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The United States’ Two Futures

Question: What will be the U.S.’s place in the world over the next 20 years? 

Niall Ferguson: As I said earlier, there are many futures and we don’t know which one will happen. But there’s no doubt that a quite probable future, looking ahead 10 or 20 years, has the United States as the waning empire crushed under a burden of debt accumulated in a relatively short period of time. No longer as economically dynamic as it’s been in the past; perhaps also plagued by internal political dissention. 

And on the other side, a China that appears to have found the magic formula to achieve 10% growth year after year. A China that is not only content with economic predominance, but starts to crave a strategic power, at least in the Asia-Pacific region that takes the form of a submarine fleet, aircraft carriers, deep-water ports. That future is a plausible one because similar things have happened in the past. And we would not be entirely surprised if an English-speaking empire began to wane, suffered from economic underperformance and was challenged by a rival empire to the East, which was achieving sustained higher growth rates. 

It’s one future, but I want to leave you with another future that is a little bit more cheerful. In this other future, the United States, because it still has a political institutional advantage, addresses its own internal problems, achieves quire radical fiscal reform, streamlines its tax system, cuts the entitlements that are about to bankrupt it, rejuvenates its politics, and embarks on a new era of optimism, propelled forward by the technological innovation and entrepreneurship that are still properties peculiarly strong in the United States. 

If the United States can use its advantages, both political and technological—and indeed entrepreneurial—to grow its way out of this crisis that it’s currently in, then the future is rosier for Western civilization. At the same time in this alternative future, China starts to bump up against the kind of weaknesses that Wilhelmine Germany also encountered. The social dissention in Wilhelmine Germany was really one of its defining characteristics. The Social Democratic party became the biggest party in the German parliament in 1912. And this was a Marxist party explicitly hostile to almost every aspect of the German regime. 

So there’s a sense in which one could imagine things going wrong in China and going right in the United States. History isn’t one simple, predictable narrative. It isn’t governed by the laws of physics or anything resembling them. There’s a huge uncertainty about what happens in both of these countries, not to mention the rest of the world, which makes the study of history so fascinating. It’s not linear, there isn’t some nice predictable curve that tells you when America’s power will decline and when Chinese power will ascend. It’s a very non-linear, chaotic, complex process that we as historians get to study. And that’s why when we talk about the future, we should correct ourselves and say, "futures" (plural) and here are the futures we have to choose from.

Recorded on April 19, 2010

If the U.S. can use its political and technological advances to grow its way out of this crisis, then the future could be rosy. The other option is much grimmer.

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