Thank you very much, Prof. Park for that generous introduction. Let me say it is always a pleasure to come to Seoul and to South Korea. South Korea is one of the world’s great success stories. And it's always a pleasure to be here, so I appreciate your warm welcome.

 

Let me address this question [of] whether the American century is over, by taking the year back to 1941. In the year 1941, the American publisher, Henry Luce, who is the publisher of Time and Life magazines, coined the phrase the American century. He did so because he wanted the U.S. to play a major part in WW2, at that time, there was a strong feeling of isolationism in the U.S. Many people were resisting the idea of participating in the events in Europe and Asia. Luce felt that this was a mistake, so he used this terminology of the American century, and that question ‘is the American century over?’, actually, has been the title of a book which I will publish next March, which is to raise the issue, whether 100 years after Luce first used the term, we still see a role in which the U.S. is the central player in the global balance [of] power.

 

There are many who doubt it. Indeed, there are many who say that what we have seen is a situation where the United States is in decline and in which China will replace the U.S. as the dominant country of the 21st century. For example, if you look at my colleague Neil Ferguson, who is a very distinguished British historian, he argues that the 21st century is the Chinese century. Or, if you look at the title of the book published in Britain, written by British writer Martin Jock, the title tells you everything. The title is: "When China Rules the World." and, if you look at public opinion polls, you will see many polls showing people in the U.S. and elsewhere believing that China has even replaced the U.S. or is about to replace the U.S. as the world’s leading country. In April [of] this year, the Financial Times which is [a] very distinguished financial newspaper, there was a headline saying that 2014, was the year that China passed the U.S. And they quote it from a study by a unit of the World Bank, which said if you measure the economy and purchasing power parity, China has passed the U.S. this year. And, just a week or two weeks ago, Joe Stiglitz, the Nobel prize economist published an article, and project which essentially said this is the year China passed the U.S. So that would suggest that there's a fair amount of opinion that would say indeed, the American century is over. I am going to make an argument that disputes that. That says the American century is not over. And that when we reach 2041, the U.S. will still be the central country in terms of the world balance of power, and not China, in that of overall power, that China is not about to pass the U.S.

 

But, why does it matter? After all, we shouldn’t worry too much about these things. If it's just a matter of prestige, or positioning, and so forth. The answer is it does matter because if people think that one country is rising and another is in decline, there is a fair history that this can lead to policies which are dangerous. And which can be a prelude to conflict. There is a famous belief which is, goes all the way back to Thucydides' explanation for the origins of the Peloponnesian War in which the Greek city-state systems tore itself apart, which says that the causes of the Peloponnesian War were the rise in power of Athens and the fear it created in Sparta. So by this type of reasoning, the rise in the power of China causing fear in the U.S. could create the types of uncertainty that would lead to a conflict that might disrupt this century.

 

Indeed, people have in this year of 2014, harkened back a hundred years to WWI, in which the European state system tore itself apart and ceased to be the center of the global balance of power. The argument is often made that World War One was created by the rise in the power of Germany and the fear that created in Britain. In fact, the history wasn’t so simple. Some people would argue that it was the rise in the power of Russia and the fear that created in Germany, which was really the heart of the problem. But, however one judges this, it’s clear that periods where there is uncertainty about whether an era is over or whether one country is passing another can lead to attitudes that can have dangerous results. So, let’s look a bit more carefully at that question of whether the U.S. is in decline, and then look at the question of whether China will pass the U.S. in the next quarter century or so.

 

On the issue of whether the U.S. is in decline, it is important to realize that it’s very difficult to know what decline really means in terms of countries. When you look at a human being, one individual, you will get pretty good judgment of a life cycle. You can look at my biography, see my age, and you have [a] pretty good estimate that I am in decline, there's no question. But, if you look at a country, it is much harder to know what the life cycle is. For example, in the 18th century, when Britain lost its North American colonies, there was a British statesman, Horace Walpole, who said "Woe to Britain, we're now reduced to a miserable little island, like Sardinia." So there was a general sense that this was the end of Britain’s glory. But, Walpole said this on the very eve of Britain's greatest century, its second hundred years so to speak, which was produced by the industrial revolution. And, therefore, it’s an example to us to be very careful not to think when you see something moving in one direction, it’s going to go that way forever.

 

Let me give you another example, which is Richard Nixon and Henry Kissinger, often are cited as far-seeing in terms of their guiding of U.S. foreign policy in 1970 and 71, particularly the opening to China. But it’s also true that Nixon and Kissinger believed that the United States was in decline. They wrote about this and they said the world is becoming multi-polar and we have to adjust to this decline. Well in one sense, they are correct because in 1945 the U.S. had about almost half of the world economy. And, that was the result of the devastation of WWII. Europe, Japan, China all had been destroyed by WWII. The U.S. had been strengthened. So, if you ask when did the Americans have more power compared to any other country, it would probably be right at the end of WWII because of what you would call this WWII effect. But, if you measure then from 1945 to 1970, the U.S.’ share of the world product declines constantly over that period from nearly 50 percent to about 25 percent in 1970.

