Where will U.S. power and influence in the world stand at the beginning of 2015?

In brief: While the United States is in relative decline, and will likely remain so, the suggestion that it is in terminal decline is overwrought (as Joseph Nye argues persuasively in his forthcoming book). There remains no other country or coalition that can credibly replace it as the anchor of world order. And though the world is indeed becoming more disorderly and uncertain, this growing complexity confronts all actors, not just the United States.

The state of the economy

While few observers would say the U.S. economy is performing robustly, it does appear to be recovering steadily. 2014 was the best year for job creation since 1999, and the Wall Street Journal reports that U.S. economic growth this spring and summer was “the best six-month pace since the second half of 2003.” Perhaps most surprisingly, as Eswar Prasad documents in his new book, the global financial crisis has actually strengthened the dollar’s role as the world’s reserve currency.

America’s demographic prospects are also more favorable than those of most other major powers. The Pew Research Center observed in January that “the U.S. population is expected to increase by 89 million by mid-century, even as the populations of Japan, China, South Korea, Germany, Russia, Italy and Spain are either at a standstill or decreasing.” As such, it continued, the United States “may be in a position to experience a more robust economic future in comparison with other developed nations.” Despite having an immigration policy that, as Clive Crook memorably put it, seems designed “to erode U.S. prosperity,” the United States continues to attract world-class talent: More than 886,000 foreign students were enrolled in U.S. colleges and universities in the 2013-14 academic year, marking the eighth consecutive year of growth.

Perhaps the most unexpected arrow in America’s quiver is the shale revolution. While the discussion of America’s energy prospects can lapse into hyperbole—the United States is not on a fast track to achieving energy independence, as some observers claim—it is hard to overstate how significantly they have improved.  For starters, domestic oil production has increased by some 70 percent over the past six years.  In July, moreover, for the first time in almost 40 years, the United States exported oil to a country outside of North America (400,000 barrels to South Korea).

There are also encouraging trends within American society itself. The Economist notes, for example, that “[o]ver the past 20 years, crime has fallen spectacularly in America….murder is now less common than at any time since the end of the 1950s.” Finally, while concern about U.S. government dysfunction is warranted, what the federal government does and does not do is only one part of the story. Frustrated with paralysis in Washington, city and state governments are increasingly stepping up to the plate—a trend that speaks both to America’s resilience and creativity. As The Economist argued in a special report in March 2013, “the main reason for cheer [about U.S. competitiveness] is that beyond the Beltway no one is waiting for the federal government to fix the economy. At the regional and local level America is already reforming and innovating vigorously.”

There is no point, however, in denying the obvious: The United States faces serious challenges, which have been and should continue to be chronicled in detail. The American Society of Civil Engineers gave its public infrastructure a “D+” in its 2013 report card, estimating that the country will have to invest over $3.6 trillion by 2020 to bring that grade up to a “B”. Consumer debt continues to grow, reaching approximately $3.3 trillion at the end of the third quarter of this year, and outstanding student loan debt exceeds $1.2 trillion. According to the “extended baseline projections” in the Congressional Budget Office’s latest long-term budget outlook, “the deficit would equal six-and-a-half percent of GDP [by 2039], larger than in any year between 1947 and 2008, and federal debt held by the public would reach 106 percent of GDP, more than in any year except 1946—even without factoring in the economic effects of growing debt.”

Perhaps even more worrisome, wealth inequality has reached unprecedented levels. According to the Pew Research Center, the median wealth of upper-income U.S. families in 2013 was 6.6 times as large as that of middle-income families; the former’s median net worth, meanwhile, was almost 70 times as large as that of lower-income families. Kurt Campbell argues that beyond its oft-discussed domestic consequences, the growth in such disparities could persuade a growing proportion of Americans to “view foreign policy—foreign assistance and military spending alike—as a kind of luxury ripe for cuts and a reduction in ambition”; additionally, he warns, it could undercut “a critical component of U.S. soft power”: “the construction of a durable middle class.”

There are also troubling trends within America’s political system, beginning with partisan polarization. According to one calculation, 344 members of the House of Representatives belonged to the ideological “middle” in 1982; in 2013, just four did. The comparable figures for the Senate were 58 and zero. While paeans to bipartisanship can feel tiresome, it is difficult to imagine how Democrats and Republicans will be able address the country’s challenges if they fixate on obstructing each other’s agendas and punishing those within their respective ranks who occasionally cross the aisle. Elections, meanwhile, increasingly turn on funding from highly affluent individuals and special interests. The Center for Responsive Politics estimates that $1.67 billion was spent on Congressional races in 2000; in 2012, $3.67 billion. The figures for the presidential contests were, respectively, $1.4 billion and $2.6 billion.

