Robert Anton Wilson was perhaps the first to popularize the observation that during the history of human civilization, power and money has always moved west. From the beginnings of civility in Sumer to modern day China, there has always been a westward flow of technology, money, power and manufacturing capacity. In the beginnings of the Industrial Revolution, we witnessed the flow of influence from the Vatican to Britain, an empire on which it was said that the sun never set. As Britain's power waned in the early 20th century, so the flow moved westwards to America. Now in the 21st century we have witnessed a further flow westwards towards East Asia. While America still holds most of the cards as the world's richest economy, the focal point of industry and manufacture has long left its shores.
It is an absolute mystery as to why this trend has continued without exception for nearly four millenia. Yet this trend isn't so powerful as to rend all countries utterly powerless before it. America is still the richest country in the world. It still possesses a near monopoly on the flow of culture, entertainment and ideas. It has the most powerful military industrial machine in all of human history, and the biggest financial and global corporate institutions are based there. So where is the decline? The answer to that lies not in GDP figures or Wall Street or the towering heights of financial markets, but in other social and economic factors. A fair measure on which to base America is by its own declaration as the 'land of the free'. Taking that freedom in both a political and economic context, we have a basis on which to judge America's decline.
One might argue that power stems from military might alone, yet this is somewhat of an oversimplification. That would be to say that a country like Japan, who wrote pacifism into its constitution, has no power whatsoever. Power is not so tightly defined. It is rather systematic and symbolic, a mix of influences both internal and external. It isn't just military might or financial clout, but a mixture of factors. After all, Rome didn't become so powerful simply because it conquered by force, its magnetism was such that Romanisation occurred throughout nearly the whole of Europe. Once touched by Rome, countries strove to become it, to mold into its image. America too once held that magnetism, but no longer. As we've seen in the Middle East, force alone does not change the tide of a country.
When discussing the decline of the US as a world power, one frequent example is the shrinking of manufacturing. A documentation of the decline of America's industry isn't necessary, as one may only walk through Flint or Detroit to witness first hand the catastrophic fallout of industrial decline. While it is perhaps naive to focus entirely upon industry as a measure for power and influence in the world, there is doubtlessly a correlation between manufacturing capacity and global influence. Indeed, while manufacturing employment as a percentage peaked at only above 30% in 1954, the trend has declined to such a point that by 2004 industrial work only accounts for 10% of employment. Service sector employment jumped from 60% to 80% in the same time scale[1]. Perhaps one could argue that this doesn't constitute a decline per se, but it is certainly an indicator of other contributing factors.
Indeed, one of these factors is wealth inequality. It might surprise some to consider the fact that America once had a more equal distribution of wealth than Sweden. There is certainly a correlation between the decline of manufacturing in the United States and the growing wealth inequality that we've witnessed since. The Multinational Monitor places the start of this trend at around 1975, just before the decline in US manufacturing. From the early 1930's to that time, wealth inequality in the US decreased in correlation with manufacturing increases. Perhaps these trends are not correlated, but it is hard to ignore. Manufacturing has always paid higher than the service sector, partly due to the skills required by the former but also because manufacturing as a growth industry needed to pay better wages to attract a workforce. In retail or service sectors, skills are less valued and job shortages suppress wages. The US has a Gini coefficient of nearly 0.82, with 1 being the largest measure of inequality, and has the dubious honour of being the most unequal country in the developed world [2], the second being the UK.
How does this relate to world power? For one power is not just based on sheer might, but also an ethical and ideological position. The grinding poverty faced by many in the US every day undermines this ideological supremacy. As the American system of economics bleeds into other countries like the UK in particular, the increased anger and desperation faced by those suffering under increased inequality further undermines America's power. Over the last 30 or 40 years, America has declined economically into a Darwinian free for all, where the ethical component of civilization is displaced by mega corporations and their interests. For the majority of Europe and the advanced technological world, the American model is becoming one to avoid, based as it is on increasing immiseration and volatility. Indeed, the American Dream itself has become tainted, a phrase uttered in cynicism rather than hope.
As the number of well paying jobs and the number of jobs available has decreased, economic inequality has risen. As economic inequality rises, so the fabric of a society is stretched and torn. All of a sudden, the shining lights of progress seem grubby and dull, as economic factors render all wealth generation into smaller numbers of hands and institutions. We've witnessed the severe consequences of this in light of the recent financial turmoil, the inevitable result in giving risk based financial institutions too much importance in the economic tapestry. Does power really flow through the accumulation of money? Rather, accumulation is its antithesis. It takes economic growth and places it on the shoulders of a tiny elite ill equipped to satisfy it.
A prosperous country is a powerful country. As mentioned previously, power is not something borne out of capital nor weaponry alone. A prosperous country does not rely simply on a few tricks to grow, nor the accumulation of wealth at the expense of the many. Rather, it is an enormous variety of economic spheres all conjoined. To witness America's reliance on financial institutions is to witness its decline. A prosperous country has to be such continually, not just in the brief surges like we've experienced over the last 20 years. Industries like manufacturing provide a relatively stable basis to prosperity, and have a correlation to wage equality. A growth in skilled industries creates higher paid jobs far more successfully than the retail or service sectors, which are relatively static and lower paid. A powerful country is one with opportunity, with growth, with the possibility of fulfillment of life’s dreams. Perhaps America is still the leading country in the world to that end. Yet, we cannot ignore the fact that the opportunities are diminishing.
Power is not for an elite but best used spread throughout a whole society. Economic prosperity and individual freedom are the real sources of power. It is most likely that a decline in these principles has thus marked the decline in America’s own influence in the world. Fortunately, this state of affairs is unable to continue forever. Perhaps the US will need to wait for the flow of power to move westward once more. There is no reason why it cannot learn from the failures of recent times and create an economy worthy of true power and influence. If power is anything, it is admiration. One who holds that enviable position is free to spread his or her influence far and wide. This phenomenon was the symbol of American power in the 20th century, an era where its ideas, ideologies and culture grew and propagated throughout the world. There is no reason why this cannot happen again.
[1] http://yourjobismadeinamerica.com/freetrademyth/kiss -us-manufacturing-goodbye/
[2] The Multinational Monitor Volume 24 - "The Wealth Divide The Growing Gap in the United States Between the Rich and the Rest"