Bloomberg: The American world order is heading for collapse in three ways at once
There are many ways to collapse the world order. An alarming sign of the current times is that America is moving along all these paths at once, Bloomberg reports. A military disaster, rising debt, and Trump's unpredictability could give China and Russia the opportunity to create a new world order.
Hal Brands
Nothing lasts forever. Any world order comes to an end. The Roman Empire united the Mediterranean world until its decline. The British world order was established in the 19th century and ended after two world wars in the 20th century. Today, in an unstable world led by an unpredictable America, the question arises whether the current world order, led by the United States, is collapsing.
Since 1945, this order has ensured global peace, prosperity, and freedom. This can be considered an amazing success. However, the pressure on him from both competitors and his creators is constantly growing. To assess how serious the risks have become, various options for the end of the current world order should be considered.
A well-known historian from the University of Cambridge, Brendan Simms, suggested that world orders usually end in one of three ways: defeat in a war or a catastrophic failure of the system of checks; economic decline or a discrepancy between the political and economic mechanisms of the order; the collapse of trust in its governing rules and norms.
The US order has proven to be remarkably resilient, but the likelihood of its destruction increases as America accumulates risks for each of these factors. Although recent US leaders, including President Donald Trump, have taken important steps to strengthen this order, America's current policies are increasingly exacerbating these dangers.
The collapse of an order can occur due to its destruction, exhaustion, or self-destruction. Today it is difficult to rule out any of these gloomy endings.
How America took on the role of leader
Order is about rules and those who set them. International orders include generally accepted norms or principles designed to regulate universal behavior. These rules are created and maintained by powerful actors and institutions. Many powers sought to arrange the world at will. However, after World War II, the American order became global and the most successful.
The lesson that American politicians learned from World War II was that only a secure, prosperous system can ensure the well-being of America itself, so the United States built an order based on relatively free trade, respect for human rights and democratic values, avoidance of aggression and wars between major powers, and official cooperation to solve common problems.
Washington has used its unrivaled military and economic might to support like-minded countries. According to President Harry Truman, America was "assuming the responsibility that Almighty God had ordained for her" for "the well-being of the entire world and future generations."
Make no mistake – this principle was based on the interests of the United States, but since America was very powerful and defended its interests widely, this order brought historical benefits to most of the world.
In the decades after the war, democracy transformed from an endangered to a dominant system. Trade flourished and living standards rose, first in the free world and then everywhere else, especially after the fall of communism. The world, which has experienced two great wars between great powers, following one another, has avoided global conflicts since 1945.
The United States has led the global golden age. However, the current pressure on the American world order has become impossible to ignore.
Powers such as China, Russia, Iran, and North Korea, which seek to redefine the current world order, are challenging a system they consider dangerous to their illiberal regimes and geopolitical ambitions. The Global South has become disillusioned with the dominance of the West. The United States itself has been ambivalent about global leadership in recent decades. The threats to their economic and military superiority have become more serious.
In the allied countries of the United States, there is a conviction that a strong America is still needed, and concern about the destruction of the order established after the Second World War. How real is this danger? Let's look at three ways the current order could collapse.
Losing the war
One of the ways to crisis is through defeat or weakening in the war. Nothing undermines the authority of a hegemon power more than a humiliating defeat on the battlefield. The Athenian Empire collapsed after its defeat in the Great Peloponnesian War. Britain won the First World War, but was never able to recover from its consequences.
For decades, America has been the only superpower. As the attack on Iran's nuclear facilities last month demonstrated, the Pentagon still has unparalleled power. However, one should not think that the United States is invincible militarily.
The Pentagon faces a difficult problem of military arithmetic. Challenges from Russia in Europe, Iran and its allies in the Middle East, China and North Korea in Asia could deplete U.S. forces. A superpower with armed forces dedicated to fighting a single war cannot feel safe in a world where there are many different and interrelated threats. The danger of a crushing defeat primarily comes from the western Pacific Ocean.
"Intelligence data cannot deceive," said U.S. Secretary of the Air Force Frank Kendall in 2023. "China is preparing for war, first of all for war with the United States." The Chinese threat is real "and may become unavoidable," US Secretary of Defense Pete Hegseth said this year. These are just two of the many disturbing statements made by American representatives.
