 Playing a dominant role in world politics does not make for an easy life. Even very powerful states encounter problems they cannot solve and situations they would rather avoid. But as Macbeth remarks after seeing the witches, present fears are less than horrible imaginings. What really scares American foreign policy commentators is not immediate frustrations or dangers, but the prospect of longer term decline. Recently, the United States has been going through another bout of declineism by one count of fifth in the last 60 years. This one has been caused by the juxtaposition of China's rising power and American economic, political, and military malaise. Just as in the past, the surge of pessimism has produced a counter surge of defensive optimism, with various arguments put forward about the continued value and feasibility of American global leadership. Both candidates for the presidency are, of course, compelled by liberal politics to be optimistic by American prospects, while disagreeing on whether President Obama's policies have strengthened or weakened the United States. What I want to do this afternoon is to assess the prospects for continued American global leadership. I'll make some general judgments, but they are tinged with great uncertainty, since so much depends on decisions that are made, especially by the United States government, but also by other governments. But I hope to lay out some of the forces at work and what the study of comparative history and politics may suggest about the crucial determinants of future American authority in the world. We'll talk in three parts. I'll begin by assessing two fundamental aspects of world politics, authority and cooperation. Of course, interest and power, the classic realist concepts are also important, but I stress authority and cooperation because they are equally important and less often discussed. Part two of the talk is about leadership in world politics and what we know about it and what we don't know about it. And part three compares the leadership potentials for the first half of the 21st century of the United States, Europe, and China. Let me talk about authority and cooperation first. Authority can be defined succinctly as legitimate power, the ability to generate deference and cooperation on the basis of a combination of material power and perceived legitimacy. Authority enables a state to achieve outcomes that it prefers without actually expending material resources. Achieving one's goals through authority is therefore much more cost effective than achieving them through brute force or sheer power. An important reason to focus on authority rather than power is that in the 21st century, no single country will be able to achieve dominance on its own. Both material resources and the ability to mobilize populations have diffused too much. If the United States could not construct a democratic or even consistently friendly government in Iraq after more than a decade of war and post-war, and if it cannot even assure order in the very poor and weak country of Afghanistan, it's not going to dominate the world through military power alone. George W. Bush tried that. Both Barack Obama and Mitt Romney have explicitly rejected it. Instead, the United States will need authority. The current sanctions on Iran demonstrate why authority is more important than sheer power. Unilateral sanctions by the United States will be almost entirely ineffective no matter how tight the provisions were. Sanctions have to be almost universal to be effective. Otherwise, Iran could simply sell its oil and engage in banking operations with other countries. For other states that collaborate with the United States on sanctions, their governments have to believe not only that the US has substantial resources, but it will denote to ensuring that sanctions are effective, but that it has legitimate purposes, not merely serving its own or Israel's interests, but those of a wide set of countries that could be threatened by the consequences of Iran's nuclear weapons. So framing the question of American leadership and of authority is also helpful in another way. Exising leadership through multilateral institutions is essential in a world in which no state commands were in 25% of gross domestic product. As we see on issues from sanctions to peacekeeping, financial crisis to trade, cooperation is essential to achieve effective results. You can't do it on your own. Sustained cooperation requires institutions. And leadership in multilateral institutions is more a matter of authority than of power. So there is ample evidence that the multilateral institutions that were formed by the United States after World War II provide important supports for the contemporary world order. UN peacekeeping operations, with all their limitations, have been shown in scholarly work to actually work on the whole. And NATO has, for 60 years, been an effective multilateral organization. On the economic side, the World Bank provides funds and advice for developing countries. And the International Monetary Fund provides assistance to countries in times of financial distress. And organizations, which has created more recently, have also been important. One of the striking things about the post-recession years is the absence of trade wars. Normally, you expect trade wars to follow this kind of recession. It hasn't followed largely because of the World Trade Organization. So it's not noticed because it's effective in this case. Disputes persist, but they're channeled through multilateral institutions. Even human rights institutions operating under very adverse conditions with few enforcement powers haven't shown to make a difference. So there's a body of evidence now, quite impressive, which shows