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Sunday 20 Aug 2017 | 20:07 | SYDNEY
Sunday 20 Aug 2017 | 20:07 | SYDNEY

World power swinging back to America?

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COMMENTS

25 October 2011 15:54

Ambrose Evans-Pritchard writes:

The American phoenix is slowly rising again. Within five years or so, the US will be well on its way to self-sufficiency in fuel and energy. Manufacturing will have closed the labour gap with China in a clutch of key industries. The current account might even be in surplus. Assumptions that the Great Republic must inevitably spiral into economic and strategic decline - so like the chatter of the late 1980s, when Japan was in vogue - will seem wildly off the mark by then.

I sincerely hope this is right, though even if it is, I doubt it makes much difference to the larger phenomenon. The slow shift of global power away from the US really hangs on the rise of developing countries, not America's fall.

America probably will recover from its current woes, but we're living through the great convergence, in which the living standards of people in the developing world rise to meet those of the developed nations. Economic strength and strategic power are becoming (once again) functions of scale, favouring populous countries like China and India.

So even if America's living standards rise in an absolute sense, the US is still likely to come back to the field in relative terms. As Gideon Rachman points out, there is precedent for this:

What the UK discovered after 1945 is that a decline in national power is perfectly compatible with an improvement in living standards for ordinary people, and with the maintenance of national security. Decline need not mean the end of peace and prosperity. But it does mean making choices and forging alliances. In an era of massive budget deficits, and rising Chinese power, the US will have to think harder about its priorities. Last week, Hillary Clinton insisted that America will remain a major power in Asia – with all the military expenditure that this implies. Very well. But what does that mean for spending at home? Few politicians are prepared to have that discussion. Instead, particularly among Republicans, they fall back on feel-good slogans about American “greatness”.

Photo by Flickr user Scoobyfoo.

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