America’s plan to stay No. 1
America’s “dishonourable retreat” from Kabul might feel like “the latest act in the grand drama of western decline”, says Adam Tooze. But that story is “misleading”. While China is gaining ground as an economic player, American monetary and military power still give Washington a clear lead in the global power stakes.
Consider US financial dominance. The Taliban might overrun Kabul, but they can’t access Afghanistan’s national-exchange reserves, which are largely held at the New York Fed. The Afghan economy only works thanks to western aid, which funds a trade deficit worth 25% of GDP. Unable to finance imports of such basics as “petrol, flour, sugar, machinery and electrical goods”, the new government in Kabul faces an instant economic and humanitarian crisis. Russia and Pakistan may want to trade, but they also “want to be paid”. The Taliban is discovering that “it still resides in the US’s world”.
Afghanistan had become a sideshow. The US establishment has not turned isolationist. It is refocusing on the threat from China. The Pentagon has a grand strategy: “To break the link between GDP and military power.” That means “denying China strategic technologies” and “sharpening America’s own technological edge”.
US economic policy is becoming increasingly militarised. In Silicon Valley, “CIA- and Pentagon-backed venture capitalists” fund tech ventures with potential military applications. “In a digital world, the real measure” of American power is not the rout in Kabul “but the humbling of China’s 5G champion Huawei”, whose smartphone business has been decimated after US sanctions cut its access to semiconductor technology.
For Washington, “it is easier to imagine reorganising the global high-tech economy than it is to contemplate the US losing its status as undisputed hegemon”.
US generals are now concentrating on “AI, robotics, cyber weapons and new space technology”. They have vast amounts of cash to play with. President Joe Biden is proposing $753bn in military spending for 2022. The bulk still goes to traditional defence priorities: expensive surface ships and fighter jet programmes. But it also includes $10.4bn for cyber operations, where the focus is increasingly “offensive rather than defensive”. Rising US defence spending hardly “betokens retreat”.
Since World War II, US “hyper-power” has rested on the country’s economic dominance. Now the Pentagon is preparing for a very different future, one where “ultraadvanced technology, not GDP, will be the decisive factor”.