More Mark Steyn!

At Blazing Cat Fur, "John Oakely interviews Mark Steyn."

The U.S. Still Has a Promising Future?

Well, I certainly hope so.



But check Michael O'Hanlon, at Los Angeles Times, "Despite Problems, the U.S. Still Has a Promising Future":

Amid all the talk of gloom and doom in the United States, with the stock market's near-crash and the renewed threat of a double-dip recession, it is worth pausing to remember that the United States remains the greatest country on Earth. It is also the country with the most promising future. I make these assertions not as a matter of national pride, but as an analytical conclusion.

And he makes an excellent argument. The problem --- and I know it's a problem, because I'm just like O'Hanlon on this --- is that his analysis is almost completely structural. That is, O'Hanlon's looking at all this recent turmoil from a comparative power analysis interpretation, which almost systematically excludes internal political determinants. We can extrapolate from past patterns of America's remarkable exceptionalism and global preponderance and expect things to flow along fairly well simply because for all our troubles, no single other nation matches America's bounty or prospects. But the debt downgrade, as Danial Henniger points out today, is the ultimate signal that American hegemony is shrugging. To use Mark Steyn's analogy, we're like a prize fighter who's been hammered, and the opponent's sitting at the opposite stool, counting the seconds until the bell rings to come over for another round of pummeling. That's to say, for example, when Britain fell from preeminent status after WWI, and most definitely at the conclusion of WWII, the mantle of global political and eocnomic leadership passed to a benign power across the Atlantic, the United States. The U.S. had not only resisted the hegemonic role during the 1920s, but after WWII we did just about everything in our power to restore the defeated European nations and Japan to economic vitality and competitiveness. As America declines now --- and I'm using decline now for the first time really in agreement --- there's is no commensurate situation of the leading power passing the baton to a friendly rising power, as we experienced in 1945. China and Russia cooperate where possible but will seek advantage from America's weakening position, as power politics dictates, and that's while at the same time China is paradoxically hemmed in further from America's debt problems (mutual vulnerability forms a trace element of U.S. power internationally). And of course toss into the mix President Obama's hellbent agenda of making the United States the unexceptional nation, and well, let's just hope he's out in one term, November 6th, 2012. And the key factor for the electorate is the massive Democrat debt overhang. We're heading into a double-dip recession, some say. The Fed, for example, promised zero percent interest rates until 2013 because it expects no growth. The only thing good about this is that it almost guarantees that the Democrat ticket will lose next November. Even then, Republicans have been nearly as addicted to spending as the Democrats, with G.W. Bush's Medicare prescription drug expansion being Exhibit A. And the debt overhang will accelerate the collapse of U.S. world leadership unless two things happen: (1) we cut spending, and (2) the economy grows at a sustained pace of growth, say at three percent annual GDP for a decade or two, and then some. I can't see things turning around unless we have a combination of those two things, and without that we'll see a steady erosion of both U.S. global influence and a decline in the U.S. standard of living at home.



So, yes, Michael O'Hanlon makes a good case for continued optimism, but a more thorough analysis must consider the current failures of the American political system, and most importantly, the epic failures of the Democrat Party's expansionist, economic-killing social welfare policies.



More on this later ...

America as Less Than No. 1

I've been thinking about this. I find myself losing my normal optimism on America, which is extremely unlike me.



See Danial Henniger, at Wall Street Journal:

The U.S. is far from finished. The private economy—from the biggest corporations to innumerable dreamers launching start-ups—is fit and eager. But make no mistake: The U.S. has taken a hard hit to its 65-year status as the world's pre-eminent nation.

RTWT.



I'll have more on this topic in upcoming posts.

The Future of Space

We need a space program. The end of the Space Shuttle Program makes us think about our priorities and world preponderance. America's not relinquishing scientific leaderships just yet, thank goodness.

There's an appraisal at New York Times, "3, 2, 1, and the Last Shuttle Leaves an Era Behind" (via Memeorandum).

Also at USA Today, "Shuttle ends 30-year run, but U.S. will be back":

Though shuttles will have launched 135 times with unique achievements — and two catastrophic failures that claimed the lives of 14 courageous astronauts and reminded a stunned nation of the price of pioneering — the program never did vastly expand the human presence in space.

But fret not. The end of the shuttle is not a signal that America is becoming less adventurous. It is simply the latest indication that technology advances in fits and starts, and rarely along the trajectories projected by the experts.

America will be back with a new manned space vehicle at some point. This may happen for political reasons if China, or some other nation, goads us into action by embarking on an ambitious program of its own. And it will happen for a variety of reasons when engineers overcome the one barrier that has frustrated them — the prohibitive costs of getting the first hundred miles or so off the Earth's surface.

In the meantime, let's step back and consider the extraordinary age that we have created ...

Highlights of F-35 Flight Testing

At NAS Patuxent River, Md., NAS Fort Worth Joint Reserve Base, and Edwards AFB, Ca.

Via Theo Spark:

Here Come Chinese 'Trophy Acquisitions' in the U.S.

In 1989, the editorial board of the New York Times asked, "Is the transfer of American assets to Japanese ownership something to worry about?"

The answer was no, "of course." But the Times board when on to suggest that this was "a sharp reminder of Japan's growing economic strength." So true, but within just a few years, by the mid-1990s, those fears of "Japan as Number One" quickly dissipated as that nation floundered in the fallout from its overheated bubble economy.

I'm reminded of this by the news this morning that China's Industrial and Commercial Bank of China Ltd. (ICBC) has made a bid for ownership entry into the U.S. financial market. See WSJ, "China's ICBC Bids for U.S. Entry":

CHICAGO—Industrial & Commercial Bank of China Ltd. on Friday signed an agreement here to acquire a majority stake in Bank of East Asia Ltd.'s U.S. subsidiary, becoming the first state-owned Chinese bank to make an acquisition of a U.S. deposit-taking institution.

