On Tuesday evening, the Swedish ambassador in London, Nicola Clase (an ECFR Council member) hosted a dinner for Joe Nye aka “Mr. Soft Power”. Among the guests were former British Foreign Secretary Douglas Hurd and Goldman Sachs economist Jim O’Neill aka “Mr BRIC”. The conversation over dinner focused on three distinct but connected subjects: the future of power in international relations; the euro crisis; and the debate about American “decline” and the US “pivot” to Asia. The question in the background was: what is happening to Europe’s power in the world?
Nye began by outlining the thesis of his most recent book, The Future of Power – which he also discussed at a Black Coffee Morning last May. Power used to be about whose army won, he said; in an information age, it is as much about whose story wins. Nye argues that two long-term developments are transforming international politics: a power transition from west to east; and a power diffusion away from states. These two developments mean both Europe and the US must now co-operate with others to achieve their objectives, using persuasion as much as coercion and payment. But in some ways Europe is in a good position to do this: it has significant soft power based on the model of regional co-operation for which it stands.
Inevitably, at the end of a day in which everyone seemed to be talking about whether Germany might accept the creation of Eurobonds, the discussion quickly turned to the euro crisis. Nye has generally been optimistic about Europe, which he thinks has huge power potential (but a limited “power-conversion capability”). However, he is now increasingly worried about Europe, which he says has squandered much of its soft power since 2008. He still thinks that, on balance, it will probably “muddle through,” but he sees a danger that it could lose control of the situation and that the euro could collapse. As one of the other guests put it, the markets were now asking Europe: “Do you want to have this damn thing or not?”
Nye has criticised the idea of American “decline” (see for example this essay in Foreign Affairs and this op-ed) – which he sees as a metaphor, and a bad one at that. He distinguishes between absolute and relative decline. The US, he said, was not like the Roman Empire, which disintegrated from within. The gap between the US and other powers would inevitably shrink as other powers such as China rose, but that wouldn’t make them more powerful than the US. In fact, the danger lay in exaggerating the power transition from west to east: American fear and Chinese hubris could create a “Thucydides trap” (that is, a modern equivalent of the conflict created by Athenian hubris and Spartan fear). The real question, therefore, was how to manage the relationship with rising powers such as China.
But what about Europe? Nye suggests that, like the US, it is undergoing relative but not absolute decline. However, it also faces some internal challenges that the US does not. In particular, the euro crisis has exposed the limited solidarity and trust among member states, which makes forging ahead to solve some of the single currency’s problems extremely difficult – as we are now seeing, for example with the current debate about Eurobonds. As Nye pointed out at the discussion a year ago, Europe also has a demographic problem that the US – whose population is projected to increase to 400 million by 2050 – does not. So is it possible that Europe is in fact more like the Roman Empire than the US?
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