The West enters the twenty-first century at a crossroads. Having long been the model for economic and political success, the aftereffects of the 2008 Great Recession have resulted in a world in which developing countries with emerging markets now have greater economic dynamism than years past, while old economic powerhouses are struggling to secure their foundations. Atop this hierarchy sits the United States, though its base has steadily eroded. The International Monetary Fund (IMF) projects that the United States economy will grow by 1.5 percent, while Europe’s will collectively grow by 1.6 percent. This stands in stark contrast to developing countries which are projected to grow at a rate of 6.5 percent in 2011.[i]

This raises the question of whether weak economic growth against the backdrop of political divisions within the United States and its main political and security ally, the European Union (EU), will lead to an inevitable decline in US power. Despite difficult choices that need to be made in the short run, the United States still retains the economic, military, and institutional resources necessary to allow its leaders the freedom of action to address these issues in the long run and secure its preeminent position.

The prospect of decline presents the United States with a vexing dilemma; either it can continue with current spending levels, thus maintaining its military and technological primacy or, conversely, it can attempt to stimulate economic growth by contracting inwards and increasing investment in its production capacity. Economic theory speaks of the fundamental choice every society faces between “guns” and “butter”—given a limited amount of resources, a decision to increase military spending will result in a decrease in the total possible supply of consumer goods available to a society. In 2010, the combined defense budget of North Atlantic Treaty Organization (NATO) members was greater than $1 trillion,[ii] of which US expenditures accounted for roughly 50 percent. Meanwhile, collective military expenditures of the BRIC countries (Brazil, Russia, India and China), the primary potential balancers to US power, amounted to $230 billion.[iii] Given this economic reality, the burden of American military commitments, including the Iraq, Afghanistan, and Libya campaigns, appear unsustainable.

Professor Samuel P. Huntington of Columbia University observes that, “Non-Western civilizations will continue to attempt to acquire the wealth, technology, skills, machines, and weapons that are part of being modern.”[iv] For the United States, maintaining power first and foremost requires an established economic base and prosperous middle class. American leaders should commit to a reappraisal of the “grand strategy”: shift away from defense expenditures and focus on domestic priorities, or else face gradual decline.

Decline can be characterized as being relative. Professor Paul Kennedy of Yale University observes that “it simply has not been given to any one society to remain permanently ahead of all the others, because that would imply a freezing of the differentiated pattern of growth rates, technological advance, and military developments which have existed since time immemorial.”[v] A rise in the power resources of competing societies means that the United States will be unable to consistently translate power into desirable outcomes. To maintain its primacy, the United States will increasingly need to pull developing countries into the current international system, a system largely controlled by the United States.

Key areas for mutual cooperation and further progress include global security, international trade, and political development. Militarily, China has attempted to offset US power through increased cooperation with the United Nations (UN) in a number of peacekeeping missions. The International Crisis Group reports that the total number of peacekeepers deployed by China since it began participating in UN missions now exceeds 10,000.[vi] Economically, the United States is attempting to ensure its position as the world’s dominant economy by shoring up its alliances and continuing to work with Russia to configure each country’s respective trade and investment policies. Doing so will make Russia eligible for accession into the World Trade Organization (WTO) as part of a larger initiative to “reset” US-Russian relations. Diplomatically, the West continues to engage with the Middle East as it undergoes its “Arab Spring”.

Secretary of State Hillary Clinton opined, “What is America’s role in the Arab Spring? These revolutions are not ours. They are not by us, for us, or against us, but we do have a role. We have the resources, capabilities, and expertise to support those who seek peaceful, meaningful, democratic reform. And with so much that can go wrong, and so much that can go right, support for emerging Arab democracies is an investment we cannot afford not to make.”[vii] In each instance, the US’ continued engagement with other nations speaks to its acknowledged influence and diplomatic clout.

Even in the face of possible decline, the United States possesses a unique capacity for renewal and resurgence. This stems largely from the idea of social capital which political scientist Robert Putnam defines as “networks and the associated norms of reciprocity have value. They have value for the people who are in them, and they have, at least in some instances, demonstrable externalities.”[viii] The effective utilization of social capital allows groups to mobilize their resources towards a common vision and purpose. When the Soviet Union launched the Sputnik satellite in 1957, the United States was compelled to achieve a series of new technological advancements to counter-balance against the Soviet success.

In a 1961 joint session before congress, President John F. Kennedy announced, “that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the earth.”[ix] On July 20, 1969, the Apollo 11 spaceflight landed the first humans on the Moon, thus reestablishing American technological superiority. The Soviet Union had made similar investments in its space program, training as many as 2.7 times the number of engineers put out by the United States,[x] but it was the US’ superior social capital that allowed it to succeed.

Unlike measures for Gross Domestic Product (GDP) or Purchasing Power Parity (PPP), social capital cannot be measured in an exact manner. Rather, the collective goodwill and underlying strength of the economic and political structures that serve to bind societies together ultimately determine their longevity. The World Bank, the International Monetary Fund (IMF), and the World Trade Organization (WTO) all serve as important institutions for promoting the integration of economic interests among America and her allies in both the developed and developing world. Consequently, the European Union and the United States now have the largest bilateral trade relationship in the world with US exports to the European Union in 2010 totaling $239.6 billion and imports totaling $319.2 billion.[xi] The strength of such integral networks is largely based on the willingness of the United States to provide operational capacity to these institutions and evidenced by the fact that the World Bank and the IMF are primarily funded by the United States and are both headquartered in Washington D.C. The sway the United States has over these global institutions translates into the ability to influence change and address decline in a much more flexible and rapid manner than commonly acknowledged.

Understanding the politics of decline requires acknowledgement of the fact that the world has become bigger than the sum of its parts. Traditionally, the key tenants of American ideology require embracing the values of liberal democracy, market-based capitalism, and the rule of law. In recent years, the so-called “Beijing Consensus” has put forward an alternative model of development that argues for an authoritarian, state-driven approach based on single-party platform that can provide rapid and sustained economic growth. Despite these differing approaches to development, it would be prudent for American leaders to recognize that the rise of the East does not translate into a zero-sum game for the West.

Noted US foreign policy expect Ian Bremmer writes that the continued infusion of foreign direct investment (FDI) from Western countries to the developing world “ensure[s] that state capitalist countries understand that it is also in their interest for the United States to remain economically successful.”[xii] Through further FDI, the West can forestall decline by forming a mutually beneficial and symbiotic relationship with the rising emerging markets and developing countries.

The pace at which technological innovation, economic development, and knowledge transfer occur in today’s world has expanded at an exponential rate. Consequently, the global issues that the United States faces have also become increasingly complex. As such, for the first time since the end of the Cold War, US primacy is being challenged by emerging states. Effectively addressing these issues will require the United States to adjust domestic spending priorities, leverage established networks, and engage with the developing world. Critics of uni-polarity often cite the common fate of all empires: prosperity followed by decline. However, Rome was not built in a day and it did not collapse in one either, nor is the ultimate fate of the United States sealed. Its decline is not absolute.