The collapse of empires

In the Washington Post, Kevin Phillips sees parallels between America's current situation and the collapse of the empires of Spain, Holland, and France. Most pernicious, he claims, is an over-reliance on finance as a driver of the economy. Financial expansion leads to massive debt, which leads to debt crunches (like the one we're in now), and eventually to imperial collapse.

I don't doubt the part about the financial sector. Debt crises have accompanied financial expansions for as long as anyone can remember. But when he predicts that the U.S. will suffer a "collapse" along the lines of Britain or Holland, Phillips takes the analogy too far.

The big difference is that those empires were empires - most of the land they controlled was outside the home nation, populated by people with no real allegiance to the core. When the central nation suffered a period of weakness, the colonies took advantage of the situation to gain independence, and voila, imperial collapse. But the United States isn't an empire (our recent adventure in Iraq notwithstanding), it's a single really big nation. Even if financial recklessness does lead to a loss of our economic preeminence, we're still the same country, with the same land and the same number of people. There are no colonies to break away.

Britain and Holland are still very rich countries. If the United States stays rich, we'll continue to be a very powerful and influential nation. To bring us down, economic decline would have to last a long, long time - plenty of time for us to elect wise leaders to right our ship of state.