The deal, signed on the last day of Chinese President Hu Jintao's state visit to the U.S., represents what could be the start of big expansions by Chinese financial institutions in the world's largest economy.

The deal comes as both Beijing and Washington are calling for greater commercial ties between the two countries. China is prodding the U.S. to ease its export controls, especially those involving high-technology products, while the U.S. is asking for more Chinese purchases of made-in-America goods and services.

Still, the Bank of East Asia transaction promises to be carefully scrutinized by U.S. regulators, including the Committee on Foreign Investment in the United States, known as Cfius, because of the state-controlled nature of ICBC, China's largest lender. Bank of East Asia is a publicly traded bank based in Hong Kong.

RTWT.

And also at WSJ, "Why China’s ICBC Bank Deal is Important."

The Chinese are coming to America. And we'll soon see, no doubt, some "trophy acquisitions" that raise hollers far and wide. But as we've learned from previous experience, this hardly means the end of American world preeminence.

In any case, Daniel Drezner has a roundup on those "writers who vastly exaggerate China's rise!" See, "The most absurd edge of the 'China as behemoth' meme."

Related: Paul Krugman on China (via Memeorandum).

I'll have more later ...

Why China Will Not Overtake U.S. as Top Leading Power

Well, not anytime soon, at least.

And, yeah, I know.

I've admitted I'm not as bullish on continued American preponderance as I used to be, but stories like this remind us that China is seriously FUBAR on freedom --- and hence, innovation. At Telegraph UK, "China Makes Skype Illegal."

China on Thursday announced that it had made illegal the use of Skype, the popular internet telephony service, as the country continues to shut itself off from the rest of the world.

In the latest move dashing Western internet company hopes of breaking into China, it was announced that all internet phone calls were to be banned apart from those made over two state-owned networks, China Unicom and China Telecom.

"[This] is expected to make services like Skype unavailable in the country," reported the People's Daily, the official mouthpiece of the Communist party.

Websites such as Facebook, Twitter and YouTube are already blocked in China and Google closed down its Chinese servers last year after heavy government pressure.

Stand Up to China

And stand up for the defense budget.

Ambassador Bolton on Fox Business Channel:

Americans No Longer Think U.S. Economy No. 1

From Ronald Brownstein, at National Journal, "Down From The Pedestal" (via Memeorandum):

In the global race for jobs and economic prosperity, the United States is No. 2. And it is likely to remain there for some time. That’s the glum conclusion of most Americans surveyed in the latest Allstate/National Journal Heartland Monitor poll. Henry Luce famously labeled the 20th century the “American Century.” This survey suggests that most Americans now doubt that this new century will bear that name.

In the poll, only one in five Americans said that the U.S. economy is the world’s strongest—nearly half picked China instead. Looking forward, Americans are somewhat more optimistic about regaining primacy, but still only about one in three expect the U.S. economy to be the world’s strongest in 20 years. Nearly three-fifths of those surveyed said that increasing competition from lower-paid workers around the world will keep living standards for average Americans from growing as fast as they did in the past. Ruben Owen, a retired Boeing engineer in Seattle who responded to the survey, spoke for many when he said, “We’re still in a reasonably good place … but it’s going to get harder because other places are growing stronger.”

Across a wide range of issues, the poll found the traditional American instinct toward optimism straining against fears that the nation’s economic struggles may extend far beyond the current slowdown. On many fronts, particularly the quality of higher education and scientific research, large majorities of Americans still believe that we lead the world. And most say that the U.S. can remain a manufacturing leader.

RTWT.

We discussed exactly this topic in the conclusion to my World Politics course on Wednesday. China still has quite a ways to catch the United States on a number of measures. China's GDP in 2009 was roughly $5 trillion. The U.S. economy was nearly three times as large, at rougly $14.2 trillion. And while breathtaking, I doubt China can maintain its growth trajectory indefinitely (see, "China Is Not Another Ascendant Superpower"), and the nation's quality of life is still mired by its Third World standard of living for much of the population (see, "Cost of Living Increasingly a Struggle for China's Poor").

Especially problematic is Chinese authortarianism. I noticed today this piece yesterday at NYT: "China Moves to Block Foreign News on Nobel Prize." And earlier at WaPo, "On eve of Nobel ceremony, China cracks down and lashes out." The research on democracy and economic productivity suggests that non-democracies perform as well as democratic states, but given the information-driven nature of coming first-mover industries, I doubt China will compete effectively against the United States as long as it remains a closed, repressive regime.

That said, there's always the potential for increased conflict in U.S.-Chinese relations. The Economist reported on that this week: "The dangers of a rising China," and "Friends, or else: A special report on China's place in the world."

More on all of this later.

RELATED: "The Road to Ruin? American Profligacy and American Power."

Happy Thanksgiving From Blackfive

Via Theo Spark:

I almost skipped posting this, but Uncle Jimbo pulls off some Reaganite optimism toward the end of the clip. It's good to hear, considering everything of late.

Chalmers Johnson Obituaries

Following up my post, "Chalmers Johnson, 1931-2010."

WaPo published an obituary yesterday, "Renowned Asia Scholar Chalmers Johnson Dies at 79."

Dr. Johnson's interest in Asia began in 1953, after he graduated with an economics degree from the University of California at Berkeley and became an officer in the Navy aboard a landing ship tank, a shallow-bottomed cargo vessel.

During his wartime service, Dr. Johnson's ship ferried North Korean prisoners back across the demarcation line but often experienced mechanical trouble and was sent to Yokohama, Japan, for repairs.

While waiting for the vessel to be fixed, Dr. Johnson bided his time by learning Japanese and examining the country's culture, economy and longtime turbulent relationship with China.

When he returned to Berkeley in 1955, Dr. Johnson began studying political science and immersed himself in texts related to Asia. For his doctoral thesis, Dr. Johnson explored the rise of the Communist party in China, which he claimed was rooted in a contagious zeitgeist of nationalism shared among much of the country's poor.

