America was in a position of overwhelming supremacy in 1999 and it would be have extraordinarily difficult to build an even more commanding position afterwards. The American information technology and financial booms were at their pinnacle. American military power was globally dominant, multidimensional, and cleverly applied. American television and cinema reigned supreme worldwide. In 1999 Russia was recovering from its second post-Soviet economic crisis and had only begun to embrace Putin’s stronger leadership. China’s economy had grown to the point where it was highly dependent on the United States but not large enough to challenge U.S. leadership. The European Union in that year launched its new common currency, the Euro, in a spirit of confidence but remained loyal to America as leader of the Western world. India was not then in a position to raise or lower American power. All this left America in a position of unchallenged dominion, but made it much easier for secondary powers to emerge. A more reasonable measure of American success would be to examine how well it has held on to its lead despite the great advantages that rising secondary powers enjoy.
In the current atmosphere of pessimism about America, it is easy to lose sight of what America has accomplished since 1999. America has supplied the world with money in that period. The dollar endures as a global institution, still embraced by all. This is a more remarkable and globally useful accomplishment than it may first appear. The American dollar has made the unprecedented rates of growth of the world economy in this period possible. The dollar has served as the primary international basis of contracts and storehouse of value only because all and sundry, from the Chinese government to Indian software companies to drug smugglers, have had faith in the dollar and in America. There was no other single currency available to which so many would have been willing to entrust their wealth and their contracts. Without a single globally accepted currency, the volume of world trade and thus the global economic growth and poverty decline that we have seen since 1999 would have been much less. The dollar allowed the developing countries to develop. It afforded Americans, even the lower middle class, the luxury of maintaining their living standards without developing new talents. It would have been better if Americans had raised their educational levels to the top of the world scale, as they had done for nearly two centuries, but it would have been worse for all if American educational stagnation had been fully translated into economic stagnation a decade ago.
In East and Southeast Asia, American influence was on the decline until very recently. In the last few years, however, China has moved into a phase of arrogance toward its neighbors, making outlandish claims in the South China Sea that would leave Vietnam and the Philippines with only narrow strips of accessible waters. While China’s formal claims go back to the 1930s, their vigorous assertion against the claims of Southeast Asian countries over the same waters is very new. America’s continuing military strength has enabled Southeast Asian countries to stand up to China’s belligerence. For China, this arrogance is unnecessary for its continued economic rise, but may serve the political needs of factions in the Communist Party. America’s measured role has been stabilizing for this vast region.
In the struggle with al-Qaeda and the Afghan Taliban, America has so far prevented a second major attack on its home soil and a Taliban recapture of Afghanistan. The United States has kept Pakistani backing for the Taliban within certain limits. America has also begun to build a larger Afghan army that may in a few years be big enough to obstruct Taliban attacks from Pakistan.
The attack on Iraq was America’s greatest moral and political failure. The United States did ultimately defeat al-Qaeda there and the current Iraqi political system is fairly democratic, but the human cost to the Iraqi people was massive. No comprehensive honest count of the dead is currently available, but the most social-scientifically credible surveys suggest the true death toll is in the hundreds of thousands. In the view of most democrats throughout the world the United States did not have the right to impose such costs on Iraqis. Those Muslims who do not count themselves among democrats are even less sympathetic. The occupation of Iraq diverted the United States from establishing a stronger Afghan state that could resist Pakistani and Taliban depredations on its own. America borrowed heavily even as it prospered through 2007, so when the financial crash came in 2008, it had to either build up a huge and dangerous debt or accept an immediate depression. These irrational policies flowed from dysfunctional domestic politics.
Americans continued with racial bloc voting. The majority of whites have voted Republican ever since the Democrats passed civil rights legislation in the 1960s. Democratic President Lyndon Johnson thought this would go on for about twenty years when he put through the historic civil rights laws, but the white backlash is now in its fifth decade. The election of Barack Obama in 2008 heralded the possibility of a new politics or racial reconciliation, but white reaction set in swiftly. In the 2010 elections to the House of Representatives, a record 61% of whites voted Republican, even as many of them blamed the Republicans for the economic crisis. White Republicans do not espouse racist ideas. Many have accused them of harboring secret or coded racist beliefs, but this feat would be very difficult among such a large number of people. Nonetheless white Republicans, particularly Tea Party supporters, have very different anxieties from nearly all African Americans and the great majority of Hispanics. This is yielding a destructively divided political order. Since the Nixon era most white Americans have supported politicians whose legislations have led to the steady rise of income inequality in America. Minorities have lost out, but crucially, so have most pro-Republican whites. The American poor and lower middle class do live better than the Third World poor, but their struggle to maintain their living standards is becoming ever harder, despite earning in a globally privileged currency. This politics has also led to a four-decade decline in public education. That bodes ill for America’s recovery.
