by Niall Fer­gu­son, Newsweek, Octo­ber 30th, 2011
Don’t call me a “declin­ist.” I really don’t believe the United States — or West­ern civ­i­liza­tion, more gen­er­ally — is in some kind of grad­ual, inex­orable decline.But that’s not because I am one of those incor­ri­gi­ble opti­mists who agree with Win­ston Churchill that the United States will always do the right thing, albeit when all other pos­si­bil­i­ties have been exhausted​.In my view, civ­i­liza­tions don’t rise, fall, and then gen­tly decline, as inevitably and pre­dictably as the four sea­sons or the seven ages of man. His­tory isn’t one smooth, par­a­bolic curve after another. Its shape is more like an expo­nen­tially steep­en­ing slope that quite sud­denly drops off like a cliff.
If you don’t know what I mean, pay a visit to Machu Pic­chu, the lost city of the Incas. In 1530 the Incas were the mas­ters of all they sur­veyed from the heights of the Peru­vian Andes. Within less than a decade, for­eign invaders with horses, gun­pow­der, and lethal dis­eases had smashed their empire to smithereens. Today tourists gawp at the ruins that remain.The notion that civ­i­liza­tions don’t decline but col­lapse inspired the anthro­pol­o­gist Jared Diamond’s 2005 book, Col­lapse. But Dia­mond focused, fash­ion­ably, on man-​​made envi­ron­men­tal dis­as­ters as the causes of col­lapse. As a his­to­rian, I take a broader view. My point is that when you look back on the his­tory of past civ­i­liza­tions, a strik­ing fea­ture is the speed with which most of them col­lapsed, regard­less of the cause.
The Roman Empire didn’t decline and fall sedately, as his­to­ri­ans used to claim. It col­lapsed within a few decades in the early fifth cen­tury, tipped over the edge of chaos by bar­bar­ian invaders and inter­nal divi­sions. In the space of a gen­er­a­tion, the vast impe­r­ial metrop­o­lis of Rome fell into dis­re­pair, the aque­ducts bro­ken, the splen­did mar­ket­places deserted.The Ming dynasty’s rule in China also fell apart with extra­or­di­nary speed in the mid – 17th cen­tury, suc­cumb­ing to inter­nal strife and exter­nal inva­sion. Again, the tran­si­tion from equipoise to anar­chy took lit­tle more than a decade.
A more recent and famil­iar exam­ple of pre­cip­i­tous decline is, of course, the col­lapse of the Soviet Union. And, if you still doubt that col­lapse comes sud­denly, just think of how the post­colo­nial dic­ta­tor­ships of North Africa and the Mid­dle East imploded this year. Twelve months ago, Messrs. Ben Ali, Mubarak, and Gaddafi seemed secure in their gaudy palaces. Here yes­ter­day, gone today.
What all these col­lapsed pow­ers have in com­mon is that the com­plex social sys­tems that under­pinned them sud­denly ceased to func­tion. One minute rulers had legit­i­macy in the eyes of their peo­ple; the next they didn’t.
This process is a famil­iar one to stu­dents of finan­cial mar­kets. Even as I write, it is far from clear that the Euro­pean Mon­e­tary Union can be sal­vaged from the dra­matic col­lapse of con­fi­dence in the fis­cal poli­cies of its periph­eral mem­ber states. In the realm of power, as in the domain of the bond vig­i­lantes, you’re fine until you’re not fine — and when you’re not fine, you’re sud­denly in a ter­ri­fy­ing death spiral.
Remem­ber that poster that used to hang in every col­lege dorm, of a run­away steam train that has crashed through the wall of a rail sta­tion and hit the street below, nose first? The cap­tion was: “Oh sh*t!” I believe it’s time to ask how close the United States is to the “Oh sh*t!” moment — the moment we sud­denly crash down­ward like that train.
The West first surged ahead of the Rest after about 1500 thanks to a series of insti­tu­tional inno­va­tions that I call the “killer appli­ca­tions”:

1. Com­pe­ti­tion. Europe was polit­i­cally frag­mented into mul­ti­ple monar­chies and republics, which were in turn inter­nally divided into com­pet­ing cor­po­rate enti­ties, among them the ances­tors of mod­ern busi­ness cor­po­ra­tions.
2. The Sci­en­tific Rev­o­lu­tion. All the major 17th-​​century break­throughs in math­e­mat­ics, astron­omy, physics, chem­istry, and biol­ogy hap­pened in West­ern Europe.
