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The United States has been shaped by three far-reaching political revolutions: Thomas Jefferson’s “revolution of 1800,” the Civil War, and the New Deal. Each of these upheavals concluded with lasting institutional and cultural adjustments that set the stage for new phases of political and economic development. Are we on the verge of a new upheaval, a “fourth revolution” that will reshape U.S. politics for decades to come? There are signs to suggest that we are. In fact, we may already be in the early stages of this twenty-first-century revolution.
The great recession that began in 2008 caused many to suggest that the United States is entering a period of “decline” during which it will lose its status as the world’s most powerful and prosperous nation state. The metaphor of “decline” presumes that the American people will sit by passively as their standard of living and international status erode year by year. That is unlikely to occur: Americans will do everything in their power to reverse any such process of national decline. Thus, what the United States is now facing is not a gradual decline but a political upheaval that will reshape its politics, policies, and institutions for a generation or two to come. There is no guarantee that the nation will emerge from this crisis with its superpower status intact, just as there were no guarantees that it would emerge from the Civil War or the Great Depression in a position to extend its wealth and power. The most that we can say is that, in the decade ahead, Americans will struggle to forge a governing coalition that can guide the nation toward a path of renewed growth and dynamism.
The financial crisis and the long recession, with the strains they have placed upon national income and public budgets, are only the proximate causes of the political crisis now unfolding in the United States. The deeper causes lie in the exhaustion of the post-war system of political economy that took shape in the 1930s and 1940s. One pillar of that system emerged out of the New Deal with its emphasis upon national regulation of the economy, social insurance, expanding personal consumption, and public debt; the second emerged out of World War II with the U.S. dollar as the world’s reserve currency and the U.S. military as the protector of the international trading system. The post-war system created the basis for unprecedented prosperity in the United States and the Western world. That system is now unwinding for several reasons, not least because the American economy can no longer underwrite the debt and public promises that have piled up over the decades. The urgent need to cancel or renegotiate these debts and public promises on short notice will ignite the upheaval referred to here as “the fourth revolution.” There will follow an extended period of conflict in the United States between the two political parties as they compete for support either to maintain the post-war system or to identify a successor to it.