There are only two powers that meet these criteria, the Peoples’ Republic of China and the European Union. Both have the potential to become economic and military superpowers, but it is only a guess as to which one – if either or both – will grow in stature to eclipse the United States. The more likely of the two – in the short term – is the European Union, chiefly because it is a free-market democracy and is far more prosperous than China. However, since the United States is in a process of decline, the next superpower would need to weather America’s decline while increasing its own status and affluence.
Though, not a country in the strictest sense, the Europe Union is well on its way to becoming the world most powerful alliance of Western nations. It is currently a union of 15 European countries (United Kingdom, Ireland, Portugal, Spain, France, Luxembourg, Belgium, Netherlands, Germany, Italy, Austria, Greece, Finland and Denmark) who are committed to closer economic and political integration. The vision of European federalists, is a strong united Europe combining the resources of its member states in order to achieve a powerful federation based on the American model. The structure for a United States of Europe is already established. An executive, in the form of the European Council in Brussels, is equal in scope to the U.S. Presidency. A legislative body is to be found in the form of the European Parliament in Strasbourg, with a supreme court in The Hague. And of course, there exists a complicated bureaucracy to handle every aspect of a countryx. Europe, though, sti!
ll needs to harmonise its internal markets, standards, welfare and wage allowances.
Member states must also meet rigorous budgetary criteria in order to participate in monetary union set for 1999. This could pose the most immediate threat to America’s economic dominance. Most countries base their foreign reserves on American dollars, making American monetary policies globally important. If the European currency becomes a reality, it may replace the dollar as the currency of choice. However, the path to monetary union is laden with budgetary criteria that may be hazardous to future European integration. The budgetary criteria (chiefly reducing the deficit to approx. 3% of GDP) may prove to be too painful for some countries that have not yet address their inflated budgetsxi. Which ever countries do meet the requirements, will have the option of entering into the European Monetary Union, while other countries may bide their time.
Such flexibility, however, is flawed since the integration of currencies depends on the participation of the major powers – France, Germany, and to a lesser extent Britain. But with current austerity measures proposed by the French Prime Minister – intended to meet the criteria – being widely opposed, France’s prospects are shadowed by doubt. Germany may, too, face a problem if its citizens are reluctant to give up the powerful Deutschmark. With Britain historically hesitant of continental politics, the two banks of the Rhine have provided the leadership and balance that have held the union together. If either France or Germany do not ascend to the monetary union, then the ecu4 will likely never become a feasible reality. So long as this paradox continues the American dollar’s financial power is guaranteed as the currency of choice.
However, what if by the turn of the century, Europe begins to issue ecus for public consumption (they are already in use by governments). What if investment bankers and money brokers begin to buy up those ecus, at the cost of other currencies. With some European interest rates historically higher than North American rates, this is a strong possibility. European currencies – including the ecu – are already second only to the American dollar as a percentage of foreign-exchange reserves in industrialised countriesxii. When European currencies are consolidated into the ecu, investors may be tempted to dump their American dollars in favour of the more rewarding ecu, making it the most influential currency. This will almost certainly send the interest rates of the Federal Reserve upwards, slowing the American economy and sending the it into a financial tail spin. This scenario is purely hypothetical, but not unlikely considering the volatility of currency trading.
Despite concerns about its further integration, statistically Europe has several economic advantages over America. A united Europe would have as many as 380 million consumers, a GNP greater than any other, a budget which consumes less GNP and balances its investments, consumption and military expendituresxiii. The European Union is also blessed with a highly educated workforce, varying wage levels, potential new markets in Central Europe, and governments that are supportive of new industries. With the closer integration of Europe, foreign investment may start to grow as investors begin to realise that a larger single market is available in the European Union, and its future members (i.e. Central European associate countries). Such possibilities will not, however, be immediate, Europe still needs to undergo a period of adjustment as redundant companies are consolidated and national markets are harmonised.
In addition to a unified economy, Europe needs a unified military. A powerful and effective military is sometimes need to exert needed influence and gain credibility as a powerful participant in world affairs. The United States, for example, could only negotiate an accord to end the Bosnian conflict by enforcing diplomatic efforts with its powerful military capabilities. Europe is still developing a pan-European army, to be called Eurocorp. With the majority of the American body politic and citizenry opposed to involvement in peace-keeping, where there is no “vital national interest”, Europe may be pushed back into the role of military power broker. This would be akin to the role the United States has exercised in such conflicts as Haiti, Panama and most recently Bosnia-Herzegovina. Thus, Europe will eclipse the United States as superpower, exercising its influence throughout the world.
