(Much apologies for my absence on Monday – it’s Eid Al Adha here, which throws everyone off, so I missed the update. Without further ado, here we go!)
Perhaps you have seen the Chinese moaning about democracy. A great deal of people out there like to explain the U.S. debt problem as akin to a household’s – which is a great way to simplify a difficult topic, and also a great way to mislead your audience. It’s this kind of thinking that’s really giving credence to the belief that the debt crisis signals the end of American power.
It’s not. And here’s why.
#1 – Hard power and soft power
International relations breaks the expression of power into soft and hard power. ‘Soft’ power is the mushy, cultural, influence-based stuff, which is being harmed in quite a real way by the debt crisis and U.S. government shutdown. To use soft power effectively, other forces within the world must accept it. Much like fairies, it ceases to work as soon as we stop believing in it. America can persuade you to do nothing if you decide it’s not worth listening to.
Hard power, by contrast, is very much a real, “I-can-hit-you-so-I-will” thing. Hard power involves all the missiles, tanks, and other weapons systems that actually exist. Go ahead and disbelieve in America’s drone program; it’ll vaporize you all the same. Nations and leaders that don’t buy into a foe’s hard power are proven wrong in the long run – as Hitler was when he invaded the Soviet Union and as Saddam was when he challenged the United States over Kuwait. You just can’t argue with a gun.
#2 – Debt is make believe
Like soft power, debt too is something that only has power so long as we accept it. One must understand that, going back to the ancients, currency and everything that goes with it is a faith-based system. You can’t eat gold; you can’t make any weapons or tools out of it; yet people die for it. We believe it’s valuable and therefore it is.
Debt is made up of currency and does not exist in reality. You can’t find debt at a store or hold debt in your hand. You can hold paper that say it’s debt, that represents an idea, but much like God, you can never face debt alone in a room and yell at it.
#3 – Hard power comes from geography, demography, and resource distribution
Economics is the way we go about organizing these three aspects of ourselves to make more efficient societies. But economics in and of itself cannot overcome the challenges of being a landlocked nation, a country without enough oil, or a land without a people. American debt does not reflect American weaknesses in any of these areas. No matter how much China or Japan or whoever owns, America will always have two coastlines, a large, reliable river system for transportation, a well-balanced population distribution and density, and tons of resources within its easily-controlled borders.
#4 – The global order is underpinned by hard power
Being able to kill one’s enemies at any given time gives a nation-state great power. As of today, only the United States can do this on all seven continents and get away with it. No other nation in the history of the world has managed that. If China calls in all its debts tomorrow, and crashes the U.S. economy, the fact will remain that America will still have eleven aircraft carrier battle groups fully manned and fueled. If China hoped to use that debt as a weapon to leverage themselves into #1, they’d be sorely mistaken, since the vast geopolitical advantages of American geography and demography mean that the U.S. could take that hit and come back swinging.
Currency crises don’t remake global orders. They can undermine already weak systems, as the rotting away of Spain’s imperial economy in the 17th century eventually led it to being surpassed by Britain and France in the 18th century, but it was only with the Wars of the Spanish Succession that this new global order emerged. It took hard power, not a weakened currency, to remake the top dogs.
#5 – Great powers don’t fight each other anymore
The last great power war that remade the international system was World War II. Everyone knows why that was the last one. Had the Soviets or Americans attempted to finish the Cold War early, they’d have nuked one another and I wouldn’t be sitting here. If China wants to make a play for top dog, it cannot do so solely through economics. It can crash America’s economy if it likes, and reduce standards of living worldwide, but that alone won’t force the U.S. to slide down a ring. Only the destruction of American military assets can do that.
While it would be possible for a weakened economy to, over time, lead to a weakened military and therefore a reduced global status, in the case of the United States, virtually all strategic resources needed to run its military machine are within its borders. Under the circumstances that world trade collapses, or people start tossing around embargoes, it is China, not the U.S., that is well and truly fucked – after all, China doesn’t have the equivalent oil reserves or farmland to run its military as well as the United States.
This isn’t to say that debt doesn’t hurt standards of living
It sure does. As I’ve stated before, it hammers away at soft power, which is the kind of power that most citizens see and feel. Reduced American influence makes Americans feel like they’re weaker. Reduced standards of living makes Americans feel like something’s gone wrong. That’s all a very real effect of far too much debt. And austerity is a bitch; paying those bills in order to keep the international system stable is not pleasant.
But it can’t change hard power
Because hard power is measured by other factors. America is too big of a country, with too many local strategic resources, for a debt default to take down. Lament as you like the failures of the U.S. political system, but don’t go too far. Mountains don’t fall so easily.