Why the Success of the Rest is Good for America

The Upside of Down: Why the Rise of the Rest is Good for the West
Charles Kenny
Basic Books, $26.99

Among the many tomes that have been written on (relative) American decline, Charles Kenny’s new book, The Upside of Down, is the rare one that embraces it. To be clear, embracing does not mean welcoming. While Kim Jong-un or Ayman al-Zawahiri may well dream of a world in which American influence declines inexorably, Kenny, a senior fellow at the Center for Global Development, asks how the United States can cement its influence as the world’s center of gravity shifts both east and south. His book proves not only a “refreshing antidote to prophecies of American decline,” to quote the dust jacket, but also an idea-rich guide for preventing such prophecies from becoming self-fulfilling.

Kenny makes three major claims, the first two of which are descriptive: “the rise of the rest” will remain the central determinant of America’s global position, and it will continue apace no matter what actions the United States takes. As he observes:

The relative economic decline of the United States is not about gridlock in Washington, stupidity or venality on Wall Street, the lack of can-do-spirit among the young, or even the death of “the Greatest Generation.” It is about the rest of the world finally getting its act together…. policies to “regain U.S. dominance” are destined to fail—and are likely to be counterproductive.

Kenny’s third claim is prescriptive: the United States should focus on maximizing the benefits it accrues from the rise of the rest. It can leverage its current preeminence, for example, to entrench today’s liberal international order—especially by helping rising powers achieve greater representation in major international institutions (such as the United Nations Security Council and the International Monetary Fund). If it revitalizes its economy, it can continue to attract the world’s most promising students and entrepreneurs, who “will play an important role in staving off the final end of American global dominance.” And, if the United States overcomes its preoccupation with staying number one in certain categories associated with global status, it can focus on boosting its performance in those that are more immediately relevant to the average American’s quality of life. However much that recalibration might test the psyche of “a country that thrives on big," it needs to occur soon: most observers forecast that China’s GDP will overtake America’s within two decades, if not sooner; and growing numbers of observers project that its military spending will overtake America’s before mid-century.

To those who find these recommendations abstract, Kenny demonstrates that the United States already benefits from the rise of the rest. For starters, it enjoys access to newly booming markets: between 1990 and 2012, the proportion of U.S. exports going to emerging countries more than doubled. Contrary to popular belief, moreover, "recent evidence suggests that unskilled immigration . . . actually increases domestic wages and employment." And on current trend lines, immigration will help the United States stave off the population decline that is occurring in Japan, Russia, and much of Western Europe. Between 2000 and 2050, in fact, roughly four-fifths of its projected population growth will come from immigrants and their descendants.

Kenny also identifies many ways in which the United States can do much more to capitalize on the rise of the rest. Take integration into the global economy: in 2010, of the 146 countries for which the World Bank reported export data, 140 had higher export-to-GDP ratios. More remarkably, even though its population has roughly tripled since 1913, legal immigration to the United States has barely changed. And what about its runaway healthcare spending? According to a 2008 report by the Deloitte Center for Health Solutions, at least “$26 billion [will] be spent on U.S. health tourism by 2015 for procedures that would have cost $195 billion to perform in the United States.” The United States should prioritize health tourism if it wants to shrink its debt.

Even though the subtitle of Kenny’s book mentions "the West," he rightly concentrates on "the policies that America in particular might follow to leverage a richer world" and informs readers that “much of the rest of this book is about what the country [the United States] could do better to engage with a new world of opportunity.” The United States is the world’s leading power, after all, not the European Union. In mid-January, Kenny published an article in the Washington Post that better reflects the book’s focus: “America is slipping to No. 2. Don’t panic.”

But that headline also spotlights an ambiguity that pervades The Upside of Down: while Kenny speaks of a time “when there is no question it [the United States] has lost its top-nation status” and argues that it could take a page from the policies that Britain adopted after it “lost out in heavyweight contention,” he does not identify its successor. Indeed, he casts doubt on the proposition that America’s putative replacement will actually replace it as the linchpin of international affairs. Kenny notes that China is far more integrated into and dependent on the international order than any previous rising power; its ability to project military power pales in comparison to that of the United States; and, along its periphery, it confronts instability (consider North Korean provocations and unrest in Thailand), widespread concern about its strategic intentions, and formidable U.S. naval power.

