From PAX Americana to the American Era

Beatrice Rangel
Beatrice Rangel

Many are the predictions about the imminent fall of the American empire, but there is little evidence that this is an imminent or probable contingency.

Those who hold this opinion point to the loss of value of the dollar as irrefutable evidence of the American decline; the reduction of the economic participation of the United States in the global economy that from 1945 to 2019 went from 45% to 23% and finally point out that the United States has lost ground in cyberspace and outer space, advancing in those dimensions China and Russia. The reality, however, seems to contradict these statements since 60% of all transactions in the world are made in dollars; If we only take into account the digital dimension of the economy, the United States represents 80% of what is called the global digital economy, which in 2018 reached $13.2 million million (trillion in the USA) and is expected to reach $13.2 million by 2023. $53.3 trillion or half of the world’s nominal GDP1.

Consequently, we are not on the verge of a rapid or gradual collapse of the US economy. What we are living through is the beginning of a different era than the one we natives of the 20th century knew. Then there was an indisputable European power that was England, a rising economy that was North America, a rising political power with an ideological sign opposed to liberal democracy and capitalism that was the Union of Soviet Socialist Republics, and endless islands of development within liberal democracies on the European continent.

Now an era begins in which there will be two economic powers with marked interdependencies. One is the seat of the most vibrant liberal democracy in the world and the other of a system that does not stop kidnapping individual freedom and trampling on the human rights of its citizens, but promotes economic development that is China. Surrounding those two powers will be lesser powers. Europe, much to its dismay, will continue to orbit around the United States while many Asian nations will orbit around China. Russia will be a very dangerous minor power for the entire international concert for possessing nuclear weapons.

The economic interdependence between China and the United States will force the formation of integrated free trade regions. And that is where the great opportunity of Latin America lies. Because a free trade zone that covers the entire Western Hemisphere would succeed in breaking the medieval straitjacket that prevents the liberation of the economic forces of the region. This is essential to achieve development and to lay the foundations for liberal democracies. To realize this, it is enough to take a look at Mexico, a country that, after the free trade agreement with the United States, saw its economy go from US$360,096 million to US$1,269 million3 while its political system began a process of opening and of competitive politics that the current president has not been able to destroy despite his daily attempts. This process will occur with or without the participation of the Latin American elites because if something characterizes the global economy it is its power of penetration. Because once the United States initiates near shoring in Mexico (creation of manufacturing capacity close to home), the Central American tributary economies will be attracted to that center of gravity. Panama and the nations of the Pacific coast of South America will follow the same path. Perhaps the last economies to gravitate towards this pole of development are those of Brazil and Argentina. But 50 years from now the traction is sure to be irresistible. And much to their regret they will be an integral part of the American Era. Because once the United States initiates near shoring in Mexico (creation of manufacturing capacity close to home), the Central American tributary economies will be attracted to that center of gravity. Panama and the nations of the Pacific coast of South America will follow the same path. Perhaps the last economies to gravitate towards this pole of development are those of Brazil and Argentina. But 50 years from now the traction is sure to be irresistible. And much to their regret they will be an integral part of the American Era. Because once the United States initiates near shoring in Mexico (creation of manufacturing capacity close to home), the Central American tributary economies will be attracted to that center of gravity. Panama and the nations of the Pacific coast of South America will follow the same path. Perhaps the last economies to gravitate towards this pole of development are those of Brazil and Argentina. But 50 years from now the traction is sure to be irresistible. And much to their regret they will be an integral part of the American Era. Perhaps the last economies to gravitate towards this pole of development are those of Brazil and Argentina. But 50 years from now the traction is sure to be irresistible. And much to their regret they will be an integral part of the American Era. Perhaps the last economies to gravitate towards this pole of development are those of Brazil and Argentina. But 50 years from now the traction is sure to be irresistible. And much to their regret they will be an integral part of the American Era.

1. Source: https://www.statista.com/statistics/1134766/nominal-gdp-driven-by-digitally-transformed-enterprises/

2. Source: World Bank

*Beatrice Rangel is an Internationalist; Master in economic development, member of the Council on Foreign Relations of the United States

“The opinions published here are the sole responsibility of their author.”