To illustrate his point, he compared the rise of Communism in China to that of Yugoslavia shortly after the Germans invaded that eastern European country in World War II, where many peasants became fervently nationalistic and mobilized under the Yugoslav Communist party leadership.

He received a doctorate in 1961 and embarked on a year-long Ford Foundation fellowship in Tokyo. During that time, he revised his thesis and in 1962 it was released as a book - "Peasant Nationalism and Communist Power: The Emergence of Revolutionary China, 1937-1945," - the same year he joined the Berkeley political science faculty.

In 1982, Dr. Johnson released "MITI and the Japanese Miracle: The Growth of Industrial Policy, 1925-1975," where he reported on the Japanese government's control over the country's capitalistic market.

It was in the research to that book that Dr. Johnson said he initially became disillusioned with what he would later term "American imperialism" abroad and would lead him "to see clearly for the first time the shape of the empire that I had so long uncritically supported."

The full obituary at the link.

UC San Diego has a feature as well, "Leading Scholar on Japan - Chalmers Johnson (1931-2010) - Left Lasting Legacy at UC San Diego."

The Road to Ruin? American Profligacy and American Power

I've mentioned this piece a number of times now, from Roger Altman and Richard Haass, "The Consequences of Fiscal Irresponsibility." The introduction provides the background to America's massive fiscal overhang, and then this:

It is important to understand the impact of all this debt. As it grows, interest rates inevitably rise. As they do, the U.S. government's annual interest expense -- the cost of borrowing money -- will rise from one percent of GDP to four percent or more. At that point, interest expense would rival defense expenditures. And it would exceed all domestic discretionary spending, a category that includes spending on infrastructure, education, energy, and agriculture -- in effect, anything other than entitlements and national security. The U.S. Treasury would need to borrow a staggering $5 trillion every single year, both to finance deficits and to refinance maturing debt.

Yet the real outlook for deficits and debt is much worse than these forecasts. For one thing, the debt that the United States effectively guarantees but that is not included in official totals is almost equal to the Treasury Department's stated $9 trillion total. In particular, the debt of government-sponsored enterprises is another $8 trillion. The biggest of these are the essentially bankrupt housing finance agencies, Fannie Mae and Freddie Mac. They have been placed into federal conservatorship, and for all practical purposes, their debt is equivalent to U.S. Treasury debt. The American taxpayer stands fully behind it.

State and local governments also owe huge amounts, on the order of $3 trillion. And again, Washington indirectly stands behind much or all of it. This sector is deeply distressed, with the largest state, California, recently issuing IOUs. Moreover, many state and municipal pension systems use an antiquated pay-as-you-go funding approach, which has left them underfunded by another $1 trillion.

The post-2020 fiscal outlook is downright apocalyptic, for two reasons. First, the aging of the U.S. population will drive sharp increases in health care costs (and at the same time, more Americans will be retired). Second, federal interest expense will rise exponentially, as the Treasury's borrowing costs grow with the debt. The Congressional Budget Office projects that official federal debt (excluding government-sponsored enterprises) could hit 110 percent of GDP by 2025 and 180 percent by 2035. Adjusting these forecasts for the inevitably slower growth that would accompany such quickly rising debt levels means hitting those stratospheric ratios sooner.

Why is this scenario so dangerous? One reason is that a large amount of federal borrowing would eat up the stock of private capital that is available to finance investment. A higher and higher percentage of personal savings would be diverted to purchasing government debt and away from productivity-enhancing investments in equipment and technology. This would shrink the base of productive capital and flatten GDP and family incomes. As more and more debt piled up, growth would slow and Americans' standard of living would fall.

In addition, interest expense would become so large as to crowd out whole categories of federal spending. Budgets for research, education, and infrastructure, to name but three examples, would inevitably decline in inflation-adjusted terms. Washington's capacity to respond to domestic crises, such as the recent recession, would also fade. All of this would further undermine families' incomes.

More at the link.

My problem with this piece is that it's way too pessimistic, even for a problem of this magnitude. There's no discussion of how tax receipts rise dramatically during periods of robust economic growth. So should the administration agree to the extention of the Bush tax cuts from 2003, it's possible that a surge in GDP --- with a boom in individual and corporate profits --- could send a significant windfall of revenue to the treasury. This was indeed happening by the last couple of years of the Bush administration, and it's likely to happen over the next few years, now that the GOP has retaken the House. See the commentary at Wall Street Journal, "Liberal Tax Revolt."

And refer to my bullish comments from Saturday on the international aspects of coming growth domestically: "The World in China's Orbit?"

Chalmers Johnson, 1931-2010

Professor Chalmers Johnson has died.

Steve Clemons has reflections (via Memeorandum), and see also the links at Google so far. Leftists lionize Johnson --- not to mention paleocon America-bashers --- for his research on the purported American empire. Much more important is Johnson's work in comparatitve political science.

Below I've re-posted an essay on Johnson from January 31, 2007, "Chalmers Johnson and America's Imperial Decline."

*****

Chalmers Johnson's one of the nation's foremost experts on Japanese politics and international economic competitiveness. A professor emeritus at UC San Diego, Johnson's book, MITI and the Japanese Miracle: The Growth of Industrial Policy, 1925-1975, remains one of the most important selections on Japanese politics graduate syllabi. In recent years Johnson's been writing on trends in American foreign policy, particularly the consequences of America's clandestine intelligence operations and the "blowback" from U.S. strategic reach and ambition.

Johnson's got a new book out, Nemesis: The Last Days of the American Empire, which looks at what Johnson sees are threats to the republic from the country's massive military industial complex, which emerged from our post-World War II foreign policy of containing threats to U.S. national security.

Nemesis received an outstanding review by Tim Rutten in today's Calendar at the Los Angeles Times:

The thesis proffered here is that, since the end of World War II, the United States has been undergoing a kind of creeping coup in which the growth of an imperial presidency, the development of the CIA as a secret presidential army, the bloating of an outsized military establishment, and a venal and derelict Congress have conspired to undermine the American republic — perhaps irremediably.

