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The Paradox of American Power: Why the World's Only Superpower Can't Go It Alone Joseph S. Nye

Print publication date: 2003 Print ISBN-13: 9780195161106 Published to Oxford Scholarship Online: November 2003 DOI: 10.1093/0195161106.001.0001

The Home Front Joseph S. Nye (Contributor Webpage)

DOI:10.1093/0195161106.003.0004

Abstract and Keywords A key concern in U.S. security policy planning must be to identify the risks of moral and cultural decay from within, that could erode and destroy the sources of U.S. “soft” power, and thereby conduce toward a repetition of the fall of the Roman empire. This concern essentially involves U.S. self‐confidence in its values and institutions, and the preservation of America's social capital.

Keywords: foreign policy, social capital, U.S.A

How well will Americans respond to the challenges of this global information age? A nation can lose power as a result of being overtaken by rising nations, but as we saw in the first chapter, this is not the most likely challenge. The barbarians did not defeat Rome; rather, it rotted from within. People lost confidence in their culture and institutions, elites battled for control, corruption increased, and the economy failed to grow adequately.1 Today terrorist barbarians cannot destroy American power unless we also rot from within. Are there similar signs of decay in the United States today? Could this nation lose its ability to influence world events positively because of domestic battles over culture, collapse of institutions, and economic stagnation? If our society and institutions appear to be collapsing, we will be less attractive to others. If our economy fails, we will lose the basis for our hard power as well as our soft power. Even if the United States continues to hold the high cards of military, economic, and soft power, could we lose our capacity to transform those resources into effective influence? After all, sometimes card players lose despite being dealt high hands.

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Power conversion—translating power resources into effective influence—is a long‐standing problem for the United States. The (p.112) United States was the world's most powerful country in the decade following World War I, but because of our internal preoccupations in the 1920s and economic failure in the 1930s, we failed to marshal our resources effectively on the international stage, and for this we paid the price in World War II. American foreign policy making is a messy process for reasons deeply rooted in our political culture and institutions. The Constitution is based on the eighteenth‐century liberal view that power is best controlled by fragmentation and countervailing checks and balances. In foreign policy, the Constitution has always invited the president and Congress to struggle for control.2 That struggle is complicated when the Congress and presidency are controlled by different political parties. Strong economic and ethnic pressure groups struggle for their self‐interested definitions of the national interest, and a political culture of American exceptionalism complicates matters by making our foreign policy uniquely moralistic.3 This has led some realists, such as former secretary of defense James Schlesinger, to despair that American foreign policy “lacks the steadiness that has been associated with great powers.”4

Now, at a time when Americans need to adapt to a more complicated world, one in which foreign and domestic policies overlap more than ever, some observers believe these traditional inefficiencies in power conversion are being exacerbated by cultural conflict, institutional collapse, and economic problems. Each issue has spawned a vast literature. My interest here is not to settle such debates but rather to sample enough of their content to detect whether they provide evidence of a Roman fate for the United States. I will show that, at beginning of the new century, such evidence is slim.

Moral Decay and Cultural Divide Some saw evidence of deep cleavage in the closely fought 2000 presidential election, where the electoral map showed “the interior heart‐land, home of the ‘dutiful’ people,” supporting Bush, and “the godless coasts, the industrial mid‐ west,” and the big cities voting for Gore. A county‐by‐county map portrays a more complex picture but confirms (p.113) a rural‐urban split and a difference between inner and outer suburbs.5 Others go further and depict moral decay in the country as a whole. In the words of conservative historian Gertrude Himmelfarb, the United States is currently confronting “the collapse of ethical principles and habits, the loss of respect for authorities and institutions, the breakdown of the family, the decline of civility, the vulgarization of high culture, and the degradation of popular culture.” The counter‐culture of the 1960s has become dominant, while the traditional culture of the 1950s has been relegated to dissident status.6 Robert Bork also sees almost every aspect of our culture in decline, and Father Richard Neuhaus has compared America to Nazi Germany.7

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If these divisions were as deep as portrayed, they could undercut our hard power by inhibiting our capacity to act collectively, and diminish our soft power by reducing the attractiveness of our society and culture. But neither is the case.

If middle‐class America is as divided as these accounts imply, says sociologist Alan Wolfe, “our future as a nation will be marked by incessant conflicts between irreconcilable worldviews, raising the prospect that the democratic stability that has kept the country together since the Civil War will no longer be attainable.” But he argues that ordinary Americans are not as engaged in culture wars as intellectuals believe they are. The message from the middle‐ class Americans he studied to those who worry that America might fall apart is a calming one. Mature patriotism and tolerance replaced the bitter divisions that accompanied the Vietnam War in the 1960s and 1970s, and, (with some exceptions) characterized the response to the September 2001 events.8

It is true that some cultural indicators such as crime, divorce rates, and teenage pregnancy are worse today than in the 1950s, but all three measures improved considerably in the 1990s. Even before September 2001, the nation had made tangible progress toward more than two‐thirds of seventy or more significant domestic goals related to prosperity, quality of life, opportunity, personal security, and values. Contrary to views often expressed by the cultural pessimists, “there is no reliable evidence that American students are learning less in school, or that the American Dream is vanishing, or that the environment is more polluted.”9 Rates of homicide and drug use have decreased in the (p. 114) last decade, while health, environment, and safety have improved.10 Most children still live with both natural parents, and the divorce rate has stabilized. American membership in religious organizations increased from 41 percent to 70 percent over the course of the twentieth century, although church attendance remained roughly level at 43 percent in 1939 and 40 percent in 1999.11 While the United States has social problems—and always has had—it does not seem to be rushing to hell in a handbasket.

How, then, can one explain the cultural pessimism that existed before September 2001?12 In part, it reflects the mass media's tendency to emphasize stories consistent with the bad‐news theme. “If most Americans think the real world is like the world they see on TV, it is easy to see why they think the country is in deep trouble.”13 Reaction to national‐level trends is a mediated phenomenon, with few people having direct experience. To the extent they do, the majority tell pollsters that their own lives, communities, schools, and congressmen are fine, though they worry about the national level. If everyone “knows” from the media that things are a mess at the national level and you have no direct experience at the national level but only a good personal experience, you tell the pollster the conventional wisdom about the national condition. The result is an optimism gap, but not convincing evidence of decline.

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And in part, cultural pessimism is simply very American, extending back to our Puritan roots. Charles Dickens observed a century and a half ago that “if its individual citizens, to a man, are to be believed, [America] always is depressed, and always is stagnated, and always is at an alarming crisis, and never was otherwise.”14 Polls show that an optimism gap existed in the 1950s. Changing generations may also play a role in our perceptions. The generation that lived through the Depression and World War II had a more modest sense of entitlement and fewer expectations to be disappointed than today's generation.15 And historical cultural battles over immigration, slavery, evolution, temperance, McCarthyism, and civil rights were arguably more serious than any of today's issues of contention. Polls show that people often attribute a golden glow to the past that they did not feel at the time. It is always easy to show decay by comparing (p.115) the good in the past with the bad in the present (or progress by doing the converse).

For our purposes, the task is not to arbitrate intellectual battles over cultural change but to ask how such cultural judgments affect American national power and our ability to carry out an effective foreign policy. There are two possible connections. First, if Americans were so distracted or divided by internal battles over cultural issues that we lost the capacity to act collectively in foreign policy, we would undercut our hard power. That was the case in the early 1970s in the aftermath of our deep divisions over Vietnam, but it is simply not plausible in today's setting. As Himmelfarb herself concludes, “Americans can justly pride themselves on surviving both the cultural revolution and the culture war without paroxysms of persecution or bloodshed, without, indeed, serious social strife. For all their differences, the ‘two cultures’ remain firmly fixed within ‘one nation.’ ”16 We saw that amply demonstrated after September 11, 2001.

