2011 has all the makings of going down in history as a disastrous year. Among other things, America and Europe risk being crushed by their own debts. They are seen as the problem children of the world economy and get lectured to by state capitalists from China, diplomats from Singapore and economists from India. So it is not strange that many observers with a feeling for the times sense that four centuries of western domination are at an end and see the sun rising in the Far East.

The American president is behaving accordingly : he thinks America must get its own economic house in order before embarking on further foreign interventions. If even the most powerful man in the world thinks that Washington has taken on too much, then one can tend to agree with historian Paul Kennedy (who wrote on the theme in his 1987 work The Rise and Fall of the Great Powers) that America is suffering from imperial overstretch.

Experimentation and innovation

However, Kennedy made his prophecy shortly before the end of the Cold War. Not only was he blind to the global rise of democracy, but also missed the collapse of Soviet communism occuring right before his eyes. You would think that in the wake of such events, his statements would be a little more reserved, but no, he yet again believes that the West reached an historic “watershed” in which its dominance is petering out almost unnoticed.

Kennedy is a historian for whom economic factors are the most crucial and who attaches less value to the power of ideas and “great men”. Nevertheless these are not the best criteria to guage decline at a global level. It is much more important to see how political systems respond when they go through crisis and and how they cope with challenges hitherto never experienced.

If the Soviet leadership had not thrown in the towel in the eighties, the Berlin Wall might still be standing. If in 1980, Ronald Reagan and Margaret Thatcher had not resisted growing Soviet influence, the Kremlin may have possibly clung to its own power politics. Why political reformers in Moscow caved in and Beijing’s economic reformers did not will always be subject to historical speculation. However, they show that unquantifiable forces such as determination and faith in one’s cause actually play a decisive role.

When it comes to experimentation and innovation, it is much too early to write Europe off. With the introduction of the euro and EU expansion into Eastern Europe, no other continent has witnessed such a radical trans-national transformation in the last decade. It is only natural then that such transformations falter and face challenges. It remains an achievement therefore that the euro was introduced according to plan and that the eurozone, in spite of a complex debt problem whose scale few had predicted, has so far not disintegrated. This demonstrates that Europe holds much greater political power than it is generally credited with.

A world economy shaped by western ideas

The current crisis, with all its financial entanglement, is leading (albeit unintentionally) to an unprecedented European solidarity that will be difficult to reverse. European leaders including Angela Merkel and Nicolas Sarkozy, and the European Central Bank are also displaying an impressive ability to learn as they improvise their way through uncharted waters. That the media sees this differently is because point scoring sets the tone and that political leaders are routinely slated. However, I think you can only really judge the calibre of politicians when they have their feet in the mire – which is now the case.

Of course, many things may go wrong, and Atlantic cooperation has seen better days. But the East can only dream of such pacification mechanisms. And even if Asia – still plagued by all sorts of disasters and having still to prove itself when it comes to enduring self-governance – has its future ahead of it, it will nevertheless be a future in a world economy shaped by western ideas. You would have to be a true defeatist to then still speak of the decline of the West.