that multilateral institutions have achieved a lot in the contemporary world. And they are really an invention in terms of their breadth and strength of the post-1945 order. Of course, not all multilateral institutions are uniformly effective. The UN is often stymied by great power disagreements manifested in the veto. Much of what goes on in the General Assembly is political theater for audiences at home. Environment institutions vary in effectiveness. The Montreal Protocol is very effective on the ozone layer. The Kyoto Protocol is not very effective with regard to climate change. The European Union, as you know, has achieved a great deal in many ways, but the Eurozone was badly designed and has a source of uncertainty and stress. So I'm not claiming that multilateral institutions are always effective just if they are essential to manage in the contemporary, multilateralized world. And I'm not denying that the US needs substantial military power either. It needs military power to maintain its leadership role, its alliance with other democracies, and helps to maintain a stable world order. Yeah, it's because military power unfortunately remains the ultimate recourse for deterrence or actual use in a world without government. But military power will not be sufficient. A government with only material resources and military power will be all thumbs or only fists, able to fight and destroy, but not able to achieve more positive or subtle purposes. But my principle folks in this talk is not on the role of international institutions, that's just the commercial beginning. My emphasis instead is on leadership. And that's why I stress the concept of authority. As I said a few minutes ago, we can't be at all certain about the future because much depends on current political decisions, but we can identify some of the crucial choice points and where leadership can matter. So what do we know and what don't we know about leadership in world politics? I wanna say five things that I think can be said with confidence about leadership. First, we know that in the absence of leadership, cooperation is very difficult because states will try to shift the burdens of adjustment to change onto others, not pay the price themselves. And without alliances or other institutions helping to provide reassurance, uncertainty generates security dilemmas with states tying each other with suspicion. So leadership is essential in order to solve global problems ranging from war, danger of war to climate change. Second, we know that leadership is exercised most effectively by creating multilateral institutions that enable states to share responsibility and burdens. Such institutions will not always succeed. As I've said, they may cooperation easier and they reduce the burdens on each side, including the burdens of leadership. Thirdly, we know that leadership is costly. States other than leader have incentives to shirk. This means that the burdens borne by a leader are likely to increase over time and that without efforts to encourage sharing the load, leadership may not be sustainable. Fourth, we know that in a democracy such as the United States, most people pay relatively little attention to details of foreign policy. Pressures for benefits to voters at home inform both the welfare benefits and tax cuts, compete with demands for military spending, and especially non-military foreign affairs spending, which is always under pressure. This means that in the absence of immediate threats, public willingness to invest in international leadership will decline. So it's always threatened. And when it comes then to netting out the sum of all of these factors about leadership, we'll go back to the climate and an optimist. What do we say? Well, we first have to talk about what we don't know. We know these things about leadership and we also know at a fifth point that autocracies are less stable fundamentally than democracies. That autocracies have a disadvantage in this respect and China's leadership crisis during the spring of 2012 marked by the detention of Boji Lai and his wife illustrates this point. What we don't know though is at least as important. Will major powers in the international system, especially China, maintain their social and political coherence and avoid civil war? Will the instabilities in the global economy be exposed by the 2008 financial crisis be corrected or merely papered over and thus left a cause potential havoc down the road? Will ideologically driven regimes such as the one in Iran be prudent or reckless in their quest to develop or even use nuclear weapons? And will threaten states like Israel act prudently or imprudently in response? Will the trend in recent decades toward greater global democratization be maintained or will it give way to an anti-democratic trend? And perhaps most important for this issue discussed today, can the United States as a society summon the political coherence and willpower to define a sustainable leadership strategy for the 21st century? So we know some things. We have some general knowledge. We don't know an awful lot of things about it. So we're not gonna be able to make point level level predictions. When it comes to netting out the sum of all these factors, declinus are pessimist and anti-declinus are optimist. But pundits in both camps tend to blend knowledge and speculation making it difficult to be confident about their claims. Instead we should carefully note the degree of uncertainty associated with our inferences. We have to understand the general patterns and believe and realize that we can't make specific predictions about what's going to happen and people who do are probably charlatans. But even without confident predictions, we can hope to understand world