Financial historian Niall Ferguson thinks American imperialism is a good thing. If America does not take up the banner of liberal empire, says Ferguson, the developing world will not develop, vast regions of the earth will remain backward and the march of progress may grind to a halt. Ferguson's latest book, Colossus: The Price of America's Empire, argues that Americans have wrongly come to believe that "empire" is a dirty word. "The irony is that there were no more self-confident imperialists than the Founding Fathers themselves," writes Ferguson. George Washington once referred to the United States as a "nascent empire" and an "infant empire." Thomas Jefferson once told Madison that no constitution was "ever before as well calculated as ours for extending extensive empire and self government." Alexander Hamilton also referred to the United States as "the most interesting ... empire ... in the world."
Ferguson wants Americans to look at long-term costs and benefits when judging imperialist projects like the democratization of Iraq. He also wants Americans to understand what is necessary for a successful outcome in the worldwide struggle for free markets and humane administration. America is the world's dominant power. Everything therefore depends on the United States. But there is a problem. Basic American attitudes toward consumption, credit and global responsibility aren't what they should be. Ferguson describes Americans as, "Consuming on credit, reluctant to go to the front line, inclined to lose interest in protracted undertakings." The American colossus, he complains, is "a kind of strategic couch potato." The typical American would rather live comfortably above his means, borrowing from East Asia, inattentive to the world's problems. According to Ferguson: "the percentage of Americans classified as obese has nearly doubled in the past decade, from 12 percent in 1991 to 21 percent in 2001." Meanwhile, the underdeveloped countries are struggling under tyranny and mismanagement. Millions are threatened with starvation. But today, quips Ferguson, "'the white man's burden' is around his waist." American consumption has risen from 62 percent of GDP in the 1960s to nearly 70 percent of GDP in 2002. Today Americans save less than half of what they were saving per capita in 1959. As Ferguson points out: "Household sector credit market debt rose from 44 percent of GDP in the 1960s and 1970s to 78 percent in 2002." Worse yet, Americans are disastrously preoccupied "with the hazards of old age and ill health that will prove to be the real cause of [America's] fiscal overstretch...."
The problem with American empire is not the empire. The problem is debt caused by a ballooning welfare state. The United States has explicit liabilities and implicit liabilities, and Ferguson predicts that the implicit liabilities of Social Security, Medicare and other entitlements promise to crash the American financial system. "To put it bluntly," he writes, "this news is so bad that scarcely anyone believes it." America has fallen prey to a financial delusion and the final result will be bankruptcy. "If financial markets decide a country is broke and is going to inflate," warns Ferguson, "they act in ways that make that outcome more likely." Thus begins the stampede of the bond market mammals. The trigger, says Ferguson, will be "an item of bad financial news." It will be the proverbial straw that breaks the camels back. (In this case, a bale of straw.) If America's economic deficit is not corrected, says Ferguson, then we may expect the "black hole of implicit liabilities" to deliver a financial crisis followed by political revolution. In all likelihood, he adds, "the decline and fall of America's undeclared empire may be due not to terrorists at the gates or to the rogue regimes that sponsor them, but to a fiscal crisis of the welfare state at home."
A further complication for America's empire is the U.S. manpower deficit in Iraq. According to Ferguson, America's Ivy League graduates do not dream of serving as proconsuls in the hot and dusty backwaters of the planet. Instead, America's best and brightest want to make six figure incomes and reside in comfortable suburbs. The American empire (unlike the British empire) suffers from a shortage of willing talent. "There are simply not enough Americans out there to make nation building work," laments Ferguson. The shortage of military personnel in Iraq has been acknowledged by nearly everyone. But this shortage is not purely military. There is a shortage of skilled administrators and technicians prepared to spend their professional lives abroad. "Until there are more U.S. citizens not just willing but eager to shoulder the 'nation builder's burden,' ventures like the occupation of Iraq will lack a vital ingredient," says Ferguson.
As for America's attention deficit disorder, the British historian does not hide his disgust. According to Ferguson, "one poll revealed that nearly a third of Americans thought the [Nicaraguan] contras were fighting in Norway." How can the United States uphold an empire when the American people are so utterly self-absorbed?
If America is unwilling or unable to shoulder the "nation builder's burden," will the worldly Europeans step forward to nudge the half-baked Americans aside? Is the European Union an emerging mega-empire in the making? -- Not a chance, says Ferguson. Americans may be self-absorbed but Europe is senile. EU integration has not fostered economic growth. In fact, growth has been declining since 1973. Eurozone monetary policy has been mismanaged since the single currency began. "The success of the euro as a substitute for the dollar in some international transactions masks a deep failure," Ferguson explains. "This failure has consisted in systematically underestimating deflationary pressures on the Germany economy...." Rather than emerging as a superpower rival of the United States, the European Union is becoming a kind of "super-Switzerland." This is a formation, says Ferguson, "where economics tends to count for more than politics and where the cantons and provinces are more powerful than the central government." The world has seen this sort of thing before. A country that remains strictly within the confines of economic power cannot play a leading role, even when it possesses great wealth. "Talk of federal Europe's emerging as a counterweight to the United States," argues Ferguson, "is based on a complete misreading of developments. The EU is populous but senescent. Its economy is large but sluggish. Its productivity is not bad but vitiated by excessive leisure."
As for the Chinese, Ferguson says their economy will not overtake the American economy before 2041. As things presently stand, China is far behind the United States and lacks America's positional advantage within the global economy. At present the Chinese are forced to buy America's debt to keep their currency from appreciating against the dollar. This is done to protect China's export economy. Even so, warns Ferguson, "Today's open door between America and Asia could close with a surprisingly loud bang." Trade is not an absolute guarantor of peace, he reminds us. Germany and England developed extensive trade prior to 1914. But war came nonetheless.
Ferguson is genuinely puzzled by the absence of great power conflict today. America, the dominant country of the moment, doesn't like being a great power. Europe and Japan are "senescent societies and strategic dwarfs." China is economically tied to America through trade. Russia doesn't count because of its shriveled economy. "The absence of great power conflict is a concept that is unfamiliar in modern international history," writes Ferguson, who doesn't quite trust what he sees. If only his intuition were a little stronger. If only his blinders were not so firmly fastened. Ferguson has failed to notice that yesterday's great power conflict has taken a subterranean detour. Russia pretends to be America's ally in the war against terror. But Eastern Europe, with its new democratic makeup, is still run by the same communist elite as before. And Russia's strategic rocket forces remain on a hair-trigger, aimed at the United States.
Ferguson believes that Russia's economic backwardness somehow cancels Russian power from the international equation. He ought to be reminded that poor Sparta defeated wealthy Athens in the Peloponnesian War. "I assert," wrote Machiavelli in his Discourses on Livy, "that it is not gold, as is claimed by common opinion, that constitutes the sinews of war, but good soldiers; for gold does not find good soldiers, but good soldiers are quite capable of finding gold." Russia's lean and hungry condition may be more incentive to empire than America's fattened condition. "It is obvious, wrote Machiavelli, "that when an army is short of provisions and must either fight or starve to death, it always chooses to fight, since this is the more honorable course, and one that gives fortune some chance to show you favor."
Greatness is found in the human heart, not in a pocket book. "The question Americans must ask themselves is just how transient they wish their predominance to be," says Ferguson. Let us acknowledge that a bolt of lightning from an approaching storm has already illuminated this question for the attentive few. All that remains is to wait for the thunderclap.
