America Presents Unsettling Parallels With the Disintegration of Rome

Reddit

Perhaps because we are a young country, Americans tend not to pay much attention to the lessons of history. Well, we should start, because those lessons are brutal. Power, even great power, if not well tended, erodes over time. Nations, like corporations and people, can lose discipline and morale. Economic and political vulnerability go hand in hand. Remember, without a strong economy, a nation’s international standing, standard of living, national security, and even its domestic tranquility will suffer over time.

Many of us think that a superpowerful, prosperous nation like America will be a permanent fixture dominating the world scene. We are too big to fail. But you don’t have to delve far into the history books to see what has happened to other once-dominant powers. Most of us have witnessed seismic political shifts in our lifetime. In 1985, Mikhail Gorbachev settled into his job as the Soviet Union’s young and charismatic new leader and began acting on his mandate to reenergize the socialist empire. Seven years later that empire collapsed and disappeared from the face of the Earth. Gorbachev runs a think tank in Moscow now.

In a sense, the larger world is starting to resemble the nasty and brutish life that long has characterized the corporate world. Just ask Jeffrey Immelt, chairman and CEO of General Electric. Of the twelve giants that made up the first Dow Jones Industrial Average in 1896 – all of them once considered too big to fail – only GE remains. The other towering names of the era – the American Cotton Oil Company, the US Leather Company, the Chicago Gas Company, and the like – all have faded away. And as GE stands against the winds of today’s financial challenges, ask Immelt whether there is such thing as a company that is too big to fail.

I love to read history books for the lessons they offer. After all, as the homily goes, if you don’t learn from history, you may be doomed to repeat it. Great powers rise and fall. None has a covenant to perpetuate itself without cost. The millennium of the Roman Empire – which included five hundred years as a republic – came to an end in the fifth century after scores of years of gradual decay. We Americans often study that Roman endgame with trepidation. We ask, as Cullen Murphy put it in the title of his provocative 2007 book, are we Rome?

The trouble is not that we see ourselves as an empire with global swagger. But we do see ourselves as a superpower with global responsibilities – guardians if not enforcers of a Pax Americana. And as a global power, America presents unsettling parallels with the disintegration of Rome – a decline of moral values, a loss of political civility, an overextended military, an inability to control national borders, and a growth of fiscal irresponsibility by the central government. Do these sound familiar?

Finally, there is what Murphy calls the “complexity parallel”: Mighty powers like America and Rome grow so big and sprawling that they become impossible to manage. In comparing the two, he writes, one should “think less about the ability of a superpower to influence everything on earth, and more about how everything on earth affects a superpower.”

A superpower that is financially reliant on others can be vulnerable to foreign influence. The British Empire learned this in 1956, when Britain and France were contesting control of the Suez Canal with Egypt. The Soviet Union was threatening to intervene on Egypt’s side, turning the regional dispute into a global showdown between Moscow and Washington. The Eisenhower administration wanted to avoid that, and the United States also happened to control the bulk of Britain’s foreign debt. President Eisenhower demanded that the British and French withdraw. When they refused, the United States quietly threatened to sell off a significant amount of its holdings in the British pound, which would have effectively destroyed Britain’s currency. The British and French backed down and withdrew from Suez within weeks.

The US dollar has never come under a direct foreign attack (though its vulnerability is growing). A direct foreign attack would result in a dramatic move away from the dollar. That would lead to a significant decline in its value, as well as higher interest rates. This is often referred to by economists as a “hard landing.” In lay terms, it’s more like a crash landing. Still, Americans have become intimately acquainted with the shocks of financial instability. Americans of a certain age still vividly recall the depths of the Depression in the 1930s and the chaos of inflation and long gasoline lines during the oil shock of the 1970s. We will also remember the financial collapse that began in 2008, and we pray for nothing worse. Some of our smartest financial thinkers are praying right along with us. “I do think that piling up more and more and more external debt and having the rest of the world own more and more of the United States may create real political instability down the line,” investor Warren Buffett has said, “and increases the possibility that demagogues [will] come along and do some very foolish things.”

Regards,

David Walker
for The Daily Reckoning Australia

David Walker
David Walker served as United States Comptroller General from 1998 through to 2008 and is now the President and CEO of The Peter G. Peterson Foundation. He is also the author of Comeback America: Turning the Country Around and Restoring Fiscal Responsibility.
David Walker

Latest posts by David Walker (see all)

Reddit

Leave a Reply

15 Comments on "America Presents Unsettling Parallels With the Disintegration of Rome"

Notify of
avatar
Sort by:   newest | oldest | most voted
dinakarananda
Guest

I remember the TV news report about the last Soviet tank out of the famous ‘grave of empires’, Afghanistan. Would we see the last US ship out of every military base around the world before the end of this new decade?

Ross
Guest

The Japanese may finally even dump their white men of Asia imperial status.

