I downloaded The End of Influence: What Happens When Other Countries Have the Money by Brad DeLong and Stephen Cohen last night and read the whole thing. From this you can draw three conclusions. One: The book is good. Two: The book is pretty short. Three: I didn’t get as much sleep as I was hoping from a “stay in and read a book” evening.
The title implies an entrant into the American declinism literature, but the thesis offered on this score is actually extremely mild. If you didn’t already know that America’s relatively geopolitical influence 20 years from now will be less than it was 10 years ago, then you really haven’t been paying attention. DeLong and Cohen don’t think China is suddenly going to become Number One Nation or anything.
What you really get here is a brilliant short tour of the rise and fall of the neoliberal project on an international basis. They offer what will strike some as an almost laughably uncynical account of the motives behind this project, but that makes the documentation of its ultimate failure all the more compelling. As they lay out, it proved to actually be the case that the only route to sustainable economic development anyone could find involved substantial state-directed export-oriented growth. This, in turn, required the United States to play the role of global importer of last resort. The up shot of this is that more and more America doesn’t have “the money” in the world system. And not only is the money in the hands of Asian exporters and oil producers, a very large portion of it is in the hands of sovereign wealth funds. In addition, the Panic of 2008 has left governments in the developed world with large ownership stakes in a variety of firms. As a result, we’re going to have to transition to a very different-looking world economic order — one in which self-conscious government planning is going to play a bigger role, one in which US living standards will decline relative to our major trading partners, and in which American cultural and ideological influence is likely to wane.
I should say that “decline relative to our major trading partners” in this context means not just relative to poor countries like China and India, but also relative to rich countries like Japan and France that may be better-equipped for the emerging world economic order.