Then there's the connection between cultural divisions and our soft power. A decline in the quality of American cultural life could reduce our soft power if the bitterness of our family fights disgusted others, or if the overdramatization of our faults lead others to lower their respect for our national example. Certainly there are faults to report. Although the United States has made progress in many important respects over the past forty years, we lag behind Canada, France, Germany, Britain, and Japan in infant mortality, life expectancy, children in poverty, health insurance coverage, homicides, and births out of wedlock. “All too often, the areas in which we lead the industrial world are fields in which we would greatly prefer not to excel, such as rates of homicide and incarceration, percentages of the population in poverty, or per capita costs of health care.”17

Even though we are doing better than in the past, we are not doing as well as we could or as some others are. Such comparisons can be costly for American soft power, but doubly so if they are exaggerated and amplified by American politicians and intellectuals seeking to score points in domestic battles.

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At the same time, the United States is not alone in many of the cultural changes that cause controversy. When such problems are shared, comparisons are less invidious and less damaging to our soft (p.116) power. A Population Council report finds “trends like unwed motherhood, rising divorce rates, smaller households and the feminization of poverty are not unique to America, but are occurring worldwide.”18 Respect for authority and some standards of behavior have declined since 1960 throughout the Western world. But there is little indication that our levels of personal responsibility are much lower today than those of other advanced Western societies, and our levels of charitable giving and community service are generally higher.19 As Himmelfarb admits, “In this international perspective, the American ‘case’ emerges clearly, not as an unprecedented anomaly, but as an all‐too‐common phenomenon.”20 Our soft power is eroded more by issues such as capital punishment or gun control, where we are the deviants in opinion among advanced countries, than by the cultural changes that we share with others. To the extent that social changes are similar in postmodern societies, culture battles become transnational rather than merely national. Those who applaud or deplore such changes find allies in other countries, and stark national comparisons become blurred. Such blurring limits the loss of soft power that accompanies inadequate (not declining) American performance.

Immigration and American Values Fears over the effect of immigration on national values and on a coherent sense of American identity have been with us since the early years of the nation, and they have been accentuated by the September 2001 terrorist attacks. Benjamin Franklin worried about the stupidity of German immigrants, few of whom knew English, and whose presence might mean “great disorders may arise among us.”21 The nineteenth‐century Know‐Nothing party was built upon opposition to immigrants, particularly the Irish. Asians were singled out for exclusion from 1882 onward, and with the Immigration Restriction Act of 1924 the influx of immigrants slowed to a trickle for the next four decades. During the twentieth century, the nation recorded its highest percentage of foreign‐born residents in 1910 —14.7 percent of the population. Today, 10.4 percent are foreign born, but some people are worried not about two cultures but about too many cultures.22

(p.117) Twice as many Americans are skeptical about immigration as are sympathetic to it. Various polls show that a plurality or majority want fewer immigrants coming into the country.23 They fear the effects on wages and the costs to taxpayers, and above all they worry that the culture cannot assimilate large numbers of new immigrants. The rise of multiculturalism, a philosophy that rejects the melting‐pot metaphor and instead celebrates ethnic differences, exacerbates such fears.24 In response, states have enacted laws to restrict benefits for illegal immigrants and to reinforce English as the official language.

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In the aftermath of the Immigration Act of 1965, which eliminated racial and ethnic restrictions, patterns of immigration changed, with the majority of new immigrants coming from less developed countries.25 Half of the foreign‐born residents today are from Latin America; a quarter are from Asia.26 They have little to do with terrorism. This second great migration has seen a worsening economic performance by new immigrants partly due to a decline in their relative work skills. Immigration produced a small measurable net benefit (0.1 percent of GNP) for the country as a whole, but also harmed the economic opportunities of the least skilled workers and had a severe fiscal impact on the affected states, such as California.27

Both the numbers and the origins of the new immigrants have caused concerns about immigration's effects on American culture. Data from the 2000 census showed a soaring Hispanic population driven largely by waves of new immigrants, legal and illegal, with Hispanics about to replace blacks as the nation's largest minority.28 Demographic projections portray a country in 2050 in which non‐Hispanic whites will be only a slim majority. Hispanics will be 25 percent, blacks 14 percent, and Asians 8 percent.29 For some, including author Peter Brimelow (himself an immigrant from Britain), the United States can no longer afford to be an immigrant country. “What is unusual in the current American immigration debate is that Americans are being urged to abandon the bonds of a common ethnicity so completely and to trust instead in ideology to hold together their state.” A century ago, the last great wave of immigrants were met by an unflinching demand that they Americanize. He worries that today such a demand is weakened by multiculturalism taught in American schools.30

(p.118) But Brimelow and others underestimate the continuing power of the melting pot. Communications and market forces still produce a powerful incentive for mastering the English language and accepting a degree of assimilation. According to the National Research Council, three‐fifths of the immigrants who came in the 1980s spoke English well, and of those in the country thirty years or more, only 3 percent reported they could not speak English well.31 Most of the evidence suggests that the latest immigrants are assimilating at least as quickly as their predecessors. Modern media help new immigrants to know more about their new country beforehand than immigrants did a century ago. A Washington Post poll of twenty‐five hundred Latinos showed that nine out of ten who were newly arrived in America thought it important to change to fit in. But nine out of ten also thought it important to retain part of their ethnic culture.32 Alan Wolfe finds this type of view acceptable to the middle‐class Americans he interviewed. While they firmly oppose bilingualism in education, they tend to both accept a multiculturalism that reflects the diversity of the groups belonging to America and respect America at the same time.33

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While the short‐run economic benefits of immigration are modest, and too rapid a rate of immigration can cause social problems, over the long term immigration has strengthened the power of the United States and will continue to do so. For one thing, population is one of the sources of power, and most developed countries will experience a shortage of people as the century progresses. Some eighty‐three countries and territories currently have fertility rates that are below the level necessary for a constant population level. To maintain its current population size, Japan would have to accept 350,000 newcomers a year for the next fifty years, which is difficult for a culture that historically has been hostile to immigration.34

For all of America's ambivalence, we are a country of immigration. The result is that by 2050, the United States will likely hold its rank in terms of population and will be the only developed country remaining among the world's twenty most populous nations.35 Today the United States is the third largest country; fifty years from now it is still likely to be third (after only China and India). “Even if the current (p.119) membership of the European Union were to form a single state, its projected 2050 population would be significantly smaller than America's.”36 Not only is this relevant to economic power, but given the fact that nearly all developed countries are aging and face a burden of providing for the older generation, immigration could help reduce the sharpness of the policy problem. In addition, even though the directly measurable short‐term economic benefits at the national level are relatively small, some short‐term economic benefits of skilled immigrants can be important to particular areas. For example, in 1998 Chinese‐ and Indian‐born engineers were running one‐quarter of Silicon Valley's high‐technology businesses, which accounted for $17.8 billion in sales.37

In its effects on population and the economy, immigration bolsters America's hard power.

Equally important are immigration's benefits for America's soft power. The fact that people want to come to the United States enhances our appeal, and the upward mobility of immigrants is attractive to people in other countries. America is a magnet, and many people can envisage themselves as Americans. Many successful Americans “look like” people in other countries. Moreover, connections between immigrants and their families and friends back home help to convey accurate and positive information about the United States. In addition, the presence of multiple cultures creates avenues of connection with other countries and helps create a necessary broadening of American attitudes in an era of globalization. While the September 2001 terrorist attacks pointed out the need to improve our immigration and naturalization system, it would be a mistake for Americans to reject immigration. Rather than diluting our hard and soft power, immigration enhances both.

