Ferguson’s essay “Complexity and Collapse: Empires on the Edge of Chaos” in Foreign Affairs (March/April 2010) asserts that empires can suddenly and unexpectedly collapse if a small trigger throws off the balance of the system; imperial collapse does not necessarily require a long period of decline. Considering that fiscal failures often cause such collapses, the growing public debt of the United States may be a signal that the US empire is in danger.
Reading through your article, the question arises: is the United States losing its ability to create value as a complex adaptive system in any other way than by the increasing debt burden—are we losing the creative edge, or is this purely fiscal?
Well, I think one way of looking at it is to say that the amount of debt you had to take on to create an additional percentage point of GDP rose steadily from the 1980s right the way until 2010, and that suggests some kind of problem. The US economy still has great strengths when it comes to innovation and entrepreneurship, but for a variety of reasons, those strengths have not been particularly important since 2001. The main drivers of growth from 2001 to 2007 were leverage on bank and household balance sheets, and with that leverage people engaged in the consumption of imports from Asia, the consumption of oil from the Middle East, and speculation in real estate. That’s a very different story from the 1990s, when you had surging investment in information technology and big gains in productivity driving up the asset prices of companies that were doing that. It’s a much less healthy story. So from that point of view, you have to be worried, and I still don’t see much sign of the next wave of American growth coming from those healthy sources, unless you count the iPad as a major contribution to Western civilization, which it may be. I don’t know.
To talk more about the complex systems that you discussed: you have talked a lot about the fragility of even the greatest of powers; how do you suggest that we strengthen the great powers in such a fashion that their collapse occurs over a longer period, that their time in the sun is measurably longer?
I think the first step is to understand the nature of a complex system, and part of the point of the piece was to say that we have outmoded ways of thinking about power. We are trapped in nineteenth century—or even earlier—paradigms, and that leads us to assume decline will be smooth and gradual. So we first have to recognize that that isn’t the case and that decline can be very sudden if complex adaptive systems can fall apart really fast.
Are there things that we can do? Yes, I think there are. I was trying to argue in the piece that financial/fiscal problems are often, in great part, the drivers of disintegration. It’s not too late for the United States to reform its tax system and its welfare entitlements, and it’s not too difficult to see how that might be done. You could very swiftly simplify the tax code—and I speak with feeling having just paid my tax bill—you could simplify and reduce corporate tax; you could create a federal sales tax; you could reform Social Security; you could reform Medicare, there are lots of things that could be done, and I think in that sense the debt-driven crisis isn’t inevitable. It’s politically hard to do, but it’s not economically hard to figure out the solution. So, number one: reform of the tax and spending system.
And number two: I think, beware of that strategic model that presumes the ultimate objective of policy is always the exit. In foreign policy, the United States has an exit fixation. Its interventions are always short-term and designed to be over as soon as possible, and I’ve been arguing for years that that isn’t the right way to approach a problem like Afghanistan or Iraq where local collaboration will only come if they feel you are there for a long time. So, my second suggestion would be take a longer view of overseas interventions rather than expecting that you can have it all done and dusted in Afghanistan by 2011, which is next year.
Is it the nature of complex systems that they are just prone to sudden collapse, or is it the failure of these societies or empires to adapt that brings them to the brink of collapse?
One of the characteristic features of these complex systems is that they can last a long time in the natural world. I mean, whether you’re talking about the human nervous system, the tropical rainforest, or a termite hill, you can stay a long time on the edge of chaos before something tips you over. Obviously, human bodies can last up to a hundred years; they don’t all fall apart at age 35, or in my case, 46, and that leads me to think that the process of adaptation can be sustained for really quite a long time.
One of the problems with imperial history is that empires vary in duration enormously. The Ottoman Empire lasted over 500 years, whereas Hitler’s empire lasted from 1938 to 1944—six years, if you count only the expansion period of the Third Reich. Some of these geopolitical complex systems last longer than others, and that raises the question: are some polities better at adapting than others? And I think the answer to that is yes because the more decentralization there is, the more adaptation there is. Highly centralized polities like Hitler’s Third Reich or the Soviet Union are rigid; they’re not very good at adapting. Decentralized polities like the nineteenth-century United States are very good at adapting. So, my feeling is that taking this metaphor seriously leads you to conclude that there are more or less adaptive systems. They’re all complex; some are perhaps more dynamic and more adaptive than others, and those are the ones you want to live in.
You discuss that there are mechanisms that trigger collapse in certain situations, and some other historians have said that there are causes that date further back in history. Is there any way to reconcile the proximate and the ultimate causation mechanisms for imperial collapse?
This is really the central problem of historical explanation: we don’t really have a very rigorous way of distinguishing between preconditions and proximate causes, but there’s a thought experiment you can run. In most historical explanations, people have a tendency to construct explanations that fit the magnitude of the event, and so they say, “Well, in Europe in the 1870s there was rising nationalism and in the 1890s rising imperialism and so on, and the causes of World War I therefore date back to at least the 1870s, and certainly the 1890s.” The thought experiment is to ask, “Can one imagine a world in which those preconditions arise but no World War breaks out?” And the answer, I think, must be yes because there have only been two World Wars, and there have been many periods of nationalism and imperialism. So I think the answer I would give is that many of the so-called long-run causes—the deep or distant causes—aren’t really causes at all. They might be preconditions; they might be necessary for a world war to happen, but they’re not in themselves sufficient just because they’re around. I mean, let’s face it, the causes of World War I, understood in that sense, were there in 1930, in 1912, in 1911, in 1910, and so on back, but no world war happened in those years.