That assigned voluntarily and secretly as evidenced in writing signed by Roosevelt’s hand. And that status which survived the double crossing Roosevelt’s energy sealane blockading and drawing them in and knocking them out in the WWII Pacific slugfest.

So bye bye trilateral commission, see u later rockefeller, and JPII isn’t praying for you from beyond ZBIG ….

http://www.nytimes.com/2010/02/09/world/asia/09japan.html?hpw

Roosevelt and imperial Japan’s “negroes of Asia” might even finally be courted rather than marshalled.

Dan
Guest
From the article: (referring to secret WW2 pacts between Japan and USA): “This could lead to calls to remove the American bases, rewrite Japan’s pacifist Constitution to allow a full-fledged military or even develop the country’s own nuclear deterrent, political observers said.” Well the battle lines are being drawn, but I think Japan will be unlikely to side with its Chinese neighbour, unless perhaps if it occurs through a mutual friend. In other words I think it’s still very easy for the US to keep Japan in a state of submission. For Japan to break free, their economy would first… Read more »
Ross
Guest
Dan, check out Nissan’s recent results and where they sold the most cars and what tipped them into profit. Japan is mercantilist. The Chinese auto market is now the world’s largest by units. It is though in my opinion way too early for anyone major or with anything less than extreme fervour to accept the massive losses (to at best fight to a standstill) to do anything but stonewall the US, so I don’t see any external acts of aggression directly. The soft diplomacy competition is ratcheted up in Africa and South America and the Chinese are doing quite well.… Read more »
christina
Guest

The Roam empire lasted 500 years and it collpased. America has been an empire for 65 years and they think they are too big to collpase. Hmmmm….

Don
Guest

History repeats itself until it doesn’t.

Ross
Guest
Daniel Newhouse
Guest

Ross, Roosevelt was dead before Japan surrendered.

If Japan wants us out of its agreements, fine. But then we withdraw the nuclear umbrella. So all this talk is pointless until Japan develops its own nuclear arsenal. I highly encourage them to do this. The U.S. is overextended. If the Japanese and the Chinese want to nuke themselves into oblivion, more power to them.

GB
Guest

You cant really compare the soviets and rome to the US. The soviets and rome invaded and occupied foreign lands, the US does not. They may invade but they leave the country eventually

The talk of the system turning rotten is probably correct and i think its true of the last decade but deep recessions change people and i think you will find the US will not be the same in the future as it was in the past. They will probably become more family orientated and less materialistic and greedy

Biker Pete
Guest

That was because the Roam Empire was always wandering off, Christina…

Ross
Guest
Daniel, we are talking about the actions of two different Roosevelt’s, one made the treaties and secret agreements and the other broke them : And extracted here because it is succinct : http://en.wikipedia.org/wiki/Arthur_H._Vandenberg In mid-1939 he introduced legislation nullifying the 1911 Treaty of Navigation and Commerce with Japan and urged that the administration negotiate a new treaty with Japan recognizing the status quo with regard to Japan’s occupation of Chinese territory. Instead, Roosevelt and Secretary of State Cordell Hull used the resolution as a pretext for giving Japan the required six months’ notice of intent to cancel the treaty, thus… Read more »
Ross
Guest

Daniel I have a post in moderation that might take a day or so to list here (re Teddy Roosevelt deals v FDR breaking them to sort the confusion) meanwhile people calling US financial fraud for what it is can still manage to harbour xenophobic extraterritorial chauvinism like this : http://market-ticker.denninger.net/archives/1949-China-Flaps-Its-Jaws-Again.html (love how he puts it in the 1949 archive – the great wrong to be undone!)

Ross
Guest
Unpopular Truth
Guest

There’s an article linked here which came out today (or at least I saw it today) showing a similar move by the Chinese who are angry about USA selling weapons to Taiwan.

http://www.reuters.com/article/idUSTRE6183KG20100209

Using money weapons is better than using bullet weapons I guess. Casualties can be big either way :)

Btw, comparing Rome’s demise and the USA’s theorized demised is a fun but pointless exercise. It’s like comparing modern aircraft carrier based battles to ye olde shipe of the line battles. Too many changed variables.

Dan
Guest
All money and every contract is ultimately backed by the military (or physical force, more generically), which is able to threaten, invade, or at also cause ‘nasty accidents’ to happen to people and countries who push their luck too far, or happen to be in the way of something. If America were to crumble from its current military supremacy (despite everything that has happened this last few decades), it can only occur by the wilful mismanagement by its own leaders. No matter how much it appears that some usurper appeared to win fair and square, you can be sure that… Read more »
wpDiscuz
Letters will be edited for clarity, punctuation, spelling and length. Abusive or off-topic comments will not be posted. We will not post all comments.
If you would prefer to email the editor, you can do so by sending an email to letters@dailyreckoning.com.au