Why the West Rules—for Now

by Morris, Ian;

  The only way the twentieth-century Wars of the World could plausibly have produced a wildly different outcome was by descending into all-out nuclear war. If Hitler had developed atom bombs he would surely have used them, but since he virtually canceled his nuclear program in 1942, that was never likely. That left the United States free to drop two bombs on Japan with impunity. But once the Soviets tested their first nuclear weapon in 1949, Nightfall became increasingly possible. Even at their peak levels in 1986, all the world’s warheads combined only had one-eighth of the destructive power of a two-mile-wide meteor impact, but that was still more than enough to annihilate modern civilization.

  It is hard to understand those—like Chairman Mao—who can contemplate nuclear war with anything approaching equanimity. “Let us speculate,” he said to the Communist world’s leaders in 1957.

  If war broke out, how many people would die? There are 2.7 billion people in the entire world … If the worst comes to the worst, perhaps one-half would die. But there would still be one-half left; imperialism would be razed to the ground and the whole world would become socialist. After a number of years, the world’s population would once again reach 2.7 billion and certainly become even bigger.

  Fortunately for us all, the men who actually made the decisions in the Soviet Union and United States in the 1950s realized that the only way to handle nuclear weapons was through Mutual Assured Destruction, a no-middle-ground doctrine where one false move would mean annihilation all around. The details of how to play this game remained nail-bitingly murky, and there were some close calls, particularly when John F. Kennedy and Nikita Khrushchev tried to work out the rules in the autumn of 1962. Khrushchev, alarmed by American saber rattling, had installed Soviet missiles on Cuba, and Kennedy, worried, had blockaded the island. Soviet warships sailed within a few miles of the American line in the sea; Kennedy sent an aircraft carrier to cut them off. Kennedy suspected at this point that the odds of disaster were reaching one in three or even one in two. And then, around ten in the morning on Wednesday, October 24, they worsened sharply. As Kennedy and his closest advisers sat in strained silence, news came that a Soviet submarine had blocked the American aircraft carrier’s path. What could its intention be, if not to attack? Kennedy’s “hand went up to his face and covered his mouth,” his brother remembered. “He opened and closed his fist. His face seemed drawn, his eyes pained, almost gray.” His next move would be to launch four thousand warheads. But the Soviet submarine did not fire. The clock ticked on; and at 10:25 the Soviet ships slowed, then turned back. Night did not fall.

  For thirty years brinksmanship and blunders produced an agonizing sequence of glimpses of the outer darkness, but the worst never came to the worst. Since 1986 the number of warheads in the world has fallen by two-thirds, with further big reductions agreed upon in 2010. The thousands of weapons that the Americans and Russians still have could kill everyone on earth with megatons to spare, but Nightfall now seems far less likely than it did during the forty years of Mutual Assured Destruction. Biology, sociology, and geography continue to weave their webs; history goes on.

  FOUNDATION

  Asimov’s story “Nightfall” has not, so far at least, provided a very good model for explaining the onward march of history, but perhaps his Foundation novels can do better. Far, far in the future, says Asimov, a young mathematician named Hari Seldon takes a spaceship to Trantor, the mighty capital of a Galactic Empire that has endured for twelve thousand years. There he delivers a scholarly paper at the Decennial Mathematics Convention, explaining the theoretical basis for a new science called psychohistory. In principle, Seldon claims, if we combine regular history, mass psychology, and advanced statistics, we can identify the forces that drive humanity and then project them forward to predict the future.

  Promoted from his provincial home planet to a chair at Trantor’s greatest university, Seldon works out psychohistory’s methods. His major conclusion is that the Galactic Empire is about to fall, leading to a thirty-thousand-year dark age before a Second Empire rises. The emperor promotes Seldon to first minister, from which illustrious position he plans a think tank called the Foundation. While gathering all knowledge into an Encyclopedia Galactica its scholars will mastermind a secret plan to restore the empire after just one thousand years.

  The Foundation novels have delighted science fiction fans for half a century, but Hari Seldon is a standing joke among those professional historians who have heard of him. Only in Asimov’s feverish imagination, they maintain, could knowing what has already happened tell you what is going to happen. Many historians deny that there are any big patterns to find in the past, while those who do think there may be such patterns nevertheless tend to feel that detecting them is beyond our powers. Geoffrey Elton, for instance, who held not only the Regius Chair in Modern History at Cambridge University but also famously strong opinions on all matters historical, perhaps spoke for the majority: “Recorded history,” he insisted, “amounts to no more than about two hundred generations. Even if there is a larger purpose in history, it must be said that we cannot really expect so far to be able to extract it from the little bit of history we have.”

  I have tried to show in this book that historians are selling themselves short. We do not have to limit ourselves to the two hundred generations in which people have been writing documents. If we widen our perspective to encompass archaeology, genetics, and linguistics—the kinds of evidence that dominated my first few chapters—we get a whole lot more history. Enough, in fact, to take us back five hundred generations. From such a big chunk of time, I have argued, we really can extract some patterns; and now, like Seldon, I want to suggest that once we do this we really can use the past to foresee the future.

