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The rise and fall of great powers makes exciting history – all the more exciting if, as in the case of the Soviet Union, we can watch the spectacle unfold before our eyes. It is hardly surprising, therefore, that much of the discussion of the role of the US in the world is warped by the natural human desire for drama. The US is a declining power headed for collapse, says one side. No, says the other, America is the greatest empire since Rome at its peak.

The truth is less dramatic but nonetheless fascinating: America’s share of global economic power, and its potential share of global military power, have been roughly the same for a century and may remain so for another century or more.

A country’s gross domestic product is a useful, though far from perfect, surrogate for its potential military power. According to the World Bank, in 2000 the US accounted for 27 per cent of the world’s GDP. That seems like a lot, until you learn that in 1913 the US share was even larger at 32 per cent and larger still even earlier, in 1900 (38 per cent). As the American political scientist Robert A. Pape points out: “For the past century, the US share of gross world product was often double (or more) the share of any other state: 32 per cent in 1913, 31 per cent in 1938, 26 per cent in 1960, 22 per cent in 1980.” At the end of the second world war, the US accounted for about half of all world manufacturing – but that was nothing new. As early as 1929, the US share of global manufacturing output was more than 43 per cent.

If the US had converted its economic potential into military power from the beginning, it would have been the dominant global power from the early 1900s onward. Americans deferred doing this as long as possible, in part because the US is a liberal, civilian society. In addition, in the early years of the two world wars, Americans hoped that Britain and other countries could restrain Germany with the help of US aid. Even in 1937, when Hitler’s Germany spent 23.5 per cent of its much smaller economy on the military, the US dedicated only 1.5 per cent of its own GDP to defence. The moment that the US mobilised its gargantuan economy for war, however, Nazi Germany and Imperial Japan were doomed. Later, by devoting a relatively small part of its economy to defence, the US was able to spend the far more militarised but smaller Soviet economy into bankruptcy.

As the war in Iraq has shown, superior arms and money cannot guarantee victory in an essentially political contest. But it would be a mistake to conclude that the US is overextended. Since 2000, the US has ramped up its military spending from a little more than 3 per cent of GDP, not much more proportionately than France spends, to a little less than 5 per cent of GDP. This level of military spending is low by the standards of the Gulf war (6 per cent), the Vietnam war (10 per cent), the Korean war (15 per cent) and the second world war (35 per cent). Because the US economy is so huge, a little less than 5 per cent of GDP buys the US roughly twice as much military as the combined total of the Nato nations, most of which spend less than 2 per cent of national GDP on defence. If costs drop following the Iraq war, a policy of spending 3-4 per cent of US GDP on the military may be sustainable indefinitely, as long as the retirement costs of the baby boom generation are paid for by a combination of tax increases and spending cuts rather than by raids on the Pentagon budget.

What about the future? In 2050, China, India and the US are expected to be the world’s most populous nations. The French International Relations Institute has predicted that by then, Greater China (China, Hong Kong, Macao and Taiwan) would be the leading economic power, accounting for 24 per cent of the world economy. North America (the US, Canada and Mexico) would be next with 23 per cent of world GDP. Goldman Sachs has also projected that by 2050, China will have the largest economy in the world, followed by the US and India.

But the rise of China and India will not mean the fall of the US. Instead, it will come at the expense of Europe, whose share of global GDP will decline, chiefly for demographic reasons. In some projections, Europe as a whole half a century from now will have fewer people than the US. If Goldman Sachs is right, the US, Mexico and Canada’s share of global GDP in 2050, at 23 per cent, will be roughly what the US share of the world total was 70 years earlier in 1980, when it was 22 per cent. And per capita income in the US will be far higher than that in China and India into the 22nd century, if not beyond.

The relative size of the US in the global economy, then, may prove to be astonishingly stable over the 150 years from 1900 to 2050. Some neo-conservatives tend to underestimate US strength when they compare the US to Britain in the years before the second world war. Jihadists notwithstanding, the world is far safer today than in the 1930s. But in any case, the contemporary US should be compared not to Britain in 1937, with 10.2 per cent of the world’s military power, but to the US in 1937, with 41.7 per cent of the total.

But supporters of US global hegemony would be mistaken to take heart from the underlying stability of America’s share of world power. A country which over the long term is likely to account for about a quarter of world GDP can be first among the great powers in a multipolar world for generations to come. But an attempt to be the New Rome, by undermining economic strength with excessive military mobilisation, would most likely make the US the next Soviet Union.

The writer is the Whitehead Senior
Fellow at the New America Foundation

Copyright The Financial Times Limited 2017. All rights reserved.
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