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Declining US World Dominance: Implications to Business and Society

The highly vexing question on the minds of many Americans and non-Americans alike nowadays is whether the American dominance is declining in the world and when will it topple over?

According to social historian Harold Perkin, global history has become exeedingly complicated due to today's daily conflicts, protests and riots against corporate globalization, greed, dominance and the threat of worldwide terrorism against the Western nations. These evolving events seem to fit into a global pattern of the rise and fall of societies which can be traced back to ancient times. Similar to the fate of ancient nations, Perkin maintains, the cycle of the rise and decline of empires appears to be accelerating. During the 20th century alone, seven great empires have collapsed: Mandarin China, Germany, Austria-Hungary, Ottoman Empire, Japan, the British Empire, and twice over in the case of Tsarist and Soviet Russia. According to many analysts, since the unforgettable calamity of September 11, 2001, the 21st. century seems to threaten the only remaining superpower, namely the United States.

Compared to Harold Perkin, Alfred W. McCoy (another well-known historian) is rather more pessimistic about the United States' downfall. He maintains that a glance at history reminds us that most empires are fragile entities in their "ecology" of power that as soon as things begin to truly go bad, they regularly unravel with great speed. McCoy indicates that it took a year for Portugal, two years for the soviet Union, eight years for France, 11 years for the Ottomans, 17 years for Great Britain, and the United States will go under in 22 years, counting from 2003.

Among many salient factors contributing to the rise of an empire, three major categorical sources of the matrix of power are usually present in modern times: Politics, Economy, and Military.

Politics. Strong leadership with the support of the population at large and the right momentum with the military power, the right circurmstances may give rise to a nation's eminence. The United States has enjoyed world leadership in politics until 1980s. Historians have already begun to identify the George Bush administration's rash invasion of Iraq as the start of United States' downfall. Unlike the end of many previous empires which ended through bloodshed, with cities burning and civilians massacred, the 21st-century imperial collapse could come surreptitiously through the invisible tendrils of economic collapse or simply through ever menacing cyber warfare. As is amply clear, on account of dubious foreign policies, the world has begun to despise the United States. Once some foreign countries used to hang portraits of US presidents on the wall and now US flag burning has replaced that sentiment.

Undoubtedly, when United States' global domination finally ends, there will be painful daily reminders of what such a loss of power means for its citizens in every walk of life. European nations such as Germany, Britain have discovered that imperial decline tends to have a remarkably demoralizing impact on a society, regularly bringing at least a generation of economic privation. The national and international business would suffer with irreversible trends. As the economy cools, political temperatures rise, often sparking serious domestic unrest in the form of civil war.

Economy. In the arm of the economy is periodically shot inventions/innovation, material resources, financial availability, marketing skills just to mention a few factors. Many resources enter into the pipe of the economy - The output is either a robust or a dismal economy. The ecology of the economy depends on these input ingredients. Analysts predict that current economic, educational, and military data indicate that when it comes to US global power, negative trends will materialize rapidly by 2020 and they will most likely reach a critical mass by around 2030. The "American Century," proclaimed so triumphantly at the start of World War II, will be weakened and fading by 2025 after its eighth decade of dominance and could be on its deathbed by 2030.

Based on economic trends, The US National Intelligence Council admitted in 2008 for the first time that US global power was indeed on a declining trajectory. In one of its periodic futuristic reports entitled Global Trends 2025, the Council cited “the transfer of global wealth and economic power now under way, roughly from West to East" and "without precedent in modern history,” as the primary factor in the decline of the “United States' relative strength—even in the military realm.” Consistent with many economists, the Council’s analysts anticipated a very long, very soft landing for the US global preeminence. Some, however, entertained the hope that somehow the US would long “retain unique military capabilities… to project military power globally” for decades to come.

Such an optimism is very questionable to many observers of the scene. According to current projections, the United States will find itself in second place behind China (already the world's second largest economy) in economic output around 2026, and behind India by 2050. Similarly, Chinese innovation such as in nanotechnology, solar applications, and electronics is on a trajectory toward world leadership in applied science and military technology sometime between 2020 and 2030, just as America's current supply of brilliant scientists and engineers retires, without adequate replacement by a so-called ill-educated younger generation. Naturally, negative outlook such as these do not bode well for business and society.

Military. According to most analysts, in view of current plans, the Pentagon will play a military requiem for a dying empire by 2020. It will launch a lethal triple canopy of advanced aerospace robotics that represents United States' last best hope of retaining global power despite its feeble economic influence. By that time, however, China's global network of communications satellites, backed by the world's most powerful supercomputers, will also be fully operational. Undeniably, the supercomputers will provide Beijing with an independent platform for the military deployment of space and a powerful communications system for missile- or cyber-strikes into every quadrant of the globe.