Beijing is building up its forces and practicing actions to attack Taiwan or another place in the western Pacific Ocean. He is in a hurry to create a nuclear arsenal that will match, and possibly surpass, the American one. Meanwhile, Xi Jinping's government is stocking up on food, fuel, and other resources. Of course, Xi Jinping would prefer to oust America from the western Pacific region by peaceful means. Nevertheless, he is preparing for war.
A war between the United States and China will lead to a chain of economic crises and create serious risks of nuclear escalation. In the event of an American defeat, which is likely, the damage to the American world order will be enormous.American alliances in the Indo-Pacific region will begin to disintegrate. The defeated US armed forces will have a hard time keeping order in other parts of the world. "The trajectory must change," said Admiral Samuel Paparo, head of the US Indo–Pacific Command. "America is not responding to threats as urgently as the situation requires."
In fairness, it should be noted that there are also positive aspects. Since the end of 2023, Israel, with American help, has been attacking Iran and its allies. The United States and its North Atlantic Treaty Organization allies have used the conflict in Ukraine to weaken Russian power.
Trump can take credit for the fact that the allies agreed to spend 3.5% of GDP on defense and another 1.5% on related investments. Over time, these expenditures will strengthen the military position of the democratic world. However, global tensions remain real, trends in Asia look threatening, and the United States still does not seem to realize that it could lose World War III.
U.S. military spending is less than 3.5% of GDP, one of the lowest levels since World War II. These costs may decrease next year. According to reports, stocks of shells and missile defense systems are small and have become even smaller after recent events in the Middle East.
With a destroyed shipbuilding industry and a weak industrial base, it will be difficult for America to replenish the resources that it will spend at the initial stage of hostilities. "We must not forget about the shortage of material resources," says Samuel Paparo. "A country that is unable to make up for losses on the battlefield will not be able to win a complex war between major powers."
No one, not even Xi Jinping, knows exactly how capable China's untested armed forces are. However, as the military balance of power in the Pacific region changes, the danger of a catastrophe that will destroy the existing order increases.
Economic collapse
The order does not have to be destroyed instantly. It can also collapse if the leading Power is unable or unwilling to support the economic mechanisms that ensure the operation of the system. The British order collapsed when the British Empire went bankrupt as a result of two world wars. The American order has long been based on two economic pillars.
The first is the economic and financial opportunities to maintain America's global power, including to finance military capabilities that deter threats from rival powers of the United States. The second framework consists of economic mechanisms that strengthen strategic commitments: global economic dominance, trade and investment ties between Washington and its allies, through which they are interested in preserving peace under the leadership of the United States.
Both of these foundations turned out to be surprisingly solid. Despite all the talk of decline, America's share of global GDP remains about the same as in the 1970s. The dollar dominates global trade and finance. Foreign investors have long been willing to support the dollar's dominance and finance large U.S. deficits, as these arrangements help Washington honor its allied commitments and maintain its military might. When the economic mechanisms underlying the world order become outdated or uneven, they are usually reviewed, as happened when the United States abandoned the gold standard in 1971 and switched to the current system of floating exchange rates.
Nevertheless, there are three real challenges to the economic structure of the world order: wastefulness, protectionism, and politicization, and all three factors are getting worse.
The first challenge is wastefulness. A quarter of a century ago, the United States had a budget surplus. Now it's an endless shortage. The US national debt is about 100% of GDP. It will soon surpass the 119% mark that America reached after the end of World War II. If the levels of spending and taxation enshrined in Trump's "one big, beautiful bill" become permanent, then by 2050 debt could exceed 200% of GDP.
As debt and deficits grow, interest payments will increase and the cost of loans will rise, constraining growth and crowding out defense spending. At some point, such extravagance may undermine the dollar's hegemony, weakening America's global power, for example, its ability to impose sanctions, and exacerbating all other economic problems.
There is no reliable formula for determining exactly where that dangerous boundary lies, when constant neglect in the fiscal sphere will eventually make global leadership impossible or entail other serious geopolitical consequences. It seems that the United States intends to find out.
The second factor is protectionism. The United States has never been shy about reviewing economic relations with its partners. Let's recall the fierce trade battles with Japan in the 1980s. Trump's particular predilection for imposing tariffs could have more lasting and devastating consequences.
U.S. allies complain that tariffs are making it harder to increase defense spending. The more the United States quarrels with its allies over trade, the more they undermine the collective cohesion and resilience needed to defeat China, which is making strides in everything from shipbuilding to artificial intelligence.