Much of what Johnson denounces is the Bush administration's advocacy of executive branch supremacy in the realm of national security, manifest, for example, in the adminstration's early policies on the detention and torture of enemy combatants. But Johnson goes too far in making his case, essentially equating the Bush administration's excesses with the totalitarianism of Hitler's Nazi regime. Here's what Rutten says about that analytical overstretch:

Many of the conclusions Johnson teases from his shrewdly assembled and analyzed material are not so convincing. For example, appropriating Hannah Arendt's description of Adolf Eichmann — "desk murderer" — and applying it to Cheney, George W. Bush and Donald H. Rumsfeld isn't just histrionic, it's wrong on the merits, wrong in ways so fundamental that it renders moral judgment itself a uselessly blunt instrument. However horrific events in Iraq have been, they have nothing in common with Hitlerian Germany's "final solution," and it does violence to both reason and history to carelessly suggest otherwise for mere effect.

On the other hand, when Johnson argues that America "will never again know peace, nor in all probability survive very long as a nation, unless we abolish the CIA, restore intelligence collecting to the State Department, and remove all but purely military functions from the Pentagon," he presents a case that demands consideration.

That sounds pretty fair. Rutten goes on to give additional examples of the difficulties of Johnson's analysis. For example, even if the Bush administration succeeded in elevating White House power into an "imperial presidency," the election of a Democratic majority in the November midterms has already started the process of restoring the balance of power among the branches in the federal system. The democracy's not in jeopardy of succumbing to a military dictatorship any time soon, as Rutten ably points out.

(An interesting aside here is that Johnson's book shares its title, Nemesis, with the second edition of Ian Kershaw's authoritative biography of Adolph Hitler, Hitler: 1936-1945, Nemesis. I agree with Rutten, though, that comparing Bush to Hitler -- or U.S. foreign policy to Nazi foreign policy -- defies reason. The antiwar left, nonetheless, loves to denounce the Bush administration as fascist. Whether the shared title was deliberate or coincidental is an intriguing footnote to Johnson's scholarship.)

I've been reluctant to read Johnson's latest books. Upon skimming The Sorrows of Empire at Barnes and Noble, for example, I got the feeling the work was just a dressed-up, high-brow anitwar attack on the Bush administration war policies. Rutten's cool-handed review has convinced to give Johnson's writing a second look, however. There's a growing debate on America's continued leadership of the global system -- which I have discussed here and here, for example -- and Johnson's work certainly adds an important dimension to the discussion.

The World in China's Orbit?

From Niall Ferguson, at Wall Street Journal, "In China's Orbit":

Today per capita GDP in China is 19% that of the U.S., compared with 4% when economic reform began just over 30 years ago. Hong Kong, Japan and Singapore were already there as early as 1950; Taiwan got there in 1970, and South Korea got there in 1975. According to the Conference Board, Singapore's per capita GDP is now 21% higher than that of the U.S., Hong Kong's is about the same, Japan's and Taiwan's are about 25% lower, and South Korea's 36% lower. Only a foolhardy man would bet against China's following the same trajectory in the decades ahead.



China's has been the biggest and fastest of all the industrialization revolutions. In the space of 26 years, China's GDP grew by a factor of 10. It took the U.K. 70 years after 1830 to grow by a factor of four. According to the International Monetary Fund, China's share of global GDP (measured in current prices) will pass the 10% mark in 2013. Goldman Sachs continues to forecast that China will overtake the U.S. in terms of GDP in 2027, just as it recently overtook Japan.



But in some ways the Asian century has already arrived. China is on the brink of surpassing the American share of global manufacturing, having overtaken Germany and Japan in the past 10 years. China's biggest city, Shanghai, already sits atop the ranks of the world's megacities, with Mumbai right behind; no American city comes close.



Nothing is more certain to accelerate the shift of global economic power from West to East than the looming U.S. fiscal crisis. With a debt-to-revenue ratio of 312%, Greece is in dire straits already. But the debt-to-revenue ratio of the U.S. is 358%, according to Morgan Stanley. The Congressional Budget Office estimates that interest payments on the federal debt will rise from 9% of federal tax revenues to 20% in 2020, 36% in 2030 and 58% in 2040. Only America's "exorbitant privilege" of being able to print the world's premier reserve currency gives it breathing space. Yet this very privilege is under mounting attack from the Chinese government.



For many commentators, the resumption of quantitative easing by the Federal Reserve has appeared to spark a currency war between the U.S. and China. If the "Chinese don't take actions" to end the manipulation of their currency, President Obama declared in New York in September, "we have other means of protecting U.S. interests." The Chinese premier Wen Jiabao was quick to respond: "Do not work to pressure us on the renminbi rate…. Many of our exporting companies would have to close down, migrant workers would have to return to their villages. If China saw social and economic turbulence, then it would be a disaster for the world."

Read the whole thing at the link.



Ferguson's a phenomenal scholar. I really enjoyed his piece on U.S. decline earlier this year, at Foreign Affairs, "Complexity and Collapse: Empires on the Edge of Chaos." And up until recently I'd been mostly bullish on the duration of American preponderance, but with the long recession in the U.S., and the political intransigence that makes the tough decisions (massive reducdtions in federal spending) nearly impossible, I'm growing more skeptical on sustaining U.S. hegemony for much more than a generation. It's not like we can't turn things around at home, especially on fiscal policy (see, "How to Cut $343 Billion from the Federal Budget"), but that we've got a massive collective action problem, particularly on entitlement reform, which hinders progress.