  12

  … FOR NOW

  IN THE GRAVEYARD OF HISTORY

  At the end of Chapter 3 we left Ebenezer Scrooge staring in horror at his own untended tombstone. Clutching the hand of the Ghost of Christmas Yet to Come, he cried out: “Are these the shadows of the things that Will be, or are they shadows of the things that May be, only?”

  I suggested that we might well ask the same about Figure 12.1, which shows that if Eastern and Western social development keep on rising at the same speed as in the twentieth century, the East will regain the lead in 2103. But since the pace at which social development has been rising has actually been accelerating since the seventeenth century, Figure 12.1 is really a conservative estimate; the graph might be best interpreted as saying that 2103 is probably the latest point at which the Western age will end.

  Eastern cities are already as large as Western, and the gap between the total economic output of China and the United States (perhaps the easiest variable to predict) is narrowing rapidly. The strategists on America’s National Intelligence Council think China’s output will catch up with the United States’ in 2036. The bankers at Goldman Sachs think it will happen in 2027; the accountants at PricewaterhouseCoopers, in 2025; and some economists, such as Angus Maddison of the Organization for Economic Cooperation and Development, and the Nobel Prize winner Robert Fogel, opt for even closer dates (2020 and 2016, respectively). It will take longer for the East’s war-making capacity, information technology, and per capita energy capture to overtake the West’s, but it seems reasonable to suspect that after 2050 Eastern social development will catch up quickly.

  Figure 12.1. Written in stone? If Eastern and Western social development scores carry on rising at the same speed as in the twentieth century, Western rule will end in 2103.

  Yet nagging doubts do remain. All the expert predictions mentioned above were offered in 2006–2007, on the eve of a financial crisis that these same bankers, accountants, and economists had managed not to foresee; and we should also bear in mind that the whole point of A Christmas Carol is that Scrooge’s fate is not written in stone. “If the courses be departed from,” Scrooge assures the Ghost, “the ends will change,” and, sure enough, Scrooge pops out of bed on Christmas morning a new ma
n. “He became as good a friend, as good a master, and as good a man,” said Dickens, “as the good old City knew, or any other good old city, town, or borough, in the good old world.”

  Will the West, Scrooge-like, reinvent itself in the twenty-first century and stay on top? In this final chapter, I want to suggest a rather surprising answer to this question.

  I have argued throughout this book that the great weakness of most attempts to explain why the West rules and to predict what will happen next is that the soothsayers generally take such a short perspective, looking back just a few hundred years (if that) before telling us what history means. It is rather as if Scrooge tried to learn his lessons solely by talking to the Ghost of Christmas Present.

  We will do better to follow Scrooge’s actual method, hanging on the words of the Ghost of Christmas Past, or to imitate Hari Seldon, who interrogated millennia of history before peering into the Galactic Empire’s future. Like Scrooge and Seldon, we need to identify not only where current trends are taking us but also whether these trends are generating forces that will undermine them. We need to factor in the paradox of development, identify advantages of backwardness, and foresee not only how geography will shape social development but also how social development will change the meanings of geography. And when we do all these things, we will find that the story still has a twist in its tail.

  AFTER CHIMERICA

  We have been cursed to live in interesting times.

  Since about 2000 a very odd relationship has developed between the world’s Western core and its Eastern periphery. Back in the 1840s the Western core went global, projecting its power into every nook and cranny in the world and turning what had formerly been an independent Eastern core into a new periphery to the West. The relationship between core and periphery subsequently unfolded along much the same lines as those between cores and peripheries throughout history (albeit on a larger scale), with Easterners exploiting their cheap labor and natural resources to trade with the richer Western core. As often happens on peripheries, some people found advantages in backwardness, and Japan remade itself. In the 1960s several East Asian countries followed it into the American-dominated global market and prospered, and after 1978, when it finally settled into peace, responsibility, and flexibility, so did China. The East’s vast, poor populations and indigenous intelligentsias that had struck earlier Western observers as forces of backwardness now began to look like huge advantages. The industrial revolution was finally spreading across the East, and Eastern entrepreneurs were building factories and selling low-cost goods to the West (particularly the United States).

  Nothing in this script was particularly new, and for a decade or more all went well (except for Westerners who tried to compete with low-cost East Asian goods). By the 1990s, however, manufacturers in China were discovering—as people on so many peripheries had done before them—that not even the richest core could afford to buy everything that a periphery could potentially export.

  What has made the East-West relationship so unusual is the solution to this problem that emerged after 2000. Even though the average American was earning nearly ten times as much as the average Chinese worker, China effectively lent Westerners money to keep buying Eastern goods. It did this by investing some of its huge current-account surplus in dollar-denominated securities such as United States Treasury Bonds. Buying up hundreds of billions of dollars also kept China’s currency artificially cheap relative to the United States’, making Chinese goods even less expensive for Westerners.

