Why The U.S. Is Not An Empire In Decline – Barron’s

Except that the data doesn’t back up this catchy political punchline. Rather than another year highlighting the inevitable decline of U.S. economic and political influence as authoritarian governments rise around the world, 2021 showed an American renaissance in the offing. 

The U.S. economy is poised for a strong 2022. That’s making the world’s authoritarian leaders nervous. Driven by the recovery, U.S. international influence is growing again after years of retrenchment. From Moscow to Beijing to Istanbul, excessive state control is causing economic pain for the people in the grip of authoritarianism. Their international political isolation is growing.

It’s easy to take a negative view on U.S. prospects. At first glance, perceptions of U.S. democracy around the world are strikingly low among other advanced democracies, such stalwart proponents as the UK, Germany, and Japan. According to an early 2021 Pew research poll, 57% agreed that the U.S. political system “used to be a good example” for others, but only 17% felt that it still is. 

That seems ominous, but look closer. Another Pew survey of these same countries, also in early 2021, found 61% had an overall positive view of the U.S., compared to the 27% who viewed China favorably. This preference extended to economic relations as well. When asked which country was more important for “strong economic ties,” 64% preferred the U.S. versus 21% choosing China, despite many viewing China as the dominant global economic power.

Part of these favorable views may have to do with the U.S. re-engaging with allies. As Russia cuts back on natural gas sales to Europe just as winter bites, the U.S. is increasing exports of liquified natural gas to these countries. Russian troops are on Ukraine’s borders, and Putin is attempting to wring security guarantees out of Washington. But the White House is refusing to be split off from NATO in a joint approach to Moscow. 

China has amped up military threats to Taiwan. Record numbers of military fly-bys in Taiwan’s airspace prompted Washington and Tokyo to state their support for the island. Chinese flights dropped dramatically shortly after. China has also sustained its militarization of the South China Sea, despite losing its case under the U.N. Convention on the Law of the Sea. In response, the U.S. has strengthened military ties with Australia and India in an actual pivot to an Indo-Pacific strategy. 

These are not the moves of a country in decline, but rather one that puts alliances first in lieu of unilateral action.

As the U.S. economy begins to thrive again, it is helping consolidate global influence chipped away by a more insular approach.

The domestic economy has remained remarkably robust, even with the trifecta of supply chain bottlenecks, rising prices, and a Covid slowdown that for several months earlier this year devastated the services industries (restaurants, movie theaters, hotels). Consumer spending rose a solid 8.5% from the beginning of November through late December over the same period a year ago. Holiday-specific sales rose 10.7% over prepandemic 2019 spending levels.

This can be partly attributed to forced Covid-induced savings and the Federal Reserve’s seemingly insatiable desire to print money. People have been feeling so flush with cash that they’ve been quitting their jobs in droves.

Economic resilience is behind yet another positive trend: Countries around the world are making longer-term bets on U.S. growth with increased foreign direct investment.

After several years of declines, inbound FDI soared. For the third quarter of 2021, $74.5 billion flowed into the country, a 68% increase over the same period a year ago. Second quarter figures were 144% higher than the year ago period. And both were significantly higher even compared with 2019 prepandemic levels. 

How are the leading authoritarian countries faring? According to the OECD, while the U.S. economy expanded by 0.6% in the third quarter over the second, China grew only 0.2%, and Russia declined by 0.8%. 

The challenges of continued U.S. growth and sustained global influence are hardly insignificant. Threats to a free and fair 2022 midterm election cannot be taken lightly. Failure to pass legislation to stem climate change, bridge the enormous wealth gap, and improve education would certainly degrade U.S. competitiveness. 

But these would be entirely self-inflicted wounds. And they are largely within Washington’s power to overcome. For countries like China and Russia, their problems are systemic and unlikely to improve because the efforts needed to reverse these trends threaten the authoritarian systems that caused them in the first place—namely, centralized economic control and a rogue’s list of political-military relationships with countries like North Korea, Syria, and Iran. 

Every new year brings with it hopes for change. As 2022 dawns, signs are good that the U.S. will muster the will to keep this political and economic revival going. That in turn will help reassert a positive influence around the globe when the world needs it the most.

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