India’s greatest success since 1999 has been the acceleration of its economic growth. The tax collecting structure has improved with direct taxes—on corporate profits and on personal incomes—matching revenues from the indirect customs and factory excise taxes. Surprisingly, faster growth has been achieved with minimal reforms. Politically tough decisions have been assiduously avoided by all the governments since then. And yet, growth accelerated. Indeed, in the last three years the wages of agricultural laborers, the poorest people in India, have risen faster than those of software engineers. The last year and a half has seen the fastest growth of merchandise exports (not software and other services) in Indian history.
The level of violence in Kashmir has declined sharply since 1999. India put up enough resistance that the Pakistan Army had to build up its jihadis. That tactic eventually backfired, with some jihadis turning on the Pakistan Army. At that point, the generals had to back off in Kashmir. The Kashmir issue has lost the central position that it once held in Pakistani diplomacy. The West has promoted the concept of Kashmir as a disputed territory on and off since 1947, but now sees the consequences of doing so; it is clear that jihadi organizations in Pakistan, like Lashkar-e-Jhangvi, which slaughters Shia Muslims every few weeks, would have been continuing their work in any part of Kashmir India might have given away to Pakistan. Indeed, the spectacle of Pakistan’s ties with terrorism has had a salutary effect on Kashmiri Muslims with separatist sentiments.
India’s greatest failure has been that its economy did not grow faster. Indian Prime Ministers articulated with great clarity the reforms that were needed for faster economic growth, but they never implemented them. Both Vajpayee and Manmohan Singh dithered in the face of modest opposition. Both failed to make it easier for factory managers to fire workers, though both publicly recognized that this would make managers less reluctant to hire workers in the first place. If Vajpayee has taken advantage of his popularity, after the Kargil success in 1999, to make it easier for factories to dismiss workers, as he had promised to do, factories would have hired more workers, averting the jobless growth that Vajpayee actually delivered. Eventually, factory employment picked up, but the delay was crucial. It is often said that China can make the changes it needs because it is authoritarian and India cannot because it is democratic. This is an overstatement. India failed to implement the second generation of reforms because voters repeatedly elected leaders who, contrary to their public promises, sacrificed the mass of the voters’ interests to appease very small but well organized minorities, particularly tax cheats and trade unions. This is possible but not inevitable in a democracy.
India and the United States
The partnership between India and America has made some major gains. Economically, software exports from India to the United States are going strong. While the United States is suffering from high unemployment overall, the few software engineers American universities have graduated remain well-employed. American corporations purchasing Indian software are using it to raise their productivity and global competitiveness. The nuclear deal reflects American recognition that India is a rising power and that India’s rise can benefit America. In Afghanistan, cooperation between India and America has been halting due to American deference to Pakistani demands, but with Pakistan unwilling and, indeed, unable to reduce its assistance to various terrorists, strategic cooperation between the United States and India in Afghanistan is rising. The new India-Afghan strategic cooperation reflects that. The most important U.S. action in Afghanistan has been to increase the size of the Afghan army to over 170,000 from around half that three years ago. The Afghan army needs to double again in the next three years. It will be difficult for America alone to train that many Afghan soldiers, and India can play a useful role. By 2014, the Afghan army will be big enough to saturate the border areas with Pakistan so American soldiers can return home.
While a great deal of convergence between America and India has taken place, significant differences of perspective remain. America believes itself to have a legitimate tutelary role in the world, which India largely denies. The two countries understand the world-historical period of Western ascendancy quite differently, and thus have different views on what is just and inevitable in the future. But still such visions are not permanent, and changing circumstances will force adjustments, even painful ones.
India and America have followed very different historical trajectories, and envision futures that converge only modestly. This does not mean that future circumstances will permit them to proceed that way.
In writing for India Currents over this period, I have often been seized by the fervent wish that my readers not remember what I wrote earlier! Things, sometimes, have not gone the way I predicted. I have tried to apply by factual and theoretical knowledge to my column, and yet errors are common. I wish to offer an elaborate excuse. There are three major causes of error in the application of social sciences. The first, of course, is the limited intelligence of the social scientist. The second is bias and wishful thinking by the social scientist. The third is the low predictability of the objects being studied. Natural scientists have, for example, obtained data on a tiny portion of the carbon atoms in existence. Yet they have great confidence that the rest work the same way. Medical science is similar. Social science does not have this luxury. The object of study is not merely complicated, but becomes more complicated over time. Knowledge of the past, howsoever thorough, is inadequate to predict the social future. In my case, no doubt the first two causes weigh heavily, but I plead with my readers for understanding that the third cause is also present.
Sanjoy Banerjee teaches International Relations at San Francisco State University.