Let me start by saying that this is a diary to try to explain some of the constant Gloom and Doom we hear on this site. The base cause is something we cannot change: The United States is declining as a major world power. It has been in relative decline since the end of World War II. Vietnam has nothing to do with it. The only question is will we decline slowly, and maintain great power status for centuries, much like Austria did after its 1620s peak in power. Austria remained a great power afterward until its final collapse in 1918. Or will the US fade swiftly like Spain (global superpower in 1559 to pawn of powers by 1640), or the UK (peak of economic power in 1860, peak of military power in 1880, has-been by 1945)?
My basis for this is a book published in 1987, titled
The Rise And Fall of the Great Powers, 1500-2000 by Paul Kennedy, a professor of history at Yale. His basic thesis is this: Relative Economic Power equals Relative Military Power. Whether a nation is actually richer doesn't matter. Great Britain is far wealthier today than it was in its Victorian heyday, but in 1860, Britain was 35% of world economic output, today, its more like 6-8%. In that victorian era, Britain was a superpower. Military strength lags a bit behind economic strength.
Military prowess tends to lag behind the economic prowess. As a nation rises to Great Power status, it takes on obligations that it can handle in its 'youthful' vigor: Spain's promise to protect Catholicism and defeat Protestanism from 1559-1648. France's multiple bids under Louis XII and Napoleon for European Hegemony. Britain's Empire. The US's worldwide cold war bases. As other national economies rise in relation to the current #1, those obligations become more difficult. The general response has been to increase military/defense spending to try to hold on to the current position. But because military spending is dead weight on the economy, this only allows the faster growing nations to keep catching up, and eventually pass the previous #1 nation.
Britain is the previous Hegemon, a great power nation from its defeat of the Armada in 1588 to the end of World War II. Britain was the first nation to Industrialize, making her the premier economic power from about 1770 to 1890, with a peak in economic power in 1860. After 1860, Germany and the US, and to a lesser extent, France and Russia pushed at the British economic position. Britain's position with such a large percentage of economic power in 1860 was an artificial construct of industrializing almost a century ahead of everyone else. By about 1880-1890, Britain began to feel the pressure, as its older industrial base became non-competitive with Germany and the US. Britain responded by building a HUGE navy, in competition first with Germany, then the United States. By 1895, Germany had a slightly larger economy than Britain. By 1900, the United States had an economy almost as large as the five great powers of Europe combined. World War One all but proved this state of affairs: Germany was almost capable of defeating Britain, France, and Russia, but the economic backing of the US arrived 'just in time' to halt the German bid for Europeans Hegemony.
By 1945, The US reached its peak of economic power by a similar artificial state of affairs: The US controlled 50% of world economic production in 1945, mostly because every other industrialized state was pounded flat. Russia, the next most powerful state, had about 30% of world production. The US started the Cold War WAY ahead, and stayed there. Nevertheless, the US position of 50% of production was utterly unsustainable. Russian peaked in the late 1950s at around 35% of world Production, with the US already declining to the 40-45% range in the same time period. By the late 60s, Western Europe was more or less back on its feet, and Japan, who had completely eschewed military spending (less than 1% of the economy was military spending) also regained a large part of the remaining economic position. By 1970, a true multipolar world was emerging again. As China shook off the 'Great Leap Forward' debacle, she started growing at 8-10% a year during the 1980s. Japan passed Russia in 1985 to become the world's #2 Economy. The EEC/EU also grew. In the 1990s, the Asian Tigers started taking off. All this economic growth had to come at the expense of the US and USSR. The Soviets had stagnated with very slow growth in the 1960s, and negative growth through the 70s, until at the collapse of the Soviet empire in 1989-91, they were only running about 10% of World Economic power. The US has been chopped in half in economic power, from 50% to around 25% of world economy. We're still the single largest, but not by much. (The EU may have a slightly larger economy, but they also have a larger population, and indicators of that are split) We spend as much on our military as the entire rest of the world combined, yet we feel no safer for it. We are solidly in the downside curve of Kennedy's thesis.
What can we do about it? Nothing really, short of devastating the rest of the world's cities like humanity did from 1939-45. Our position of strength in the second half of the 20th Century was as artificial as Britain's in 1860. The only real solution is one we can never take: Withdrawal from our overstretched positions, slashing the military, and investing in industry/economic power again. Japan succeeded at this, going from near zero to the #2 economy in under 40 years. The US may never again be the master of the world. Like Britain in 1860 then 1880, by the middle 1960s the US was under pressure. That Pressure really started to be felt in the 1970s and 1980s. Nothing we have done or can do will arrest this slide. From its available natural resources and population, the US should be between 12 and 16% of world economy, so we still have a ways to decline. That position would put the US as the #2 or 3 Great Power, Behind China and roughly tied with the EU. Failure to recognize that we are doomed to lose our #1 position (but, probably, not 'Great Power' status) and working to control the slide, puts us in danger of crashing entirely, like the Soviets did.
Peak Oil may also lead to difficulties recovering our position, as Kennedy's Thesis is predicated on growth, not stagnation or global economic decline. The last time the West was hit with an economic decline of the sort being suggested by the Peak Oil Worst Case doomsayers, it was the period from 198 - 275 AD, collectively known as the 'Crisis of the Third Century' and was the hollowing out of the Roman Empire, setting it up for its western collapse 150 years later.