Colossus (53 page)

There may be ways of bridging two of these three deficits, at least for a time. Since 1985, as we have seen, the United States has gone from being a net international creditor to being the world’s biggest debtor; its net international liabilities are now equivalent to around a quarter of gross domestic product. However, that is far from being the maximum ever run up by a developed economy. In the 1990s Australia’s net foreign debt touched 60 percent of GDP, while New Zealand’s came close to 90 percent.
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It may therefore be possible to carry on borrowing from abroad since there seems to be an insatiable appetite on the part of foreign investors for dollar-denominated securities, no matter how low the return on them.
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Unlike
Australia and New Zealand, after all, the United States gets to issue debt denominated in the global reserve currency.

Admittedly, America’s reliance on foreign capital is a balancing act on a very high wire. One conceivable and troubling scenario is that foreign expectations could shift, leading to simultaneous pressure on the exchange rate and bond prices, with higher interest rates threatening American growth more than a weak dollar boosts it.
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No one should rule out the possibility that American fiscal profligacy, even with the most accommodating monetary policy in the history of the Federal Reserve system, could still coincide with a Japanese-style deflation rather than a return to inflation, especially if American consumers began to save more and attempt to reduce their indebtedness. Two generations with no experience of sustained declines in prices would struggle to adjust their behavior in appropriate ways. In particular, people with large accumulations of mortgage and consumer debt would find apparently low nominal interest rates becoming painfully high in real terms if prices fell by more than 1 or 2 percent a year.

Yet the costs of such a crisis would be heavier outside the United States than inside. Even a modest reduction in the growth of American consumer demand in the years ahead would have serious consequences for the rest of the global economy, given that nearly 60 percent of the total growth in world output since 1995 has come from the United States.
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And if the United States were to press for a devaluation of the dollar and some measure of protection against Chinese imports, there could be a deflationary chain reaction throughout the world economy.
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A deflationary world would not necessarily be a disastrously depressed world; it might be more like the 1880s than the 1930s. The original Great Depression that began in the aftermath of the 1873 crash and lasted until 1895 saw prices depressed much more than output (which more than doubled in the United States), and although the period was associated with increases in tariffs, these were not so large as to choke off global trade. If such a Great Deflation were to happen again, America’s latent fiscal crisis would not go away, of course; indeed, it might get even worse if real interest rates rose above the real growth rate or if the costs of Medicare continued to rise at a time when other prices were declining. As in the depression of the 1880s, the deflation losers might well turn to radical forms of politics to express their disgruntlement. Populism and socialism thrived as falling prices squeezed
farmers and workers, while white-collar workers and small-business owners often turned to new strains of xenophobic nationalism. These were the first harbingers of the “end of globalization” in the mid-twentieth century.
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On the other hand, the British Empire’s strategic position was positively enhanced by the late Victorian slowdown, not least because it discouraged the strategic ambitions of potential rivals. It was only after the deflation was over that the Germans began to build their navy and to pursue their “world policy.” A Great Deflation would be likely to hurt Europe and China more than it hurt America.

Nor is America’s manpower deficit insuperable. There is undoubtedly something perplexing about the apparent lack of American combat-effective troops at a time when the U.S. population is growing at 1.25 percent per annum, unemployment is proving stubbornly resistant to economic recovery (by one estimate there are 4 million victims of the current “job gap”)
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and the American prison population exceeds 2 million—1 in every 142 American residents.
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If one adds together the illegal immigrants, the jobless and the convicts, there is surely ample raw material for a larger American army. One of the keys to the expansion of the Roman Empire was, after all, the opportunity offered to non-Romans to earn citizenship through military service. One of the mainsprings of British colonization was the policy of transportation that emptied the prison hulks of eighteenth-century England into ships bound for Australia. Reviving the draft would not necessarily be unpopular, so long as it was appropriately targeted.

The only alternative is to rely on foreign armies to provide auxiliary forces. There are precedents for this too. Without the Indian Army, Britain’s empire would have suffered from a chronic manpower deficit. India was, as Lord Salisbury memorably remarked, “an English barrack in the Oriental Seas from which we may draw any number of troops without paying for them.”
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The British relied heavily on their empire to provide manpower in wartime: roughly a third and just under a half of total British forces during World War I and World War II, respectively. Having rashly dissolved the Iraqi Army, L. Paul Bremer belatedly came to see that resurrecting it might be his best hope of establishing order and reducing unemployment. The alternative, as we have seen, is to go begging to the UN or NATO for
reinforcements. If Americans themselves are reluctant peacekeepers, they must be the peacekeepers’ paymasters, and strike such bargains as the mercenaries of the “international community” may demand.

