Damn straight he does! I’ve often been awfully hard on Dan, but, well, when Dan changes, I change too, and Dan has, in my opinion, served up a real stunner, bouncing off a recent piece by Paul Krugman, The Strange Decline of the Pax Americana, something I did too, but Dan and I bounce differently, mine being a rather grumpy take-down of what I considered to be Paul’s overly starry-eyed description of the Pax, while Dan instead decries Paul’s cavalier acceptance—for the most part—of the sadly global rejection of globalism, which both Dan and I, unlike everyone else, think is a good thing.
As Dan points out, Paul disagrees with the notion that the U.S. simply lacks the economic heft that it once did, so that the notion that people don’t listen to us the way they used to because we can’t tighten the financial screws on them the way we did back in the good old days is false. It’s those gosh-darn Republicans down in DC, Paul says, who seem to lack any form of gratification other than stepping on their own dicks,1 that have cost us the international influence we used to have.
Hold on, says Dan. Yes, the Republicans are a disaster, but that’s only a part of the story, and in fact the lesser part. When Paul says that the U.S. economy is still No. 1, well, yes, but the relative size of the “rest of the West” (Canada, Germany, France, the United Kingdom, Japan, and Italy) has declined. The share of the world economy accounted for by the “full” West (these countries plus the U.S.) has declined from 2000 from about 20% of world GDP2 to about 16%, while the share of China has skyrocketed. Furthermore, says Dan (and this is really the “interesting” part), many countries around the world are less interested in listening to the U.S. because the U.S. is aggressively pursuing avowedly protectionist economic policies.“Beggar thy neighbor” is not a good way to win friends and influence people:
One reason the liberal international order is fraying is that the member countries most loosely tied to it do not see much upside to cooperating with the United States. The implicit contract of the United States maintaining an open economy has come to an end due to unilateral U.S. actions. And those actions have had bipartisan support.
I would also suggest that Republicans, the Biden team, like Krugman et al have weighted the dangers of weaponized interdependence too highly and the benefits of commercial interdependence too lightly. As I argued in my Cato Institute essay last month, the commercial peace is not an ironclad constraint but it is an important constraint on war in the international system.
I would also remark that, before the collapse of the Soviet Union, many nations listened to the U.S. because they feared “the Revolution”—the naïve (at best) dream of literally hundreds of millions of people around the world that life for everyone could be radically reshaped (for the better, of course) by a single, orgiastic outburst of revolutionary passion, a dream that dwindled slowly, like a deflating balloon, over the decades as the U.S.S.R. looked less and less like the wave of the future and more and more like stodgy relic from the forgotten past, the Red Army’s once fearsome bayonets finding no purchase against American blue jeans and rock and roll. Yes, there once was a spectre haunting Europe—Europe and the rest of the world. But the spectre died, and now, with the rise of “anti-globalism”, Uncle Sam is starting to look less like a protector and more like a selfish and self-interested bully.
Dan’s paper for the Cato Institute, The Dangers of Misunderstanding Economic Interdependence is well worth a read, Dan arguing intelligently against what is often little more than xenophobia masquerading as “analysis” among both liberals and conservatives, both just a bit obsessed with reaching that ever elusive “white working class”. It is, in fact, a basic rule of thumb among working class people of all races that there simply aren’t enough “good jobs” to go around, and therefore we need to rig things so that we get them all, or as many as possible. As Dan explains, that’s not how it works. I wish more people were listening.
1. Professor Krugman did not use this metaphor.
2. GDP measured by Purchasing Power Parity.
