America’s place at the top of the global pecking order seems more secure at the end of 2014 than at the beginning.To extend a Paul Krugman metaphor, countries are neither companies, nor sports teams that have to be properly coached. And other countries have institutions less favorable to emergence.
In 2014, American power grew despite some foreign policy errors. There is nothing unusual about that. The ultimate sources of American power – the economic dynamism of its culture, the pro-business tilt of its political system, its secure geographical location, its rich natural resource base and its profound constitutional stability – don’t depend on the whims of political leaders. Thankfully, the American system is often smarter and more capable than the people in office at any given time.
In 2014, America continued to power out of the recession faster than either Japan or the EU, while the fracking boom had a growing impact on the world’s economic and geopolitical balances. A newly assertive Japan and its growing relationship with India helped check China’s bid for regional supremacy, and falling oil prices in the last quarter of the year undermined the Iranian and Russian economies.Next up, Germany, where it's likely there are people nostalgic for the days when a flag and a band came in handy.
Angela Merkel carries one of the most difficult portfolios of our time. Should she make substantial progress on the various items on her to-do list, she will be remembered as a great German chancellor, and Germany’s position at the center of the world system will become much more secure and, perhaps, less stressful. The odds are not necessarily in her favor; Germany’s choices are both consequential and difficult. That is what life in the big leagues is all about; it matters gravely when you get it wrong.It's a splendid place for a vacation, and even the big cities struck me as less frenetic than just about anywhere in the States.
Next three: China, Japan, Russia, ominous echoes of the 1930s.
Russia is a nation in decline, but it has not yet finished declining and it by no means reconciled to the prospect. This makes it extremely dangerous. It may be failing at some of the most important tasks of a great power, but it still has nukes; plentiful natural resources; effective (and often underrated) intel, infowar and cyber capacities; and is currently led by a tactically canny president who punches above his weight.Rounding out the list: India and Saudi Arabia.
Should worst come to worst with Iran, and the Saudis have to defend themselves without the American backing they no longer take for granted, the Kingdom should be able to muster a unified Sunni coalition stretching from the Gulf States to Cairo. The Israeli air force may also step in. And as a last resort, the Saudi relationship with Pakistan, a relationship that has been steadily growing closer as the Saudis lose confidence in Washington, assures that there will be Sunni bombs in the region to offset Shi’ite nukes.Makes one want to pay more attention to Hollywood's follies ...
But perhaps it will not go that far. At the end of the year, Saudi Arabia stunned the world, using its economic might and political heft to force OPEC hawks to accept a collapse in the world oil price. Yes, this did have some effect on U.S. fracking companies—the policy’s stated aim—but what it really did was start to cause huge financial losses in petroleum-dependent Tehran. Saudi Arabia, with its deep reserves of money as well as oil, can absorb such losses for quite a while; it knows that Iran is much less well positioned to stand the pain.