The prognostication about the US politics, economy, and the military sound very fatalistic. If all the malaise in the three areas of politics, economy, and the military happen, the ripple effect would have drastic impact on business and society. Unemployment, inflation, foreign completion, terrorism, aging scientists, graying population, social unrest, etc. will paint USA in a gloomy picture. The US society would suffer from malaise, anomie, and restlessness.

My take on this subject would be more optimistic, though. Personally, I strongly believe in the USA exceptionalism. The nature of our country and the political system do not conform to the norm. We are unlike France, Britain, or Greece. We have the ability to rebound. If we have drought in one area of the country such as in California, we would be subsidized by another state to feed the nation. USA consists of 50 mini nations or countries! Like a giant retail corporation, if one branch suffers loses, another branch would bail out the ailing branch. During the Great Depression, people from Oklahoma moved in caravans to California in search of employment. Other nations do not have this kind of blessing to weather any kind of disastrous economic storm.

Admirably, our political system has had the elasticity to conform to the demands of the zeitgeist for over two hundred years. After the First and the Second World Wars, the USA came out stronger in its economy and political dominance of the world. In fact, the USA remained so powerful that it helped Europe and Japan build its infrastructure and vital industries as bulwark against Communism. The USA has a mystic to survive the odds just as the Jews have proven to survive centuries of discrimination and persecution.

At the present, China is excelling economically based mainly on abundant cheap labor, but wait till the peasants who are rushing to the cities from the rural areas begin to demand higher wages than a few dollars a day or a higher standard of living. Japan once had the same advantage of a dedicated and cheap labor, but over the years the Japanese people wanted more of the slice of good life. For example, Japanese executives refused to work 24/7 a day anymore; they wanted to go to Hawaii to play golf for recreation. In this way, Japan gave way to China to rise economically. But sooner or later China will have to face an educated and exhausted labor demanding more of the national income to lead a more comfortable life style. It is a matter of time, when China's differential advantage will erode just like Japan and Taiwan had to face the reality and become a follower rather than the leader of the world economic pack.

Despite the challenges faced by the USA education system, many nations still want to send their children to attend US colleges and universities, some of which are the world's best institutions of higher learning. Chinese government officials, for example, strive to send their children to the US schools at increasingly younger ages. In fact, China sends 160,000 of their youth to US schools. Unlike other nations around the world, US schools do not focus on the basics or rote learning that make the US education valuable. It is the culture of creative thinking, the pursuit of innovation that we imbue. The "can-do" attitude and the US entrepreneurial spirit come together to meld a country of innovators and tycoons.

It seems that no one is speaking of Yankee ingenuity and brain gain. To the young scholars and scientists around the world, USA is still the land of opportunity to come here for research and development. International students are coming to the United States to attend many of well-established universities. Most of them, upon graduation, tend to stay in the States. Moreover, many immigrants are coming and more and more highly educated people will come to the United States to work and live here since the old world is going through civil wars, cultural clashes, and jihadist warfare.

Moreover, Yankee ingenuity is well and alive in the land of multicultural society. United States dominates the world in three important areas with incessant innovations, let us call them 3Ms: music, movies, and management knowhow. The US exports more of the 3Ms than any country in the world. That shows us the multifaceted talent and dedication of the American mind. USA leads the world in Internet innovation, biotech and many other technological fields that require creative thinking. Companies like Apple computers, DreamWorks Studies, General Motors are just examples of world innovators.

We have always had problems like during the Great Depression. Within a few years the economic issues were addressed to the point of rising from the ashes stronger and more innovative. Currently, we have problems in education, in political leadership, in raising our children to be more patriotic and ambitious, in dealing with illegal immigration, etc., but these are on the agenda for solutions. Despite all those problems, the USA is still the best country to provide opportunities to overcome its shortcomings.

Let us not get into the trap of self-fulfilling prophesy and be a victim of doomsday mentality. USA is still the promised land of opportunity for many scientists to come to these shores to make history. Compared to any nation in the world, after all, most Nobel Prizes are received by talented, diligent, and devoted US scientists to advance the frontiers of our knowledge and technology which are designed to solve world problems. Such kind of international recognition is testimony to the fact that Yankee ingenuity is still alive and well. Dr. Turan Senguder, our CEO & Executive Chair, joins me in inviting our readers and contributors to write about this timely and important subject for publication in our refereed periodical-- Journal of the Academy of Business, Cambridge (JAABC)!

Z. S. Demirdjian, Ph.D.

Senior Review Editor

California State University, Long Beach, CA