One point not discussed is cyclical economic trends, domestically and internationally. I've consistently maintained that the U.S. will not only come roaring back, but that we're soon likely to experience another decade like the 1990s (which stifled talk of American decline after our last period of self-doubt). And who's to say that China will ineluctably continue its path to the tops of international power? Perhaps the secular trend toward parity is largely inevitable, but the U.S. has assets that other former hegemonic powers lacked (continued population dynamism at home, for one thing, set to increase the U.S. population to about 400 million by 2050, something even Joseph Nye neglected to mention in his recent piece, "The Future of American Power: Dominance and Decline in Perspective").



More on all of this going forward.

Current Status of Science Around the World: Implications For the Distribution of World Power

Via Glenn Reynolds, I'm interested in this report from The Economist, "Climbing Mount Publishable: The Old Scientific Powers Are Starting to Lose Their Grip":

TWENTY years ago North America, Europe and Japan produced almost all of the world’s science. They were the aristocrats of technical knowledge, presiding over a centuries-old regime. They spent the most, published the most and patented the most. And what they produced fed back into their industrial, military and medical complexes to push forward innovation, productivity, power, health and prosperity.

All good things, though, come to an end, and the reign of these scientific aristos is starting to look shaky. In 1990 they carried out more than 95% of the world’s research and development (R&D). By 2007 that figure was 76%.

Such, at least, is the conclusion of the latest report from the United Nations Educational, Scientific and Cultural Organisation, UNESCO. The picture the report paints is of a waning West and a rising East and South, mirroring the economic shifts going on in the wider world. The sans culottes of science are on the march.

More food for thought in light of last night's entry, "China Challenges United States for Aerospace Leadership."

RELATED: "Chinese Plan to Buy Stake in GM."

China Challenges United States for Aerospace Leadership

I mentioned earlier some of my quibbles with Professor Joseph Nye on the likelihood of continued American preponderance. Actually, my quibbles are even smaller than quibbles, if quibbles can be quantified. Mostly, our massive fiscal deficits are upsetting, and I'm hoping to have something to say on "American Profligacy and American Power," by Roger Altman and Richard Haass. But I have to admit I was caught off guard by this report at LAT, "China to Unveil Its Own Large Jetliner":

China is aiming to reshape the global aviation industry with a home-grown jetliner, a direct challenge to the supremacy of Boeing and Airbus, the world's only manufacturers of large commercial aircraft.



The communist government has staked billions of dollars and national pride on the effort. What may surprise some Americans worried about slipping U.S. competitiveness is that some well-known U.S. companies are aiding China in its quest.



That partnership will be on display next week at an air show in southern China with the unveiling of a full-scale mockup of the C919. Slated for production by 2016, the 156-seat, single-aisle passenger plane would have its fuselage emblazoned with Comac, short for the state-owned Commercial Aircraft Corp. of China. But inside, the most crucial systems would bear the trademarks of some of the biggest names in Western aviation.



Honeywell International Inc. will supply power units, on-board computing systems, wheels and brakes; Rockwell Collins Inc. will handle navigation systems; GE Aviation is building the avionics; Eaton Corp. is involved with fuel and hydraulics; and Parker Aerospace of Irvine is responsible for flight controls. Powering the aircraft will be two fuel-efficient engines built by CFM International, a company co-owned by GE and French conglomerate Safran.



Global supply chains are common in the aviation industry: Chicago-based Boeing and Europe's Airbus rely on parts makers and assembly operations around the world. But China isn't content just to buy sophisticated gear for the C919; the government has required foreign suppliers to set up joint ventures with Chinese companies.



That has put U.S. and European suppliers in a tough spot: Be willing to hand over advanced technology to Chinese firms that could one day be rivals or miss out on what's likely to be the biggest aviation bonanza of the next half a century. Honeywell alone has snagged contracts worth more than $11 billion for the project.



"You're faced with either being part of it or not," said Billy Lay, a Dubai-based partner at PRTM, an international consulting firm with expertise in aerospace. "I don't know what the alternatives are."

Actually, we've dealt with such scenarios before, when Americans were concerned with growing Japanese industrial competitiveness in the late-1980s (see, "Beyond Mutual Recrimination: Building a Solid U.S.-Japan Relationship in the. 1990s," and "Do Relative Gains Matter? America's Response to Japanese Industrial Policy"). Back then, the U.S. response was to place export controls on sensitive industrial sectors, especially in aerospace. I can't imagine in just twenty years that kind of realpolitik in economic policy (neo-mercantilism) has been completely repudiated at the top levels of strategic planning. Perhaps Japan was more brazenly competitive, or China's more stealthy now. Either way, concerns for relative gains contributed to restrictions on sensitive technologies, and limits on private sector exports and cooperation in strategic technologies.



Maybe we're complacent. But we're still on top, at least for now. See, "Asia and Europe Giving U.S. Science a Run for the Money":

The United States still leads the world with its scientific clout, armed with highly respected universities and a big war chest of funding, but Europe and Asia are catching up, according to a Thomson Reuters report released on Friday.



The U.S. emphasis on biological and medical sciences leaves the fields of physical sciences and engineering open to the competition, the report finds.



"The United States is no longer the Colossus of Science, dominating the research landscape in its production of scientific papers, that it was 30 years ago," the report reads.



"It now shares this realm, on an increasingly equal basis, with the EU27 (the 27 European Union members) and Asia-Pacific," adds the report, available at http://researchanalytics.thomsonreuters.com/grr/.

I'll be back to this topic soon. President Obama was just in the news last week with the statement that America's best days were behind us: "Obama Acknowledges Decline of U.S. Dominance." The president is post-American anyway, but the matter's worth paying attention to. As noted, I'm mostly with Joseph Nye above. But extreme levels of deficit and debt, and now with new signs of threatening international economic competition, look to be putting tremendous pressure on the continuation of American world leadership.



More later ...

