Rupert Cornwell: The American Century that never was

Whatever happened to the new American Century? Back on the eve of 2000, I remember (with some embarrassment) writing with absolute conviction how the future would belong to the United States.

I based that assertion on the status of the US as the only country with a truly global reach. It spent more on the military that the next dozen countries combined. Its economy accounted for over a quarter of global output. Its budget was in surplus, American technology ruled the world. Not since ancient Rome had a single state been so dominant.

At the end of a pretty wretched 2005, how different everything appears. Yes, the American economy is still easily the world's largest. But the gap is shrinking. Last year China overtook Italy to become the world's sixth largest economy, and in 2006 should surpass Britain and France. By 2035, it should have caught up with the US.

The US remains far and away the greatest military power on earth, with the best trained, best equipped armed forces, who enjoy extraordinary support from their people. But Iraq has brutally revealed the limits of American "hard power."

The 2003 invasion will go down in the textbooks for the brilliance of its execution. But despite spending $5bn a month, and 140,000 troops on the ground, the US can ensure neither stability nor security in what is only a middling-sized Middle Eastern country.

Instead, Iraq has stretched America's all-volunteer military close to breaking point. Washington intends to cut that force by a third this year. In truth, it has no choice.

Yes, the Pentagon can send unmanned drones to kill al- Qa'ida operatives on the furthest frontiers of Yemen and Pakistan. But the major US military operations against Iran, three times larger than Iraq, or even little Syria - that seemed all too likely after the triumphant march on Baghdad - are now virtually inconceivable. So much then for US "hard power" that was supposed to impose a Pax Americana on the world, stretching into the 21st century as far as the eye could see.

What of its "soft power" - not the stick but the carrot - the innate appeal of America as projected by its ever-growing economy, its culture, and the unstoppable advance of the English language?

"Soft power" was supposed to be the long-term trump card of the US. But right now it looks more like the six of clubs than the ace of spades. In economic terms, not only China, but also India and the countries of the Asian rim are snapping at America's heels. And, after its post-Cold War eclipse, Russia is re-emerging, this time as an energy superpower.

The American social model, with its increasing conservatism and the "winner take all" ethos of the Republicans who dominate national politics, has become less attractive. Even US popular culture has lost some of its magnetism. Anti-Americanism grips much of the globe, and Hollywood and the rest of the US entertainment industry no longer sweep all before them.

Americans, of course, furiously resist any suggestion they are imperialists. They did not shake off British rule, they say, in order to build an empire of their own. Americans see their country as an international good cop who keeps the world safe for the advance of liberal democracy and global capitalism. But that role has many ingredients of empire: armed forces based around the world, a currency accepted on every continent, and the ability to bend many other countries to its will, by economic and military means.

But six years into this imagined second American century, the weaknesses of this approach are all too apparent. The two world wars of the 20th century are supposed to have replaced a British empire with an American empire. But there are two crucial distinctions.

The British, for better or worse, made a huge long-term commitment to their subject nations. Entire civil service careers were spent in the colonies. Officials immersed themselves in local languages and culture.

The US approach is utterly different - as Iraq has proved so miserably. The ideal American war now is a massive strike to achieve the immediate military objective, followed by speedy withdrawal. No cultural immersion, no direct long-term involvement, and perish the thought of "nation-building".

In Iraq of course, there was no alternative to nation-building. But the US must go about that task with few people who truly know the country, and only a handful of fluent Arabic speakers - hardly the way to make friends and influence people.

The second difference is economic. Pax Britannica was built not only on the Royal Navy, but also on Britain's position as the world's biggest creditor nation. The US, however, is the world's biggest debtor, needing to attract $2bn a day of foreign investment to cover its huge external deficit.

To be sure, the global reserve role of the dollar means the US can print its currency to pay those foreign debts. But ultimately America's financial stability relies on the assumption that the central banks of China and other Asian countries will keep buying US stocks and government securities. That assumption is probably correct. The US and its citizens with their overused credit cards are the world's consumers of last resort. A serious run on the dollar would devastate the economies not only of the US, but China as well.

So there you have it: a country living beyond its means, heavily reliant on an over-stretched military, which flinches from imposing tax sacrifices on its people to get its accounts in order. History has not been kind to great nations which get themselves into this position.

Back in 2000, I was of course naive in my belief that US power was boundless and almost timeless. The equally dangerous temptation now is to write off America prematurely.

History is shaped not only by events, but by individual human beings. It is impossible to imagine that America's reputation in the world would have sunk so far and so fast, had Bill Clinton or Al Gore had been President instead of George W. Bush. The next President, or Presidents, will be able to regain some of the lost ground.

But on the eve of 2006, I offer this assertion. This will not be the American century. In all probability, the zenith of American power has already passed.