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Has the American century ended?

Has the "American Century" ended?

In 1941, a year before America entered World War II, Henry Luce, the founder and publisher of Time, wrote an essay called “The American Century.” It was an argument not just against isolationism but for America as a global moral beacon.

Luce, the son of American missionaries to China, wrote that America must “accept wholeheartedly our duty and our opportunity as the most powerful and vital nation in the world and in consequence exert upon the world the full impact of our influence.” That vision, he wrote, was only possible if it reflected “a passionate devotion to great American ideals.” He enumerated them as a love of freedom and justice, equality of opportunity, and a commitment to truth and charity and cooperation.

The history of the U.S. has moved only one way, toward greater riches and military might. The notion that the US might one day fall from power is rather strange to most Americans, but to the Chinese, who are used to the fall of dynasties, it's quite normal. In fact, many of them are convinced that the era of Westernization is coming to a close.

This idea is most evident in cities like Shanghai and Hong Kong. Shanghai now gleams with the tallest buildings in Asia. This coming June, the MSCI indexers might include Shanghai stocks in their biggest emerging market benchmarks, mandating more American money into the mainland. Shanghai is a microcosm of greater China: a city within a city, in a world within a world.

The world it straddles is communism and uber-rich capitalism; new China and old-China with remnants of its semi-colonial past. Back then, Shanghai and China made concessions to the Western imperial powers. That past is eroding quick. China is rising. The west is merely an economic system the Chinese have adopted and hybridized into something the world is still trying to figure out.

Attitudes towards the West, and the U.S. in particular, are mixed. Nationalists are inclined to dismiss criticism from the Democracy nuns (my term, not Rachman's) in Washington who hammer on about human rights and territorial disputes, forgetting wholeheartedly that they brought the world such wonderful things as Abu Ghraib, and the implosion of Libya and Iraq (with Syria waiting in the wings, if not for Russians getting in the way).

Liberal Chinese, meanwhile, are very skeptical if not fearful of one party rule in Beijing. They view the past colonial days as more positive than negative. This is particularly true in Hong Kong, where there is a strong pro-democracy movement that does not want to be controlled by Beijing. Yet, even as Hong Kong prefers the lifestyle and a more open market democracy that it inherited from British colonizers, there is little doubt that widespread "easternization" is happening.

The U.S. became the world's largest economy in 1871 and holds that title to this day. In terms of both purchasing power parity and overall economic output, the U.S. wins the day over mainland China. Outside of the wealthy eastern cities, China has a lot more poor people than the United States.

As a stand-alone, however, Hong Kong is on par today with the United States in terms of purchasing power parity, according to World Bank data. And Macao, the former Portuguese colony now home to China's casino's and also a special administrative region like Hong Kong, is actually far wealthier than the United States. In fact, the roughly half a million people who live in Macao have more wealth than those in Boston, a similar sized city, based on GDP per capita and purchasing power parity.

At the same time, the United States is witnessing a decline in life expectancy for the first time in nearly a quarter century. America is also the first high-income country to see its adults, on average, no longer growing taller. The reasons for the United States’ lag are well known. It has the highest infant and maternal mortality rates of any of the developed countries, and the highest obesity rate. It is the only one without universal health insurance coverage and has the largest share of unmet health-care needs due to financial costs.

Opinion polls show that many Americans believe China is to blame for the decline of the United States. They also think, by and large, that China will one day surpass the U.S. as global economic superpower. As it is now, many U.S. companies are becoming dependent on China for future growth. If not, they are betting on China to help drive growth in the future. This is as true for Amazon, with its favorite side kick in China, e-commerce juggernaut Alibaba, as it is for Hollywood.

After World War II, the U.S. was about 30% of world economic output. But the rise of China in the geopolitical sense raises the question of how long the United States can continue to dominate global politics. Thus, the post-Western world has already begun. Like an angry dog boxed into a corner, it begs the question what this all means and how the U.S. might react to counter it.

Source: Forbes