Joseph Nye and the Future of American Power

Probably no scholar has written as much on the nature and longevity of American power as has Joseph S. Nye Jr. of Harvard University. Professor Nye has a forthcoming book, The Future of American Power, and his essay, "The Future of American Power: Dominance and Decline in Perspective," is the lead article at the new Foreign Affairs special edition, "The World Ahead." Here's the introduction:

The twenty-first century began with a very unequal distribution of power resources. With five percent of the world's population, the United States accounted for about a quarter of the world's economic output, was responsible for nearly half of global military expenditures, and had the most extensive cultural and educational soft-power resources. All this is still true, but the future of U.S. power is hotly debated. Many observers have interpreted the 2008 global financial crisis as the beginning of American decline. The National Intelligence Council, for example, has projected that in 2025, "the U.S. will remain the preeminent power, but that American dominance will be much diminished."

Power is the ability to attain the outcomes one wants, and the resources that produce it vary in different contexts. Spain in the sixteenth century took advantage of its control of colonies and gold bullion, the Netherlands in the seventeenth century profited from trade and finance, France in the eighteenth century benefited from its large population and armies, and the United Kingdom in the nineteenth century derived power from its primacy in the Industrial Revolution and its navy. This century is marked by a burgeoning revolution in information technology and globalization, and to understand this revolution, certain pitfalls need to be avoided.

First, one must beware of misleading metaphors of organic decline. Nations are not like humans, with predictable life spans. Rome remained dominant for more than three centuries after the peak of its power, and even then it did not succumb to the rise of another state. For all the fashionable predictions of China, India, or Brazil surpassing the United States in the next decades, the greater threat may come from modern barbarians and nonstate actors. In an information-based world, power diffusion may pose a bigger danger than power transition. Conventional wisdom holds that the state with the largest army prevails, but in the information age, the state (or the nonstate actor) with the best story may sometimes win.

Power today is distributed in a pattern that resembles a complex three-dimensional chess game. On the top chessboard, military power is largely unipolar, and the United States is likely to retain primacy for quite some time. On the middle chessboard, economic power has been multipolar for more than a decade, with the United States, Europe, Japan, and China as the major players and others gaining in importance. The bottom chessboard is the realm of transnational relations. It includes nonstate actors as diverse as bankers who electronically transfer funds, terrorists who traffic weapons, hackers who threaten cybersecurity, and challenges such as pandemics and climate change. On this bottom board, power is widely diffused, and it makes no sense to speak of unipolarity, multipolarity, or hegemony.

In interstate politics, the most important factor will be the continuing return of Asia to the world stage. In 1750, Asia had more than half the world's population and economic output. By 1900, after the Industrial Revolution in Europe and the United States, Asia's share shrank to one-fifth of global economic output. By 2050, Asia will be well on its way back to its historical share. The rise of China and India may create instability, but this is a problem with precedents, and history suggests how policies can affect the outcome.

I've highlighted the second to last quote above, because it caught my attention. I can recall, almost twenty year ago, Nye offered the same basic analogy, in an article from Spring 1992 at Foreign Affairs, "What New World Order?":

No single hierarchy describes adequately a world politics with multiple structures. The distribution of power in world politics has become like a layer cake. The top military layer is largely unipolar, for there is no other military power comparable to the United States. The economic middle layer is tripolar and has been for two decades. The bottom layer of transnational interdependence shows a diffusion of power.

The top of the international remains unipolar with the concentration of military power in the United States. But I'm interested in how in 1992 Nye spoke of economic "tripolarity" but today mentions "multipolarity" going back from more than a decade ("tripolarity" was a hip term at the time, as Japan and Germany seemed to be emerging at "the new superpowers.") And the bottom layer --- now a chessboard and not a layer cake --- is transnational relations, which implies much larger system effects from non-state actors such as al Qaeda (clearly a nod to the dramatic importance of the global war on terrorism in U.S. foreign policy over the last decade).

Overall, I have little disagreement with Nye's analysis. The one thing that really concerns me, and perhaps more so that it does Nye, is the impact America's long-term debt burden will have on the sustainability of U.S. power. He writes later in the essay, for example:

On the question of absolute, rather than relative, American decline, the United States faces serious problems in areas such as debt, secondary education, and political gridlock. But they are only part of the picture. Of the multiple possible futures, stronger cases can be made for the positive ones than the negative ones. But among the negative futures, the most plausible is one in which the United States overreacts to terrorist attacks by turning inward and thus cuts itself off from the strength it obtains from openness. Barring such mistaken strategies, however, there are solutions to the major American problems of today. (Long-term debt, for example, could be solved by putting in place, after the economy recovers, spending cuts and consumption taxes that could pay for entitlements.) Of course, such solutions may forever remain out of reach. But it is important to distinguish hopeless situations for which there are no solutions from those that could in principle be solved. After all, the bipartisan reforms of the Progressive era a century ago rejuvenated a badly troubled country.

I'll have more on this, but see, in the current issue, Roger C. Altman and Richard N. Haass, "American Profligacy and American Power." And Niall Ferguson, from March/April 2010, "Complexity and Collapse: Empires on the Edge of Chaos."

Post-Anti-Americanism?

I'm sure Howard Fineman is a good guy (hardly a netroots freak), but seriously, he should read some of the scholarly literature on hegemony and U.S. power. Signs in Europe of a post-post-9/11 anti-Americanism simply signal that continent's ever increasing irrelevance in great power international politics. See, "Europe can’t even be bothered to hate America any more":

I got on a recently completed three-week trip to Italy, Greece, Turkey, and the Black Sea. America is no longer admired, imitated, or feared. We remain—for now—a safe haven for dollars (of which there are too many in the world). But we increasingly are seen less as a model or as an empire than as a cautionary tale of national neglect and decline.



Some Europeans can’t quite hide their schadenfruede. The British—whose publications and personalities are increasingly (and annoyingly) influential in the colony they lost 227 years ago—are global leaders in condescension (think Simon Cowell). But for America they add a special twist of bitter lemon to their analyses. It’s the triumph of the doddering older brother who no longer has to be grateful to his junior. Memories fade, and the Brits no longer feel they have to be kind out of homage to our having saved them from Hitler.



