Books: The End of Influence

Without an international economic catastrophe, a major war or game-changing disaster America's economy will lose its power.

(Photo: Anna Lisa Sang)

THE END OF INFLUENCE: What Happens When Other Countries Have the Money
Stephen S. Cohen and J. Bradford DeLong

Well, nothing especially good happens, according to this pair of Berkeley economics profs, so Americans—“the world’s supreme debtor nation”—won’t find this cheerful reading. “Absent an international economic catastrophe or a major war or another game-changing disaster, the money will not soon be coming back to America.”

Not that this essay argues that America should just concede they’re doomed. The future Cohen and DeLong articulate is grim, but mostly by the standards of a country unused to being “normal.” Borrowing will no longer be as easy for American households, and they see the standard of living declining relative to other industrialized and industrializing countries. The American economic model will be forced to shift away from borrow-and-import to consume-at-the-level-you-produce. And the loss of both hard and soft power, as well as America and China’s weird co-dependent relationship, will mean checks on the way that the U.S. and its leaders comport themselves. As America loses influence, its best hope, “as with good parenting…[is that its] ideas and ways have been so thoroughly integrated that they have become part of what is normal and regular abroad as well as at home; sometimes, of course, they don’t.”