The United States: headed for renewal or bound for division?

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Supplementary conference reading matter appears below the following Terms of Reference for the discussion


Where is the United States headed? Towards a new deal, prosperity, greater equality and renewed global influence and alliances, or towards ever deeper internal political and cultural divisions and gradually fading pre-eminence? What is the US’s narrative for itself and for the world in the 21st century?

Can the Biden Administration deliver on the President’s mission of healing the American body politic? To what extent does success depend on national consensus – or has American politics become winner takes all? What are the implications of the demographic trends in American society and of economic insecurity and inequality? Where and how should the US lead internationally and where does it expect other states to step forward? What are the implications and responsibilities for the US’s allies and friends? If part of the challenge for the US is psychological, to accept the possibility of a world where it is not pre-eminent in all fields – in which fields, for example in technology, would the US be ready to see China lead? If not prepared to accept such a shift, then how does it see the end state of relations with China?

This Ditchley Greentree conference, organised in partnership with American Ditchley, will bring together global expertise and perspectives on the United States across politics, economics, technology, business and cultural life. In normal times, Ditchley and American Ditchley hold an annual conference at the Greentree estate on Long Island. Due to the pandemic this conference will be a hybrid event, with a group gathered face to face at Ditchley in the UK, along with virtual participation across North America and globally.

Context for the discussion

The United States remains the world’s pre-eminent power economically, scientifically, technologically, militarily and arguably culturally. Despite the publicity around recent cyber attacks, the US also remains the world’s dominant cyber power. The US has been pre-eminent in all these fields for so long and by such a margin that any diminution is felt as a loss and threat.

Stepping back and looking objectively at how the US’s overall wealth and capabilities have developed over the last 35 years belies any sense of inevitable decline. Growth rises steadily at a broadly consistent rate over that period. In retrospect, and from the lofty heights of GDP and not the experience of the man or woman on Main Street, the great financial crisis of 2008 looks like a short-term blip and even 2020’s unprecedented interruption of the economy looks to be going the same way. The list of the world’s biggest companies has many more Chinese names than a decade ago, testament to the rise of China, but the displacement so far at the top has largely been of European giants. Within the US, the economy has responded to innovation, with a shift from one sector to another with the rise of the major technology platforms. There is no sign as yet that the US’s highly effective combination of government funding of research and risk-taking private sector investment is faltering. The US (and Europe) continue to turn out ground breaking new capabilities – for example the gene editing technology of CRISPR-CAS9. New companies such as SpaceX have benefitted from a public and private partnership that is much more important to the US’s success than free market proponents generally allow.

US military spending is roughly equivalent in dollars to that of China, India, Russia, Saudi Arabia, France, Germany, the UK, Japan, South Korea, Brazil and Italy combined. Although dollar for dollar that money probably buys more raw capability in China and Russia because of lower local costs, it is unlikely to be capability of the same quality. The military gulf between the US and the rest of the world remains wide. Even allowing for the border-erasing impact of cyber warfare, the US is secure strategically and generally able to exert consistent influence, except at the edges of its operating range, for example in Afghanistan or in the South China Seas. The threat of jihadist terrorism remains vivid even 20 years after 9/11 but the number of victims since has been very small and counter terrorist efforts highly effective. The rate of technological innovation and consistent funding mean that the US is highly unlikely to fall behind others militarily any time soon.

Over six hundred thousand US citizens have tragically died in the current pandemic but in terms of deaths per million the US now ranks 18th globally, somewhat lower than western European countries such as Belgium and Italy and quite close to France, once lauded for tough and immediate action. On vaccinations, the US is doing much better than most, a tribute to the Biden Administration but also showing that beneath the turbulent surface of President Trump’s stewardship of the pandemic, some prudent planning was underway.

The progress on vaccinations, the lifting of restrictions and massive federal stimulus have seen the stock market rebound and growth return to long-term trends. Economists’ concerns are now turning towards potential overheating and the return of inflation and the scale of the Biden Administration’s plans for further historic investment in the economy are disputed by some of those who have been arguing for fiscal stimulus for years. An economic debate is raging over whether public debt matters any more or not. But for now, the US is, as a whole, doing economically well in the circumstances and unemployment is shrinking.

The contested transition of power, culminating in the ugly Capitol riots of 6 January, tested the political system to its limits. In the end the constitution stood up to the stress both politically and legally. The Republican leadership refused to back unfounded legal challenges and across the country, in states and up to the Supreme Court, judges acted impartially and the separation of powers was maintained. Despite the counter claims of ‘stop the steal’, this built on a successful democratic election with high turnout that was both peaceful and well protected from information warfare interference.

Culturally, American media, American literature, music, TV and film all remain globally relevant and are now distributed very often on American platforms such as Netflix and Amazon. Large parts of the world connect with friends and colleagues via US social media platforms. The US itself is becoming more Hispanic but English remains the global lingua franca and the language that everyone else learns. After an inevitable lag, some norms of behaviour are being enforced in social media as society and state adjust.

Threats to pre-eminence

Two sets of factors threaten, however, the US’s long-term pre-eminence: 

The first set is external, with the continued growth of China and the shift of the world economy to the East. There are many potential threats to China’s continued stability and progress (explored in Ditchley’s May conference, ‘China Today and Tomorrow’) but for the moment China’s trajectory has been accelerated by its navigation of the pandemic. There are clear signs too of growing innovation and technological success such as the Chinese lunar exploration and Mars rover programmes, as well as the growth of Chinese technology giants. China is investing heavily and successfully in technologies identified as critical to the future, such as connectivity, electric vehicles, AI and bio-engineering, but is still struggling to reach independence on semiconductors. On current trends, China is set to surpass the US economically by 2028.

