We’re not witnessing the beginning of the end of American power, but the end of its beginning

Friday, June 14th, 2024

Accidental Superpower by Peter ZeihanIn The Accidental Superpower, Peter Zeihan traces a lot back to Bretton Woods:

On July 1, 1944, 730 delegates from the forty-four Allied nations and their respective colonial outposts convened at the Mount Washington Hotel in the skiing village of Bretton Woods, New Hampshire, with a mission to do nothing less than decide the fate of the postwar world.

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Many of the rooms lacked running, potable water; there wasn’t enough ice or Coca-Cola to go around; staffing was so thin that some nearby Boy Scouts had to be drafted; and the establishment’s manager locked himself in his office with a case of whiskey and refused to come out.

[…]

But despite this inauspicious beginning, the delegates set to work on the agenda White and Keynes had laid out and over the next three weeks engaged in multilateral negotiations that were responsible for creating the World Bank, the International Monetary Fund, and the International Bank for Reconstruction and Development: the institutions that helped knit devastated Europe back together and that hammered out the foundations of the free-trade-dominated global economic system that endures to this day.

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The attendees had arrived in Bretton Woods knowing that they had no real leverage to negotiate or bargain with the United States; they had mainly come to hear what White and the other Americans had to say. And what the Americans had to say shocked them all.

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Everything from Sicily to Saipan was in essence an American effort fought with American equipment and American fuel. Even in terms of manpower the fronts were largely American affairs, with American troops tending to outnumber all other combatants, Allied and Axis combined, by a two-to-one margin. Only grand affairs such as the Normandy landings featured the sort of multinational resolve the propaganda lauded.

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Until that point there really hadn’t been a “global system” in an economic sense. Instead, various European nations maintained separate trade networks stemming from their earlier imperial ventures, in which their colonies served as resource providers and captive markets while mother countries produced finished goods. What interempire trading that occurred was largely limited to goods, whether raw materials or specific manufactures, that could not be sourced within the respective “closed” systems. Most of this cross-empire trade flowed through enterprising peoples like the Dutch who excelled at brokering deals among imperial leaders. Protecting each empire’s trade were its national naval forces, and the use of navies to guard national commerce and raid the commerce of competitors was as old an industry as the use of sail and oar.

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Building a navy is one of the most expensive and time-consuming projects a nation can undertake in the best of times, and it wasn’t something that a country emerging from rubble and occupation could even consider.

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There was about to be only one navy.

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White and the American team didn’t let the others sweat it out for long, and they presented their two-part plan with all the kindness and amused patience that comes from a position of unassailable strength. The first part alone likely stunned the conference into baffled silence: The Americans had no intention of imposing a Pax. They didn’t plan to occupy key transshipment or distribution nodes. There would be no imperial tariff on incomes or trade or property. There would be no governors-general stationed in each of the Americans’ new imperial outposts. No clearinghouses. No customs restrictions. No quotas.

Instead, the Americans said that they would open their markets. Anyone who wanted to export goods into the United States could do so. The Americans acknowledged that devastated Europe was in no condition to compete with American industry, which hadn’t been touched by the scourge of war, so this market openness would be largely one-way. The Americans suggested ideas about a new global system to reduce tariffs, but that was to be negotiated separately and later.

As startling and unexpected as part one of the plan was, part two must have rolled the Europeans in particular back on their heels. The Americans offered to use their navy to protect all maritime trade, regardless of who was buying or selling the cargoes. Even trade that had nothing to do with the United States would be guaranteed by the overwhelming strength of the American navy. Far from proposing a Pax that would fill their coffers to overflowing with trade duties, levies, and tariffs, the Americans were instituting the opposite: a global trading system in which they would provide full security for all maritime trade at their own cost, full access to the largest consumer market in human history, and at most a limited and hedged expectation that participants might open their markets to American goods. They were promising to do nothing less than indirectly subsidize the economy of every country represented at the conference.

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While American aid helped get Western Europe back on its feet, it was American markets’ absorption of every bolt, table, and car that the Western Europeans could produce that proved to be the determining factor in resuscitating their fortunes. The American economy, never touched by the bombs that devastated Europe, was larger than any that the Europeans had ever had entry to, and the ability to access that market allowed the Europeans to export their way back to affluence.

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As the Cold War ended and entire swaths of the globe changed economic and political orientations, the price grew, and as years turned to decades, the system expanded ever outward, until nearly the entire world had acceded to this American-guaranteed network. In fact, the Bretton Woods agreements are the single most important factor behind the Japanese and Korean miracles, the European Economic Community and its successor the European Union, the rise of China… and the statistical monster that is the U.S. trade deficit.

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At Bretton Woods the United States produced about one-quarter of global GDP, about the same proportion as it does in 2014. At Bretton Woods the United States was responsible for nearly half of global defense outlays, about the same proportion as in 2014. At Bretton Woods the American military controlled half of global naval tonnage, about the same proportion as it does in 2014. At Bretton Woods the United States was the only country that for the past eighty years had exited every decade with an economy larger than when it had entered, a record of the modern age that the Americans have since extended to 150 years.

