THE WORLD is coming to the end of another century, and its number-one power is faltering.
Forty years earlier, it was in a class of its ownin manufacturing output, per capita productivity, high-technology goods, and average personnel income. Now, with the country's overall growth rate lagging behind that of its chief rivals, that is no longer the case.
At the same time, the social problems of its inner cities, the shortcomings of its educational system, the eroding infrastructure, all call for a vast allocation of resources. So, too, do its armed services, which are grappling with a dreadful spiral in the cost of weaponry, and have numerous theaters of war to prepare to fight in. So many military commitments overseas have been assumed in more favorable times that, with the global economic and strategical balances changing so rapidly, it is doubtful whether the country could fulfill one-half of its treaty obligations in the event of a large-scale war. Being number one remains a source of pride, but it also has its disadvantages, especially in a period of relative decline.
Most readers will take the remarks above as a description of America's current predicament. In fact, it could also be a fair description of an earlier power, Great Britain, which a century ago found itself in very similar circumstances: its economic and industrial ascendancy being eroded, its pre-eminent position in various parts of the world coming under challenge, its military obligations being far in excess of its capacity to fulfil them all.
And in just the same way as thoughtful American politicians do today, late-Victorian statesmen worried about inner-city poverty, inadequate educational facilities, the erosion of manufacturing jobs, "unfair" foreign competition, and the constant press of demands for more spending on health care, social services and defense..
In the mid-19th century, Britain's industrial and strategical position had been secured. But by 1903, in the words of the Colonial Secretary, Joseph Chamberlain, it resembled a "weary Titan," staggering under the orb of its own fate. In the opinion of certain members of the Prussian General Staff, the future would probably see what they termed "the war of the British Succession" -- that is, a struggle to carve up the empire which Britain could no longer control.
And yet, the British Empire survived for much longer than those gloomy turn-of-the-century forecasts. It emerged victorious, albeit at heavy cost, from the two great wars of this century. Its empire did not suffer a devastating blow, like the fall of Rome or the sack of Constantinople. It was dismantled more gently, and transferred into a Commonwealth.
Britain's overseas obligations were ceded, at least in the less vital regions, to others who took over the burdens and privileges of power. And while it was no longer able to preserve or recover its predominant position of former times, it did ensure that its relative decline was both reasonably smooth and gradual.
Is there something in this story for America today? It needs to be said immediately that there are enormous differences between Britain and the United States, simply because of their respective size, population and natural resources. Thus, the argument here is not that global trends are relegating this country to second- or third-class status. In 50 years, America still ought to be a major player in world politics.
It is with the British example in mind, therefore, that one poses the question: How can the United States' own relative decline be made to occur just as smoothly and slowly as possible?
In the sphere of preserving economic competitiveness, for example, it is clear that the British record was a mixed one. While its share of world manufacturing was virtually bound to decline, did that decline have to be so swift? Probably not. Dozens of studies of Britain's eclipse as "the workshop of the world" have pointed to the low esteem held for manufacturing and commerce (as opposed to the law, or merchant banking) by the educated classes, to the inability to sell in foreign markets, to the limited technical training of the workforce, and, in particular, to the comparatively low rates of investment in new manufacturing plant and in civilian research and development.
Since this latter element is probably the most important indicator of an economy's long-term future, it is worth wondering whetherthe contemporary American economy is devoting a sufficient share of its resources towards non-military R & D in order to remain competitive with such countries as Japan and West Germany. If the answer is "no", as I suspect it is, the British example should pose a grim warning.
The British had an altogether better record than recent American administrations in budgetary policy and in handling their balance of payments. A strong Treasury department, resting firmly upon pre-Keynesian economic assumptions, insisted that central government revenues and expenditures always be balanced. In fact, in most years there was a slight surplus, which could be used to reduce the National Debt -- the total of which was decreased in each peacetime year.
Borrowing from the money markets to cover government deficits was thus restricted to wartime, and widely regarded as one of the great "reserve-engines" of British national strength, giving it an advantage over rivals whose credit-worthiness was much shakier. The government's fiscal rectitude also meant that interest rates were lower there than anywhere else -- as is the case today in, say, Switzerland or Japan.
Like the present American economy, the late-Victorian economy witnessed a structural shift from manufacturing into services, attented by a widening of the trade deficit in visible goods. But that gap was always covered by the large and swiftly-growing surpluses in invisible trade, due to Britain's earnings as the global banker, insurer, shipper, and commodity-dealer, as well as its vast returns on overseas investments.
Until about a decade ago, the United States also enjoyed the position of being the world's greatest creditor nation. Now it has gone to the opposite extreme, with alarming implications for its national prosperity and strength. In that respect, and especially in terms of its soaring budget deficit, the Reagan administration has more resembled the feckless attitude of the Bourbon monarchs of France than the fiscal sobriety of the late-Victorians.