The flip side of the impressive and consistent American growth over the last 30 years is that a further acceleration would require something extraordinary and new. Something radical would need to happen in the American economy that has not been achieved to date by successive Democratic and Republican administrations or by generations of American innovators.

Economic power is not the same as global power and there will be a lag, but American power will be increasingly contested in the Pacific in the coming decade and perhaps more widely as time passes. The fruits of the Chinese Belt and Road Initiative may be uncertain economically but politically it has delivered a lot of support in multilateral fora, especially when combined with Chinese engagement in numbers in regulatory bodies and committees. The US can block but it, like everyone else, struggles to get multilateral fora to deliver what it wants.

The US’s resilience in response to this challenge will flow not only from its own capabilities but also the strength of its alliances and the extent to which it remains an inspirational and reliably present partner. Taken collectively, democratic economies vastly outweigh China and authoritarian counterparts. Although dwarfed by the US, allied military capabilities further extend and solidify American reach. Confidence in American dependability and particularly predictability, however, has been damaged by a series of events and policy twists since 2003. The Iraq War dissolved post 9/11 solidarity. The pivot to the Pacific under President Obama reduced European confidence that the US was committed to the Transatlantic relationship and Europe was not able to fill the gap left by reduced American leadership. President Trump shifted the US stance towards China decisively and lastingly but, at the same time, his perceived pivot inward and emphasis on America first, alienated many. President Biden’s reassertion of American global democratic leadership and championship of climate action has been met with mixed feelings by many natural allies – a sense of relief that ‘America is back’ but uncertainty that this trajectory will be maintained over time. In response, American supporters of Biden warn that this could become a self-fulfilling prophecy, with President Biden having four years to show the American electorate that global engagement and a rules-based international order deliver more security and prosperity at home than any alternative.

The second set of factors is domestic. The US has always succeeded in drawing strength from its political, geographical and racial diversity, despite many tensions. Will that success continue or are the pressures and inequalities becoming too great for the vessel to hold?

Politically, the US faces a dynamic that could lead to yet more polarisation. With control of the Senate only assured until the mid-term elections, the Administration is focused on enacting its programme to deliver a sense of change and momentum for the American middle class. Meanwhile, as the treatment of Liz Cheney showed, almost all Republicans are focused on the need to retain the support of the parts of the Republican vote energised by President Trump, or face close to certain defeat. The possibility of a new centre that seemed to emerge in the shocked days after 6 January is long gone. Democrats are headed left, Republicans right and the distance between them arguably increasing. President Biden is both a more popular and more divisive president than President Trump with the gap between Democrat approval and Republican disapproval a record 88 percent, compared to President Trump at 76 percent[1]. Former President Trump still enjoys approval ratings of over 80 percent amongst Republicans and may anoint the next candidate if he does not run himself.

Racial tensions are growing with African Americans understandably impatient with the pace of reform. Meanwhile, white supremacists and other extremists continue to exploit a sense of decline and exclusion in certain communities. There is growing tension too over immigration policy, with Hispanic voters split and not yet won over by President Biden. How will immigration and demographic shifts towards a more Hispanic and Asian country change American politics?

The continued growth of the US as a whole continues to be accompanied by increasing economic insecurity for many, including those in work, and inequality, with the gaps between asset owners and those dependent on earned income growing ever wider. Universal high-quality healthcare remains synonymous with socialism for many Americans. Global cities continue to diverge from smaller cities, suburbs and rural areas, with views on gun control, gender rights, abortion and even climate concerns badges of cultural identity. The US is deeply divided over the type of society and the type of economy it wants – untrammelled markets driving cheap prices and generating huge fortunes, or more heavily regulated social solidarity. Advances in education over life will be needed for the US workforce to adapt to the impact of AI and automation and remain internationally competitive. There is a risk of inequality of outcomes turning into embedded and pervasive inequality of opportunity, undermining the promise of America that anyone can make it if they work hard enough.

Questions arising

Faced with these challenges, will the Biden Administration be able to set the US on a path to renewal? How could (and should) the Republican Party evolve in response to the Biden Administration and to pressures from the right? What signs should we be looking for that the Biden Administration is succeeding in building a solid majority across the country and a bipartisan agenda that could survive a lost election? Is the cross-party deal with centrist senators on infrastructure investment a sign of more to come or a flash in the pan?

What are the prospects for the mid-term elections in 2022 and how might they remake the political balance in the US? What potential is there for constitutional reform and how might the relationship between the states and the federal government evolve? What are the risks of violent protest and domestic terrorism? Can US-style capitalism deliver new levels of prosperity and improved economic security?

Looking outwards, what more can the US do to renew its alliances and how should allies respond and help? What are the prospects for American leadership on freedom, democratic values and free markets? What should be the American vision for the relationship with China? How should it contain Russian mischief and is there scope for stabilising the relationship with Russia?

How can the Biden Administration best lead global action on climate change? Will the Administration be able politically to deliver changes in the American way of life necessary to combat climate change or does that court political disaster? Will all bets therefore be on green energy and carbon capture innovation?

Format of the discussion

This conference will take the form of a phased conversation allowing for participation from various time zones at different points in the programme. For the middle part of the discussion we will split into a series of working groups and time zone-specific plenary sessions to look at different sets of issues, before regrouping to report back to each other and to sum up our insights.