3. The Rule of Law and Rep­re­sen­ta­tive Gov­ern­ment. An opti­mal sys­tem of social and polit­i­cal order emerged in the English-​​speaking world, based on private-​​property rights and the rep­re­sen­ta­tion of prop­erty own­ers in elected leg­is­la­tures.
4. Mod­ern Med­i­cine. Nearly all the major 19th– and 20th-​​century break­throughs in health care were made by West­ern Euro­peans and North Amer­i­cans.
5. The Con­sumer Soci­ety. The Indus­trial Rev­o­lu­tion took place where there was both a sup­ply of productivity-​​enhancing tech­nolo­gies and a demand for more, bet­ter, and cheaper goods, begin­ning with cot­ton gar­ments.
6. The Work Ethic. West­ern­ers were the first peo­ple in the world to com­bine more exten­sive and inten­sive labor with higher sav­ings rates, per­mit­ting sus­tained cap­i­tal accumulation.

For hun­dreds of years, these killer apps were essen­tially monop­o­lized by Euro­peans and their cousins who set­tled in North Amer­ica and Aus­trala­sia. They are the best expla­na­tion for what eco­nomic his­to­ri­ans call “the great diver­gence”: the aston­ish­ing gap that arose between West­ern stan­dards of liv­ing and those in the rest of the world.
In 1500 the aver­age Chi­nese was richer than the aver­age North Amer­i­can. By the late 1970s the Amer­i­can was more than 20 times richer than the Chi­nese. West­ern­ers not only grew richer than “Restern­ers.” They grew taller, health­ier, and longer-​​lived. They also grew more pow­er­ful. By the early 20th cen­tury, just a dozen West­ern empires — -includ­ing the United States — con­trolled 58 per­cent of the world’s land sur­face and pop­u­la­tion, and a stag­ger­ing 74 per­cent of the global economy.
Begin­ning with Japan, how­ever, one non-​​Western soci­ety after another has worked out that these apps can be down­loaded and installed in non-​​Western oper­at­ing sys­tems. That explains about half the catch­ing up that we have wit­nessed in our life­times, espe­cially since the onset of eco­nomic reforms in China in 1978.
Now, I am not one of those peo­ple filled with angst at the thought of a world in which the aver­age Amer­i­can is no longer vastly richer than the aver­age Chi­nese. Indeed, I wel­come the escape of hun­dreds of mil­lions of Asians from poverty, not to men­tion the improve­ments we are see­ing in South Amer­ica and parts of Africa. But there is a sec­ond, more insid­i­ous cause of the “great recon­ver­gence,” which I do deplore — and that is the ten­dency of West­ern soci­eties to delete their own killer apps.
Ask your­self: who’s got the work ethic now? The aver­age South Korean works about 39 per­cent more hours per week than the aver­age Amer­i­can. The school year in South Korea is 220 days long, com­pared with 180days here. And you don’t have to spend too long at any major U.S. uni­ver­sity to know which stu­dents really drive them­selves: the Asians and Asian-​​Americans. The con­sumer soci­ety? Did you know that 26 of the 30biggest shop­ping malls in the world are now in emerg­ing mar­kets, mostly in Asia? Only three are in the United States. And, boy, do they look for­lorn these days, as maxed-​​out Amer­i­cans strug­gle to pay down their debts.
Mod­ern med­i­cine? Well, we cer­tainly out­spend every­one else. As a share of gross domes­tic prod­uct, the United States spends twice what Japan spends on health care and more than three times what China spends. Yet life expectancy in the U.S. has risen from 70 to 78 in the past 50 years, com­pared with leaps from 68 to83 in Japan and from 43 to 73 in China.
The rule of law? For a real eye-​​opener, take a look at the lat­est World Eco­nomic Forum (WEF) Exec­u­tive Opin­ion Sur­vey. On no fewer than 15 of 16 dif­fer­ent issues relat­ing to prop­erty rights and gov­er­nance, the United States fares worse than Hong Kong. Indeed, the U.S. makes the global top 20 in only one area: investor pro­tec­tion. On every other count, its rep­u­ta­tion is shock­ingly bad. The U.S. ranks 86th in the world for the costs imposed on busi­ness by orga­nized crime, 50th for pub­lic trust in the ethics of politi­cians, 42ndfor var­i­ous forms of bribery, and 40th for stan­dards of audit­ing and finan­cial reporting.
What about sci­ence?