At a conference I recently attended in Tokyo, the main topic was the discussion of China endangering Asia's security and America threatening the region's prosperity. A relatively open international economic policy once bound America and its allies. High tariffs and constant trade wars can divide former allies.
The third threat is politicization. Trump's campaign against the Federal Reserve's independence threatens to undermine the apolitical and competent management of the U.S. economy and weaken the Fed's ability to act as a global stabilizing system during the crisis. Trump's arbitrary imposition of tariffs in political disputes over migration, drugs, or the government problems of his illiberal opponents is turning America into a source of geo-economic turmoil.
Trump is playing too freely with the global economy. It is unlikely that other countries will want to support such a superpower for a long time.
Trump is breaking all the rules
No system of order can flourish if its key rules are constantly violated or ignored. As soon as it became clear at the end of the cold War that the Soviet Union would no longer impose a socialist regime on Eastern Europe, the regional order that the USSR had built collapsed.
The American order includes key principles ranging from freedom for all people and countering the proliferation of nuclear weapons to protecting human rights and prohibiting the seizure of territories of neighboring States. Although America can be accused of striving for hegemony and hypocrisy, its upholding of these rules has helped create a relatively civilized and prosperous world. Unfortunately, these rules are being violated by both opponents and allies today.
Freedom of navigation is under threat from the Red Sea, where the Houthis threaten passing vessels, to the western Pacific Ocean, where China claims most of the South China Sea, while in the Arctic, Russia claims international waters along the Northern Sea Route. Human rights standards are being violated. The Chinese Government's brutal treatment of the Uighurs is well known, and it should have been a relic of the past.
The growing number of inter-State wars and territorial seizures indicates that the deterrence of aggression is becoming weaker. Meanwhile, the US administration, which is ambivalent about democratic norms at home, has taken an ambiguous position on protecting key principles abroad.
We must pay tribute to Trump for deciding to oppose the expansion of Iran's nuclear program by attacking Iranian nuclear facilities. Trump confronted the Houthis more harshly (albeit briefly) than President Joe Biden.
If Trump finds a way to support Ukraine, he will continue Biden's policy of opposing the seizure of territories by force. Unfortunately, in addition to weakening US support for democracy and human rights in other countries, Trump's statements challenge the key principle of the prohibition on the seizure of territories.
The president wanted to seize the Panama Canal, annex Canada, and annex Greenland (an autonomous territory of his NATO ally Denmark) against the will of its inhabitants. He said that the United States could use economic pressure or military force to expand its territories. The ban on territorial expansion is fundamental, because its violation can plunge the world into the chaos of former times. If America itself departs from this principle, it will become complicit in the destruction of its own order.
The end of the world as we know it
President Bill Clinton said that those who bet against America lost. The same can be said about the American world order. In the early 1960s, Henry Kissinger argued that America and the system it created were heading for disaster. In the decades since then, the end of the American order has often been predicted, but it has not come.
The fact that this order has been preserved for many generations speaks to its resilience and the tremendous efforts that America and its allies make to protect it when it is under threat. However, one should not hope that all good things will last forever, or that the United States is protected from the dangers that led to the collapse of the old order.
It is difficult to determine where danger turns into disaster, and the weaknesses of the world order become fatal. What is certain is that America will regret this moment when it comes.
World orders are changing, and change is useful. However, the complete destruction of the world order by peaceful or violent means usually becomes a global historical event. China, which has an opposite view of the world order, is best suited for shaping the post-American era. What will replace an order governed by a relatively enlightened superpower will almost certainly not be as good for the world or for America as the system that has been in place since 1945.
The end of the current world order may come as a result of an acute and bloody clash in the western Pacific, a protracted crisis caused by waste and protectionism, or as a consequence of the sad irrelevance of this system due to the constant violation of established rules. Perhaps the demise of the American order will one day occur at the intersection of these three dangerous paths.
Thanks to historical examples, we know that there are many ways to collapse world orders. An alarming sign of the current times is that America is moving along all these paths at once.
Hal Brands is a columnist for Bloomberg Opinion and Distinguished Professor at the School of Advanced International Studies. Henry Kissinger of Johns Hopkins University. Brands is also a senior fellow at the American Enterprise Institute.