A couple of examples from the genre. Writing in the Guardian, Timothy Garton Ash sees a Third World shabbiness when he visits the United States. “Every time I come back to the United States,” the Oxford don writes, “the airports, the roads, the public spaces look more tattered, battered, old-fashioned. Modernity is no longer self-evidently here.”



Edward Luce, a brilliant and diligent reporter for the Financial Times, surveyed the American landscape and came up with a mournful portrait that echoes, in equal measure, Diane Arbus, Walker Evans, and Robert Altman. Citing incontrovertibly bleak statistics about the struggles of middle-class Americans, and the growing disparity between the really rich and everyone else, he concludes that the U.S. is losing its essential character: it is no longer the land of opportunity and upward mobility; no longer the place where the future will surely be better, and more prosperous, than the past ...

Oh God ... tha's all I can read.



Folks are better off reading Michael Mandelbaum, "The Downsizing of American Foreign Policy." And Mandelbaum's no declinist, by the way. Let's get this economy pumping (ahem, President Obama), and we'll get America back on top in world public opinion (hope and change ain't doin' the trick).



RELATED: "Do States Ally Against the Leading Global Power?"

The Nukes We Need

Keir Lieber and Daryl Press, previously at Foreign Affairs, "Preserving the American Deterrent":

The success of nuclear deterrence may turn out to be its own undoing. Nuclear weapons helped keep the peace in Europe throughout the Cold War, preventing the bitter dispute from engulfing the continent in another catastrophic conflict. But after nearly 65 years without a major war or a nuclear attack, many prominent statesmen, scholars, and analysts have begun to take deterrence for granted. They are now calling for a major drawdown of the U.S. nuclear arsenal and a new commitment to pursue a world without these weapons.

Unfortunately, deterrence in the twenty-first century may be far more difficult for the United States than it was in the past, and having the right mix of nuclear capabilities to deal with the new challenges will be crucial. The United States leads a global network of alliances, a position that commits Washington to protecting countries all over the world. Many of its potential adversaries have acquired, or appear to be seeking, nuclear weapons. Unless the world's major disputes are resolved -- for example, on the Korean Peninsula, across the Taiwan Strait, and around the Persian Gulf -- or the U.S. military pulls back from these regions, the United States will sooner or later find itself embroiled in conventional wars with nuclear-armed adversaries.

Preventing escalation in those circumstances will be far more difficult than peacetime deterrence during the Cold War. In a conventional war, U.S. adversaries would have powerful incentives to brandish or use nuclear weapons because their lives, their families, and the survival of their regimes would be at stake. Therefore, as the United States considers the future of its nuclear arsenal, it should judge its force not against the relatively easy mission of peacetime deterrence but against the demanding mission of deterring escalation during a conventional conflict, when U.S. enemies are fighting for their lives.

Debating the future of the U.S. nuclear arsenal is critical now because the Obama administration has pledged to pursue steep cuts in the force and has launched a major review of U.S. nuclear policy. (The results will be reported to Congress in February 2010.) The administration's desire to shrink the U.S. arsenal is understandable. Although the force is only one-fourth the size it was when the Cold War ended, it still includes roughly 2,200 operational strategic warheads -- more than enough to retaliate against any conceivable nuclear attack. Furthermore, as we previously argued in these pages ("The Rise of U.S. Nuclear Primacy," March/April 2006 [1]), the current U.S. arsenal is vastly more capable than its Cold War predecessor, particularly in the area of "counterforce" -- the ability to destroy an adversary's nuclear weapons before they can be used.

Simply counting U.S. warheads or measuring Washington's counterforce capabilities will not, however, reveal what type of arsenal is needed for deterrence in the twenty-first century. The only way to determine that is to work through the grim logic of deterrence: to consider what actions will need to be deterred, what threats will need to be issued, and what capabilities will be needed to back up those threats.

The Obama administration is right that the United States can safely cut its nuclear arsenal, but it must pay careful attention to the capabilities it retains. During a war, if a desperate adversary were to use its nuclear force to try to coerce the United States -- for example, by threatening a U.S. ally or even by launching nuclear strikes against U.S. overseas bases -- an arsenal comprised solely of high-yield weapons would leave U.S. leaders with terrible retaliatory options. Destroying Pyongyang or Tehran in response to a limited strike would be vastly disproportionate, and doing so might trigger further nuclear attacks in return. A deterrent posture based on such a dubious threat would lack credibility.

Instead, a credible deterrent should give U.S. leaders a range of retaliatory options, including the ability to respond to nuclear attacks with either conventional or nuclear strikes, to retaliate with strikes against an enemy's nuclear forces rather than its cities, and to minimize casualties. The foundation for this flexible deterrent exists. The current U.S. arsenal includes a mix of accurate high- and low-yield warheads, offering a wide range of retaliatory options -- including the ability to launch precise, very low-casualty nuclear counterforce strikes. The United States must preserve that mix of capabilities -- especially the low-yield weapons -- as it cuts the size of its nuclear force.

More at the link.

VIDEO HAT TIP: William Jacobson.

Do States Ally Against the Leading Global Power?

The latest issue of International Security came yesterday. It's a beauty. I was impressed since a few long-established scholars have articles, and I'm looking forward to reading Helen Milner et al., "The Center Still Holds: Liberal Internationalism Survives." The rest of the selections look great as well, and the timing's perfect since I'm starting up my Fall 2010 World Politics class next week.

Best of all, the lead article from Jack Levy and William Thompson is an instant classic: "Balancing on Land and at Sea: Do States Ally against the Leading Global Power?" I finished reading it Sunday afternoon. My specialty, back in the day, was international theory on balancing and alliances. My 1999 dissertation focused on "under-balancing" in interwar Europe. It's a topic that still gets a good amount of attention in the literature, but I've fallen far behind by this point (and I have no aspirations to jump back into that scholarship for publication). Mostly teaching this stuff nowadays, which I obviously enjoy.

