Good Fred Kaplan article on the possible end of American dominance. A friend and I were recently talking about the likelihood that the U.S. would eventually lose its superpower status to either China or Europe. I was somewhat skeptical—for reasons outlined at the end of this post—but my friend was downright bullish on America, arguing that the U.S. had one unbeatable advantage: The Global Baby Bust. U.S. fertility rates are still much more robust than those of China and Europe, she noted, and this disparity will leave our would-be competitors crippled by old people. It's a good argument, but I'm not entirely convinced.

Start with China. It's true that the People's Republic will start aging very quickly, but Beijing also enjoys a rather unique ability to force its citizens to do whatever it wants. If it can coerce each family to have only one baby, as it has done, why not mandate two babies? If it needs more urban workers, why not massive relocation schemes? If pensions and geriatric health care prove too crippling to economic growth, why not just cut the old people off? I don't know how to design policies that force people to make more babies and are harsher on old people, but I'd guess that such schemes would be most likely to succeed in a non-democratic country. Sad but true!

Europe presents a more interesting case. Clearly an aging European society is going to burden their rather extensive welfare state, and Europe is aging faster than America. But they're also better equipped to handle it, thanks to a cheaper and more efficient health care system. To quote Phillip Longman, from the most recent of the Washington Monthly:

[I]n the United States, health-care spending per person 65 and over is more than double what it is in Japan, and more than three times what it is in Great Britain. For all this extra spending, U.S. seniors don't enjoy any advantage in health and well-being. Indeed, at age 60, American women can look forward, on average, to 3.8 fewer years of healthy life than their counterparts in Japan, while American men at the same age share nearly the same disadvantage…

This means that America faces a huge comparative disadvantage when it comes to aging. Only 12 percent of the population of the United States is 65 or older, yet the cost of their health care already amounts to 5 percent of GFP. That's far more than we spend on national defense and equal to about one quarter of all federal spending. By contrast, in Great Britain, where nearly 16 percent of the population is 65 or older, the cost of their health care consumes only 2.8 percent of GDP. Going forward, that means that the United Kingdom can "afford" far more seniors than the United States can…

So the aging global population may actually hurt America the most. Now as I said above, I'm relatively bullish on America, mostly because I believe that the Republican Party will drive the country into the ground over the next decade or so, leading to a progressive revival. In that case, liberals will be able to design a welfare state considerably less intrusive than Europe—after all, we know a lot more now about how to create flexible welfare programs that harness the free market—and the net result will be a social democratic state that still leaves room for dynamic economic growth and innovation. That's the utopian dream, anyway. Now I could be wrong and the GOP could use gerrymandering and the levers of power to stay on top indefinitely. In that case, we better start hording euros and yuan!