Of the three deficits, however, it is the third that may prove the most difficult to overcome—namely, the attention deficit that seems to be inherent in the American political system and that already threatens to call a premature halt to reconstruction in both Iraq and Afghanistan.
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This is not intended as a term of abuse. The problem is systemic; it is the way the political process militates against farsighted leadership. In the words of retired General Anthony Zinni:

There is a fundamental question that goes beyond the military. It’s, “What is our obligation to the world?” We preach about values, democracy, human rights, but we haven’t convinced the American people to pony up…. There’s no leadership that steps up and says, “This is the right thing to do.”… That’s the basic problem…. There’s got to be the political will and support for these things. We should believe that a stable world is a better place for us. If you had a policy and a forward-leaning engagement strategy, the U.S. would make a much greater difference to the world. it would intervene earlier and pick fights better.
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But a “forward-leaning engagement strategy” is much easier for a soldier to imagine than for an elected politician. It is not just that first-term American presidents have only two and a half years in office before the issue of securing reelection begins to loom. It is the fact that even sooner, midterm congressional elections can have the effect of emasculating their legislative program. It is the fact that American politics operates on three tiers simultaneously: the national, the state and the local. How could Californians be expected to pay full attention to the problems of nation building in Baghdad in the summer of 2003, when a self-selected mob of amateur politicians was noisily bidding to recall their incumbent governor? It is the fact that the federal executive itself is anything but a homogeneous entity. Interdepartmental rivalry is of course the norm in most human institu
tions of any size. But there were times in 2003 when the complete absence of coordination among the Defense Department, the State Department and the Treasury—to say nothing of the Commerce Department, the trade representative, the U.S. Agency for International Development and the host of institutions now notionally concerned with “homeland security”—recalled the worst “polycracy” of Wihelmine Germany.
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The presidency is of course an elected rather than a hereditary office, but its recent incumbents have sometimes appeared to conduct business in the style of the last German kaiser, allowing policy to be determined by interagency competition rather than forging a sense of collective responsibility. Small wonder so many American interventions abroad have the spasmodic, undiplomatic quality of Wilhelm Il’s
Weltpolitik
. Imperial Germany too practiced what Michael Ignatieff has called imperialism in a hurry. It too was “impatient for quick results.”
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Unlike the kaiser’s Germany, however, the United States disclaims any interest in acquiring new “places in the sun.” Its conquests are not merely temporary; they are not even regarded as conquests. The Victorian historian J. R. Seeley famously joked that the British had built their empire “in a fit of absence of mind.” Americans, however, have gone one better; here absent-mindedness has become full-blown myopia. Few people outside the United States today doubt the existence of an American empire; that America is imperialistic is a truism in the eyes of most educated Europeans.
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But as the theologian Reinhold Niebuhr noted as long ago as 1960, Americans persist in “frantically avoiding recognition of the imperialism [they] in fact exercise.”
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Does imperial denial matter? The answer is that it does. Successful empire is seldom solely based on coercion; there must be some economic dividends for the ruled as well as the rulers, if only to buy the loyalty of indigenous elites, and these dividends need to be sustained for a significant length of time. The trouble with an empire in denial is that it tends to make two mistakes when it chooses to intervene in the affairs of lesser states. The first may be to allocate insufficient resources to the nonmilitary aspects of the project.
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The second, and the more serious, is to attempt economic and political transformation in an unrealistically short time frame. As I write, the United States would seem to be making the second of these mistakes in both Iraq and Afghanistan. By insisting—and apparently intending—that they will remain in Iraq only until a democratic govern
ment can be established “and not a day longer” American spokespeople have unintentionally created a further disincentive for local people to cooperate with them. Who in these countries can feel confident that if he lends support to American initiatives, he will not lay himself open to the charge of collaboration as soon as the Americans go? “If the people of the Balkans realized America would be there,” General John Shalikashvili remarked in the late 1990s, “it would be great…. Why is it such a crime to suggest a similar longevity [to the occupations of West Germany and Japan] in Bosnia and Kosovo?”
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The answer is a political one. Today’s GIs must be brought home, and soon.

These two points help explain why this vastly powerful economy, with its extraordinary military capability, has had such a very disappointing record when it has sought to bring about changes of political regime abroad. The worst failures—in Haiti, Cuba and Vietnam—were due, above all, to this fatal combination of inadequate resources for nonmilitary purposes and a truncated time horizon. It would be a tragedy if the same process were to repeat itself in the Balkans, Afghanistan and Iraq. But not a surprise.

TOWARD APOLARITY?

Consuming on credit, reluctant to go to the front line, inclined to lose interest in protracted undertakings: if all this conjures up an image of America as a sedentary colossus—to put it bluntly, a kind of strategic couch potato—then the image may be worth pondering. According to the standard measure of obesity, the body mass index,
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the percentage of Americans classified as obese has nearly doubled in the past decade, from 12 percent in 1991 to 21 percent in 2001. Nearly two-thirds of all American men are officially considered overweight, and nearly three-quarters of those aged between forty-five and sixty-four.
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In other words, for every superfit Schwarzenegger there are now three fat Frank Cannons. International comparisons, insofar as these are possible, suggest that only western Samoans and Kuwaitis are fatter.
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Today, it seems, “the white man’s burden” is around his waist.
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Yet this should not be taken to vindicate those pessimists who predict imminent decline for the United States, whether relative to Europe or to
China. The trouble with “realist” fears of a coming shift from “unipolarity” to “multipolarity” is that they overlook the possibility of generalized impotence—or, if you like, apolarity. Those fixated on a Bismarckian model of the balance of power tend to assume that international relations resemble the interplay of magnets, with the larger powers attracting satellites as if they were iron filings, sometimes joining together, but more often repelling each another. But what if the great powers of today ceased to be magnetic, losing their powers both to attract and to repel? What if even the United States, ever more preoccupied with its own internal problems, became the strategic equivalent of an inert lump of old iron? In many ways, this is already the fate that has overtaken Japan and the European Union; once economic titans, they are now senescent societies and strategic dwarfs. Nor will China be exempt from demographic “graying.” One legacy of the one-child policy will be a rising dependency ratio in the coming decades.