The First Decade: The age of uncertainty

How will the world remember this century's first decade, which is now drawing to an end? For once alliteration works well. The 'decade of disorder' perhaps, reflecting the fragmentation of power into what historians of the present call a multipolar world. Or how about the 'decade of drift', in which huge global problems went untackled?

Or one might describe it as a 'decade of destruction' – not in the sense of annihilation, but as a period of necessary creative destruction, in which many comforting props of the past disappeared in order to permit a new equilibrium. As for the country that not long ago informally ruled the world, another alliteration might apply. For the United States of America, briefly the hub of a unipolar world, this has been a decade of disaster.

The rise and decline of great nations may be relative. But the defining event of the last 10 years has been the rise of other countries, above all China, at the expense of the United States.

When the century opened, America, whether one liked it or not, was in charge. Now, no one is. Not long ago, a President in Washington talked of a 'new world order'. Today, there seems less order than ever, merely an array of jostling states and collections of states, whose interests on occasion coincide, but more often do not.

Nature has seemed increasingly ungovernable as well: huge earthquakes, lethal heatwaves, and the deadliest tsunami in recorded history. These calamities may or may not be related to climate change. Suffice it to say that the failure to agree, let alone implement, co- ordinated steps to tackle climate change is as good a measure of the vacuum of global governance as any. And then of course, almost at the start of the decade, the Twin Towers fell.

As the image of the decade, that one wins without argument. The photographs of that brilliant September morning, of the skyscraper emblems of New York transformed into monstrous smoking pyres before collapsing, are seared into our collective memory. The attacks on the financial and political capitals of the US were the watershed event that truly started the 21st century, after its predecessor concluded – in terms of history, if not the calendar – with the formal dissolution of the Soviet Union on Christmas Day 1991.

Between the collapse of Communism and the perfect autumn morning of 9/11 we lived locust years. Pax Americana prevailed, organised by what one French Foreign Minister described not as a superpower but a 'hyper-power'. Madeleine Albright, Bill Clinton's Secretary of State, called the US "the indispensable nation", and she was right. Take 1999, when Clinton finally decided that Slobodan Milosevic must be driven from Kosovo. The deed, 4,500 miles from the US mainland, was achieved by American air power alone. No country had ever possessed such ability to project power so fast and so massively, to any corner of the globe.

A professor named Francis Fukuyama published a book entitled The End of History and the Last Man, proclaiming the definitive triumph of liberal market democracy. Most lingering doubts about his thesis were banished by 15 years of soaring markets and virtually uninterrupted solid growth that led central bankers and Wall Street managers to believe they had finally tamed the dismal science, eliminating not only recession but the very concept of risk itself.

The news of that last pre-9/11 summer echoes back from a vanished world: a shark scare on Florida beaches, a Washington obsessed by rumours of an affair between the California Congressman Gary Condit and a female aide who had vanished. One American century had just ended. There was no reason to suppose that another was not beginning.

True, a couple of days before, on 9 September 2001, the anti-Taliban leader Ahmad Shah Massoud had been murdered in Afghanistan by suspected al-Qa'ida terrorists, but few paid great attention. And even George W Bush should not be castigated too harshly, simply because a month earlier, on holiday at his ranch in Texas, he had received a CIA daily intelligence briefing headlining "Osama bin Laden determined to strike in US". Hindsight is always 20/20. No one imagined how soon and how devastating that strike would be.

Nonetheless, the attacks must be kept in perspective. The cliché is wrong; in reality, September 11 did not change everything. Yes, almost 3,000 people were killed, the US economy briefly faltered, and Bush launched the invasion of Afghanistan. Foreign terrorists may have struck the US mainland, shattering the unquestioned assumption of Americans that such outrages happened in other countries, not their own.

But these were far from the first major attacks launched by al-Qa'ida against US targets. As for what followed – the 2003 Iraq war, the horrors of Guantanamo Bay and Abu Ghraib, the use of torture and the Bush doctrine of preventive war – 9/11 was the pretext, not the direct cause. There is much evidence that long before that date the Bush White House was determined to get rid of Saddam, if necessary by force.

By the perverted logic of the terrorists, of course, that awful September day was an unalloyed triumph. As never before, the world could follow their spectacular and co-ordinated acts of slaughter in real time. It was a global moment; everyone remembers where they were when they heard the news or saw the TV pictures. Eight years on, the images seem an even more powerful metaphor of American vulnerability, an advance warning of American decline.

And if the strategic goal of terrorism is to provoke one's enemy into counterproductive overreaction, 9/11 succeeded beyond bin Laden's wildest dreams. Bush's immediate response, the invasion of the country where the attacks had been plotted and which now refused to hand those plotters over, was generally supported. "We are all Americans," proclaimed Le Monde in its editorial of 12 September 2001, capturing the spontaneous outpouring of sympathy for the US around the globe.

