Foreign Policy Blogs

A Funny Thing Happened on the Way to American Decline

What James Cameron and SpaceX tell us about the Future of Global Power

The Deepsea Challenger (Mark Thiessen/National Geographic)

James Cameron’s solo journey into the ocean’s deepest recesses is being hailed as a tale of personal daring and scientific adventure.  But it also holds a lesson relevant to the debate about whether the global hierarchy is being reshuffled and to what consequence.

The debate is propelled, of course, by the meteoric growth of Chinese power, made all the more vivid in recent years by America’s “Great Recession” and military exhaustion in the Greater Middle East.  Martin Wolf at the Financial Times captures the mood when he argues that “we are seeing at least the beginning of the end not just of an illusory ‘unipolar moment’ for the US but of western supremacy, in general, and of Anglo-American power, in particular.”  Philip Stephens, his colleague at the newspaper, concurs, noting that “the march of power from west to east has become the central, unnerving fact of geopolitical life.”

This narrative has been broadcast in a cascade of recent books, with such titles as: When China Rules the World; The Beijing Consensus: How China’s Authoritarian Model Will Dominate the Twenty-First Century; Eclipse: Living in the Shadow of China’s Economic Dominance; and most provocatively, Becoming China’s Bitch.  We are advised that China will “trounce” the United States in the coming years and generate an astounding $123 trillion in economic output by 2040.  A key element of the country’s success, it has been alleged (here and here), resides in a state-centric brand of economic management that presents a viable alternative to the Western model of liberal capitalism.

But the story line about China’s eminence and America’s declension may not be as preordained as many conclude.  It is easy to dismiss the profusion of febrile rumors that came out of Beijing last week.  But their proliferation has exposed deep ideological rifts within the leadership, suggesting (here and here) that the regime is not as stable as is widely believed.  Moreover, it is very much an open question whether the country’s authoritarian structures, bereft of incentives for commercial innovation, will permit its economy to continue on a high-flying trajectory.  Daron Acemoglu and James A. Robinson, in their noteworthy new book, Why Nations Fail, argue that “the spectacular growth rates in China will slowly evaporate” precisely because of its closed political institutions.

Add to this the serious population challenges that are about to befall the People’s Republic.  As one expert notes, “China is confronting the demographic version of ‘the perfect storm’, and these new demographic realities may ultimately force us to revise today’s received wisdom about ‘China’s rise.’  Suddenly, its long-term future does not look quite so bright.

Now contrast America’s prospects, which rather unexpectedly appear to be brightening.  Of particular note are the key advances recently registered by the private sector in spurring economic growth and technological innovation.  Consider, for example, the marked surge in domestic oil and natural gas production that promises to transform the country’s energy outlook, its trade balance and, perhaps, its foreign policy agenda.  An article last week in the New York Times charts the magnitude of this development:

Not only has the United States reduced oil imports from members of the Organization of the Petroleum Exporting Countries by more than 20 percent in the last three years, it has become a net exporter of refined petroleum products like gasoline for the first time since the Truman presidency. The natural gas industry, which less than a decade ago feared running out of domestic gas, is suddenly dealing with a glut so vast that import facilities are applying for licenses to export gas to Europe and Asia.

National oil production, which declined steadily to 4.95 million barrels a day in 2008 from 9.6 million in 1970, has risen over the last four years to nearly 5.7 million barrels a day. The Energy Department projects that daily output could reach nearly seven million barrels by 2020. Some experts think it could eventually hit 10 million barrels — which would put the United States in the same league as Saudi Arabia.

This stunning turnabout is, in important measure, a story of private entrepreneurs pursuing breakthroughs in drilling technology that have unlocked energy resources believed just a short time ago to be inaccessible.

The growing self-reliance in energy may also be matched by the reversal of America’s decline as a manufacturing powerhouse.  A new report by the Boston Consulting Group concludes that the United States is on the cusp of an industrial renaissance, brought about by the relocation of production assets due to rising labor costs in China as well as a growing appreciation about the dangers of operating extended global supply chains and the advantages of being closer to U.S. consumers.  A new Booz & Company study likewise finds reason for optimism about the manufacturing sector.

As the approach of Facebook’s initial public offering reminds us, America has never lacked for creative entrepreneurs such as Mark Zuckerberg.  But James Cameron’s achievement illuminates a highly significant new trend: How the private sector is supplementing and in some cases supplanting governmental efforts to push forward the frontiers of science, technology and imagination.  Cameron’s submersible (see photos here), designed by himself and funded by private groups, has accomplished a feat that none of the world’s governments can duplicate at present.  Other private deep-sea expeditions are also in the works, including vessels financed by swashbuckling entrepreneur Richard Branson and Google’s executive chairman Eric Schmidt.

A similar trend is playing out in the heavens, as the private sector fills the void left by cutbacks in the U.S. manned-space program.  In December 2010, Space Exploration Technologies Corporation (more popularly known as SpaceX) became the first private company to launch and return a spacecraft from orbit.  Established by Paypal co-founder Elon Musk, the firm has signed a contract with NASA to conduct a dozen cargo flights to the International Space Station.  An unmanned demonstration flight to the Station is scheduled for next month.  If successful, private entrepreneurs will have inaugurated a new era in space transportation, taking on tasks that were heretofore the province of governments.

As we learn more about the exploits of Cameron and SpaceX in the weeks ahead, we might do well to ponder their broader significance.  There is no question that the global order is becoming more pluralistic.  Yet the opportunities for entrepreneurs, innovators and risk-takers engendered in the West, and especially in America, should give pause to confident predictions about China’s inexorable ascendancy.

  • John

    America is welcoming of change, innovation – and immigration. Not so much in Russia, and definitely not in China. However, Canadian immigrants to the US, like James Cameron, or from Russia like Sergey Brin, came to America seeking an environment for opportunity – and they found it.

  • Reg

    A U.S. energy policy that recognizes that (relatively cheap) fossil fuel will continue to drive global economies for at least the next 50-75 years is needed to attain the economic optimism in this article. Create economic prosperity first with cheap energy before investing in the more expensive renewable sources. A global push to precipitously switch to the expensive energy from renewable sources will sour economies and lower standards of living. The poor, around the world, will die first of hunger and disease before they fry in the heat of global warming.


David J. Karl
David J. Karl

David J. Karl is president of the Asia Strategy Initiative, an analysis and advisory firm that has a particular focus on South Asia. He serves on the board of counselors of Young Professionals in Foreign Policy and previously on the Executive Committee of the Southern California chapter of TiE (formerly The Indus Entrepreneurs), the world's largest not-for-profit organization dedicated to promoting entrepreneurship.

David previously served as director of studies at the Pacific Council on International Policy, in charge of the Council’s think tank focused on foreign policy issues of special resonance to the U.S West Coast, and was project director of the Bi-national Task Force on Enhancing India-U.S. Cooperation in the Global Innovation Economy that was jointly organized by the Pacific Council and the Federation of Indian Chambers & Industry. He received his doctorate in international relations at the University of Southern California, writing his dissertation on the India-Pakistan strategic rivalry, and took his masters degree in international relations from the Johns Hopkins University School of Advanced International Studies.