All told, then, some trends are promising; others, concerning. While it is difficult to conduct a rigorous net assessment of America’s internal situation, an intuitive appraisal suggests that neither triumphalism nor despondence is warranted. Cautious optimism seems reasonable. However fashionable talk of America’s decline remains, most leaders would prefer to confront its challenges rather than those facing almost any other major power. Reflecting on the formidable internal problems facing China—ranging from environmental degradation to demographic decline—a veteran China hand told me this past October that “there must be sheer terror” behind President Xi Jinping’s oft-discussed poker face.

Is America still a superpower?

The late Samuel Huntington observed in 1988 that there had been five cycles of postwar declinism in the United States. If one accepts his count, the sixth such cycle began in earnest with the collapse of Lehman Brothers in September 2008 and the global economic downturn it precipitated. At least two of the phenomena driving it feel new, or at least more pronounced: The first relates to the manner in which the United States has conceptualized its power in the postwar era; the second, to the state of world order.

The United States has grown accustomed to being number one, not only in an abstract sense (most observers recognize it is the world’s only superpower, even if it is difficult to identify the criteria that distinguish a “superpower” from a merely “great power”), but also in terms of easily understood metrics, especially gross domestic product and military spending.  The World Bank inspired a predictable rash of rebuttals when it estimated that China’s economy had surpassed America’s this year in terms of purchasing power parity. China minimizes the economic milestones it achieves, lest it be asked to undertake a greater level of responsibility for world order. The United States, meanwhile, tends to revert to exaggerated despair or defensive triumphalism, both of which reflect insecurity.

No matter what combination of parameters one uses, China’s economy will eventually overtake America’s in absolute size. Its military spending, meanwhile, is projected to overtake America’s before the middle of the century—perhaps as early as the 2030s. Quibbling over the precise dates of these transitions only distracts the United States from the adjustments it must make to address China’s rise: While much has been made, properly, of the strategic adjustments it must make, the more critical and challenging ones are mental.

Americans are steeped in the narrative that their country is exceptional, both in present times and in the annals of history. They interpret the end of the Cold War as signaling the defeat of all collectivisms. However, China not only believes it, too, is exceptional, but also reckons that its one-party authoritarianism is more efficacious than U.S. governance. This dual challenge will strike many Americans as audacious, even preposterous. The difficulty of accepting China’s rise is compounded by the rapidity with which it is occurring. Only 50 years ago, after all, China was reeling from the worst famine in human history, which is estimated to have killed 30-45 million people. Reflecting on the World Bank’s aforementioned announcement, Joseph Stiglitz observes that “China understands full well America’s psychological preoccupation with being No. 1—and was deeply worried about what our reaction would be when we no longer were.” Few observers doubt that America’s comprehensive national power will surpass China’s for a long time. The question is whether Americans’ fixation on surface indicators of preeminence will prevent them from appreciating that reality.

The second new—or at least seemingly new—driver of the current declinism is the fear that “world order” is passing from a structural reality into an antiquated abstraction. The clearest manifestation of that concern, sadly but not surprisingly, comes from the Middle East and North Africa: The continued devolution of Syria into chaos and the ascent of the Islamic State of Iraq and the Levant highlight the collapse of longstanding regional arrangements. Transatlantic ties, the linchpin of liberal world order, are also under strain.  Having spent the better part of the past 15 years bogged down in two wars, the United States is attempting to rebalance to the Asia-Pacific—not only to influence the rise of China, but also to share in the success of the world’s most economically vibrant region.  It is unclear where or how Europe will figure in this shift, especially given the continent’s ongoing economic malaise.

While some observers hope Russia’s ongoing efforts to destabilize eastern Ukraine will revitalize NATO’s mission and make transatlantic security ties more balanced, the trend lines are not encouraging.  Anders Fogh Rasmussen, NATO Secretary-General through the end of September, lamented a few months before departing that

Russian defense spending has grown by more than 10 percent in real terms each year over the past five years….By contrast, several European NATO countries have cut their defense spending by more than 20 percent over the same period….And the cuts have been particularly deep here in Central and Eastern Europe.

The old order exhibits many other signs of duress. The Financial Times’s Philip Stephens adduces the increasing (re)nationalization of banking sectors, the fragmentation of the Internet, the growing prominence of bilateral and regional trade arrangements, Chinese assertiveness in its near seas, and a host of other phenomena to argue that the world is splintering. U.S. influence in the postwar era has been so tightly linked with the cultivation of a liberal world order—the one Stephens and a growing number of other observers believe is fading into obsolescence—that one struggles to articulate the role it would play in case of that order’s degradation or dissolution.

Two biggest misperceptions about the U.S.  