There followed, however, two massive misjudgments by Washington. The first was the decision to go to war against Iraq, a war that led to sympathy being replaced, even among traditional US allies, by the most virulent anti-Americanism since the Vietnam conflict. Bush's war of choice thus played into bin Laden's hands. Saddam Hussein would be caught, and ultimately executed; by then, however, the very word 'Iraq' had become a one-word recruiting tool for terrorists and their sympathisers.

The second mistake took longer to become evident, but was at least as damaging. Fearful that the mild downturn prompted by 9/11 might turn into recession and a global slump in business confidence, the Federal Reserve cut interest rates and kept them artificially low for years. The result was the housing bubble, the sub-prime mortgage crisis and finally the 2008 near-death experience of the financial system. Bin Laden surely loathes American capitalism and all its works, but he cannot have imagined how close the events he set in motion would come to bringing about its ruin.

In the end, however, this decade is unlikely to be remembered as the 'decade of terrorism'. True, it provided more than its share of horrific attacks: the 2002 Bali nightclub bombings, the 2004 Madrid train bombings and the London attacks of 7 July 2005, not to mention countless instances of carnage – car bombs, suicide bombings and sundry IEDs or 'improvised explosive devices' – across the Middle East and Asia.

Today, however, terrorism is on the back foot. Skilful police and intelligence work has disrupted al-Qa'ida and its murderous imitators. Since September 2001, America has suffered plenty of homegrown shooting rampages, but not a single foreign terrorist attack. And in the greater scheme of things, 9/11 of itself yields in importance to several other events in recent history. Watergate probably had a greater lasting impact on American politics. The election of a Polish pope in 1978 set in motion events that led to the fall of the Berlin Wall and the liberation of Eastern Europe, while even that anti-Communist revolution pales beside the disintegration and collapse of the Soviet Union itself in 1991.

Now something perhaps even more momentous is happening: a slow but seemingly inexorable shift in the global balance of power away from America. The beneficiary of this process has not been Europe, even in its re-united post-Communist form. The Old Continent is emerging from the decade about as marginal to the march of global affairs as when it entered it.

Nor is it Russia, heir to the former ideological and geopolitical rival of the US – richer certainly than in its Soviet guise, but burdened by a declining population, mismanagement and corruption. Despite the ascent of Brazil, Latin America not been a special beneficiary either, while the woes of Africa and the Arab world seem as intractable as ever.

No, the centre of global gravity is moving from West to East: to Asia, to countries like India and Japan, and above all to China.

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In one sense, of course, 9/11's message of an America with feet of clay is misleading. Now as then, the US remains in a class of its own in terms of hard – that is, military – power. Its defence budget exceeds those of its nearest competitors – China, Japan, Western Europe and Russia – combined. Its global military presence is unmatched.

Unquestionably however, the war to overthrow Saddam Hussein was a colossal error. It was Washington's biggest foreign policy blunder since Vietnam, and maybe the biggest in the entire history of the republic. Perhaps the US will achieve its minimum objective of a non- hostile and relatively stable Iraq. But who would now argue that the conversion of a middling-sized Arab dictatorship into a precarious quasi-democracy was worth hundreds of billions of dollars in national treasure, tens of thousands of American dead and wounded, and incalculable damage to America's reputation?

No one foresaw how the biggest regional winner in the conflict would be America's sworn enemy, Iran, and no one expected that the neo-conservative notion that the way to Jerusalem led through Baghdad would be so comprehensively exposed for the nonsense it is. Rarely have the prospects for a Middle East settlement seemed more remote than now. But others who finds themselves in the sights of the US should not feel comfortable. In terms of military execution, the 2003 conquest of Iraq was a dazzling display of American arms. The failure lay in the post-invasion planning, and the lack of geopolitical common sense.

But Iraq is not the only reason why this has been so inglorious a decade for America, the worst certainly since the 1970s, perhaps since the 1930s. Having launched two wars, the country declined to pay for them. Asked once what sacrifice Americans were making, Bush cited longer security queues at airports. Later he would add that he personally had given up golf, to avoid sending the wrong impression to the families of those doing the fighting. Never, though, were new taxes levied to help meet the bill for Iraq and Afghanistan – now $1 trillion or more and counting. The consequences are visible to all.

In the pre 9/11 days, when emerging Asian economies were embroiled in the financial crisis of the late 1990s, American policy-makers would dispense lectures to the likes of Thailand, South Korea and Indonesia on how to run their affairs. The 'Washington consensus' – conceived in the US Treasury, implemented by the International Monetary Fund, and mandating fiscal discipline, open markets and painful belt-tightening – were the rules all had to live by.