politics better by understanding sources of authority in world politics. And I wanna focus on six in this third part of the talk. And what I'm gonna do is to mention six sources of authority and I'm gonna try to rank the United States, China and Europe on each of these six and reach a conclusion about where leadership is likely to come from in the next 20 or so years. The six sources are geography, first demography, second, economic resources, third including technological competence and economic organization as well as sheer economic size. Fourth, reliability, that is policy coherence across issues and over time. Fifth, what Joseph Nye calls soft power, fostered by admiration of one society, by others. And sixth, nationalism. I include nationalism because it's a source of solidarity and therefore both of power and legitimacy, but it's also a source of weakness. So it's a double-edged resource. So for each source of authority, I'm gonna rank the US, China and the European Union, which I think are the only three plausible candidates for leadership in world politics in the first half of 21st century. And then we'll see, which at least in my view, country or region, seems best situated to exercise global leadership. So you can imagine a kind of matrix with six sources of leadership and three countries or entities, the US, the European Union and China. First geography, a Halford MacKinder declared a century ago that geography is destiny, comparing land powers with sea powers. Geography may not be destiny, but it plays a major role in world politics. The European Union, which really have had many fewer than 27 states, if we're not for the Alps, the Pyrenees, the English Channel, the North Sea, and the Irish Sea. Unlike China and the United States, Europe is naturally divided and division reduces authority. China and the United States are both large countries, not divided by nature, with substantial coastlines. They're both in mountain ranges, so they don't divide up the areas that way. But as my friend and colleague Jonah has remarked to me, while the United States has two oceans and two neighbors, China has one ocean and more than a dozen neighbors, giving the United States an advantage. Geographically, the ranking has to be the United States, it's the most advantageous situation, China's second, Europe's third. Second source is demography. Now, size is a potential source of power, and insofar as it can be derived from power of authority, that is population size. China has 1.3 billion people, the EU has 500 million, the US has about 305 million. So that's the order in strict demography. China's number one, EU's number two, US's number three. Third, economic and technological resources. One dimension of authority is material. The resources available to states to use in their foreign policies. I think it's very unlikely that in the next decade, the United States will become poorer and therefore weaker. If the US does, it's gonna throw a monkey wrench into all of my calculations. Scientifically and technologically, the US is by far the most important center of innovation in the world. From Apple to Google to Facebook to Twitter. And extending to more dubious innovation, such as collateralized debt obligations. It helps to bring the system down. Innovations aren't always good, but the US is a very innovative society for better and for worse. The dollar is still a strong currency. The US has the deepest capital markets. US government credit is good, despite the deficit and interest rates are very low. And the United States, maybe most of all, remains a magnet for talented people. Despite its political divisions, the American economy is too multi-dimensional and too resilient for an absolute material weakening to occur, barring some very unlikely disaster much greater than Hurricane Sandy. But relative power is what really counts in world politics. Great Britain and Germany are wealthier and more populist than they were when they were great powers. They have declined in relative but not absolute terms. So we have to examine the prospect of American relative decline. And in discussing the prospects of American relative decline, China is the first subject that comes to mind. China's economy is growing at a remarkable rate for 30 years, riding an export and investment boom. But China is still a relatively poor country with all that low per capita GDP implies about technology and organization. Its investment-led growth can continue at a rapid rate forever. And China will have to shift toward a more consumer-led economy and toward an economy that does not just purchase, borrow, or steal innovation but innovates itself. Most seriously, the Chinese demographic profile over the next 20 years will become older. As the impact of the one-child policy of the last several decades works its way through age cohorts. China will become older, which will slow down growth. China will keep growing economically but it's impossible to project 8% growth rates which double every nine years indefinitely into the future. At official exchange rates, China's GDP is now about half of the United States and this figure overstates the real difference on a purchasing power parity basis. US is about a third larger than China in terms of its economy. China has about four times as many people as the US so the US GDP is about five times as large as in China per capita. As China keeps growing faster than the United States it will increasingly have sufficient resources to challenge the United States militarily and now has built its first aircraft carrier as well as to engage in economic competition in a wide variety of fields including high tech. But the United States will for the next decade I suspect longer maintain advantages derived from