While there have long been multiple conceptions of world order, there is, as of yet, no coherent alternative to the liberal one. What one sees instead is a series of piecemeal efforts to reduce its salience. In July, for example, the BRICS pledged to establish a development bank.  In October, 21 Asian countries agreed to create an Asian Infrastructure Investment Bank.  The following month, Chinese President Xi announced a Silk Road Fund to boost Asia’s connectivity. Further isolated from the West, Russia is undertaking its own rebalance to the Asia-Pacific, making special efforts to strengthen ties with China and India.

While there have long been multiple conceptions of world order, there is, as of yet, no coherent alternative to the liberal one. What one sees instead is a series of piecemeal efforts to reduce its salience. In July, for example, the BRICS pledged to establish a development bank.  In October, 21 Asian countries agreed to create an Asian Infrastructure Investment Bank.  The following month, Chinese President Xi announced a Silk Road Fund to boost Asia’s connectivity. Further isolated from the West, Russia is undertaking its own rebalance to the Asia-Pacific, making special efforts to strengthen ties with China and India.

Still, it is resentment of Western—and especially U.S.—preeminence, not an organic vision, that principally weaves together these various efforts. The most this sentiment can theoretically accomplish is the collapse of the existing order; it cannot define the contours of an alternative. While the erosion of the liberal world order has not, therefore, paved the way for a Beijing or BRICS consensus, it has amplified two misperceptions: first, that the world is becoming more dangerous, and second, that the United States is losing control of world affairs.

Adapting a 20th-century architecture of world order to the realities of the present century will be a formidable undertaking.  Concerns about today’s dangers—whether nuclear terrorism, the spread of a pandemic more lethal than the flu of 1918, or a cyberattack that cripples the vital infrastructure of a major power—would understandably be heightened if the overarching framework for mitigating their impact is weak or nonexistent. But those concerns should not yield nostalgia for the 20th century, which produced two world wars (killing an estimated 80 million in total) and the possibility, nearly realized on many occasions, of a nuclear exchange in which hundreds of millions may have perished. One of the underappreciated paradoxes of our time is that while the world is becoming more disorderly, it is also becoming more secure. While that conclusion may seem preposterous—especially given the carnage in the Middle East—careful studies of trends in genocide, war, and battle deaths reveal a world that is becoming more peaceful.

It is more difficult to understand why the second misperception exists, for the question it invites is so easily answered in the negative: Has the United States ever come close to exercising “hegemony” in the postwar era? This misperception may be a simple matter of amnesia. After all, policymakers and intellectuals began decrying the country’s alleged impotence in world affairs almost as soon as World War II ended. It may also owe to the presumption that great power yields commensurate influence. It is true that America’s shares of economic and military power used to be considerably higher; in the immediate postwar era, in fact, it had a nuclear monopoly and a commanding share of gross world product—roughly half, by some estimates. Even with that disproportion of power, however, it could not prevent the Soviet Union from going nuclear or China from going Communist—strategic setbacks that were considerably more formidable than the ones the United States has suffered in recent years.

Three policy recommendations for 2015

At least three considerations should guide the United States’s effort to locate itself in the emergent brave new world:

  1. It should adopt a richer, more nuanced conception of power to anchor its foreign policy—one that centers less on its ranking in individual metrics and more on its centrality within networks. As Anne-Marie Slaughter in early 2009, “[i]f power is derived from connectivity, then the focus of leadership should be on making connections to solve shared problems….the United States must [also] recognize the necessity of orchestrating networks of public, private and civic actors to address global problems.”
  2. It should strive to rejuvenate the liberal world order, which is responsible for unprecedented gains in human welfare, and without which, as noted earlier, America’s world role would become far more difficult to formulate. That rejuvenation will require not only giving emerging powers a greater voice in key international institutions, but also accepting a diminished role in the backyards of countries with which it has challenging relationships: China and Russia, in particular, will have little desire to integrate themselves further into a Western-stamped structure if they conclude that doing so will impose a ceiling on the influence they can wield in their immediate peripheries.
  3. It should also, however, develop a backup plan: What role should it play, and what objectives should it pursue, should its effort to modernize world order fail? The United States will not be able to formulate satisfactory answers to those questions if its foreign policy continues to turn on the day’s crises. As Moisés Naím explained this month, “we ultimately don’t know what will transform the world in the coming year….We will all be wiser if we pay heed to the rule of impersistence in geopolitics—and accept that in 2015, as in 2014, and most years before that, the events that disrupt the world will take everyone by surprise.” That is, crises cannot provide much more than short-term direction, if even that.

This piece originally appeared in War on the Rocks.

Ali Wyne is a member of the adjunct staff at the RAND Corporation, a contributing analyst at Wikistrat, and an IVY Member (DC). Connect and collaborate with Ali here! To learn more about IVY, please visit www.ivy.com.