reached its peak and is beginning to decline. The long cycles of history are not visible to us mortals, but I think it is an arguable stance that the end of the American Century came on that April day in 1975 when the last helicopter pulled out of the American embassy in Saigon. America's greatest military misadventure had resulted in an ignominious defeat.

The American Century, in that case, is the shortest reign on record. Other imperial powers, like the Cholas, Mughals or Romans, were able to hang on for centuries, while declining slowly. Even the British had a clear run throughout the 19th century CE and part of the 20th.

A disclaimer: I wish to emphasize that I say this without a trace of anti-Americanism. If anything, I am quite pro-American, having lived in the US for decades. I like America, and I like Americans. But I am more pro-Indian than pro-American, and when the interests of the two diverge, I am on the side of the former. Thus, for instance, when I wrote a previous column, US Policy on India is war by other means, I was merely stating a conclusion based on observed facts, from an Indian point of view.

General Powell was kind enough, the very next week, to emphatically support my contention, with his infamous 'non NATO military ally' tag for Pakistan, with the promise of cheap weapons which will be used, of course, against India, as has happened before every time America opened up its purse to Pakistan. To add punch to it, he also followed it up with removing all sanctions on Pakistan for Musharraf's coup. I wish I could claim that I had inside information, but it was pure coincidence.

The limits to American power are being tested today. A final quote from Paul Kennedy: 'This year, the US will be spending 50% of all the defense expenditures of the 191 nations of the United Nations. That has never ever happened in human history.' But the question is, are Americans that much more safe today than they have ever been? What can the 13 aircraft carrier groups do against a determined biological terrorist? The answer? Nothing.

I also see a long-term systemic decline in the US. I hate to talk of superficial impressions, but it has struck me that when I first went to San Francisco in the early 1980s, there were no derelicts around the magnificent City Hall there. The seediness of the Tenderloin district, with its drunk vagrants as well as teenage-runaway-junkie-hookers who come up to you and enquire whether you would like to 'party' seems to have spilled over to downtown later.

This I think is a metaphor for the decline of America. The 1950s were truly the pinnacle of American self-confidence; Vietnam sowed the seeds of self-doubt, and these have not been erased by the Gulf Wars. The trauma of 9/11 has left a major wound on the national psyche. Americans, famous for their black-and-white view of the world, are now forced to deal with moral ambiguity, much like the Graham Greene hero of The Quiet American, a riveting Vietnam-era tale. And they are not doing a great job of it, because in their zeal for instant gratification, they are making long term blunders.

The hollowing out of American industry is clearly the big talking point of the presidential election, and it is an emotional issue, but I think what is far more significant is the hollowing out of the educational system. For a long time, people have been worrying that the average American student is less interested in the hard sciences than are students from Asia, in particular. In a way, the research programs that have kept the US at the cutting edge of technology have been staffed mostly by immigrant talent.

I remember reading somewhere an article titled 'Why Johnny can't add, but Suresh Venkatsubramanian can.' The writer was talking about the fact that if he took a random research paper from a major American lab, the majority of the authors would appear to be of foreign extraction, often Asian or Russian or Israeli.

The great research universities of the US, such as Stanford, California at Berkeley, Harvard, MIT, Caltech, UCLA, Texas at Austin, Michigan, etc have been magnets for foreign talent, but in the post 9/11 world, foreign students have begun to gravitate away from them. Great centers of learning are not necessarily any one country's birthright: Germany and Britain had the best a hundred years ago, and America's lead may vanish as easily as theirs did.

Furthermore, the incentives for foreign students to come to the US have diminished. I heard over the grapevine that IIT Madras students are no longer flocking to the US as they once did. I was told of two reasons: first, that the prospect of getting interesting jobs in India has improved dramatically; second, that these graduates heard from their predecessors that times are tough in graduate school in the US these days: not enough assistantships, and too many people trying to hang on at school to ride out the tough economic times.

If the education system does not improve, Asians, and Indians and Chinese in particular, will choose to leave the US or never come to it: they view the education of their children as a very important issue. Besides, after 9/11, and with the current brouhaha over outsourcing, it has become a little difficult being a non white in the US: there is underlying racism. For instance, all Indian immigrants were stripped of US citizenship a hundred years ago, on the grounds that though they were Caucasian they were not white.

The other big thing nobody talks about is the self-inflicted wounds on the American nation. It is apparent that the military-industrial-media complex has a vested interest in periodic war: like the Krupp group of companies in pre-war Germany which made a lot of money from weapons, there are many firms in the US that need a good little war now and then, to prime the pump and get rid of old inventory. This leads to the US getting into short, sharp, easily winnable wars now and then, eg. Granada, Panama, etc.

The problem they are running into now is Islamism, something that Americans do not yet have a good handle on. Americans have tried to run with the hare and hunt with the hounds: on the one hand, they support rabidly Islamist states such as Pakistan and Saudi Arabia as part of their Great Game against the Soviets at one time, and now as part of a strategic containment of future powers.

This game plan, while brilliant in the short run, is disastrous in the long run: for the Islamists propped up by the Americans have figured out how to tell the Americans exactly what they want to hear, while they continue down their own paths, American interests be damned. We see this every day in how General Musharraf is able to con General Powell by offering him little tidbits like a low-level Al Qaeda member or two, or even a lot of noise about the number two man in Al Qaeda.

In the meantime, Islamists, who are not only your average wild eyed terrorist, but also smart, Armani-clad, Hermes-scarfed international bankers (and the likes of the suave Musharraf), are quietly moving ahead with their plans for the annihilation of the US and Western civilisation as we know it. Instead of realizing this strategic problem, the Americans delude themselves into thinking they are outsmarting them. The Islamists, with a sense of purpose and a sense of grievance, are a greater threat than the Germans or Japanese were during the World War, or the Soviets even at the peak of the Cold War.

I think America can only deal with Islamists through massive and well directed force, because theirs is a triumphalist cause. If the Americans can demoralise, dispirit and demotivate them through ideological and psychological warfare in addition to physical force, they can win this battle. US military planners know exactly what to do, and it is a relatively simple operation. However, out of political considerations (perhaps overlain with a lot of money paid by Saudi Arabia to bribe former American bureaucrats) I don't believe the Americans will take this radical, and necessary, step.

If not, I'm afraid they have been eclipsed, and it really is the end of the American Century: their hard power has not been of any use. The paradox is that even if they do, the US has reached an inevitable relative decline, as Asia rises: things will be back to what has always been the case throughout most of history, when Asia dominated the world, through its wealth and human resources.

I am reminded of the story of the Indian courtier who annoyed his king when he compared him to the new moon, and the emperor to the full moon. The courtier's comeback: the new moon is going the wax, and the full moon to wane. America's full moon may be on the wane.