Inflation and American Power
Article Summary and Author Biography
In recent years, American policy at home and abroad has seemed more pressed by events and less sure of its responses than at any time since the late 1940s. Since World War II, the guiding ideals of policy have been neo-Keynesian "full-employment" at home and neo-Wilsonian leadership abroad. It is difficult to count the achievements unimpressive. Along with an unparalleled domestic prosperity, America's leadership and power have coaxed the world into a structure of collective security and liberal economic interdependence--a pax Americana that has been, on balance, the happiest era of this troubled century. The present disarray of American policy arises from two broad trends that have increasingly undermined both its domestic and foreign achievements. The first is the apparently relentless acceleration of domestic inflation--a process that involves increasingly violent swings of the business cycle and a progressive stagnation of real growth and competitiveness. The second is the deterioration of American power abroad and, with it, the disintegration of the pax Americana.
David P. Calleo is Professor of European Studies at the School of Advanced International Studies, The Johns Hopkins University. He is co-author of America and the World Political Economy and author of The Atlantic Fantasy, The German Problem Reconsidered and the forthcoming The Imperious Economy.
In recent years, American policy at home and abroad has seemed more pressed by events and less sure of its responses than at any time since the late 1940s. Since World War II, the guiding ideals of policy have been neo-Keynesian "full-employment" at home and neo-Wilsonian leadership abroad. It is difficult to count the achievements unimpressive. Along with an unparalleled domestic prosperity, America's leadership and power have coaxed the world into a structure of collective security and liberal economic interdependence-a pax Americana that has been, on balance, the happiest era of this troubled century. The present disarray of American policy arises from two broad trends that have increasingly undermined both its domestic and foreign achievements. The first is the apparently relentless acceleration of domestic inflation-a process that involves increasingly violent swings of the business cycle and a progressive stagnation of real growth and competitiveness. The second is the deterioration of American power abroad and, with it, the disintegration of the pax Americana.
Blaming the ineptitude of incumbent policymakers is always tempting and in recent years perhaps unusually plausible. In longer perspective, however, America's difficulties seem long-standing and cumulative rather than adventitious and random-the result less of inept and inexperienced tactics in one administration than of increasingly inadequate strategies through several. From this perspective, improvement depends not so much upon fresh leadership, per se, as upon a hardheaded reexamination of the mix of strategies long used to maintain American goals at home and abroad.
This is a premium article
You must be a logged in Foreign Affairs subscriber to continue reading. If you wish to continue reading this article please subscribe , or activate your online account to get full online access.
Sign-up for free weekly updates from ForeignAffairs.com.