US Intelligence Estimate predicts imminent end of US hegemony

December 13, 2012

The National Intelligence Council’s annual Global Trends report is out.  It is a disappointing product, weighted down with faddish themes and, in my opinion, insufficient recognition of the historical world economic system.  Focusing on anticipated changes to the economic and geopolitical environment over the next two decades, the report comes to the non-controversial conclusion that China will overtake the US as the world’s largest economy and that the US will cede its role as global hegemon in favor of a multi-polar system of shared power.

As I noted, the statement that China will become the world’s largest economy is non-controversial . . . but that does not mean the outcome is inevitable.  True, China has been the world’s largest economy for most of recorded history; the last century and a half are anomalous.   In some instances, though, size is not definitive. The term “largest economy” does not equate to “leading economy.”  The size of a nation’s economy is an aggregate measure of economic activity and not a measure of economic influence.  For example, throughout its nearly two centuries of global hegemony, England never had the world’s largest economy (indeed, China was the world’s largest economy until late in the 19th century).  According to estimates, France probably exceeded England in total economy just prior to the Napoleonic Wars, and Germany certainly exceeded England just prior to World War One, the last two global contests for hegemony (see chart below).  In both cases, the larger economies failed in their bid for hegemony.

copyright EnerGeoPolitics, 2010

copyright EnerGeoPolitics, 2010

It is also far from clear that China will actually ascend to the top position.  A continuing theme of this blog has been that of “Peak China” – the belief that China’s ascent has neared or reached its peak.  I think it is possible (likely even) that India surpasses China in the next two decades and becomes the world’s largest economy.

The report also predicts that the US will achieve energy independence over the same period (welcome to the party – I have been predicting as much since 2007).  And this is why I believe the US will maintain hegemony for the rest of the century.  The US will be not only energy independent, but has the capacity to become the worlds greatest producer, consumer and exporter of energy.  Additionally, the US will remain the supermarket to the world – the top producer of food in an increasingly hungry world.  The ability to fuel and feed ourselves and our allies, combined with the geographic reality of a two-ocean buffer, are the most profound geopolitical advantages of any nation on the globe for the foreseeable future.

Consciously or not, Chinese leadership is making a bid for global hegemony.  I believe that these variables mean that the Chinese bid will crest short of that goal, and that the US will remain not simply the “important” nation that the NIC envisions, but the continued world hegemon that it has been since the end of World War Two.  Of course, decline can be deliberately chosen by a series of feckless leaders, but I find it unlikely that the American people and the leaders they choose going forward will be as comfortable with that choice as the current occupants apparently are.


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