Nevertheless, until Europe solves its structural problems, and so long as there is no political will to animate the giant European Union, Europe will continue to be preoccupied with internal affairs. China, conversely, is shedding its traditional isolation and is embracing a new role on the world stage. Ironically, the People’s Republic of China is in some respects the world’s most progressive nation. Its present leadership seems to be developing a grand strategy more coherent and forward-looking than the other major powersxiv. While Congressional forces in the United States are trying to reduce American exposure in world affairs, China is trying to reassert itself as a powerful player. Although poorest of the world’s major powers, with a meagre GNP per capita of $371xv, it is committed to the development of its full economic and military potential.
Unlike the United States, China is enjoying an economic Renaissance. The Communist government has embraced capitalism with the fervency of Japan and America. It is lobbying investors to enter into joint ventures, thus providing a steady supply of foreign currency. The foreign currency in turn, helps China modernise its infrastructure, agriculture and industries, thus benefiting China’s gargantuan population of 1.2 billion people. If only a quarter of them could be considered middle class (urbanisation is 26%), then there exists a potential market of more than 300 million eager consumersxvi. If China, in the coming decades, increased its GNP per capita to $5,000 – the level of its new industrialised neighbour, South Korea – it would possess the world’s largest economy. With such economic power, will come influence, as China will become one of the world’s leading trading power. It is a goal that the Chinese authorities are firmly intent on reaching, with their sights set!
on membership in the World Trade Organisation; and perhaps, even a G-8, sometime in the next century.
But even before China will join these venerable clubs of First World countries, China will have become a regional superpower, possessing one of the world’s most powerful militaries. The Chinese authorities are shedding excess personnel, streamlining, conscripting and modernising a planned military of 3 million personnelxvii. Unlike the U.S., China can afford greater military spending, owing to its limited foreign obligations. America, conversely, has numerous obligations in East Asia. It maintains armies in Japan and South Korea, a Pacific fleet, and must honour treaties of defence with the Philippines, Thailand, Australia and New Zealand. As the costs of maintaining its obligations continues to rise, and America’s ability to cover these costs declines, it will be faced with the prospect of a diminished presence. Such a move would leave a vacuum which China would be more than pleased to fill. A worse scenario, would be if the traditional antagonism between China and its!
neighbours were to reach an alarming level. The United States could be drawn into conflict, or more likely given China’s nuclear deterrent, a tense arms race which it can ill afford.
China has already postured itself as a regional power, threatening Taiwan’s de facto sovereignty and Vietnam’s and the Philippines` claim on the Spratly islands. As America’s natural ideological enemy, relations between the two powers is vulnerable to any strain. In the Congress, issues of human rights violations and oppression of dissidents threaten relations with China; and access to China’s vast market. Other countries are not handicapped by America’s ideological extremism. In the post-modern world, ideological differences are being subordinated to the more lucrative endeavours of trade and commerce. It is a reality that has been recognised in Europe and Canada, but has yet to be accepted in the United States.
For this reason, and because of its domestic discord and decay, America is the source of its own decline. Even before Europe or China emerge as superpowers, the United States will have declined to a level of such irrelevance that either Europe or China – or both – will have had the opportunity to eclipse the great empire. One cannot say when the United States will fall from power, and when – or even if – China or Europe will emerge as the new superpowers. There are no longer barbarians at the gate, nor vanquishing conquerors, or natural disasters that could mark the end of one empire and the rise of another. The pathology of American decline will be evolutionary. As America recedes from world affairs other countries will grow in influence, as the American economy weakens other economies will strengthen.
Eventually, America will simply lose its international credibility, its prominent position and economic strength to such an extent that it will no longer be considered a superpower. However, the forces that can lead to such a cataclysmic future – economic decline, loss of competitiveness, debt, ideological and racial strife – can also be reversed. America’s future is not, after all, a runaway train heading towards a metaphoric brick wall. This vision of America’s future is based on a current evaluation of its position. If this vision is not to materialise, the American public and its politicians will need to formulate a plan that envisions the future of the United States; and the methods by which to create that future. Otherwise, without a new direction – needed to replace the Cold War mentality – the forces of