Springer Nature is making SARS-CoV-2 and COVID-19 research free. View research | View latest news | Sign up for updates

In the Long Run We Are all Dead: Hey Keynes, What Is Long in the Contemporary US Case?

  • 141 Accesses


The idea of declinism of the US had emerged in every decade after the World War Two and so it was as well after the end of the Cold War. The article argues that such a phenomenon may be attributed to the nature of the international system, where through the globalization the US enables ‘the rest’ to grow on its expense. China and other export led economies, made great benefit of the US open market that is functioning as a ‘big vacuum cleaner’. The focal question of article is two-folded: first, is ‘the raise of the rest’ causing the geoeconomic centre of power to shift from the Atlantic to Pacific; second, is the US in decline? Article presents economic data that show that there are no economic incentives for the geoeconomic shift. The geopolitical centre may indeed by shifting, but not due to the geoeconomic reasons, but rather due to military, political, and ideological power factors. The US has been in relative decline since the end of the WW2—other international actors seized the chance that the international system created by the US provided. Thus, the relevant question about declinism is—is the US in absolute decline? The article argues that the 2008 financial shock was not cyclical in nature, but rather systemic. It is the first time since the WW2 that the US was unable to answer to the challenge adequately. The main reason for that is not external, namely, the relative decline of the US—G8 was replaced by G20—but internal—the US is not tackling the core of its systemic economic problem. This suggests that the US is marching towards an absolute decline. To avoid its demise, the US has to change its Keynesian pragmatic short-sighted economic mentality and do the well needed structural reforms.

This is a preview of subscription content, log in to check access.

Graph 1
Graph 2
Graph 3
Graph 4
Graph 5
Graph 6
Graph 7
Graph 8
Graph 9


  1. Bank for International Settlements (2010) Triennial Central Bank Survey, Report on global foreign exchange market activity in 2010. http://www.bis.org/publ/rpfxf10t.pdf/. Accessed 3 June 2012

  2. Bremmer I, Roubini N (2011) A G-Zero world, The New Economic Club will produce conflict, not cooperation. Foreign Aff. http://www.foreignaffairs.com/articles/67339/ian-bremmer-and-nouriel-roubini/a-g-zero-world. Accessed 31 May 2012

  3. Bull H (1977) The Anarchical society: a study of order in world politics. Columbia University Press, New York

  4. China’s foreign exchange reserves, 1977–2011 (2012). http://www.chinability.com/Reserves.htm. Accessed 3 June 2012

  5. Clinton B (2012) The Daily Show, 20 September

  6. Department of the Treasury (2012) Major foreign holders of treasury securities. http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt. Accessed 10 Oct 2012

  7. Dicken P (2007) Global shift: mapping the changing contours of the world economy. Sage, London

  8. Eurostat (2012a) United States. http://trade.ec.europa.eu/doclib/docs/2006/September/tradoc_113465.pdf. Accessed 10 Oct 2012

  9. Eurostat (2012b) China. http://trade.ec.europa.eu/doclib/docs/2006/September/tradoc_113366.pdf. Accessed 10 Oct 2012

  10. Ferguson N (2009) What ‘chimerica’ hath wrought. American interest. http://www.the-american-interest.com/article.cfm?piece=533. Accessed 10 Oct 2012

  11. Friedman TL (2000) The lexus and the olive tree. Knopf Doubleday Publishing Group, New York

  12. Gilpin R (1981) War and change in world politics. Cambridge University Press, New York

  13. Index of economic freedom (2012) http://www.heritage.org/index/default. Accessed 10 Oct 2012

  14. International Monetary Fund (2011) Currency composition of official foreign exchange reserves. http://www.imf.org/external/np/sta/cofer/eng/cofer.pdf. Accessed 3 June 2012

  15. International Monetary Fund (2012) World economic outlook database. http://www.imf.org/external/pubs/ft/weo/2012/01/weodata/index.aspx. Accessed 2 June 2012

  16. Inward Foreign Direct Investment (FDI) Performance Index (2010) http://www.conferenceboard.ca/hcp/details/economy/inward-fdi-performance.aspx. Accessed 3 June 2012

  17. Joffe J (2009) The default power, the false prophecy of America’s decline. Foreign Aff. http://www.foreignaffairs.com/articles/65225/josef-joffe/the-default-power. Accessed 3 June 2012

  18. Johnson S (2009) The last european: Why the G-20 was a success. http://economix.blogs.nytimes.com/2009/04/03/why-the-g-20-was-a-success-obamas-initiative/. Accessed 3 June 2012

  19. Kalergi RNC (2000) Panevropa. Slovensko panevropsko gibanje, Ljubljana

  20. Kegley CW (1993) The Neoidealist moment in international studies? Realist myths and the new international realities. Int Stud Quart 2:131–146