 

But, if you start your measurement earlier, and you say what was the U.S.’ share of the world product in 1900? It’s about 25 percent. And then, what was the share of world product in 2000? It was about 25 percent. So, what was abnormal was this very high level after 1945. So, if you plotted a curve for the century as a whole, it starts out at 25 percent, goes up to near 50 percent and goes down to 25 percent. Nixon and Kissinger seeing the shape of the curve from 1945 to 1970, properly said this is decline. It was decline. But, what they didn’t understand was that the decline wasn’t going to continue. Indeed, instead of the world becoming multi-polar, as they said in 1970, by the end of the century the world was unipolar. The U.S. was the world’s only super power, partly because the U.S. kept its share, but partly because of the collapse of the Soviet Union, which had balanced American power.

 

So, that's an example from two statesmen who are often cited as being more far-seeing than others. Who saw decline, which was true, but they assumed the decline was going to continue, which was not true. So I think the moral of the story is to be very careful about projecting in a linear fashion the trends that we see in global politics. Even more misleading are the kinds of evidence we get from popular attitudes and public opinion polls. For example, if you took a poll in 1960, inside of the United States, there was a wide spread feeling that after the Soviet Union launched Sputnik in 57, the U.S. was falling behind and was in decline. Krushchev visits the U.S. and says to the Americans "we're going to bury you." And in economic terms, the Soviet economy was growing more rapidly than the American economy at that time. So, the polls showed Americans believed that they were in decline. Of course, that proved to be a mistake. In fact, by the end of the century, not only had the Soviet Union not passed the Americans, there was no more Soviet Union.

 

In the 1980s, you again got polls that showed a majority of Americans thought that their country is in decline. This was the response to the extraordinary success of the Japanese economy, which had double digit rates of growth and which was showing extreme skill and expertise in manufacturing. This again led to a feeling that the Japanese were taking over. There was a book by one of my colleagues called, "Japan is Number 1, there was another book with an alarmist tone to it, said the coming war with Japan. Of course, we have seen for [the] last twenty years, a Japan with a growth rate which has been around 1 percent. So, the public opinion polls are misleading. In another way of putting this, in the 1960s or so, Americans thought the Russians are 10 feet tall, in 1980s Americans thought that the Japanese are 10 feet tall, and today many Americans think the Chinese are 10 feet tall. But, I think what we learn is that with time, we get a certain perspective on the fact that the attitudes that are measured by public opinion polls are telling you something about people’s mentalities, they are not telling you anything about geopolitical reality.

 

So, let’s look more carefully at those realities. And there again, we want to be careful about the words that we use. Decline is a quite misleading or confusing concept, because it pushes together or merges together two quite different things: Absolute decline and relative decline. Absolute decline is what happens to a country which suffers from internal disabilities and therefore is overtaken by others. An example of this might be imperial Spain, Philip the Second's Spain in the 17th century or so. Relative decline is when you are doing fine but others are doing even better. That’s what happened to Netherlands which continued to prosper through the 17th century but Britain did even better. So, Britain passed the Netherlands, the Netherlands had relative decline not absolute decline.

 

But the case that's often cited and often used by editorial writers and others is Ancient Rome. And the argument is that the story of Ancient Rome and the Roman Empire that declined, the fall of Rome, will be the model for what will happen to the United States. And the problem with that analogy, though it's popular with editorial writers and so forth, is that it doesn't fit the facts. Ancient Rome declined not because of the rise of another empire, it succumbed to the onset of barbarians and it was not able to defend itself against these various waves of barbarians because it was racked by internal warfare and its economy had no productivity. And so it was unable to fend off these relatively minor enemies because it was internally in decay. That’s an example of absolute decline. Now if you look at the United States today, there is a mood in Washington which is very sour about American institutions and so forth. And there will be many people who say that American institutions are in decay and it's like Ancient Rome. But the facts really don’t fit that.

 

If you look more carefully at what is happening in the United States, you will see that there are some very powerful trends, which are very different from what we would call absolute decline in Ancient Rome. Start with demography, among the major states in terms of their share of world population, the ranking today is China is number 1, India is number 2, the United States is number 3. UN demographers who look to the year 2050, say the ranking will be India number 1, China number 2, and the US number 3. What’s interesting about that is the U.S. is the only major developed country which will keep its rankings. Europe, Russia, Japan, will all diminish in terms of their share of world population. The United States will not. So, demographically partly because of fertility rates and partly because of immigration, the United States will continue to enjoy considerable strength.

 

Another favorable trend is energy. A few years ago, a conventional wisdom was that the world reached peak oil, and that the United States was increasingly dependent on energy imports, and that dependence on energy imports would weaken the U.S. in this period of decline. Instead of that, because of the shale revolution, both in gas and in tide oils, what you're seeing is that North America is likely to be self-sufficient in energy in terms of imports in the 2020s. So here is this view of North America, as in trouble, in fact, if you look at the trends in demography and energy, quite the contrary. It will be a much more vibrant area than people realize. Add to that the fact that if you look at research and development, the United States is still the leader in research and development, including some of the technologies, which will be most important to this century. Technologies like bio-technology and nano technology as well as the newer aspects of information technology. The U.S. still is in the lead...(Continued)