There have been many sober pronouncements lately about the end American hegemony. Some have reacted with despondence, others with glee. It may be that the end is nigh--it has to end sometime--but we should keep in mind that the forecasters of doom emerge from their caves during every period of hardship. They were last seen in force in the 80's as American manufacturing foundered and Japan floated into the economic stratosphere on a very large bubble. The end-of-the-hegemony pessimists are the antimatter twins of the eternal-hegemony optimists who imagine that every stock market rally will last forever. Neither should be trusted.

So let's take the measure of this hegemony thing: what is it, where is it going, and who really cares anyway?

What Is It?

The term hegemony comes from the Greek word for leadership. The Greeks first used it describe Sparta's political dominance of its neighboring Peloponnesian city-states. In modern times, the term may also denote social, cultural, ideological, and economic influence. A hegemony is distinct from an empire in that the leading nation extends its influence over other nations indirectly as opposed to governing them through appointed representatives and military occupation.

The size and power of a hegemon is more ambiguous than that of an empire, since the extent of its influence cannot be measured by geography or population. Some perceive coordinated American influence in every geopolitical event. Others argue that the U.S. lacks the resources to effectively influence the world outside its borders and should not even be called a hegemon. Books have been written on the question; I plan to focus on the tangible elements: economy and military.

Though it was long in ascendence, the U.S. emerged as a dominant force during WWII, as the economy exploded out of the Great Depression, and the military ballooned in size during the war. Our GDP was a full 35% of the global economy at its peak in 1945 (higher than that of the British Empire which, with all its colonies, peaked at 24% in 1870). At the same time, the British Empire splintered, and the European powers gradually lost their colonies, leaving the U.S. with far more resources and population than any other industrialized nation. Since the 1960s, our GDP has consistently made up from 20 to 25 percent of the global economy and still does today.

After WWII, American maintained its military spending to counter the newly expansionist Soviet Union. For a time, the Soviets kept pace with the U.S. militarily but never came close in economic terms. When the Soviet Union collapsed, the U.S. was in its own league. Today, our military expenditures make up almost half of all the world's military spending. The next in line, China, spends around 8% of the global total and our former rival, Russia, spends under 5%.

Where Is It Going?

Those who predict the imminent demise of the American hegemony look to the unhealthy attributes of the U.S. economy--our low savings rate, the decline in our manufacturing base, the trade deficit, and our massive debt--and contrast it with China's incredible growth and vast population. They conclude that the U.S. economy will stagnate or decline as China surges past.

This conclusion is likely correct but not in the timeframe its proponents envision. When economies "collapse," they don't literally disintegrate. Rather, they grow extremely slowly or shrink slightly. So even if we remain in a 10-year recession comparable to Japan's lost decade, our share of the global real GDP will still be over 20% ten years from now. And according to World Bank projections, our share of the global GDP will actually be 23% in 2030, while China's will still be 16%. Another blog has put together a table comparing the year at which China's GDP would overtake that of the U.S. under different growth assumptions:

(It should be noted that these comparisons assume real values rather purchasing power parity (PPP). PPP compares domestic prices of goods and services, e.g. haircuts, rather than using current exchange rates. Among industrialized countries, relative PPP and real levels should be roughly equivalent, but there are greater disparities between industrialized and developing countries. For instance using PPP, China has the second largest economy in the world, almost twice as large as Japan's, because goods and services like haircuts are much cheaper in China. PPP is useful in comparing standards of living, but in terms of influence and political power, actual exchange rates are more appropriate, since they indicate international purchasing power. Other reasons for using exchange rates are offered here and here. The one caveat to using real numbers is that there is some evidence that the yuan is significantly undervalued, in which case China's share of the real global GDP could rise dramatically once it's allowed to float.)

In terms of military expenditures, China is also growing at a much faster pace than the U.S., and its aggressively modernizing its armed forces. But while China has more soldiers, its equipment and infrastructure remains very inferior the U.S. military, and I see no evidence that they will displace American military preeminence in the next decade.

The other factor to consider is that China's current growth rate may not be sustainable. As my co-blogger, Deadman, has argued with respect to our own economy, what goes up must come down. We saw a clear example of that principle in the case of Japan's economic implosion after years of rapid growth. With a much larger population and more resources, China's economy will soon outpace Japan's and eventually our own, but the road may yet be bumpy. I've also argued in a previous post that without political reforms, China's growth may stagnate as its government calcifies. Time will tell.

Who Really Cares Anyway?

Without whitewashing America's failings, from ill-conceived wars to sovereignty and human rights violations, or belittling the suffering caused by U.S. foreign policy, it's important to realize that things could be a lot worse. The Iraq War death count ranges from 100K to 1.5M depending on who you ask. The Vietnam War killed 1.7M people. The Korean War killed 2.8M. In contrast, WWI killed 15M, and WWII killed 55M. Stalin's regime is estimated to have killed 20M, and Mao Zedong's, 40M. Perhaps more significantly, the threat of nuclear annihilation dissipated significantly once the Soviet Union collapsed, leaving the U.S. the world's preeminent power. For all our warring, the last twenty years has been a period of relative peace in the world, and while we should always strive for better, we should not take it for granted either. It could easily get worse.

For instance, China's growth is likely to intensify competition with the U.S. and could lead to a new cold war, complete with proxy wars and another arms race. The latter is particularly likely if antimissile technology improves to the point that Mutually Assured Destruction is no longer guaranteed. Moreover, China could prove to be a much more destructive hegemon than the U.S. ever was. It's lack of democracy, abysmal human rights record, and willingness to work with the world's most criminal regimes should give pause to those who hope for the end of American hegemony.

In other words, watch out what you wish for.

Sources:

End of the hegemony
http://www.midasletter.com/commentary/090418-2_US-hegemony-the-beginning-and-the-end.php
http://www.csmonitor.com/2009/0408/p09s01-coop.html
http://www.newamerica.net/publications/articles/2008/waving_goodbye_hegemony_6604
http://eufo.blogspot.com/2008/10/why-worry-about-china.html

Economy
http://www.ers.usda.gov/Data/Macroeconomics/
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)
http://en.wikipedia.org/wiki/List_of_largest_empires
http://www.visualizingeconomics.com/2008/01/20/share-of-world-gdp/
http://www.imf.org/external/pubs/ft/fandd/2007/03/basics.htm
http://www.rediff.com/money/2008/aug/23guest1.htm
http://eufo.blogspot.com/2008/10/naked-and-ppp-gdp.html

Military
http://en.wikipedia.org/wiki/List_of_countries_by_military_expenditures
http://www.globalissues.org/article/75/world-military-spending
http://www.dollarsandsense.org/archives/2006/0706sturr.html
http://www.bedfordstmartins.com/history/modules/mod32/frameset.htm
http://www.comw.org/pda/bmemo10.htm

War
http://users.erols.com/mwhite28/warstatz.htm

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Cross posted as usual at dagblog.com. You can subscribe to all my posts via RSS feed or email.