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Confidence in Our Institutions In 1964, three‐quarters of the American public said they trusted the federal government to do the right thing most of the time. After 1970, roughly a quarter of the public admitted to such trust. Levels of trust sometimes spiked after dramatic events (as they did in 2001), but the long term trend after 1970 was decline.38 Government was not alone. (p.120) Over the past three decades, public confidence dropped in half for many major institutions: 61 to 30 percent for universities, 55 to 21 percent for major companies, 73 to 29 percent for medicine, and 29 to 14 percent for journalism.39 Could our hard or soft power erode because of loss of confidence in our institutions?

One possible interpretation is that the decline was a sign of health. The United States was founded in part on a mistrust of government; the Constitution was deliberately set up in such a way as to resist centralized power. Thomas Jefferson felt that the less government, the better, and a long Jeffersonian tradition says we should not worry too much about the level of confidence in government. If the polls reflect wariness, that may be a good thing. Moreover, when asked not about day‐to‐day government but about the underlying constitutional framework, the public is very positive. If you ask Americans what is the best place to live, 80 percent say the United States. If asked whether they like their democratic system of government, 90 percent say yes. Few people feel the system is rotten and must be overthrown.

Some aspects of mistrust are probably cyclical, while others represent discontent with bickering in the political process rather than deep disillusion with institutions. Compared with the 1950s, party politics became more polarized, but nasty politics is nothing new. In the 1884 presidential campaign, the two prevailing slogans were “Blaine, Blaine, James G. Blaine, the continental liar from the state of Maine,” and “Ma, Ma, where's my pa? Gone to the White House, ha, ha, ha” (referring to Grover Cleveland's illegitimate child). Part of the problem is that faith in government became very high among the generation that survived the Depression and won World War II. In that case, over the long view of American history, the anomaly was overconfidence in government in the 1950s and early 1960s, not low levels thereafter.40

Moreover, much of the evidence for loss of trust in government comes from polling data, and responses are sensitive to the way questions are asked. One of the most important surveys, the National Election Study, has long asked whether people trust the government a great deal of the time. If the response “only some of the time” is (p.121) added to “a great deal,” then Congress and the executive branch of the federal government received approval from about 60 percent of the public.41 What cannot be dismissed is that there was a downward trend to answers to the same questions over time, and the duration of the resurgence after September 2001 remains uncertain. The sharpest decline occurred in the late 1960s and early 1970s. According to a study in the 1970s,

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people “who had direct dealings with government agencies, both federal and state, were found to be satisfied with their bureaucratic encounters” but still reported a negative general view of government agencies.42 Like the optimism gap noted above, there seems to be an “experience gap” in which people report to pollsters something other than their direct experience.

How do people get their information about government if not from direct personal experience? Seventy percent say they rely on the media rather than friends or personal experience. Confidence in institutions seems to be more a social than a personal judgment.43 The role of the media changed over the same period during which the decline in confidence in institutions occurred. Both the press and television became more intrusive, editorial, and negative in their reporting.44 In addition, television entertainment increasingly portrayed government figures in a negative light. In the 1970s, most government characters in sitcoms were seen in a positive light, but by the mid‐1990s, most were portrayed in disparaging tones.45 These effects were reinforced by changes in the political process that emphasized negative ads and a tendency for politicians to “run against Washington.” The effect has been what advertisers call a “de‐marketing” campaign against government. It is worth noting that two federal agencies that bucked the trend of declining confidence (as measured by answers to pollsters) are both large bureaucracies—the military and the postal service. What they also have in common is that both engaged in substantial positive advertising about themselves—for recruiting in the case of the military, and to compete with private companies in the case of the postal service. Marketing matters.

This does not imply that there are no problems with expressions of declining confidence in government. Whatever the reasons for the decline, if the public becomes unwilling to provide such crucial resources (p.122) as tax dollars or to voluntarily comply with laws, or if bright young people refuse to go into government service, governmental capacity would be impaired and people would become more dissatisfied with it. Such a result could impair both American hard and soft power. As yet, however, these results do not seem to have materialized. The General Accounting Office reports that federal agencies are “poorly equipped to meet challenges of the 21st century because their employees lack the necessary skills in information technology, science, economics and management,” and it remains to be seen if agencies will recruit more easily after the 2001 tragedy. On the other hand, the Internal Revenue Service sees no increase in cheating on taxes.46 By many accounts, government officials and legislators have become less corrupt than they were a few decades ago.47

Voluntary mail return of census forms increased to 67 percent in 2000, reversing a thirty‐year decline since 1970.48 Voting rates have declined from 62 percent to 50 percent over the past forty years, but the decline stopped in 2000, and the current rate is not as low as in the 1920s. Moreover, polls show that nonvoters are no more alienated or mistrustful of government than voters are.49 Behavior

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does not seem to have changed as dramatically as have responses to poll questions. If so, the effect on the ability of our government to produce and use hard power has been limited.

Despite predictions of institutional crisis expressed in the aftermath of the tightly contested 2000 presidential election, the incoming Bush administration was able to get off to an effective start, even before his rise in the polls after September 2001. Nor does the decline in confidence in government seem to have greatly diminished American soft power, if only because most other developed countries seem to be experiencing a similar phenomenon. Canada, Britain, France, Sweden, and Japan—just to name a few—have seen a similar trend. The causes of the expressed loss of confidence in institutions may be rooted in deeper trends in attitudes toward greater individualism and less deference to authority that are characteristic of post‐modern societies. As we saw above with regard to social change, when such attitudes are typical of most advanced societies, it is impossible to make invidious comparisons that undercut our attractiveness compared (p.123) to the others. Thus far there have been few effects of the changes in confidence in government on our soft power.50

A significant decay in our social institutions could also erode our power by diminishing both our capacity for collective action and the overall attractiveness of our society. Robert Putnam's influential book Bowling Alone suggested that America's stock of social capital—the social networks and norms of reciprocity and trust that make a country more productive and effective—has been declining. The French nobleman Alexis de Tocqueville famously observed in 1830 that American individualism and tendencies to leave the greater society to look after itself are counterbalanced by a propensity to join voluntary associations “of a thousand different types—religious, moral, serious, futile, very general and very limited, immensely large and very minute.”51 While not all voluntary organizations are good for society—witness the Ku Klux Klan—states that rank high on social capital, such as Minnesota and South Dakota, outperform low‐ranking states, such as Mississippi and Arkansas, on such issues as safety, health, child welfare, and prosperity.52 In Putnam's terms, social capital makes “light touch government” more efficient. Police officers close more cases, child welfare departments work better when neighbors provide social support, and public schools teach better when parents volunteer.53

How serious are these changes in social capital for the effectiveness of American institutions? Putnam himself notes that community bonds have not weakened steadily over the last century. On the contrary, American history carefully examined is a story of ups and downs in civic engagement, not just downs—a story of collapse and renewal.54 He suggests a number of policies that might contribute to a renewal early in the twenty‐first century analogous to that created by the Progressive movement at the beginning of the last century. Moreover, Putnam's critics argue that his evidence confirms social

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transformation rather than decline. As Alan Wolfe argues, “Of course civic life has changed; how in a dynamic and entrepreneurial society could it be otherwise? To use the language of decline as Putnam so often does, is to show that people at one period of time were somehow better than at another period of time. . . . If my experience is at (p.124) all typical, Americans have lost community but gained opportunity. Each is valuable, but I know of no social science research that can prove that one is more valuable than the other.”55

