Roughly 400 years ago, Amsterdam was the financial capital of the world. The Dutch guilder was also the global reserve currency, at least for the Western world.
150 years ago, the Brits were running the largest empire the world had ever seen.
The Greeks, Romans, Russians, Persians, Brits, Mongolians, and Dutch were all global superpowers at one point in history… none of them are today.
Superpowers have a shelf life, which will be the case for the United States relatively soon.
America as a global superpower will likely become history in my lifetime, superseded by China, who, like America, will also rise and fall from that status.
Superpowers fall from grace because we humans have a funny way of screwing a good thing up. When things are great, and there are very few obvious problems, such as decaying infrastructure, declining quality of education, or collapsing fertility rates, we look to social constructs with a pessimistic eye and create domestic issues to fight over. Inherently, this makes a nation less competitive on the global stage (think about the divide between Democrats and Republicans — neither side leaves much, if any, room for compromise).
Tear it all down and rebuild! That becomes the mantra. Change for the sake of change — allowing young generations to put their fingerprints all over society. Yet, often, this young generation ignores or is entirely ignorant of what propelled their country to the top spot in the first place. (This is one big reason why erasing or revising history in classroom textbooks, whether it’s good or bad, is dangerous.)
Author G. Michael Hopf explained it best,
“Hard times create strong men, strong men create good times, good times create weak men, and weak men create hard times.”
Much of America now lacks, ignores or chastises some of the things that made it a superpower, including:
History books often point to a decisive battle that caused a superpower’s downfall. In reality, that lost war was just a symptom of a decades-long decline brought about by annual increases in national debt from empire expansion, excessive social support programs, and a loss in productivity. This leads to domestic rising taxes, which can rapidly erode faith in the state and patriotism and accelerate productivity losses.
Ray Dalio broke down the eight keys of a global superpower. In the video, referencing Dalio’s 8 superpower elements, I break down where I see the America vs China superpower competition. It’s a very close race today, and China has the momentum…
When times are good, collectively as a society, we look for problems to ‘fix’. Attempting to solve these perceived problems typically creates domestic conflict and growing debt loads — threatening a superpower’s status of having the world’s reserve currency, largest economy, best technology and most powerful military…
If renewable energy is the future, China is leading the way in wind and solar (remember the importance of relatively cheap and abundant energy in becoming a superpower). In the last decade, China has created world-class airports, dozens of solar and wind farms, state-of-the-art hydro dams, shipping ports, underwater and overland high-speed rail, roadways and bridges, leaving America’s infrastructure looking old-fashioned and quaint…
China intends to build a whopping 70,000 kilometres of high-speed rail lines by 2035!
China is mimicking how America rebuilt itself during the Depression and post-WWII (the decades which cemented it as the global superpower), except with 21st century-style, technology and unprecedented scale. The investments it is making now will pay dividends for decades to come. Meanwhile, America is experiencing a period of bitter infighting and political divide…
Without a rejuvenation of the patriotism it has been known for, a congenial political class, fiscal prudence, and a strong desire to be the best again, I don’t think the United States can remain the global superpower much beyond 2030.