And you tell me over and over and over and over again my friend,
Ah, you don't believe we're on the eve of destruction.
No, that's not a line from the 2008 presidential campaign debates. It's the refrain of a protest song, “Eve of Destruction,” which topped the charts in 1965. A world gripped by the Cold War had just witnessed the Kennedy assassination in 1963, the Cuban missile crisis in 1962 and the building of the Berlin Wall in 1961. Vietnam loomed. Even in the days for which Washington is now fondly remembered as Camelot, it was one crisis after another.
Does it ever end? Today we have the financial crisis, following the oil crisis, concurrent with the jihadi terrorist crisis, compounded by the nuclear proliferation crisis (and though I do not share this view, many would argue there's a climate crisis).
Lest anyone think that crisis is a specialty of the Bush years alone, recall that the Clinton administration, along with presiding over the dot-com bubble and the incubation of Sept. 11, featured a major bout of emerging-markets crisis. That entailed the cascading collapses of assorted currencies and developing economies, from Mexico (1994) to Southeast Asia, South Korea, Russia, Brazil and Turkey (1997-2000). Fear of global contagion ran high enough to invite more than $200 billion worth of bailout packages thrown together by a group informally dubbed “the committee to save the world.”
And yet, despite the drum roll of crises above, America over the years has found ways not only to cope but to lead the world into an era of extraordinary opportunity and progress. Thanks to creative destruction, productivity has taken off in ways hard to measure but clear to anyone who surfs the Web for news or browses the global markets for merchandise from places that two generations ago were barely on the map.
This has chiefly come courtesy of innovations wrought under America's system of democratic capitalism–protected by that gun-slinging tendency, at least in a crisis, to stand up to enemies. Markets may be careening right now, but the current bust follows a boom in which, according to the International Monetary Fund's latest figures, global output–measured in terms of purchasing power parity–had soared by 2006 to above $60 trillion per year, or roughly double its average during the 1990s.
The biggest beneficiaries have been in the developing world. According to the same IMF tables, growth rates for emerging economies these past four years have been roughly 6%, or almost double the average rate during the 1990s (and almost twice the growth rate for advanced economies). Also compared with the average of the 1990s, per capita annual output in the developing world has almost quadrupled. Not all of that has been loaned back to America. It has also translated into better housing, clothes, medical care and communication with the wider world and more know-how for further progress.
These advances came during the era in which America was increasingly reviled–especially by many of its own elite–as the lone superpower, the sinister and stingy Santa of a unipolar world. Now we keep hearing that the current turmoil represents a failure of U.S. capitalism and the much-awaited end of the American era.
From Barack Obama, now closing in on the White House, the mantra is “change.” His promise, given an intoxicating kick by the immediate crisis, is to complete a transformation now fitfully begun, from compassionate conservatism all the way over to the flabby cradle-to-grave guarantees of socialism, partnered with a foreign policy built around diplomatic charm.
That promised sea-change of the basic American ethos is the real crisis. There will be hell to pay, to the extent that a panicked U.S.–hounded for years by its critics at home and abroad–succumbs to the idea that democratic capitalism will no longer serve, that creative-destruction must be staved off at any cost, that enrolling in a kumbayah chorus can change the nature of mankind.
The biggest bills may fall first on the developing world. And far from preventing turmoil and devastation, “change” is more likely to strip America of the agility and means to cope when the next crisis comes.
Claudia Rosett, a journalist-in-residence with the Foundation For Defense of Democracies, writes a weekly column on foreign affairs for Forbes.com.