large previous high technology military investments, higher educational and technical competence in its population, better educational institutions and especially from a more dynamic and creative high technology sector. A movement toward equalization of material power between the US and China will continue but it's unlikely to lead in the next decade or two to an overcoming of America's material power advantage. More serious United States could be the much more marked decline economically of its major allies, Europe and Japan. In GDP terms the EU is the world's largest economy but I don't have to tell this audience about Europe's financial problems or its lack of significant net economic growth over the last five years. If we look not just at aggregate GDP but at physical unity, rate of economic growth, technological capabilities, the US is a stronger economy. Japan has been stuck in a high level growth equilibrium for 20 years. Since the United States has relied in many ways on European and Japanese financial support for its foreign policy from the Gulf War of 1991 onward the fall on the sides of its allies economies relative to those of central adversaries actually weakens the United States. But the most serious threats to American material strength come neither from the inherent weaknesses of the American economy which I think can be overstated or from its allies weaknesses but from its own political system. The US budget deficit is very large and future prospects are grim unless efforts are made to reform entitlement program especially social security and Medicare. The United States has taken bipartisan action in the past on such issues. Notably during the Reagan administration when a Democratic Congress and a Republican president agreed on a deal that prolonged the life of Social Security for 30 years. I'm really optimistic that whoever wins the election there's likely to be a budget deal. I'm not sure I should be so optimistic but I still optimistic on that score that keeps the US running over the physical cliff. That reforms entitlements to make them more sustainable but I said this is more a statement of faith than a research-based analysis and this is very uncertain. So we should label this prognosis as very uncertain because of the political issues that are involved. So overall on economic and technological capability I would rank the United States first, Europe a close second, China third. Although this ranking is contingent on cooperation between the Democrats and the Republicans which at this stage seems more difficult than cooperation with other states in world politics. Fourth, coherence of policy. Any election campaign is full of phony differentiation between the candidates, appealing to different groups of voters. What was striking though about the President's debate on foreign policy a week ago in addition to the lack of any questions from the moderator about Europe, you have just been forgotten about, totally, don't exist, was the almost total agreement on policy. Governor Romney and President Obama both seek to fight terrorism, support the American alliance system, cooperate with China but be tough on its economic policies, favor democratization in the Middle East but a little idea of how to achieve it and want to disentangle the United States from the war in Afghanistan without discussing the consequences of failure there. In other words, they agree on general policies and they agree on the avoidance of some of the most important issues. So in the American expression there was not a dime's worth of difference between them in the recent foreign policy debate. To draw contrast between them, each of them had to move to domestic taxation, domestic social policy. And quite strikingly, neither candidate criticized the manifest unrealism of the other's position because he shared it. During the Cold War, the United States belied the notion that democracies could not be steady in foreign policy. It keeps showing remarkable bipartisan agreement on the essentials of foreign policy which won't be very different whoever wins the election. China's current leadership is quite coherent as well although the Bojila instant indicates there's a possibility of a difference that our leaders coming to the fore, but not right now. And as we will see, Chinese nationalism is strong and potentially destabilizing. Europe, due to its financial crisis, is the least coherent of these three entities. Greece may leave the Euro and great efforts will be needed to keep other Gryffindor countries inside the zone. Europe does not, despite many efforts, have a coherent foreign policy. So on coherence of policy, the rank order is clear. United States first, China second, Europe third. I turn now to soft power. Joe and I has coined the phrase soft power to further the ability of a country to attract support because of the nature of its society. Throughout my lifetime, the United States has enjoyed enormous soft power. Even people who criticize the US harshly want to visit it and many of them want to live and work there. Even studies of anti-Americanism show that many people who express anti-American sentiments also think that people who emigrate from their own countries to the United States lead better lives. Many features of the United States from its popular culture to its economy to its political openness are widely admired around the world. The fact that the US welcomes immigrants on the whole as well as visitors magnifies its soft power. China falls on the other end of the spectrum of soft power. Chinese culture is universally respected, that's much more closed than American culture. China appears to many people to be an expansionist power as well as to have a sense of its own superiority, neither of