I just finished reading a bit of a “futurist” prediction from Alfred McCoy, a professor at the University of Wisconsin-Madison.
In it he proposes a series of scenarios under which the “US century” will come to a crashing end, as, he states, has occurred to the UK, France, USSR and countless other empires of bygone years. The scenarios are as follows:
- General Economic Decline: Dollar loses its status as a reserve currency, deficits can no longer be funded, US military overseas cut down, soaring prices, rising unemployment, general unrest, cyber warfare and at the end the election of a far right candidate to push US power worldwide, but by this point it is too late.
- Oil Shock: Oil no longer traded in dollars, but in a “basket” of competing currencies or even in a new reserve currency not attached to any single country, US can no longer patrol the Gulf region and has to abandon the entire Indian Ocean, prices skyrocket and an economy that has done nothing to prepare itself for an alternative energy source spirals out of control.
- Military Misadventures: Pretty self-explanatory. Iraq, Afghanistan…Iran? Never-ending need to satiate the military-industrial complex eventually leads to huge deficit and overreach, leading eventually to a US “Suez Canal” moment like that which quickly spelled the end of the UK and French colonial eras.
- World War III: The author predicts rising tensions with China, especially through cyber attacks and competition in the Western Pacific in waters that China increasingly considers to be Chinese. No casualties are predicted though, since Chinese military technology will simply outclass the US and hackers will be able to deactivate US drones, equipment and so on within a matter of hours- Equipment whose components likely came from China.
- New World Order: The US, Europe and Japan shed their relative power to the BRIC countries faster than ever before. What comes out of the ashes of the great unknown could rival anything from powerful regional blocs to a comprehensive Westphalian system as existed in the wake of the Napoleonic wars in Europe whereby a “Balance of Power” is rigourously enforced and no one country is allowed to dominate.
See also the following articles:
- Is America’s Age of Discovery Over?
- The Folly of a Chinese Trade War
- America’s Lost Economic Decade
- The End of the Dollar Standard
- Once a Leader, U.S. Lags behind in College Degrees
What do you think? Will there be a specific “scenario” or “trigger” that signals a quick exit of the US as the premier hegemon? Or maybe you already believe that it has already lost the claim to being the only hegemonic power? What would the post-US world look like in your opinion?
The accuracy of “Futurism” is obviously difficult to measure and is grounded on assumptions. Events can change, often at a blinding speed. War with Iran is now a possibility. The Eurozone has deteriorated greatly since the article was written (notice that his “basket” of alternative Oil currencies includes Euros in the 2025 scenario). I personally doubt the possibility of the World War III scenario since China and the US are too intertwined economically for this to make sense. Instead, I think that a realisation that the US can no longer finance foreign wars and 100+ military bases will catch up with US politicians too late and that this, combined with general economic decline and an over-dependence on oil, really could signal a major problem for the US in 10 years’ time. Even if all of these scenarios don’t come to pass, the US certainly isn’t realistically tackling its ballooning trade deficits. FATCA and citizenship-based taxation certainly do not help either to make the US an attractive investment location or exporter of goods.