The Decline of the American Empire

Our recent visit to the United States got me thinking about the challenges facing America today.  I think that the road ahead will be very difficult.

What is an empire?

Empires are nations whose power and influence extend beyond their borders.  They tend to enjoy false economies based on cheap labour and the plunder of other nations.  This is typically enabled by large and costly militaries.

Why do empires decline?

Empires enjoy false economies based on the continued access to cheap resources.  Cultural decay sets in when people become used to living lives subsidized by cheap imports and high levels of personal and government debt.  When empire economies falter, their militaries become an economic drain, but remain essential to try to protect the empire’s position despite its declining influence.  People used to an easier life squabble over how to divide the pie, rather than working together to increase the size of it.

Empires fall because they must eventually begin living within their means.  If they do not do this, they can only hope to delay the decline by borrowing against future generations – e.g. letting infrastructure decay, running a deficit, etc.

The American Empire

I believe that the United States currently enjoys empire status.  Its economic power and military reach allow it to influence world events far more than its size and population would suggest.  Through foreign and economic policy it exerts control over other countries, up to and including cases where some governments survive only because of U.S. support.  Why are the Americans at the table in virtually every peace talk?  What gives the Americans the right to chastise Palestine for recently seeking a recognition of statehood at the UN?

Even when the American economy was in free fall, investors flocked to the U.S. dollar for safety.  Despite serious economic problems and massive debt levels the U.S. enjoys very low interest rates, unlike other countries where interest rates rise as the risk of default increases (e.g. Ireland, Greece).  Through illegal immigration, multinational corporations, and lax environmental standards, the U.S. enjoys access to cheap labour and raw materials and consumes more resources on a per capita basis than most other countries.  And they don’t want to share.

The massive U.S. military allows them to project force anywhere in the world.  According to reports of the US. Department of Defence Department of Defence Base Structure Report and Active Duty Military Personnel Strengths by Regional Area and Country the US military has over 540,000 facilities located on nearly 5,000 sites worldwide.  They have facilities in 39 foreign countries, with the majority of these located in Germany (194 sites, 52,000 personnel), Japan (108 sites, 36,000 personnel), and South Korea (82 sites, 29,000 personnel).  When the U.S. wins a war, they never really leave.  Despite their recent withdrawal from Iraq, I doubt that it will turn out to be any different in the long run.  There are over 1,400,000 U.S. Active Duty military personnel.  Of these, almost 300,000 were stationed in 150 other countries (including 126 people in Canada).  This is in addition to 104,000 deployed in Afghanistan (‘Operation Enduring Freedom’, an overly optimistic name) and 85,000 in Iraq (‘Operation New Dawn’, sounds like a B-movie).  The troops in Iraq were recently removed, but most are likely deployed elsewhere.  All together, the U.S. military has 78,000 personnel located in Europe alone.

The massive U.S. military props up the government and allows it to exert power worldwide, but at a very high cost.  In 2010, 20% of the US budget ($689 Billion) went to the Defence Department (Source: Wikipedia), an amount almost equal to that spent on Social Security ($701 Billion) and Medicare & Medicaid ($793 Billion).  The U.S. industrial military complex has a massive economic effect and exerts its own political influence to sustain itself.  Despite the recent US economic problems, spending on the U.S. military continues to rise even after removing the effects of inflation, almost doubling on a constant dollar basis in the last 10 years (Source: Wikipedia).

The American Empire in Decline

All good things come to an end. — Anonymous

I believe that the U.S. is an empire at the peak of its power, peering over the edge at a potentially precipitous drop ahead.  They are beginning to exhibit many of the symptoms of an empire in decline.

The U.S. has severe economic problems.  Some of these challenges may be short-lived, but others appear to be more structural and could have lasting impacts.  Despite repeated economic stimuli (e.g. bank and auto industry bailouts, near zero interest rates, multiple rounds of quantitative easing, tax breaks to home owners), the U.S. economy is limping along.  The U.S. currently has historically high unemployment, partly as a result of the continued trends of offshoring and automation.  The gap between rich and poor continues to widen.  Over 20% of U.S. home owners are ‘under water’ on their mortgage, meaning that they owe more than their homes are worth.  They have high and growing levels of personal debt and almost 1 in 6 Americans rely on government food stamps to ensure they have enough to eat. The U.S. budget has a huge annual deficit which continues to add to its massive national debt.  The government appears paralyzed, bickering over irrelevant matters while the nation suffers.  They’re spending their time rearranging the deck chairs while the Titanic sinks.

Can the U.S. halt its decline?

The U.S. possesses a lot of assets that may be able to help postpone or slow its decline.  They have the largest economy and most powerful military in the world (many times larger than any other country).  As a result they have tremendous economic and political influence globally.  Through media conglomerates and Hollywood, they also have great cultural influence.  The U.S. dollar is the primary reserve currency for world banks, which affords it benefits it would not otherwise be entitled to, and the U.S. continues to be a world leader in research and in technology.

Most importantly, the U.S. has a record of re-inventing itself, allowing it to overcome virtually all important challenges to-date. Their notion of American Exceptionalism results in a confidence and ‘can do’ attitude that is hard to beat.  Will this be enough to overcome the apparent economic, political, and cultural decay they’re experiencing?  It remains to be seen.  If not, what will happen to Canada in the long term if our primary ally and partner in virtually everything loses it privileged position in the world?