President Barack Obama has won re-election. However, in addition to all of the constraints on him that I discussed last week, he won the election with almost half the people voting against him. His win in the Electoral College was substantial -- and that's the win that really matters -- but the popular vote determines how he governs, and he will govern with one more constraint added to the others. The question is whether this weakens him or provides an opportunity. That is not determined by his policies but by the strategic situation, which, in my view, gives the United States some much-needed breathing room.
The Structure of the International System
At the moment, the international system is built on three pillars: the United States, Europe and China. Europe, if it were united, would be very roughly the same size as the United States in terms of economy, population and potential military power. China is about a third the size of the other two economically, but it has been the growth engine of the world, making it more significant than size would indicate.
The fundamental problem facing the world is that two of these three pillars are facing existential crises, while the third, the United States, is robust only by comparison. Europe is in recession and, faced with a banking and sovereign debt crisis, is trying to reconcile the divergent national interests that were supposed to merge into a united Europe. China, dependent on exports to maintain its economy, is confronting the fact that many of its products are no longer competitive in the international market because of rising costs of labor and land. The result is increasing tension within the ruling Communist Party over the direction it should take.
The United States has a modestly growing economy and, rhetoric aside, does not face existential political problems. Where the European Union's survival is in serious question and the ability of China to resume its rate of growth is in doubt, the United States does not face a political crisis on the same order as the other two. The fiscal cliff is certainly there, but given American political culture, all crises signify the apocalypse. It is much easier to imagine a solution to the United States' immediate political problems than it is to imagine how Europe or China would solve their challenges.
We have written extensively on why we think the European and Chinese crises are insoluble, and I won't repeat that here. What I am saying is not that Europe or China will disappear into a black hole but that each will change its behavior substantially. Europe will not become a united entity but will return to the pursuit of the interests of individual nations, though still in a wealthy continent. China will continue to be a major economic power, but its term as the leading growth engine in the world will end, causing institutional crises. Again, these powers will not fall off the map, but they will radically change their behaviors and expectations.
Since power is relative, this leaves the United States with no significant challenger for international primacy, not because the United States is particularly successful but because others are even less so. The United States has a decision to make right now. As the leading power, should it attempt to preserve the political order that has existed for the past 20 years or allow it to pass into history? Perhaps a better question to ask is whether the United States has the power to preserve a united Europe and a high-growth China, and if so, is the current configuration of the world worth preserving from the U.S. point of view?
The United States has done nothing to stabilize either Europe or China. Even given U.S. resources, it is not clear that there is anything it could do. Europe's financial requirements outstrip its political ability to act in a united manner. Europe does not need U.S. leadership and the United States does not need to shoulder the European burden. The only solution for the European crisis is that a third party underwrites debtors' economic needs and thereby preserves creditors' interests. Even given the possible impact on the United States, adopting Europe is neither possible nor desirable.