Leaving aside the value judgment, the effects on American hard and soft power are likely to be limited. The changes in social capital do not seem to have eroded our national capacity for collective action on foreign policy, and since we compare well with other countries, our soft power is unlikely to be diminished. For one thing, the absolute levels of engagement remain remarkably high on many indicators. For example, there was a tremendous upwelling of community spirit and volunteering after the September 2001 tragedy, ranging from flag flying to donations to community support groups. Three‐quarters of Americans feel connected to their communities and say the quality of life there is excellent or good. According to a 2001 poll, 111 million Americans volunteered their time to help solve problems in their communities in the past twelve months, and 60 million volunteered on a regular basis.56 Moreover, as Putnam himself points out, Americans remain more likely to be involved in voluntary organizations than most countries, with the exception of a few small nations of northern Europe.57

And Americans are far more involved in their churches than Western Europeans —only 10 percent of British and French and 3 percent of Scandinavians attend as often as once a month.58 As the historian Robert Fogel points out, “The role of American evangelical churches in promoting popular democracy, radical social reform, and new political alignments stands in sharp contrast to that of European churches.”59 While many of the trends that Putnam identifies may be troubling in and of themselves, it does not seem that they are seriously eroding America's hard or soft power in the world.

It's the Economy, Stupid! While the cultural and social problems discussed thus far do not threaten to weaken American power, a failure in the performance of the American economy would be a real showstopper. By economic (p.125) failure, I do not mean the depressed condition of the stock market after the September 2001 terrorist attacks or the recessions of a year or so that are typical of all capitalist economies; rather, I refer to decreases in the level of productivity and the loss of the capacity for sustained high levels of growth measured over a decade or more. Not only does economic growth provide the sinews of hard power, it also burnishes the reputation and self‐confidence of the country and thus contributes equally to soft power. When the U.S. economy slowed down in 2001, some skeptics were ready to say “I told you so.” What matters, however, is not one‐ or two‐year corrections in the business cycle but whether the American economy

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can return to the higher productivity that developed in the second half of the 1990s.

A decade and a half ago, many observers believed that the U.S. economy had run out of steam. Technological dominance had been lost in several manufacturing sectors, including automobiles and consumer electronics. The annual rate of increase of labor productivity, which averaged 2.7 percent in the two decades after World War II, had slipped to 1.4 percent in the 1980s. Although the American standard of living was still the highest among the seven largest market economies, it had grown only a quarter as fast as the others since 1972. According to a leading business magazine in 1987, “the nation is in a growth crisis. . . . Both personal and national agendas that were once unquestioned suddenly seem too expensive.”60 Japan and Germany were believed to be overtaking America, and this undercut both our hard and soft power. We seemed to have lost our competitive edge. As the new century began, the picture looked very different, with the World Economic Forum ranking the United States first in growth competitiveness.61

Can it last? Will the new levels of productivity and growth extend American influence well into the new century? Or will the United States merely follow Japan in a cycle of ups and downs? Long‐run optimists argue that there is a “new economy” that has removed the prior speed limits on American growth, but an IMF study is more cautious about the term: “Despite the amount of attention that the ‘new economy’ has received, there is very little consensus on what is now different about the U.S. economy and whether such a difference (p.126) has fundamentally changed the way the economy works.” What is clear is that the United States leads in the production and use of information technology (IT). The IT sector accounts for a larger share of GDP than in the other major industrial countries.62 That puts the United States at the forefront of the information revolution, with the attendant implications for power described in chapter 2.63 As The Economist summarized the debate early in 2001:“That many ‘new economy’ claims look flawed does not necessarily mean that all are. There is evidence that structural productivity growth has quickened, but not as much as is widely believed. Those who think that productivity growth of 3% or more is sustainable are saying that IT will have a bigger economic impact than the era of electricity and cars in the 1920s. That was, and remains, a bold claim.”64

Productivity

While there were no notable productivity growth differences between the United States and Europe in the first half of the 1990s, after 1995, a noticeable change in the rate of decline in the cost of computing power enhanced American productivity. Productivity is crucial because the more that workers can produce per hour, the more the economy can grow without shortages and inflation. And sustained noninflationary growth provides the resources we can invest in hard power as well as an attractive economic model that enhances our soft power.

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Productivity can increase because of new investment in tools or new forms of organization. Moore's law, which is a generalization about the rate of development in computing speed, continued to predict the doubling of semiconductor speed every eighteen months. Productivity also improved as companies began using the Internet intensively for commercial purposes and the government deregulated the American telecommunications industry.65 And while information technology was a fairly small part of the economy (8.3 percent in 2000), it accounted for a third of all output growth from 1995 and 1999.66

Information technology was not the only source of the new productivity. Globalization, deregulation, and competition also spurred business process improvements.67 The Economic Report of the President (p.127) argued that information technology, business practices, and economic policies reinforced each other. The information revolution (discussed in chapter 2) and economic globalization (described in chapter 3) both spurred the American economy. “Indeed globalization and the recent advances in information technology at the core of the New Economy are inextricably linked. On the one hand, globalization has played a crucial role in promoting the technological innovation and investment and facilitating the organizational restructuring that built the New Economy. On the other hand, improvements in information technology have spurred deeper integration between the United States and the world economy.”68

The key question for the future of American power is whether increases we see in rates of productivity are merely cyclical (and thus likely to be reversed) or structural (and thus capable of being sustained over long periods). For a number of years economists puzzled over why the rise in investment in new information technology tools was seen “everywhere except the productivity figures.” This now seems to be changing, though there are differences over whether the structural gains are limited to the information industry alone or have spilled over into the rest of the economy. Some skeptics about the new economy attributed most of the gains to the manufacture rather than the use of computers, but other economists, such as Yale's William Nordhaus, found that the other sectors contributed roughly half of the recent upturn in productivity growth.69 The White House Council of Economic Advisors argued that the 2.6 percent rate of growth in productivity in the second half of the 1990s was not merely cyclical and that the improvement in the ways capital and labor are used throughout the economy were important to the increase. The Economist estimated that the noncyclical structural productivity rate might be closer to 2 percent, but “productivity growth of 2% would still be pretty impressive by historical standards.”70 As Alan Greenspan warned Congress, even if one believes the gains are not ephemeral, “the rate of growth of productivity cannot continue to increase indefinitely. At some point, it must at least plateau.”71 But if it maintains the new plateau, and the risk premium associated with terrorism does not become too high, the “speed limit” on American economic (p.128)

https://oxford.universitypressscholarship.com/view/10.1093/0195161106.001.0001/acprof-9780195161106-chapter-2#

https://oxford.universitypressscholarship.com/view/10.1093/0195161106.001.0001/acprof-9780195161106-chapter-3#

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growth that was presumed to be in effect a decade ago will have been raised, with positive implications for American hard and soft power.72

Saving and Investment

In addition to the question of whether the new rates of productivity are sustainable, other concerns about the future of American economic power include our low rate of personal savings and the current‐account deficit (which means that Americans are becoming more indebted to foreigners). Personal savings are difficult to calculate and such estimates are subject to error, but the trend is clearly down, from 9.7 percent of personal incomes in the 1970s to near zero today. In part this is attributed to an increased culture of consumerism and easier access to credit. How much it matters is difficult to determine. Despite the drop in personal savings, a broader measure of savings, the national savings rate, which includes government and corporate savings, has held up.73 The switch from government deficits to surpluses in the 1990s represented a significant gain in savings. If recent budget changes and tax cuts return us to a persistent pattern of deficit spending, the results would be costly for both our hard and soft power.