  21. Kennedy P (1989) The rise and fall of the great powers: economic change and military conflict from 1500 to 2000. Vintage Books, New York

  22. Keohane RO, Nye JS (2000) Introduction. In: Nye JS, Donahue JD (eds) Governance in a globalizing world. Brookings Institution Press, Washington, pp 1–43

  23. Keynes JM (2000) A tract on monetary reform. Prometheus Books, Amherst

  24. Keynes JM (2008) The general theory of employment. Interest and Money, Atlantic

  25. Kim SS (2000) East Asia and globalisation: challenges and responses. In: Kim SS (ed) East Asia and globalisation. Rowman & Littlefield Publishers, Lanham, pp 1–29

  26. Kindleberger CP (1969) American business abroad: six lectures on direct investment. Yale University Press, New Haven

  27. Krauthammer C (1990/1991) The unipolar moment. Foreign Aff 1:23–33

  28. Lebow RN (1994) The long peace, the end of the Cold War, and the failure of realism. Int Organ 2:249–277

  29. Levin RC (2010) Top of the class, the rise of Asia’s Universities. Foreign Aff 3:63–75

  30. Luttwak EN (1993) The endangered American dream: how to stop the United States from becoming a Third World country and how to win the geo-economic struggle for industrial supremacy. Simon & Schuster, New York

  31. Major foreign holders of treasury securities (2010) http://www.treas.gov/tic/mfh.txt Accessed 13 Nov 2010

  32. Mann M (2005) Incoherent empire. Verso, London

  33. Nayar BR (2005) The geopolitics of globalization: the consequences for development. Oxford University Press, Oxford

  34. Norris T (2010) Asia challenges US innovation leadership, new report shows. http://leadenergy.org/2010/01/asia-challenges-usa-leadership/. Accessed 3 June 2012

  35. Organski AFK (1958) World politics. Knopf, New York

  36. Rosecrance R (2010) Bigger is better, the case for transatlantic economic union. Foreign Aff 3:42–50

  37. Simoniti I (1997) Predgovor k knjigi. In: Parker G (ed) Zahodna geopolitična misel v dvajstem stoletju. Fakulteta za družbene vede, Ljubljana, pp 7–62

  38. Strange S (1996) The retreat of the state: the diffusion of power in the world economy. Cambridge University Press, Cambridge

  39. Sunkel O (1995) Poverty and development: from economic reform to social reform. In: Carlsson I, Ramphal S (eds) Issues in global governance: papers written for the Commission on Global Governance. Kluwer Law International in Commission on Global Governance, London, pp 123–139

  40. The US–China Business Council (2012) US–China trade statistics and China’s World trade statistics. https://www.uschina.org/statistics/tradetable.html. Accessed 10 Oct 2012

  41. US Census Bureau (2012a) Trade in goods with China. http://www.census.gov/foreign-trade/balance/c5700.html#2011. Accessed 10 Oct 2012

  42. US Census Bureau (2012b) Trade in goods with European Union. http://www.census.gov/foreign-trade/balance/c0003.html. Accessed 10 Oct 2012

  43. US Federal Reserve Board (2012) Household debt service and financial obligations ratios. http://www.federalreserve.gov/releases/housedebt/default.htm. Accessed 10 Oct 2012

  44. US Government Spending Charts (2012) http://www.usgovernmentdebt.us/spending_chart_1900_2016USp_XXs1li111mcn_G0f. Accessed 3 June 2012

  45. US–China trade statistics and China’s World trade statistics (2009) http://www.uschina.org/statistics/tradetable.html. Accessed 3 June 2012

  46. Vickery G, Wunsch-Vincent S (2009) R&D and innovation in the ICT sector: toward globalization and collaboration. In: Dutta S, Mia I (eds) The global information technology report 2008–2009, mobility in a networked World. World Economic Forum, Geneva, pp 95–109

  47. Wolf C (2002) Straddling economics and politics: cross-cutting issues in Asia, the United States, and the global economy. RAND, Santa Monica

  48. World Bank (2012) World data Bank. http://databank.worldbank.org/ddp/home.do. Accessed 29 May 2012

  49. World Trade Organization (2012) Trade growth to slow in 2012 after strong deceleration in 2011. http://www.wto.org/english/news_e/pres12_e/pr658_e.htm. Accessed 3 June 2012

Download references

Author information

Correspondence to Igor Kovač.

About this article

Cite this article

Kovač, I. In the Long Run We Are all Dead: Hey Keynes, What Is Long in the Contemporary US Case?. Transit Stud Rev 19, 275–290 (2013). https://doi.org/10.1007/s11300-012-0248-0

Download citation


  • USA
  • China
  • EU
  • Economic power factor
  • Geoeconomic centre
  • Declinism

JEL Classification

  • E12
  • F30
  • O10