It’s cer­tainly true that U.S.-based sci­en­tists con­tinue to walk off with plenty of Nobel Prizes each year. But Nobel win­ners are old men. The future belongs not to them but to today’s teenagers. Here’s another strik­ing sta­tis­tic. Every three years the Orga­ni­za­tion of Eco­nomic Coop­er­a­tion and Development’s Pro­gram for Inter­na­tional Stu­dent Assess­ment tests the edu­ca­tional attain­ment of 15-​​year-​​olds around the world. The lat­est data on “math­e­mat­i­cal lit­er­acy” reveal that the gap between the world lead­ers — the stu­dents of Shang­hai and Sin­ga­pore — and their Amer­i­can coun­ter­parts is now as big as the gap between U.S. kids and teenagers in Alba­nia and Tunisia.
The late, lamented Steve Jobs con­vinced Amer­i­cans that the future would be “Designed by Apple in Cal­i­for­nia. Assem­bled in China.” Yet sta­tis­tics from the World Intel­lec­tual Prop­erty Orga­ni­za­tion show that already more patents orig­i­nate in Japan than in the U.S., that South Korea over­took Ger­many to take third place in 2005, and that China is poised to over­take Ger­many too.
Finally, there’s com­pe­ti­tion, the orig­i­nal killer app that sent the frag­mented West down a com­pletely dif­fer­ent path from mono­lithic impe­r­ial China. Well, the WEF has con­ducted a com­pre­hen­sive Global Com­pet­i­tive­ness sur­vey every year since 1979. Since the cur­rent method­ol­ogy was adopted in 2004, the United States’ aver­age com­pet­i­tive­ness score has fallen from 5.82 to 5.43, one of the steep­est declines among devel­oped economies. China’s score, mean­while, has leapt up from 4.29 to 4.90.
And it’s not only that we’re becom­ing less com­pet­i­tive abroad. Per­haps more dis­turb­ing is the decline of mean­ing­ful com­pe­ti­tion at home, as the social mobil­ity of the post­war era has given way to an extra­or­di­nary social polar­iza­tion. You don’t have to be an Occupy Wall Street left­ist to believe that the Amer­i­can super-​​rich elite — the 1 per­cent that col­lects 20 per­cent of the income — has become dan­ger­ously divorced from the rest of soci­ety, espe­cially from the under­class at the bot­tom of the income distribution.
But if we are headed toward col­lapse, what would an Amer­i­can “Oh sh*t!” moment look like? An upsurge in civil unrest and crime, as hap­pened in the 1970s? A loss of faith on the part of investors and a sud­den Greek-​​style leap in gov­ern­ment bor­row­ing costs? How about a spike of vio­lence in the Mid­dle East, from Iraq to Afghanistan, as insur­gents cap­i­tal­ize on our troop with­drawals? Or a par­a­lyz­ing cyber­at­tack from the ris­ing Asian super­power we com­pla­cently underrate?
Is there any­thing we can do to pre­vent such dis­as­ters? Social sci­en­tist Charles Mur­ray calls for a “civic great awakening” — a return to the orig­i­nal val­ues of the Amer­i­can repub­lic. He’s got a point. Far more than in Europe, most Amer­i­cans remain instinc­tively loyal to the killer appli­ca­tions of West­ern ascen­dancy, from com­pe­ti­tion all the way through to the work ethic. They know the coun­try has the right soft­ware. They just can’t under­stand why it’s run­ning so damn slowly.
What we need to do is to delete the viruses that have crept into our sys­tem: the anti­com­pet­i­tive quasi monop­o­lies that blight every­thing from bank­ing to pub­lic edu­ca­tion; the polit­i­cally cor­rect pseu­do­sciences and soft sub­jects that deflect good stu­dents away from hard sci­ence; the lob­by­ists who sub­vert the rule of law for the sake of the spe­cial inter­ests they rep­re­sent — to say noth­ing of our crazily dys­func­tional sys­tem of health care, our over­lever­aged per­sonal finances, and our new­found unem­ploy­ment ethic.
Then we need to down­load the updates that are run­ning more suc­cess­fully in other coun­tries, from Fin­land to New Zealand, from Den­mark to Hong Kong, from Sin­ga­pore to Swe­den. And finally we need to reboot our whole system.
I refuse to accept that West­ern civ­i­liza­tion is like some hope­less old ver­sion of Microsoft DOS, doomed to freeze, then crash. I still cling to the hope that the United States is the Mac to Europe’s PC, and that if one part of the West can suc­cess­fully update and reboot itself, it’s America.
But the les­son of his­tory is clear. Vot­ers and politi­cians alike dare not post­pone the big reboot. Decline is not so grad­ual that our biggest prob­lems can sim­ply be left to the next admin­is­tra­tion, or the one after that. If what we are risk­ing is not decline but down­right col­lapse, then the time frame may be even tighter than one elec­tion cycle.