However, the key to economic growth and power is not savings but investment. Japan, for example, has kept up a high savings rate, but its economy has stagnated. When the figures are corrected for the fact that capital goods are cheaper in the United States, American real investment compared favorably with other OECD countries.74 Moreover, competitive American capital markets and shareholder demands on managers have made the United States more efficient in the use of capital, thus getting more bang for the same buck of savings. A unit of capital invested in the American business sector creates half again as much output as it does in either Germany or Japan. American business earned an average real rate of return of 9 percent per year, compared to 7 percent in Germany and Japan. “If rates of return are higher in America, then it makes sense for America to have a net inflow of foreign capital: excess savings in Japan and elsewhere can be invested more profitably in America than at home.75 In an open economy, if the current‐account deficit leads to greater investment (rather than merely consumption), it can leave a country stronger. The danger is that in a (p.129) severe recession foreigners might withdraw their investments rapidly and add to instability in the economy. American income would be even higher and dangers of instability lessened if the United States financed more of its investment through higher savings.76

Education

A well‐educated labor force is another key to economic success in an information age. At first glance, the United States does well compared to other rich countries. Eighty‐three percent of adults have graduated from high school, and 24 percent have graduated from college. The United States ranks seventh in high school graduation rates, slightly lower than Japan or Germany, but higher

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than most countries.77 American university graduation rates are also higher than most countries, and the United States spends twice as much on higher education as a percentage of GDP than does France, Germany, Britain, or Japan. The American higher education system is very strong, and American universities have widened their lead in academic reputation over competitors in Britain, Continental Europe, and Japan over the past few decades.78 The number of graduate degrees awarded annually has quadrupled since the 1960s.79

Americans win more Nobel prizes than do citizens of any other country. These accomplishments enhance both our economic power and our soft power.

However, while American education is strong at the top, it is less impressive at lower levels. American education at its best—much of the university system and the top slice of the secondary system—meets or sets the global standard. But American education at its worst—too many of our primary and secondary schools, especially in less affluent districts—lags badly. This may mean that the quality of our labor force will not keep up with the rising standards of an information‐based economy. Student test scores showed slow but steady gains over the 1990s, but the nation failed to achieve the ambitious “Goals 2000” aim (set in 1989) of achieving 90 percent high school graduation, being first in the world in math and science, and demonstrating competence in other subjects.80 A national assessment of educational progress found that only between a fifth and a quarter of students were at or above the proficient level in math, and between a (p.130) third and two‐fifths scored at that level in reading.81 Twenty‐nine percent of all college freshmen require remedial classes in basic skills.82 In adult literacy, 24 percent of Americans fell in the lowest category of comprehending documents (twice as bad as Germany, four times worse than Sweden).83 Some American children get much better access to educational resources than do others; there are significant disparities in per pupil spending both between states and between districts within the same state.84 The achievement gap between well‐off children and others is above the average for the twenty‐nine industrialized nations of the Organization for Economic Cooperation and Development. American teachers were paid only 1.2 times the average per capita income, whereas in Germany, Ireland, South Korea, and Switzerland, teachers earn twice or more the per capita income.85

Contrary to alarmist talk, there is no reliable evidence that students are performing worse than in the past, but “American students do not seem to be improving their knowledge and skills to keep pace with an advancing economy, nor do they compare particularly well in science and math with their counterparts in other countries.”86 In a recent test of 180,000 eighth graders in thirty‐eight countries, Americans did worse in math and science than children in Singapore, Taiwan, Russia, Canada, Finland, and Australia, and worse in comparisons than they did as fourth graders in 1995.87 While average SAT scores have improved slightly over the past two decades, the question is whether the changes are enough to cope with an information‐based economy.

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Forty years ago, a high school dropout could use a hammer in a foundry; today he or she is likely to have to work a numerically controlled machine tool. And as productivity increases in manufacturing, jobs switch to services that often require the use of computers. Increasingly, college is becoming a requirement for a middle‐class lifestyle, and workers who use computers are paid more than those who do not. We will have to continue to work on improving our educational system if we are to meet the standards needed in an information‐based economy.

Income Inequality

The changing shape of the nation's income distribution also poses a problem for the American economy. From 1947 to 1968, census data (p.131) show, inequality in family income decreased. From 1968 to 1993, inequality increased. Data collected since 1993 suggest that the increase has slowed or halted, but it is too soon to be sure. The nationwide poverty rate, which stood at 22 percent in 1960, fell to 11 percent in 1973 but worsened to 15 percent in 1993. The economic growth in the second half of the 1990s brought it back down to 11.8 percent.88 Shifts in labor demand away from less‐educated workers are perhaps a more important explanation of eroding wages than the shift out of manufacturing.89

The problem is not only a question of justice but one of whether inequality may lead to political reactions that could curb the productivity of the economy and slow the high rates of economic growth that are the foundation of our hard and soft power. As the Council of Economic Advisors points out, “Dislocation is an unavoidable effect of economic growth and technological change.” The price of progress is what the economist Joseph Schumpeter called “creative destruction,” but the burdens are not equally borne. The evidence suggests that worker displacement is largely the result of technology rather than import competition. In the 1990s, employment by American corporations at home and overseas rose in tandem rather than one at the cost of the other. Nonetheless, even though the country as a whole benefits, globalization and technological change are especially threatening to less‐skilled and less‐educated workers. Unless policies ensure that they are not left behind, they may provide a political basis for a reaction that could slow American growth.90

Despite these problems and uncertainties, it seems likely that with the right policies the American economy will continue to function well in producing hard power for the country. The wild card would be if repeated terrorist attacks so damaged confidence that a long period of recession occurs. Soft power is a more open question. Clearly many people admire the success of the American economy, but not all extol it as a model. Government plays a lighter role in the U.S. economy, spending (and taxing) one‐third of GDP, while Europe is nearer one‐half. Competitive market forces are stronger, social safety nets weaker. Unions are weaker and labor markets less regulated. Cultural attitudes, bankruptcy laws, and financial structures more strongly favor entrepreneurship.

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While foreigners extol many of (p.132) these virtues, some object to the price of inequality and insecurity that accompanies this greater reliance on market forces.

The area where the American model clearly excelled was in job creation, with less than half the rate of unemployment in Germany (though about the same as Japan). As The Economist noted, “Overall, however, the notion that the American economy stands on top of the world is questionable. It is also vulnerable to criticism because of its wider income inequality. It is often asserted that America has traded higher inequality for faster growth; yet over the past decade, average incomes have risen by similar amounts in the three countries, despite America's bigger income differentials. . . . The poorest 20% in Japan are about 50% better off than America's poorest 20%.”91 The lowest 10 percent of people in America's income distribution had only the thirteenth highest average income when compared with relatively poor people in other advanced economies. The superior job performance of the American economy will not lead Europeans and others to see it as the best model unless we alleviate the effects of inequality.92 How we deal at home with those who are left behind has an important effect on our soft power.

How Americans View the World Even if social cleavages do not disrupt internal stability, institutional capacities remain adequate, and the economy grows over the long run, the United States might fall short in converting its power resources into effective influence if American public opinion were to turn inward after September 2001, as it did after World War I. If Atlas shrugs, what happens to hegemony?

In the initial response, this does not seem to be happening, though some worry that it may. The Chicago Council on Foreign Relations polled Americans about foreign policy every four years after 1974. It found continuing support for an active role for the United States in the world, with 61 percent of the public and 96 percent of leaders favoring such activism. Some three‐quarters of the public and leaders foresaw an even greater role for the country in ten years. A majority (p.133) of the public believed there would be more violence in the twenty‐first century, and terrorism was considered the number one threat to U.S. vital interests, followed by chemical and biological weapons and nuclear proliferation. Concern about the development of China as a world power was rising among leaders. Superficially, American attitudes seemed appropriate.

