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the fall of an empire

  1. croupier

    5,447 posts.
    I read this on Long Waves.......we can only watch to see which course history takes.Does the last lines mean the cashing in of the US gold reserves.

    Lessons from the fall of an empire
    By Harold James
    Published: December 29 2002 19:05 | Last Updated: December 29 2002 19:05

    It is the time of year when people are casting about for good books to read to
    resolve the current perplexity. If you are sitting in Washington, there are few
    guides to the unique position of the US, whose military expenditure exceeds
    that of the next 14 countries combined.

    The most frequently cited historical parallels, Britain and its 19th-century
    pax Britannica, or 16th-century Spain, the first country to grasp New World
    prosperity to dominate the Old World, do not really fit modern America. Both
    were locked in rivalry with other nearly equal European powers: France and (in
    the British case) Germany.

    Washington readers could do worse than go back to a study of the first real
    exerciser of unipolar power, the Roman Empire. The book to read is Edward
    Gibbon's classic study, whose first volume was (by chance) published in 1776,
    the year of the signing of the American declaration of independence. Gibbon's
    advice immediately looks quite attractive and relevant to today.

    He begins with praise for the peaceful character of the Emperor Augustus and of
    Roman realism and multilateralism: "Inclined to peace by his temper and
    situation, it was easy for him to discover that Rome, in her present exalted
    situation, had much less to hope than to fear from the chance of arms; and
    that, in the prosecution of remote wars, the undertaking became, every day,
    more difficult, the event more doubtful, the possession more precarious, and
    less beneficial."

    Previously secure countries can quickly drift away from the political grasp of
    the hegemon, as resentments and anxieties about the unipolarity of the world
    grow. Gibbon even had words that might help President George W. Bush understand
    or deal with Gerhard Schröder's would-be independent foreign policy. "The
    forests and morasses of Germany were filled with a hardy race of barbarians;
    and though, on the first attack, they seemed to yield to the weight of Roman
    power, they soon, by a single act of despair, regained their independence, and
    reminded Augustus of the vicissitude of fortune." This is a good description of
    the often counter-productive psychology of the need to slap the hegemon. But
    such revolt alone is not enough to overthrow hegemonic power.

    Why did the Roman version of uni- polarity collapse? Gibbon's empire depended
    at the height of its success on a sort of multiculturalism, which Romans put in
    terms of the admission of local deities to the quite crowded complex of the
    Roman imperial pantheon. In the same way, the US has recently gone out of its
    way to show how eagerly it will embrace a non-threatening version of Islamic
    (or indeed Hindu or Confucian) values. A too emphatic insistence on any
    uniquely Roman virtue or divinity would destroy a precarious notion of cultural
    pluralism. But it was exactly that plurality of a social and economic kind that
    proved to be a mechanism of disintegration.

    Gibbon saw his story of decline and fall in terms of a revolt against Roman
    universalism driven by a Christian and egalitarian protest against the unequal
    distribution of property. This was an early version of an anti-globalisation
    movement, in which inequalities stemming from the character of imperial power
    touched off protests. "Most of the crimes which disturb the internal peace of
    society are produced by the restraints which the necessary, but unequal, laws
    of property have imposed on the appetites of mankind, by confining to a few the
    possession of those objects that are coveted by many." Maybe Gibbon was also
    making a contemporary reference of his own, to the weaknesses of the
    late-18th-century British empire, with its global commercial culture, so
    signally exposed and attacked by the American Revolution.

    This 18th-century historian's picture of empire and its rules breeding
    resentment is at odds with a deeply reasoned view, drawn from American social
    science, about the way in which the modern world can be made peaceful. The
    argument of the September 2002 US national security strategy initially appears
    compelling. Because the US can so clearly outspend and defeat (pre-emptively if
    necessary) any other power, all other powers have an interest in cutting back
    military spending and threats to their neighbours. This will probably make them
    wealthier and, therefore, more democratic and peaceful. The world will in this
    manner be stabilised by the benign force of Washington - a dream very close to
    that of Augustus.

    Which of the arguments is right: the historian's view of long-term decline and
    fall, or the social scientist's of permanent peace as a result of rational
    calculation by rational leaders?

    The answer depends as much on the stability of the country at the centre as on
    the behaviour of the rest of the world. The US, unlike the British empire, is
    building its rule on a foundation that is potentially quite unstable. The
    British empire in its 19th-century heyday ran enormous current account
    surpluses (7 per cent of gross domestic product on the eve of the first world
    war). For more than 20 years, in the period of its cold war victory and of the
    conversion of the world to a new consensus about markets, the US has had quite
    large current account deficits. In 2001, the deficit was 4.2 per cent of GDP.

    One way of reading this odd situation - which is popular with many Americans -
    is that the rest of the world has bought into US stability. The deficits are
    financed by capital inflows, as the non-American world buys the stock of
    fast-growing US companies or - when the stock market looks bad - property.
    Indeed, there appears to be a security premium that the rest of the world pays,
    in that non-American purchases of US assets show consistently lower returns
    than US purchases of foreign assets.

    But nobody thinks that this kind of inflow can be sustained indefinitely. The
    inflows of foreign capital could be rapidly reversed on some chance piece of
    bad news. Such a reversal would involve a collapse of the US stock market, the
    property market and the dollar. US consumers would no longer be able to binge
    on cheap goods supplied by the rest of the world. American producers would try
    to protect their markets; foreign producers would be thrown out of business and
    no longer see any gains to be realised by peaceful integration in a benign
    world economy.

    The financial reversal would also bring the collapse of the US security policy
    and of its calculated strategy of world pacification. The cost of US defence
    spending would look much too high and scaling it down would give a chance to
    would-be rivals, at least on a regional basis - China, for example.

    The American case would then look more like that of Spain (which also ran a
    current account deficit, financed by the outflow of precious metals from its
    imperial possessions) than that of 19th-century Britain. And Gibbon's story of
    decline would begin.

    The writer is professor of history at Princeton University and author of The
    End of Globalization



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