which contributes to soft power. As a rising power, it has sharp elbows, most notably in the South China Sea. Machiavelli said that it's better to be feared than loved. So China qualifies on that count. But he also said that it's best to be both loved and feared, which is widely true of the United States. Until the crisis of the Euro, European proponents trumpeted its soft power in economy, welcoming of refugees and support for human rights. European openness is indeed an asset, but soft power suffers when economic crisis appears and hard power is diminished. So in soft power, I put the US first, Europe second, and China a rather distant third. Finally, I want to talk about nationalism. Now, it may be surprising for me to add nationalism as a resource to this list. And it would be surprising if you assume it's a positive resource, but it can be either positive or negative. Nationalism creates social solidarity and energy, it's the positive side. Ernest Renan, a 19th century French writer said famously, quote, to have had glorious moments in common in the past, a common will in the present to have done great things together and to wish to do more. These are the essential conditions for people, unquote. Countries with no national feeling because they're divided in allegiance may or may not have civil wars, but they can accomplish little in world politics. They can't accomplish great things. So nationalism in a certain sense a necessary condition for accomplishing great things for the kind of self-sacrifice that's required. Europe banished nationalism ideologically if not in practice after World War II, a good thing in view of European history, but it makes Europe unable to do great things together in Rehman's phrase if they involve emotional solidarity or require emotional solidarity. Europe wants to make contributions to global governance, but its lack of nationalism makes it veer into self-admigration as on climate change and to allow others to exploit it. In world politics, there is some merit in leading by example, but it's not necessarily effective. Nearly the United States and North China suffers from a lack of nationalism. The Chinese government both manipulates and contains nationalistic demonstrations from below. Anyone who watched the US presidential debates cannot doubt the depth and extent of American nationalism. In both cases, nationalism provides solidarity, energy and willingness to sacrifice for the ambitions expressed by political leaders. In both cases, however, it can also lead to distorted one-sided perceptions or judgments warped by self-love. For China, nationalism is on balance of weakness. It generates animosity to our nearby countries over territorial and historical issues that are of no large importance to China and makes it more difficult for the Chinese government to set priorities and to forge alignments for mutual benefit or to avoid meaningless territorial quarrels, such as those about the islands in the South China Sea that China and Japan are disputing. For the United States, nationalism is probably a strength. It provides energy, but liberal constitutionalism and a commitment to multilateral institutions has recently kept it largely in check. Overall, the US benefits from the best balance of the three of the kind of energy of nationalism and the constraints on nationalism that constitutional democracy provides. So if I had a chart, I would draw you one, but I will tell you what the overall picture looks like. If we think about the various dimensions, the only dimension on which China is first is demography. It's by far the largest, has a very talented and large population. That's the only dimension on which the US is last. On geography, economy and technology, reliability, soft power, and on the balance of nationalism, the United States is in the most advantageous position of these three entities. The United States, Europe in general comes in second in most cases, although it's least strong on geography and nationalism. China first only in demography and otherwise either second or third. So it seems to me that it's pretty clear if we can go through these six sources of authority and source of leadership that the United States has the clearest path to continue leadership in the 21st century. If, big if, it can avoid financial and policy gridlock and maintain policy coherence. That is the only thing the United States has to fear is itself. The EU and China with quite different strengths and weaknesses are far behind and effectively in my little listing tied. Only the United States has the material capacity and political unity to exercise consistent global leadership. It has shown a repeated ability to rebound from economic and political difficulties. The size, youth, and diversity of its population, the stability and openness of its political institutions, and the incentives that its economic system creates for innovation means that it remains the most creative society in the world, keeps reinventing itself. It also has major problem, major problems, most striking in which is the intense domestic partisan conflict that prevents problems from being resolved when even when they have fairly clear solutions like raising the age for Social Security. And that comes with a major threat to continuing American global leadership. The United States will have to solve these problems to fulfill its promise. So I'm consciously optimistic that American leadership will continue through the first half of the century. But given the mix of the known and the unknown, the unknown being quite large, safest conclusion for readers interested in the next era of world politics is probably the familiar aphorism. Never make predictions, especially about the future. Thank you very much.