Overall public commitment to engagement coexists with reluctance to support the use of American troops overseas, although leaders continue to be more willing to deploy troops abroad. We prefer multilateral approaches over going it alone. Fifty‐seven percent of the public agree the United States should take part in UN peacekeeping forces, and 72 percent of the public (but only 48 percent of leaders) think the United States should not take action alone in international

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crises if it does not have the support of allies. On the question of globalization, 54 percent of the public and 87 percent of leaders believe it is mostly good for the United States. Sixty‐three percent of the public and 89 percent of leaders believe that a country's economic strength is more important than its military strength as a measure of power and influence in the world.

So far, so good. Most Americans are not isolationist, and they do not focus solely on military hegemony. They want to engage the world through multilateral institutions. So what's wrong with this picture? Why are we having such a hard time defining our national interest? Why was our policy so often arrogantly unilateralist? For example, why did we undercut our own influence in the United Nations during the 1990s by refusing to pay our dues when polls showed that two‐thirds of the public supported the UN?

In a word, the problem was indifference. After the Cold War and before the September 2001 terrorist attacks, Americans became preoccupied with domestic affairs, turning to the present and past rather than a concern about the global future. Foreign policy played little role in our presidential elections. As Henry Kissinger has observed, “Ironically, America's preeminence is often treated with indifference by its own people. . . . Hence prudence impels aspiring politicians to avoid discussions of foreign policy and to define leadership as a reflection of current popular sentiments rather than as a challenge to raise America's sights.”93

(p.134) When the majority are indifferent, they leave the battlefields of foreign policy to those with special interests. The result is a narrow definition of our national interest that often alienates other countries. Take the apparent paradox of our refusal to pay UN dues despite a majority being in favor of the United Nations. A large part of the reason was the intensity of preferences of a minority. Many of the political activists who turned out to vote in Republican primaries (often only a fifth of the electorate), strongly believed that the UN was a threat to national sovereignty, and for them, the dues issue was very important. Though they constituted a minority of the public, theirs was the voice that Congress heard in determining the American interest.94 Moreover, that voice was amplified by the ideology of important committee chairs such as Senator Jesse Helms, and by special‐interest tactics of linking payment of dues to extraneous issues such as abortion.

The polls were very clear on the issue of indifference. Americans' interest in the news, particularly news about foreign countries, declined after the end of the Cold War. Only 29 percent of the public are “very interested” in news about other countries, and 22 percent were “hardly interested.”When asked about the biggest problems facing the country, foreign policy issues made up the smallest portion (7 percent) for the public. (For leaders, the number was 19.5 percent.) “In a post–Cold War world, without a clear‐cut ‘us vs. them’ mentality, the

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relevance of world events appears less evident for many Americans.”95 Some people describe these attitudes as “soft isolationism.”96 Others call it “tempered internationalism.”97 The problem is not one of rejection of foreign concerns, which characterized American attitudes toward Europe in the 1930s. It is more a question of indifference and internal preoccupation.

The danger of public indifference is that the special interests—economic, ethnic, ideological—always present in a democracy develop an even stronger voice than normal in defining the national interest. During the Cold War, containment of Soviet power provided a north star to guide American foreign policy. Historically, the Cold War era was an anomalous period of consensus about the central concern of foreign policy (and even it involved bitter disputes (p.135) over Vietnam and Central America). In fact, confusion has more often been the rule. For example, ethnic differences colored appraisals of whether the United States should enter World War I, and economic interests have always played an important role in the making of American foreign policy.98 A careful study of American definitions of national interests in the 1890s, 1930s, and 1980s concludes that “there is no single national interest. Analysts who assume that American has a discernible national interest whose defense should determine its relations with other nations are unable to explain the persistent failure to achieve domestic consensus on international objectives.”99 But never before have we been so preponderant. Public indifference made our situation before September 2001 all the more poignant when it came to deciding how to use and preserve our power.

Congress pays attention to squeaky wheels, and the special interests press it to legislate the tactics of foreign policy and codes of conduct with sanctions for other countries. As Henry Kissinger points out, “What is presented by foreign critics as America's quest for domination is very frequently a response to domestic pressure groups.” The cumulative effect “drives American foreign policy toward unilateral and bullying conduct. For unlike diplomatic communications, which are generally an invitation to dialogue, legislation translates into a take‐it‐or‐leave‐it prescription, the operational equivalent of an ultimatum.”100 The September 2001 wake up call wiped away indifference for now, but the isolationist and unilateral temptations remain. “To the extent that the United States turns unilateralism into a habit or cuts its contribution to the production of public goods, others will feel the sting of American power more strongly. And the incentive to discipline Mr. Big will grow.”101

Attitudes toward globalization could prove to be another Achilles heel for American power. Americans are not immune to protectionist backlash, and support for economic globalization may be more fragile than at first appears. A wide range of public opinion surveys report that a plurality or majority oppose policies to further liberalize trade, immigration, and foreign direct investment. These attitudes—which align strongly with labor market skills, with lower‐wage

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employees more likely to be negative—reflect not simply ignorance of (p.136) the benefits but a feeling that the costs of economic insecurity may be more important.102 Such attitudes may be reinforced by the new anxiety about terrorism.

Polls show that the sharpest divergence in the attitudes of the public and leaders is in response to questions about the priority to be given to “protecting the jobs of American workers.” Four‐fifths of the public rank this “very important,” compared to 45 percent for leaders.103 Less skilled workers—a group that constitutes the majority of the U.S. labor force—“have experienced close to zero or even negative real‐wage growth, despite renewed progress in recent years, and have also seen sharp declines in their wages relative to more‐skilled workers . . . Popular support for further liberalization is likely to be conditioned on effective governmental assistance to help workers adjust to its adverse effects.”104 Leeway to exercise our power abroad depends in part on the policies we follow at home. If the United States were to turn in a more protectionist direction, we would not only reduce the economic growth that underpins our hard power but set an unfortunate example that would reduce our soft power.

Some argue that the costs of exercising power eventually overburden all empires and that terrorist attacks will make the American public weary of “imperial overstretch.”105 But the financial burdens have not increased, as defense and foreign affairs expenditures have declined as a share of GNP over the past several decades. Furthermore, our vulnerabilities cannot be removed by turning inward. It is true that American attitudes are more permissive than strongly supportive of leaders' efforts to convert the country's power resources into effective influence in the world. If economic slowdown occurs or inequality grows, or if we fail to cope with terrorism, significant groups may deny permission, particularly with regard to trade liberalization and immigration. Nonetheless, public opinion is a set of constraints, like dams and dikes, rather than a direct determinant of foreign policy.106 The polls show that these constraints are quite broad. The problem of the home front is less the feared prospects of social and political decay or economic stagnation than developing and popularizing a vision of how the United States should define its national interest in a global information age. We turn to that question next.

Notes:

(1.) Of course there were many more causes of this complex phenomenon. See Ramsay MacMullen, Corruption and the Decline of Rome (New Haven: Yale University Press, 1988).

(2.) The phrase is from the classic treatment by Cecil V. Crabb Jr. and Pat M. Holt, Invitation to Struggle: Congress, the President and Foreign Policy (Washington, D.C.: Congressional Quarterly Press, 1980).

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(3.) Dexter Perkins, “What Is Distinctly American About the Foreign Policy of the United States?” in Glyndon Van Dusen and Richard Wade, eds., Foreign Policy and the American Spirit (Ithaca: Cornell University Press, 1957), 3–15.

