Volume 44, Number 174,
July-September 2013
The Decline of the United States:
Global Historical Context
Alejandro Dabat and Paulo Leal

However, the US still continues to have the highest scientific-technological, business and especially military, levels in the world, 28 although this is falling as compared to China, Korea, asean or even India and other countries. This competition is present in the scientific and educational levels of Europe, Japan, China and Korea, which are close to the US in nearly all fields (crs Report for Congress, 2007).

In R&D, US global participation fell from 46% in 1986 to 37% of the total in 2008, and from 53% to 22% in producing doctorates (PhD) over the same timespan (Ernst, ibid .), falling behind other countries in primary and secondary education (Stiglitz, 2010). China recently surpassed the US in the number of engineers graduating (Gereffi, Wadhwa and Rissing, 2009), although not in quality. Although the United States still has more top-level universities than other countries, as well as publications and authors cited (in their own publications), their supply of professors and domestic production will depend more and more on foreign scientists and technicians.

This decline is also present in the military area, and the new technological-strategic nucleus: drones, or unmanned aerial warfare, as a central aspect of the set of new operational and intelligence technologies. In this field, as recognized by the Defense Science Board of the US Department of Defense, Chinese advances in unmanned aerial systems is “alarming,” given that they could easily reach or surpass US spending in this area, quickly closing the technological gap that still separates the two.29

As seen in the economic realm, losses have been expressed in falling global competitiveness, commercial or financial deficits and the social situation of the nation. Also in political terms, this is apparent in the political functioning o the country, such as confrontations between the Republic and Democratic parties, manifest principally in fiscal subject matter.30 While previous governments and the current Republican majority in the House of Representatives continue to fight for tax cuts for the upper echelons at the expense of public services (except military spending), President Obama has aimed for a timid defense of social spending, seeking to transfer greater fiscal responsibility to the wealthiest sectors. This situation exists within a much broader political, social and cultural conflict, where the Republican Party has come to embody the speculative financial capital block and large private fortunes, the military complex, white Anglo-Saxons, anti-immigrant, religious fundamentalism and large communication monopolies (Galbraith, 2006).

To conclude this section, it is useful to point out that the decline of the US has been well documented by the Davos Global Competitiveness Forum, which is an international organization that shares its full analytical methodology and indicators used by the US government and neoliberal institutions worldwide. Table 3 provides precisely this information based on the successive annual global competitiveness reports for the country between 2001 and 2011, which we compare in Table 4.

The table shows significant losses in key areas such as the macroeconomic environment, institutions, education, technology and health, as well as the fiscal deficit and public debt. This makes the probability of an economic comeback within a few years unlikely, even more so given the possible European collapse (Dabat, Leal and Romo, op. cit.) and fiscal crisis (see footnote 30). Consequently, this recovery will be much more difficult than in the past, both due to the size of the problem (physical and social infrastructure, productive and savings attitudes, sociopolitical, environmental and institutional sustainability), as well as the magnitude of losses in competitiveness and the enormous commercial and fiscal deficits. With public debt that will be hard to bring down (from 57% of gdp in 2000 to more than 100% in 2011), stagnated national per capita income (growth practically zero, at less than 1% between 2000 and 2011) and increasing inequality in almost all fields of social and economic life (Stiglitz, 2012), it will be very difficult to comprehensively measure the mass capital outflows and size of accounting fraud.

28 The US accounts for nearly 44% of military spending in the world, allocating nearly 5% of gdp to this purpose, as compared to a global average of 2.6% for military spending, and only 2% in China (Deloitte, 2012). Even so, China could increase its cutting edge military technology spending more quickly than the US, given its greater public financial capacity, as seen in footnote 29.

29 The trend towards the relative weakening of US power in the most advanced sectors of warfare technology is one of the most convincing facts used to refute those who defend the long-term sustainability of US superiority and global hegemony. This, for example, would be the opinion of George Friedman (2011), who believes that the economic problems of the US will pass and that its military and naval power is incomparably superior to that of China and other emerging countries (pp. 35-40). The only aspect that should be rescued from Friedman’s argument is that today, as it surely will be for many years, the US is still the only global military superpower with presence in both oceans. Even so, it must be recognized that China’s vertiginous military advances with cutting edge technology is still essentially regional, as the US Defense Department recognizes (Annual Report to Congress, 2012), although situated in the most populated and dynamic region of the world, set for growth, as shown by its passage from an arms-importing country to a major exporter of arms in high technology sectors (Deloitte, 2012).

30 The massive government rescue package led the federal fiscal deficit to go from 3.2% of gdp in 2008 to 10% in 2009, with slight oscillations afterwards. To reduce this deficit, and in the face of significant political differences between Democrats and Republicans, Obama created the Simpson Bowls bipartisan commission in 2010, which proposed drastic cuts to the deficit to avoid another economic collapse, including major cuts and indiscriminate revenue increases that would be automatically applied at the beginning of 2013 (the fiscal cliff). This problem was only partially resolved by Congress at the end of the year, while its fundamental elements (cutting spending) remained pending for March 2013. If Congress did not reach a bipartisan agreement before March 2013, the US would fall off the so-called “fiscal cliff,” implying a series of grave and feared consequences.

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PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 49, Number 195 October-December 2018 is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
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