In any case, Levy and Thompson have the most comprehensive review of the research on balancing and alliances that's available. All up to date of course, but going way back as well. (It was amazing to see Inis L. Claude, Jr., Power and International Relations, 1962. One of my undergraduate professors used to joke that he thought it was Claude Inis, and I used the book in my research. Funny how those memories come back.) The central problem for balance of power theory today is its failure to explain why no great power coalition of states has formed to balance the dominant position of the United States in the international system. I always get a kick out of reading the theoretical literature, since its abstracts away from current debates. For example, we keep hearing repeated announcements that the U.S. is declining as the globe's "hegemonic" power --- Glenn Greenwald cheered that possibility the other day --- but there is no new hegemon on the horizon, not even close, so even as the U.S. "declines" the demand for the American provision of international public goods will remain as high as ever. As Levy and Thompson indicate, not only has international theory failed to explain why no balancing formation against the U.S. has emerged, but that the dominant "land-based" explanations in the literature can't explain unrivaled American preponderance in an age of global mastery of the international commons. More specifically, the U.S. is the preeminent ocean-going power in world history, and where previous theories focused on continental land-based great power competition, with the history of European international relations as the central database, America's profile as the preeminent naval power providing security for trade and markets means that traditional causes of balancing behavior may not be applicable to the U.S. case. (There's reduced threat perception among potential adversaris, since the U.S. seeks no territorial conquests at the periphery).

With that, let's hear it from the authors:

Our basic argument is that alliance behavior and other forms of strategic interaction are different in the global system than in continental systems. States’ highest priorities are to provide for their territorial and constitutional integrity. The greatest threats to those interests come from large armies that can cross territorial frontiers, seize and occupy territory, take or destroy resources, depose political leaders, and impose new political structures and social systems. Dominant continental powers devote their resources to building armies that facilitate the defense of their frontiers and the expansion of regional territorial empires. They pose threats to other great powers as well as to less powerful states, and other great powers often respond by forming defensive alliances, building up their own military capabilities, or both.

Maritime powers have smaller armies, fewer capabilities for invading and occupying, and fewer incentives to do so. They pose significantly weaker threats to the territorial integrity of other states, particularly to other great powers, but greater threats to each other than to leading land-based powers. All of this reduces the incentives of land-based powers to balance against the leading global maritime power, even if the maritime leader is considerably stronger than all the rest. Thus, in 1915 Norman Angell addressed the issue of “why the world does not fear British ‘marinism’ and does fear German militarism” by arguing that “‘marinism’ does not encroach on social and political freedom and militarism does.”

Maritime power is not based on navies alone, but also, as Alfred Thayer
Mahan recognized, on economic strength, and the leading sea power is usually the leading economic power in the global system. This is as true of the United States today as it was of Britain in the eighteenth and nineteenth centuries and the Netherlands in the seventeenth century. Indeed, the principal reason maritime powers develop their navies is to protect and expand trade, just as the principal reason land powers develop their armies is to protect and possibly expand territory. Leading sea powers also create international regimes to protect their positions of economic and naval dominance. They have evolved into leading air and space powers since the twentieth century, thereby technologically updating the means by which they control “the commons” so critical to predominance in the global system. Thus the distinction is not just between land-based military power and seabased naval power and the different threats imposed by armies and navies, but even more important, the larger distinction between the threats posed by territorial hegemony over land and people and by economic hegemony over markets. Economic dominance does not necessarily require political control, certainly not over other great powers, as Ronald Robinson and John Gallagher recognized in their concept of the “imperialism of free trade.” Political leaders and their peoples may resent both the lack of fair access to distant resources and markets and poor terms of trade, but these resentments pale in comparison to the threat of physical invasion and imperial dominance posed by land-based hegemons.

Unlike land-based empires, dominance in markets and on the seas does not generally involve infringements on the territorial sovereignty of other leading powers in more developed areas, and sea powers have historically shown little interest in getting involved in territorial disputes on the continent. The classic illustration is Britain. As balance of power theorists have long recognized, Britain’s primary interests lay in expanding its markets and investment opportunities overseas. Its primary interests on the European continent lay not in increasing its power and influence, but only in preventing any single state or combination of states from gaining control of a disproportionate amount of the resources on the continent, which could then provide a basis for challenging Britain’s maritime dominance. This is the classic role of the offshore balancer, which many attribute to the United States with respect to both Europe and Asia in the contemporary system.

Given these differences between the perceived threats associated with naval and economic dominance, on the one hand, and regional territorial hegemony, on the other, we expect high concentrations of land-based military power to generate counterbalancing coalitions of other regional great powers, but we do not expect high concentrations of sea power to have a comparable effect in generating counterbalancing coalitions against the leading global power. In fact, given the public goods often provided by leading economic states, we argue that high concentrations of sea power are likely to be associated with a lower likelihood of balancing by continental great powers, and that great powers are more likely to ally with predominant sea powers than to ally against them. Great powers ally with predominant sea powers to secure military or diplomatic support against threats posed by the dominant land power or another traditional rival, gain economic benefits by associating with the leading economic power and the global system it has helped create, or reap a share of the spoils from being on the winning side of an anticipated war.

Readers can just plug in the United States as the hypothesized model case and you'll get the picture.

The authors take balancing theory to a new level, but simplify it as well (since there's been so many emendations to the main propositions over the years it's kinda ridiculous). Sea power is essentially a whole different class of capabilities, and when a state is both preponderant and benign, counterbalancing alliances are unlikely to form. The empirical tests of this research is innovative and rigorous (including regression analysis.) And I got a kick out the concluding discussion, since Levy and Thompson save a good deal of firepower for Stephen Walt, who is perhaps the most important "realist" scholar working in this literature today, and I respect him much less nowadays, since he's become one of the biggest academic Israel-bashers on the scene.

The article's free to download in PDF, so knock yourself out on some top-flight political science research.