Back then, the lecturing was just about acceptable, given that the US was about to enjoy its first budget surpluses since the 1960s. But as the 2000s wore on, the real message from Washington became: do as I say, not as I do. By the end of the decade, it was the US (along with its faithful disciple Britain) that was suffering an emerging economy-style crisis: brought low by debt, speculation and greed, with a severely weakened currency and financial imbalances that would long since have forced sharp course corrections on most other countries.

But the US has continued its profligate ways. As a result, the 2000s have merely accelerated the transformation of the country that is standard-bearer for free-market capitalism into the world's largest debtor. The hallmarks of the age have been debt-fuelled consumption and a steadily more bloated financial sector. Today, this model stands discredited. The US has been able to run huge deficits largely because of the privilege accorded by the reserve role of the dollar, meaning it can pay foreign countries with its own currency. But the patience of its creditors, most notably China, is starting to wear thin.

And as the decade has progressed, America's entrenched social problems – notable among them an ever-growing gap between rich and poor and the failure of the wealthiest country on earth to provide affordable healthcare for all its citizens – have only grown worse. One reason has been the distraction of the eight years of war that have followed 9/11. Another is the chronic inability of its political system, now so partisan that it is near-dysfunctional, to enact reforms.

In the meantime, a mercantilist China has eschewed foreign military adventures, kept a tight grip on its banking system, and run up colossal surpluses. It has not been pretty, but it has prospered mightily. Today, the East, not the West, is leading the way out of recession, and on current trends China will overtake America to become the world's largest economy in two decades or less.

Needless to say, the US is not to be written off. Not only is its 'hard power' unsurpassed, but despite the blows inflicted on the national good name, its soft power – its technology and global commercial presence, its wealth and its cultural appeal – remains enormous. Nobel prizes, global patents and the ranking lists of world universities attest to American pre-eminence in science, innovation, and higher education. No country has a greater knack of re-inventing itself. Seven years after 9/11, less than half a century after the civil rights movement, the US elected a black President who is even more popular abroad than in his own country.

Americans, and not only Americans, will hope that when history is written, the most relevant image of the decade will prove to be that joyous crowd in Grant Park, Chicago on the evening of 4 November 2008, when everything seemed possible again in America – not the nightmare of two jetliners smashing into lower Manhattan, or computer screens in Wall Street trading rooms flashing with news of the demise of Lehman Brothers.

Terrorism will not destroy Barack Obama's presidency, which started amid so much promise and hope. But the combination of a grim economy, polarised politics and deadlock in Congress, and a collective loss of national faith, could. That would be a tragedy whose reverberations would be felt far beyond the US.

According to the Washington-based organisation Freedom House, the world at the end of 2009 is, on balance, a slighter freer place than at the end of 1999. But in the last couple of years the trend has been backwards.

Whether a direct connection exists between this faltering and the ascent of the distinctly un-free China, it is impossible to say. Perhaps free-market liberal democracy as championed by the US will ultimately prevail, fulfilling Fukuyama's assertion.

The 21st century, in other words, could yet be an American century like the one before it. Most certainly however, this has not been an American decade – and not just because of 9/11.

Tomorrow: Johann Hari on the internet revolution

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The decade digested

Of the 20 highest grossing films of the past 10 years, just one was made from an original screenplay: Finding Nemo (2003).

In 2006, William Shatner sold his kidney stone to raise money for a housing charity. "How much is a piece of me worth?" the Star Trek actor asked. The answer: $25,000.

When Radiohead invited fans to pay what they wished for the digital version of their 2007 album, In Rainbows, 62 per cent paid nothing at all.

November 2005 saw the arrival of 24-hour licensing. Participating establishments close their doors, on average, 21 minutes later than they used to, a government report says.

Every minute, 20 hours of video are uploaded to YouTube, the video-sharing site launched in 2005. In 2006, the Universal Tube & Rollform Equipment Corporation of Ohio attempted to sue, after its own site, www.uTube.com, had to switch servers five times as millions of inadvertent hits made it crash.

Since cameras started rolling at the Big Brother house in July 2000, a total of 232 contestants, including 57 celebrities, have passed through its doors, spending a total of just under two-and-a-half years in the public eye.

More than 2,000 people complained to Channel 4 in 2002 about the Brass Eye paedophilia satire presented by Chris Morris. The Daily Star expressed outrage at the episode – which tackled the moral panic whipped up by tabloids – opposite a photograph of 15-year-old Charlotte Church with the headline, "She's a big girl now".

In 2000, the World Internet Forum, founded by the MP Derek Wyatt, had to cancel its first event in London due to "lack of interest".

The London skyscraper at 30 St Mary Axe opened in 2004. It was known variously as the "erotic gherkin", the "towering innuendo" and the "crystal phallus" before Londoners settled on "the gherkin".