By John Nugee of Laburnum Consulting
It is human nature to look to the future, and even in the middle of the most all-consuming crises, there is room to consider what might come after. Long before the end of the Second World War, the Allied Powers were considering what shape the world would be after the end of hostilities – it is in this period that the Bretton Woods conference designed the post-War financial world, and less happily the Yalta conference set in stone the spheres of influence in Europe which led to the Iron Curtain and the Cold War.
In Britain, the NHS, the nationalisation of much of industry and transport, and the increased welfare state all owe their origins to discussions that took place well before the War was won.
And so it is not too soon to consider how the world of the superpowers will look after the Corona-crisis, and which of America and China will emerge the stronger. Indeed, some commentators are already talking of a potential change of hegemon, and the end of the American Century being on us much faster than anyone expected.
This may sound premature, and to be sure the United States still looks very strong, not least in the economic sphere, where the US Dollar is still without serious rival. The decline of America has often been predicted, yet the country continues to maintain its pre-eminence. But it is the nature of such changes to happen much more slowly than one expects – until in the end they happen much faster than one is ready for.
Hegemonies usually end when the superpower comes out of a war weaker than it went into it. That happened to the UK after the First World War, to France after the Napoleonic Wars in 1815, and so on. In contrast, a healthy superpower usually comes out of a war stronger (both in relative terms and often also in absolute terms) than it went in – USA after 1918 and 1945, Britain after 1815, France after 1713.
The Corona-crisis is not a war in the military sense, but it is every bit as much a test of states. And America is not so far faring as well as many other countries. The US democratic process is not inspiring confidence or bringing forward strong and effective leadership. The economy is weak and behind the surface numbers, it has many inefficiencies and inequalities – too many Americans have no fall-back, no resilience, are one or at most two pay-checks (or one hospital visit) from disaster, and as the crisis bites, the numbers of newly unemployed, newly vulnerable are rising very fast. And the US health service model, while excellent for those that can afford it (or have good employer-based insurance), risks resulting in more deaths, destroyed family finances and despair than a rich country should tolerate.
Although it is fashionable to decry the presidency of Donald Trump, very little of this can be laid at his door. The weaknesses and imbalances in America’s economy and the fragilities of the way of life for too many of its citizens have not occurred overnight. But Trump, while not to blame for the decline in America’s strength, has arguably presided over its acceleration. And as importantly for its position as hegemon, America no longer even wants to lead the West: Trump has pointedly ignored the call to leadership in his isolationist unilateralism, and increasingly other western countries are actively distancing themselves from America and its world view.
China on the other hand will limit its deaths, will restart its industry, and has money aplenty to win friends and influence people. Asia will benefit most, and increasingly the smaller countries in China’s near abroad have decided that they not only need but also want a good relationship with their powerful neighbour. It will be interesting to see how many EU countries will also decide that a good standing with Beijing is worth having, regardless of whether it comes at the expense of a good standing with Washington, or even perhaps a good standing with Brussels.
We repeat, America is not about to implode or lose all its international standing. This is not the US equivalent of Britain’s position in 1945, when the country emerged from the Second World War bankrupt and a superpower in name only. But future historians may perhaps look back and see it as the US equivalent of 1918, when the world first started to query the inevitability of British power, pre-eminence and prestige.
The period that a nation can enjoy hegemony does seem to be limited to about 100 years. Portugal was the hegemon in the 15th century, Spain in the 16th, Holland in the 17th, France from 1713, Britain from 1815 and the USA from 1918. “Rags to rags in three generations”, as the saying has it, and there is a lot of truth in that as the first generation earns the power, the second enjoys it but understands how it was hard-earned, and the third believes it is their god-given right and squanders it.
A nation risks losing its position as hegemon when its leadership loses sight of the fact that it is possible that they may. The oft-forecast end of the American Century may be closer than Washington thinks.
(A shorter version of this article was published by OMFIF)