(4.) James Schlesinger, America at Century's End (New York: Columbia University Press, 1989), 87.

(5.) “One Nation, Fairly Divisible, Under God,” The Economist, January 20, 2001, 21–24.

(6.) Gertrude Himmelfarb, One Nation, Two Cultures (New York, Knopf, 1999), 20.

(7.) Robert H. Bork, Slouching Toward Gomorrah: Modern Liberalism and American Decline (New York: Reagan Books, 1996); Richard Neuhaus, “The End of Democracy? The Judicial Usurpation of Politics,” First Things, November 1996, 18.

(8.) Alan Wolfe, One Nation, After All: What Americans Really Think About God, Country, Family, Racism, Welfare, Immigration, Homosexuality, Work, the Right, the Left and Each Other (New York: Viking, 1998), 15, 176, 165.

(9.) Derek Bok, The State of the Nation (Cambridge, MA: Harvard University Press, 1996), 359.

(10.) Gregg Easterbrook, “America the O.K.,” The New Republic, January 4, 1999, 19–25.

(11.) Theodore Caplow, Louis Hicks, and Ben Wattenberg, The First Measured Century: An Illustrated Guide to Trends in America, 1900–2000 (Washington, D.C.: AEI Press, 2001), 106.

(12.) David Whitman, The Optimism Gap: The I'm OK—They're Not Syndrome and the Myth of American Decline (New York: Walker, 1998).

(13.) Christopher Jencks, foreword to Whitman, The Optimism Gap, ix.

(14.) Charles Dickens, Martin Chuzzlewit (1844), quoted in Whitman, The Optimism Gap, 85.

(15.) Robert Samuelson, The Good Life and Its Discontents (New York: Times Books, 1995).

(16.) Himmelfarb, One Nation, Two Cultures, 141.

(17.) Bok, The State of the Nation, 7, 388, 395. See also “What a Lot of SterEUtypes,” The Economist, October 23, 1999, 60.

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(18.) Tamar Lewin, “Family Decay Global, Study Says,” New York Times, May 30, 1995, 5.

(19.) Bok, The State of the Nation, 376.

(20.) Himmelfarb, One Nation, Two Cultures, 139.

(21.) Franklin quoted in George Borjas, Heaven's Door: Immigration Policy and the American Economy (Princeton: Princeton University Press, 1999), 3.

(22.) See, for example, Peter Brimelow, Alien Nation: Common Sense About America's Immigration Disaster (New York: Random House, 1995), and Chilton Williamson Jr., The Immigration Mystique: America's False Conscience (New York: Basic Books, 1996).

(23.) Wolfe, One Nation, After All, 138; Kenneth Scheve and Matthew Slaughter, Globalization and the Perceptions of American Workers (Washington, D.C.: Institute for International Economics, 2001), 35.

(24.) Arthur Schlesinger, The Disuniting of America: Reflections on a Multi‐ cultural Society, rev. ed. (New York: W. W. Norton, 1998).

(25.) Caplow, Hicks, and Wattenberg, The First Measured Century, 14–19.

(26.) U.S. Census Bureau, “The Foreign Born Population in the United States,” Current Population Reports, March 2000, 1.

(27.) Borjas, Heaven's Door, 8n.

(28.) Eric Schmitt, “New Census Shows Hispanics Are Even with Blacks in US,” New York Times, March 8, 2001, 1.

(29.) Steven Holmes, “Census Sees a Profound Ethnic Shift in U.S.,” New York Times, March 14, 1996, 16.

(30.) Brimelow, Alien Nation, 258, 208, 217.

(31.) James Smith and Barry Edmonston, eds., The New Americans: Economic, Demographic, and Fiscal Effects of Immigration (Washington, D.C.: National Academy Press, 1997), 13.

(32.) “The New Americans,” The Economist, March 11, 2000, survey 13–14.

(33.) Wolfe, One Nation, After All, 163.

(34.) Nicholas Eberstadt, “The Population Implosion,” Foreign Policy, March‐ April 2001, 43, 49.

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(35.) Barbara Crossette, “Against a Trend, U.S. Population Will Bloom, UN Says,” New York Times, February 28, 2001, A6.

(36.) Nicholas Eberstadt, “World Population Prospects: The Shape of Things to Come,” American Enterprise Institute, On the Issue, April 2001, 2.

(37.) “Silicon Valley's Skilled Immigrants: Generating Jobs and Wealth for California,” Research Brief Issue 21, Public Policy Institute of California, June 1999, 2.

(38.) Washington Post/Kaiser Family Foundation/Harvard University Survey Project, 1996; Harris Poll, 1996; Hart‐Teeter Poll for the Council of Excellence in Government, reported in the Washington Post, March 24, 1997. See also Seymour Martin Lipset and William Schneider, The Confidence Gap (Baltimore: Johns Hopkins University Press, 1987).

(39.) Harris Poll, 1966–1996. There are some exceptions. For example, confidence in science remains strong, and in Europe, confidence in business has risen.

(40.) See Samuelson, The Good Life and Its Discontents.

(41.) General Social Survey, spring 1994, National Opinion Research Center, Chicago. Congress received 58 percent and the executive branch received 63 percent. The survey, prepared by Survey Research Consultants International, is reprinted in Elizabeth Hann Hastings and Philip K. Hastings, eds., Index to International Public Opinion, 1994–1995 (Westport, CT: Greenwood Press, 1996). See as well Gallup poll of eighteen countries, “Satisfaction Index,” survey no. 22–50001–018 in The Gallup Poll, Public Opinion 1995 (Wilmington, DE: Scholarly Research, 1996).

(42.) Daniel Katz et al., Bureaucratic Encounters: A Pilot Study in the Evaluation of Government Services (Ann Arbor: Survey Research Center, University of Michigan, 1975) 178.

(43.) Lipset and Schneider, The Confidence Gap, 402.

(44.) Thomas E. Patterson, Out of Order (New York: Vintage, 1994). See also Gary Orren, “Fall from Grace: The Public's Loss of Faith in Government,” in Joseph S. Nye Jr., Philip D. Zelikow, and David C. King, eds., Why People Don't Trust Government (Cambridge, MA: Harvard University Press, 1997).

(45.) S. Robert Lichter, Linda S. Lichter, and Daniel Amundson, Images of Government in TV Entertainment (Washington, D.C.: Council for Excellence in Government, 2001), 7, 17, 62 and passim.

(46.) Whitman, The Optimism Gap, 92.

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(47.) Suzanne Garment, Scandal: The Culture of Mistrust in American Politics (New York: Doubleday, 1991).

(48.) Steven Holmes, “Defying Forecasts, Census Response Ends Declining Trend,” New York Times, September 20, 2000, 23.

(49.) Richard Berke, “Nonvoters Are No More Alienated than Voters, a Survey Shows,” New York Times, May 30, 1996, A21; also “Conventions and Their Enemies,” The Economist, July 22, 2000, 34.

(50.) See Nye, Zelikow, and King, eds., Why People Don't Trust Government, chapters 9, 10, and conclusion. See also Pippa Norris, ed., Critical Citizens: Global Support for Democratic Government (New York: Oxford University Press, 1999).

(51.) Alexis de Tocqueville, Democracy in America, ed. J. Mayer, trans. George Lawrence (Garden City, NY: Doubleday, 1969), 513.

(52.) Robert D. Putnam, Bowling Alone: The Collapse and Revival of American Community (New York: Simon and Schuster, 2000), section 4.

(53.) Ibid., 346.

(54.) Ibid., 25.

(55.) Alan Wolfe, “American Society Unglued?” Harvard Magazine, July‐August 2000, 28–29.

