After the events of the past six months, few people on either side of the Atlantic would dispute the view that the concept of Atlantic partnership and the imagery of "twin pillars" and "dumbbells" need reconsidering. As applied, the imagery has obscured the disparity in European economic and strategic strength; it has overlooked the contrast between America's genuine desire to see European economic strength increase and cohere, and its equally genuine reluctance to encourage the proliferation of nuclear weapons; it has assumed an identity of political interest between the United States and Western Europe which can, one hopes, be evolved but may not exist prima facie; and it has rested on an important confusion between the six West European countries of the Community and the 12 European countries in NATO, whose interests also are not identical with one another.
After the events of the past six months, few people on either side of the Atlantic would dispute the view that the concept of Atlantic partnership and the imagery of "twin pillars" and "dumbbells" need reconsidering. As applied, the imagery has obscured the disparity in European economic and strategic strength; it has overlooked the contrast between America's genuine desire to see European economic strength increase and cohere, and its equally genuine reluctance to encourage the proliferation of nuclear weapons; it has assumed an identity of political interest between the United States and Western Europe which can, one hopes, be evolved but may not exist prima facie; and it has rested on an important confusion between the six West European countries of the Community and the 12 European countries in NATO, whose interests also are not identical with one another.
For nearly 20 years American policy has cherished the vision of a united Europe whose leaders could talk the same language of power and responsibility as its own. During the early years of that policy there was little conflict between its economic and political aspects, for almost all the strategic power of the West was effectively in the hands of the United States. Moreover, if military technology had pursued a less breakneck course, it is possible that the United States would have viewed the acquisition of nuclear weapons by a united Europe-or its individual countries-with a reasonable equanimity. The United States might have calculated that to enhance European pride, lessen European fears and promote Western security as a whole would hasten the day when the two systems could look each other in the eye with confidence. Indeed in the mid- 1950s, when the British V-Bomber force with nuclear bombs was becoming an actuality, it was accepted in Washington as fulfilling a useful complementary role to that of the Strategic Air Command (SAC), in that, with its speed and proximity to Russia, it could be in action faster than American bombers.
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ANY attempt to look at some of the economic problems confronting the Atlantic group of nations over the next ten or fifteen years must take into account the general change in the economic climate which has occurred in the last five years. The long postwar boom ended in the summer of 1957. Before that climacteric the Atlantic group had enjoyed a period of almost continuous prosperity. Demand was high; markets were good; prices were satisfactory; and production was at capacity. Businessmen projected the lines of their graphs upwards and on without a kink. Growth and progress seemed here to stay. Since 1957 it has been a different story. Spurts of prosperity have been succeeded by the languors of recession and stagnation, except among the Six; and even among them the rate of growth has been slowing down and they have begun to be plagued with many of the problems already affecting the rest of the group. It has been a time of growing uncertainties: about maintaining the volume of production, about the erosion of profits, about the status of the two great currencies which, with gold, constitute the media of international settlement. This accumulation of doubts about the future has found expression in the last few months in a major decline in prices in the stock exchanges of the Atlantic group. There is a widespread feeling that a new set of problems has come up which will be with us for a long time and with which we do not know how to deal.
Only a few years ago pundits were sure that the United States was losing to Asia and Europe and had to emulate their more state- directed economies to remain competitive. Now the conventional wisdom is that America is number one and that the rest of the world should adopt its more laissez-faire approach. In fact, neither caricature is right. Asia was booming and now it is slumping, but it will be back. Europe's underlying ossification will persist. But most important, while the U.S. economy is in a period of robust growth, nothing fundamental has changed. Its long-run growth rate has not accelerated, productivity has not risen, and the structural unemployment rate has fallen by one percentage point at most. Come the next recession, all this triumphalism will seem silly.
America's economy is in its eighth year of sustained growth, transcending the German and Japanese "miracles." This is no fluke. America's unique brand of entrepreneurial capitalism is based on a series of advantages that explain the stunning success of the 1990s and provide the basis for extending this winning streak. These strengths include deft managers, technological innovation, and a culture that values rugged individualism -- all fueled by finance capital that can nimbly meet the needs of a globalized, rapidly changing economy. Furthermore, the era of the deficit is over. Pessimists who warn of inflation should be ignored; American business leaders understand that today's low level of inflation is self-perpetuating. America's prosperity is structural, not transient, and its lead over Europe and Asia will only widen with time. America had the twentieth century. It will also have the twenty-first.