The military position of Great Britain a century or so ago bears many resemblances to that of the United States, which may account for the fact that it is now studied so much at our war colleges. Both nations possessed, relatively speaking, a liberal, laissez-faire political culture which disliked spending large amounts of national income on defense. And yet both had extensive economic and strategical interests overseas which required protection in an unpredicatable and often dangerous world.
All this led to earnest debates about "how much is enough," with outside critics complaining about the profligacy of the armed forces, and with the admirals and generals declaring that the monies allocated were insufficient for the tasks in hand.
On the whole, one has the sense that the British managed the business of balancing needs versus means rather better. Perhaps this is because they had more experience at it, and had learned some lessons from their earlier blunders, such as the Crimean War.
But there was also the fact that Britain had a constitutionally stronger executive branch, in which a Cabinet composed of experienced, senior ministers was usually able to hammer out an integrated national policywhile coming under relatively small pressure from domestic lobbies. This meant in turn that when the British government decided to recognize another power's control of some tropical region, or when it would withdraw from an over-exposed position, it could implement such policies without much fear of domestic political obstruction. An American administration today contemplating a strategic withdrawal from, say, the Near Fast or the Western Pacific would surely have a harder time of it.
Since the U.S. Constitution grants less power to the executive branch than is the case in Britain, there is probably little to be done except to note the differences. It may simply be that when an over-extended Great Power faces the need to re-trench, controversial alternations in policy can be more easily carried out under a more autocratic constitution than under onefeaturing a leisurely, eighteenth-century system of checks and balances.
What may be worthy of more attention, however, is the heavy emphasis which Victorian and Edwardian statesmen in London placed upon diplomacy to ease their obligations and close the gap between strategic ends and military means. This, indeed, was the obverse side of that series of strategical contractions made by Britain in the first decade of this century. By ententes (with France, with Russia), by rapprochements (with the United States), and by new alliances (with Japan), the British eased their obligations in various parts of the world without a total surrender of their interests. This, in turn, allowed a concentration of military and naval power in more critical areas -- in the North Sea, for example, where Kaiser Wilhelm II's Germany was building a large and threatening fleet.
To be sure, a policy of diplomatic compromises can only work when foreign powers themselves are also willing to compromise. If such nations are un-appeasable, like the dictator-states of the 1930s, then political deals with them will be flawed. It is as a consequence of those 1930s experiences that, whenever a policy of conciliation towards the Soviet Union is being contemplated today, one will usually be warned of the "lessons of appeasement" by those who prefer a firmer view of Moscow.
But the point about British policy at the beginning of this century is that it did not require concessions to the perceived major threat of Imperial Germany. Rather, it involved a withdrawal of responsibilities in certain regions in favor of third powers -- the United States in the western hemisphere, France in West Africa, Japan in the Far East -- which guaranteed stability in return for assuming a larger position. Is such a policy excluded for the United States in the future?
All the long-term indicators suggest that we are shifting from an essentially bipolar world that has existed since 1943 towards a multipolar world with five clusters of power: the United States, the Soviet Union, Japan, China and the European Economic Community.
This multipolar world already exists at the economic level -- Japan's GNP has now overtaken Russia's and the EEC's has overtaken the USA's. In the future, that is likely to translate into a multipolar system at the military level as well. As we return to the multipolar order of a century ago, diplomacy will be at a premium, especially if a player as subtle as Mikahail Gorbachev is in the field, looking to imitate the role of a Talleyrand or a Bismarck.
Nonetheless, the diplomatic cards are stacked in America's favor. If it can play them properly.
It is surely not beyond the wit of American statesmanship to negotiate a redistribution of certain defense burdens towards Western Europe and Japan, and to maintain good relations with the People's Republic of China, which shows every sign of wanting to preserve the status quo in places like Korea.
None of these changes need be carried out abruptly, or with threats rather than consultations. And if the United States' place as the chief guarantor of order in those regions is somewhat reduced as a consequence, does that bode disaster or merely a redistribution of obligations?
For many reasons outlined above, the British example is not a totally precise one. History never repeats itself exactly. But the way in which Britian adjusted to the altered global conditions around 1900 does suggest policies that leaders in Washington might care to ponder as we move into the post-Reagan era and grapple withAmerica's changed position in the world.
A careful attention to budgetary and trade balances, a check on the rise in the National Debt, an encouragement of greater investment in civilian R & D and in an improved educational system, a greater concern towards evolving a coherent, long-term national military strategy, and a willingness to search for diplomatic solutions to ease the burden of military over-extension. That is not a bad catalog of policies for a Great Power to adopt when it confronts relative decline.
While they may not actually reverse the trend, they offer the chance that this country can manage the erosion of its unique and temporary post-1945 position as slowly and smoothly as possible.
Born and educated in England, Paul Kennedy is Dilworth Professor of History at Yale. He is the author of "The Rise and Fall of the Great Powers: Economic Change and Military Conflict from 1500 to 2000."