To understand why the World War happened in July/August of 1914 is the interesting thing. And for that, you need the proximate causes. If you or I had a nasty automobile accident at some point in the next week, it’s true that we could not have it if there had been no automobiles or highways, but that doesn’t explain anything. That just tells us what the necessary preconditions are for an automobile accident. And I think a lot of historians have the tendency to confuse these preconditions with causes, rather than seeing that these preconditions can be around for a long time without our having an automobile accident.
For us to have an automobile accident, somebody has to miscalculate—it may not be us, it may be some other driver—somebody has to make a mistake, or some auto-part has to fail. And I think we as historians have to spend more time on those short-run proximate causes and less time pretending that nationalism and imperialism can cause a war. There was nationalism and imperialism most of the time in the last 200 years, but only two world wars have taken place.
Do you think the world today is more vulnerable to a systemic collapse than a few centuries ago? Do you think international organizations that bind empires together through cooperation, such as the EU, are an effective solution to the problem of the components falling apart?
I think there’s no denying the greater complexity of the world—it is a bigger network now in terms of the sheer numbers of people, the nodes and hubs of communication, and the degree, volume, and the speed of communication. So we are clearly a more complex system than the world of a hundred years ago, when most people engaged in subsistence agriculture and communicated by writing letters. Does that make the world more or less stable? It ought to make it more stable, provided that it is a decentralized network with multiple nodes—and I think it is.
What makes me optimistic is not the United Nations or the European Union; it is the Internet. It is the decentralization of decision-making that is good. It is the fact that the market is more powerful than it was in, say, 1950—that the planned economies have failed.
So I think, on one level, we must be in a more stable world—we are less vulnerable to famines that could still kill huge numbers of people in India a hundred years ago. We are less likely, I think, to embark on the kind of war that we embarked on in 1914 because it’s hard to see such a war happen in a world of large democracies and mass media.
The problem is that the highly integrated network, as you will know from your own experience, can crash. It is wonderful most of the time, but the electricity grid in California is suddenly not wonderful if there is a power surge from demand. And that is, I think, our problem—we have the benefits of decentralization right now, but the influenza virus, that massive information technology failure, is actually potentially more disruptive than anything that could have happened years ago. The best evidence of that has been the impact of the volcano in Iceland on communications in Europe. The degree and the extent of the chaos in Europe, you really would struggle to conceive of; I hear stories from my friends and family all the time. So I think this is the tradeoff when you build the world into an enormous single network: the whole thing, or a large part of it, can fail quite dramatically as a result of a single volcano in Iceland.
Do you see the United States making a comeback and regaining its competitive advantage? You’ve touched on what the US can do, but do you think it is feasible? If not, who is going to rise to fill the gap?
I think there are at least two futures and probably many more futures that we can imagine. In one scenario, the United States does the British thing and creates an unaffordable welfare system at the moment of maximum indebtedness. Then, the country suffers low growth, and consequent inability to finance either welfare or warfare. In short, we have a rerun of the British history post-1945. That’s possible. But there’s another future that involves a political change in mood and in people’s thought. Under such a scenario, people get real about problems they face, and reform comes through sooner rather than later. With these reforms, we would see a more rapid growth and get a good outcome. I think these are both plausible scenarios. In that sense, I think the United States is at the crossroads.
A lot will hinge on decisions that are taken in the next two to four years. If we carry on pretending that we can postpone, postpone, and postpone the reckoning, with a deficit of a trillion dollars this year, next year, the year after that and so on, then my first scenario looks more plausible. But if we kind of accept the magnitude of the crisis and accept the new reforms, then I think there is clearly a way out.
I am probably an optimist about the United States—that’s one reason why I moved here from Europe. I am much more pessimistic about Europe. It’s much harder to imagine how to reform the European Union because actually, going back to your earlier question, that is not a particularly appealing system. You’ve got some things centralized, like monetary policy, and other things decentralized, like fiscal policy. It’s a very unstable combination.
So my conclusion is that the United States has a reasonable chance—I wouldn’t put a probability on it—of solving its problems. The big question is, does the United States arrive at reform through a rational preemptive decision-making process, or does it have reform imposed by another crisis? Do we have to have the public finance equivalent of Lehman Brothers to get to this? I think, unfortunately, that is probably what we do need. You can’t see congressional consensus on entitlement reform or tax reform in the absence of a 9/11, or a fiscal equivalent of the Lehman failure.
There’s been a lot of discussion about the Foreign Affairs article. Is there anything you want to say to your critics?
I think Max Boot made a point in one of the commentaries that most crises are caused by war, and that most imperial crises are caused by lost war. While that is true historically, there is a point worth making: you can have all the fiscal impact of a war without the war. In other words, what the United States is doing in terms of the scale of the deficit, the speed with which public debt is growing, and the extent to which the banking system has become a part of, a ward of the state—all of these things used to happen only in wartime, but now can happen purely because of the fiscal/financial crisis.
So, while it is true that most financial crises in the past have been caused by wars, that doesn’t mean you need a war to have a financial crisis. We are having this financial crisis, so to speak, without the need for major exchanges of gunfire. I mean there are wars going on, in Afghanistan and the continued violence in Iraq, but that’s clearly not what is weakening the American empire.
In Colossus, published in 2004, I made the argument that the problems the United States had had much more to do with welfare than with warfare. It would be internal overstretch, not overseas overstretch, that would be the problem. And I think that was right. So to my many critics, how about admitting that I was right about that six years ago when frankly most people were still assuming that the Paul Kennedy version was more likely? I still think that Iraq and Afghanistan are really quite small potatoes on the table. Social Security, Medicare, and now the financial crisis are vastly more expensive than all the wars that have been fought since the end of the Cold War.