(56.) Pew Partnership for Civic Change, “New Survey Dispels Myths on Citizen Engagement” (http://www.pew‐partnership.org/newsroom/rwa (pr).html).

(57.) Putnam, Bowling Alone, 48.

(58.) T.R. Reid, “Empty Naves Echo an Age's Loss of Faith,” International Herald Tribune, May 7, 2001, 1.

(59.) Robert W. Fogel, The Fourth Great Awakening and the Future of Egalitarianism (Chicago: University of Chicago Press, 2000), 7.

(60.) “Can America Compete?” Business Week, April 20, 1987, 45.

(61.) Michael Porter and Jeffrey Sachs, The Global Competitiveness Report 2000 (New York: Oxford University Press, 2000), 11.

(62.) International Monetary Fund, “United States of America: Selected Issues,” IMF Staff Country Report no. 00/112, August 2000, 4.

http://www.pewpartnership.org/newsroom/rwa(pr).html

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(63.) The columnist Jeffrey Madrick warns that we have been here before: “If the economy of the 1990s was indeed ‘new,’ America enjoyed a new economy in every generation of its history, beginning with the cotton economy after the War of 1812, and extending through canals, water mills, steamships, mass retailers, steel and oil, railroads, electric appliances, autos and television over the course of the next two centuries.” Jeffrey Madrick, “Tax Cuts Are in the Air, and Both Political Parties Have Their Heads in the Sand,” New York Times, March 15, 2001, C2.

(64.) “Productivity, Profits and Promises,” The Economist, February 10, 2001, 24.

(65.) Quoted in IMF Economic Forum, “The Information Economy: New Paradigm or Old Fashion,” December 12, 2000 (http://www.imf.org/external/np/ tr/2000).

(66.) Economic Report of the President (Washington, D.C.: U.S. Government Printing Office, 2001), 25.

(67.) IMF Economic Forum, “The Information Economy.”

(68.) Economic Report of the President, 23, 145.

(69.) See “Productivity on Stilts,” “Performing Miracles,” and “Another Look at Productivity,”The Economist, respectively June 10, 2000, 86; June 17, 2000, 78; and February 10, 2001, 78. See also William Nordhaus, “Productivity Growth and the New Economy,” National Bureau of Economic Research Working Paper 8096, January 2001.

(70.) “A Spanner in the Productivity Miracle,” The Economist, August 11, 2001, 55.

(71.) Richard Stevenson, “Fed Chief Calls Recent Rate of Growth Unsustainable,” New York Times, October 29, 1999, C6.

(72.) Dale Jorgenson and Kevin Stiroh, “Raising the Speed Limit: US Economic Growth in the Information Age,” manuscript, May 2000.

(73.) Sylvia Nasar, “Economists Simply Shrug as Savings Rate Declines,” New York Times, December 21, 1998, A14.

(74.) Milka Kirova and Robert Lipsey, “Measuring Real Investment: Trends in the United States and International Comparisons,” National Bureau of Economic Research, Working Paper 6404, 7.

(75.) “America's Fantastic Factories,” The Economist, June 8, 1996, 17; “The Vice of Thrift,” The Economist, March 21, 1998, 88.

http://www.imf.org/external/np/tr/2000

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(76.) Franco Modigliani and Robert Solow, “America Is Borrowing Trouble,” New York Times, April 9, 2001, A17.

(77.) Ethan Bronner, “Long a Leader, US Now Lags in High School Graduation Rates,” New York Times, November 24, 1998, A1.

(78.) Martin Wolf, “Mediocrity Flourishes When an Inspector Calls,” Financial Times (London), April 16, 2001, 17.

(79.) Caplow, Hicks, and Wattenberg, The First Measured Century, 53, 65; Bok, The State of the Nation, 61; “A Sorry State,” The Economist, July 1, 2000, 80.

(80.) Peter Applebome, “Student Test Scores Show Slow but Steady Gains at Nation's Schools,” New York Times, September 3, 1997, B8; Richard Rothstein, “Goals 2000 Scoreboard: Failure Pitches a Shutout,” New York Times, December 22, 1999, B15.

(81.) U.S. Department of Education, National Center for Educational Statistics, The Condition of Education 2000 (Washington, D.C.: U.S. Government Printing Office, 2000).

(82.) Diane Ravitch, “Student Performance Today,” Brookings Policy Brief no. 23, September 1997, 2.

(83.) Bok, The State of the Nation, 63.

(84.) National Center for Education Statistics, The Condition of Education 2000, 103.

(85.) Bronner, “Long a Leader, US Now Lags,” 18.

(86.) Bok, The State of the Nation, 65.

(87.) Diana Schemo, “Students in U.S. Do Not Keep Up in Global Tests,” New York Times, December 6, 2000, A1.

(88.) Economic Report of the President, 20–22.

(89.) United States Census Bureau, “The Changing Shape of the Nation's Income Distribution,” Current Population Reports, June 2000, 1, 10.

(90.) Economic Report of the President, 174–75.

(91.) “Desperately Seeking a Perfect Model,” The Economist, April 10, 1999, 67– 68.

(92.) Even as sympathetic an observer as Martin Wolf of the Financial Times notes that “some of the most successful economies, in terms of high technology and low unemployment (though with a mixed record of productivity growth)

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have been the Nordic welfare states. Yet these are in some respects, the polar opposites of the US, notably on taxation and public spending. For all its success, it is unlikely that the US offers the only workable way to organize an advanced economy.” Martin Wolf, “The Lure of the American Way,” Financial Times (London), November 1, 2000, 25.

(93.) Henry Kissinger, Does America Need a Foreign Policy? Toward a Diplomacy for the 21st Century (New York: Simon and Schuster, 2001), 18.

(94.) Steven Kull, “What the Public Knows That Washington Doesn't,” Foreign Policy, winter 1995–96, 114.

(95.) John E. Reilly, ed., American Public Opinion and U.S. Foreign Policy 1999, Chicago Council on Foreign Relations (http://www.ccfr.org/publications/opinion/ AmPuOp99.pdf), 4–8.

(96.) James M. Lindsay, “The New Apathy,” Foreign Affairs, September‐October 2000.

(97.) Wolfe, One Nation, After All, 170.

(98.) Charles A. Beard, The Idea of the National Interest (New York: Macmillan, 1934).

(99.) Peter Trubowitz, Defining the National Interest: Conflict and Change in American Foreign Policy (Chicago: University of Chicago Press, 1998), 12.

(100.) Henry Kissinger, “America at the Apex,” The National Interest, summer 2001, 15.

(101.) Josef Joffe, “Who's Afraid of Mr. Big?” The National Interest, summer 2001, 52.

(102.) Scheve and Slaughter, Globalization and the Perceptions of American Workers, 9.

(103.) United States Information Agency Opinion Analysis, M‐162–99, August 20, 1999, 1.

(104.) Fred Bergsten, “Preface,” in Scheve and Slaughter, Globalization and the Perceptions of American Workers, x.

(105.) Franz Nuscheler, “Multilateralism vs. Unilateralism,” Development and Peace Foundation, Policy Paper 16, Bonn, 2001, 8.

(106.) Richard Sobel, The Impact of Public Opinion on U.S. Foreign Policy Since Vietnam (New York: Oxford University Press, 2001), 10.

http://www.ccfr.org/publications/opinion/AmPuOp99.pdf

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Abstract and Keywords
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Moral Decay and Cultural Divide
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Immigration and American Values
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Confidence in Our Institutions
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It's the Economy, Stupid!
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Productivity

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Saving and Investment
Education

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Income Inequality

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How Americans View the World
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Notes:

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