None of these points is intended to downplay the trends in China’s favor. With global financial and resource markets growing more integrated, and with the influence of conventional military power waning, economic power is becoming an increasingly important component of a country’s overall power. Kenny is right, furthermore, that China’s economic rise is about much more than the size of its GDP; it is also about China’s share of world trade, its share of world net capital exports, and the renminbi’s share of global financial transactions. It does not necessarily follow, though, that it will achieve "economic dominance," regardless of how one defines the term. Based on current data, China would need a GDP of $73 trillion—roughly equal to the entire world’s GDP—to have the same per-capita GDP as the United States. It will take decades for the RMB to rival the dollar as a global reserve currency, and perhaps even longer for its higher-education system and culture of innovation to compete with America’s. Even it if were to achieve economic dominance, it would be hard-pressed to contest U.S. military power and soft power. And power should not be conflated with leadership. In an increasingly networked world, argues Anne-Marie Slaughter, “the state with the most connections will be the central player, able to set the global agenda and unlock innovation and sustainable growth.  Here, the United States has a clear and sustainable edge.” That edge, she explains, “is rooted in demography, geography, and culture.”

Like predictions of a Chinese century, predictions of an Asian century seem premature. While they might be justified from the perspective of aggregate economic size, they are less convincing according to the standard that Kenny sets forth near the end of The Upside of Down: he concludes that “there is absolutely no reason why the twenty-first century should not be an ‘American Century’—if by that is meant America retaining or even enhancing its global reputation as a country to be emulated." The United States is emulated, he notes, because of its “founding principles of broad-based democracy, education, civil rights, and openness." There is no comparable set of Asian values—not least because Japan, South Korea, and India, among others, would immediately and strongly dissent from any suggestion that Chinese values are representative of Asian values at large.

Kenny’s equanimity about America’s prospects derives from his optimism about the world’s evolution. While there are many trends in global health, wealth, and security to support that sentiment, his language leaves him vulnerable to charges of Panglossianism. He argues, for example, that the rise of the rest will “help preserve a new era of comparative global peace and broader well-being” (59); predicts “that cheer [will remain] the default state for an ever-greater majority of humanity”; and concludes that the twenty-first century, on balance, “should be one of peace, expanding unity, and unprecedented quality of life” (185). One hopes that the two world wars will prove to be aberrations from the world’s post-industrial journey toward greater peace and prosperity—but aberrations of such magnitude should continue to temper triumphalism about humanity’s wisdom and prospects.

There are also times when Kenny’s optimism depends on outcomes that seem quite improbable. He is right, for example, that “if we accelerate toward a low-carbon global economy, the future looks bright.” That “if,” however, is a huge one, especially since Kenny notes that “the initiatives to date in the battle against climate change are not yet nearly enough to stop global warming at . . . the internationally agreed target." While he helps to assuage the fear of resource shortages, he warns that if nine billion people (the world’s projected population in 2050) “consume resources in anything like the way the one billion do in the West today, the environmental costs would be catastrophic." There is no apparent reason to expect this rate of consumption not to prevail. To give one more example, how likely is a “new New Deal” to restore robust growth and reduce income inequality amid America’s legislative paralysis?

One final point: it proves difficult to be as sanguine as Kenny about the impact of relative U.S. decline on international order. His assurances bring to mind Ian Buruma’s observation that “[t]hose who monopolize power cannot imagine a world released from their grip as anything but a catastrophe.” Perhaps, but the U.S. does fulfill vital responsibilities—whether safeguarding the global maritime commons or contributing to the defense of a wide array of countries. However much the rest have benefited from integrating themselves into the international order, can one be sure that they would sustain and move it forward without U.S. support? International orders do not (indeed, they cannot) progress on the basis of their merits alone, no matter how self-evident they may be. Kenny should have gone further to address the concern that relative U.S. decline could create a vacuum in global governance that no other country or coalition could presently fill—a concern, it should be said, that transcends partisan lines within the United States and extends even to China (Zbignietw Brzezinski relates a high-ranking Chinese official’s gentle admonition to a U.S. counterpart: “But, please, let America not decline too quickly.”). Nevertheless, Kenny makes a compelling case that “the greatest threat to a brighter future is to dwell on the risk of failure.” The rise of the rest is here to stay. Rather than bemoaning that reality, the United States should draw on its enduring strengths and leverage strategic headwinds to reap the benefits.