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In 2014, we’re not witnessing the beginning of the end of American power, but the end of its beginning.

Comments

  1. Bruce says:

    And then the Democratic party used its monopoly on the federal bureacracy and control of the press to go so hog wild on shakedowns and malicious prosecutions that they broke our industrial base- US Steel, Bethlehem Steel, Detroit’s big three, US nuclear power, light planes , heavy planes down to _Boeing_, the industrial Midwest down to a Rustbelt. Malicious prosecutions of the right to self-defense broke the rule of law. The wild expansion of Democratic party patronage broke US industrial growth by 1970, and that’s half a century of no growth and counting. DEI patronage expansions going wild again and D muscle in the streets backed by D media and D courts baying for the blood of Jews and Supreme Court members. 100 million ringers imported.

    Not the end of the beginning, and well past the beginning of the end.

  2. Alex S. says:

    “While American aid helped get Western Europe back on its feet, it was American markets’ absorption of every bolt, table, and car that the Western Europeans could produce that proved to be the determining factor in resuscitating their fortunes. ”

    Completely false. There was no big export from Europe to US. The European growth was made internally mostly.

  3. DJB says:

    https://tradingeconomics.com/united-states/gdp
    “The GDP value of the United States represents 10.93 percent of the world economy. source: World Bank”

    From 25% to 11% of the world GDP in a decade.

    https://edition.cnn.com/2023/09/17/europe/ukraine-shell-supplies-intl/index.html

    We lack the manufacturing capacity to replace the artillery shells used by the Ukraine.

    We are hardly the superpower Zeihan predicted in 2014.

  4. Bob Sykes says:

    About one-third of the world’s manufacturing capacity resides in China. And Chinese factories are the most advanced and efficient in the world. They have two-thirds of the world’s industrial robots, and they optimize their plants using AI running on 5G networks. They have 80 % of all the 5G bases in the world.

    China has two-thirds of all the high speed (>200 km/hr) trackage in the world, and all their major cities are connected by high speed rail.

    They annually make 55 to 60% of all the commercial shipping by tonnage.

    They have two of the three fastest supercomputers in the world, made entirely from Chinese designs, hardware, and operating systems. They have more supercomputers than the US.

    China’s real economic growth rate is two to three times as fast as ours.

    All their cities are clean, modern, and safe. There are no minority no-go zones, or hordes of homeless people, or feces/urine covered sidewalks.

    Russia, with the fourth largest economy in the world, is China’s closest ally. They are the dominant alliance in the world, and they are getting stronger while the US and the West are fading away. BRICS 10 is the future, and will soon be BRICS 60.

  5. Adar says:

    “The Americans offered to use their navy to protect all maritime trade, regardless of who was buying or selling the cargoes”

    “He who controls the oceans controls the trade. He who controls the trade controls the commerce. He who controls the commerce controls the world.” — Sir Walter Raleigh.

  6. Jim says:

    On the bright side, the U.S. government is incarcerating its domestic political enemies so that it will be able to competently respond to threats in the future.

  7. Phileas Frogg says:

    While I always feel compelled to give credit to anyone willing to “put their money where their mouth is” with these kinds of predictions, this is one of the more embarrassing misses I’ve ever seen. Zeihan, like many of his social class, seems to be too detached to be able to meaningfully leverage the available information in an effective way. A few key errors in his premises produce massive predictive failures when it comes to the particulars.

    Conversely, to date the best predictors have been:
    - Lothrop Stoddard (Predicted the end of European Imperialism, the Revanchism of Germany, and the Rise of Japan).
    - Emmanuel Todd (Predicted the fall of the USSR and the USA within a decade in both cases).
    - Thomas Carlyle (Shooting Niagara is a perfect general prediction of the results of liberal democracy).
    - Patrick Buchanan (Along with Robert Bork he nailed the causes of American decline, and how failing to goal tend those areas doomed us).

  8. Curtis says:

    The old world passeth away. It sure was nice while it lasted.

  9. Bomag says:

    Jim: nailed it.

    Phileas: good comment; thanks for the historical reflection. Zeihan is different, for his social class, in that he leans in on demography and differences in people/populations; but he does so in service to coming up with the anodyne, acceptable conclusions for the GoodThinkers of his class.

  10. Roo_ster says:

    1. Zeihan knows that he makes bank by fluffing up the ruling & managerial classes by telling them what they want to hear in a confident manner. “You go girrrrrrl!” gets more air kisses than, “Girl, you’ll go home alone tonight if you don’t change that outfit.”

    2. Bretton Woods was the capstone of US-ian imperialism and buggering of actual Americans. Imperialists sell out their native stock to benefit the satraps and native & alien ruling class sorts, with whom they all find they have more in common than the folks from whence they came.

  11. Roo_ster says part 2 has it exactly.

    The only rational course for the US is withdrawal of its forces and pursuing a neutralist foreign policy.

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