  The relationship, economists realized, was rather like a marriage in which one spouse does the saving and investing, the other does the spending, and neither partner can afford a divorce. If China stopped buying dollars, the American currency might collapse and the 800 billion United States dollars that China already held would lose their value. If, on the other hand, Americans stopped buying Chinese goods, their living standards would slide and their easy credit would dry up. An American boycott might throw China into industrial chaos, but China could retaliate by dumping its dollars and ruining the U.S. economy.

  The historian Niall Ferguson and the economist Moritz Schularick christened this odd couple “Chimerica,” a fusion of China and America that delivered spectacular economic growth but was also a chimera—a dream from which the world eventually had to wake up. Americans could not go on borrowing Chinese money to buy Chinese goods forever. Chimerica’s ocean of cheap credit inflated the prices of every kind of asset, from racehorses to real estate, and in 2007 the bubbles started bursting. In 2008 Western economies went into free fall, dragging the rest of the world after them. By 2009, $13 trillion of consumer wealth had evaporated. Chimerica had fallen.

  By early 2010, prompt government interventions had headed off a repeat of the 1930s depression, but the consequences of Chimerica’s collapse were nonetheless enormous. In the East unemployment spiked, stock markets tumbled, and China’s economy expanded barely half as fast in 2009 as it had done in 2007. But that said, China’s 7.5 percent growth in 2009 remained well above what economies in the Western core could hope for even in the best years. Beijing had to find $586 billion for a stimulus package, but it at least had the reserves to cover this.

  In the West, however, the damage was far worse. The United States piled a $787 billion stimulus on top of its mountain of existing debt and still saw its economy shrink by more than 2 percent in 2009. The International Monetary Fund announced that summer that it expected Chinese economic growth to rebound to 8.5 percent in 2010, while the United States would manage just 0.8 percent. Most alarming of all, the Congressional Budget Office forecast that the United States would not pay off the borrowing for its stimulus package until 2019, by which time the entitlements of its aging population would be dragging its economy down even further.

  When the leaders of the world’s twenty biggest economies met in April 2009 to craft their response to the crisis, a new wisecrack went around: “After [Tiananmen Square in] 1989 capitalism saved China. After 2009 China saved capitalism.” There is much truth to this, but an even better analogy for 2009 might be 1918. That was the year when the sucking sound of power and wealth draining across the Atlantic, from the bankrupt old core in Europe to the thriving new one in the United States, became undeniable. Two thousand and nine may prove to have been the year when the sound of the drain across the Pacific, from bankrupt America to thriving China, became equally audible. Chimerica may have been merely a layover on the road to Eastern rule.

  Needless to say, not everyone agrees with this prognosis. Some pundits point out that the United States has made itself over just as thoroughly as Scrooge plenty of times already. All too many critics wrote off the United States in the great depression of the 1930s and the stagflation of the 1970s, only to see it to bounce back to defeat the Nazis in the 1940s and the Soviets in the 1980s. American entrepreneurs and scientists, the optimists insist, will figure something out, and even if the United States does slide into crisis in the 2010s it will get the better of China in the 2020s.

  Others stress that China has problems too. Most obviously, as economic success drives up wages, China is losing some of the advantages of its backwardness. In the 1990s low-end manufacturing jobs started migrating from China’s coasts to its interior, and are now leaving China altogether for even-lower-wage countries such as Vietnam. Most economists see this as the natural course of China’s integration into the global economy, but to a few it is the first sign that China is losing its edge.

  Other China bashers see demography as a bigger challenge. Thanks to low birth and immigration rates, the average age is rising faster in China than in America, and by 2040 the entitlements of the elderly may weigh more heavily on China’s economy than on that of the United States. China’s shortage of natural resources may also slow economic growth, and tensions between the booming cities and languishing countryside may get much worse. If any of these things happen, popular unrest (which is already rising) could get out of control. Ethnic rev
olts and protests against corruption and environmental catastrophes helped bring down plenty of Chinese dynasties in the past; maybe they will do so again in the near future. And if the Communist party does fall, the country might break apart, just as it did at the end of the Han, Tang, Yuan, and Qing dynasties. The best analogy for China in 2020 might not, after all, be the United States in 1920, soaking up the old core’s wealth, but China itself in 1920, sliding into civil war.

  Then again, an influential group of Western Panglosses insists, maybe none of these guesses really matters, because all will be for the best regardless. Despite seeing wealth and power drain across the Atlantic in the twentieth century, the typical western European in 2000 is richer than his or her forebear at the height of Europe’s imperial grandeur, because the rising capitalist tide has lifted all the boats. In the twenty-first century the drain across the Pacific may lift everyone’s boats even higher. Angus Maddison, mentioned above for his calculation that China’s gross domestic product will overtake that of the United States in 2020, foresees Chinese incomes tripling (to an average of $18,991 per person) between 2003 and 2030. He expects that American incomes will rise only 50 percent, but because they started from such a high level the typical American in 2030 will earn $58,722, more than three times as much as the typical Chinese. Robert Fogel, who thinks China’s economy will outgrow the United States’ in 2016, is even more bullish. By 2040, he says, Chinese incomes will reach an astonishing $85,000—but by that time the average American will be making $107,000.*