America as superpower: shaken, not deposed

Another is that no other country or international institution appears ready to step into America's shoes. By opting last weekend for nationalist strategies rather than a common European approach to the credit crisis, for example, Europe's top finance ministers suggested that even Europe is not ready for a role of unified leadership.

Still another reality: Broad adherence to the Washington-driven international economic prescriptions of recent decades, under which the market and private sectors took over for a reduced state, is a thing of the past.

"This crisis has finished off the Washington consensus," the standard package of free-market reforms promoted by Washington and the Bretton Woods institutions to replace the state-run economies of developing countries, says Anatol Lieven, a professor at King's College London and a senior fellow at the New America Foundation in Washington. "We're going to see much greater state interventionism."

Yet Mr. Lieven adds a caveat: "That doesn't mean there's a new economic model to replace the old one," he says. "It's still much too early to know if China's authoritarian capitalism, as one example, is the wave of the future – or if its export economy might yet collapse."

Proponents of the shrinking America thesis say it is much more than the end of the Washington consensus that supports their vision. They cite everything from America's reduced leadership role in the Middle East to its fall from the lofty position as the world's most admired power.

"Look at Georgia," says Wallerstein of Yale, noting that Russian troops remain in that country two months after demands from Washington that it depart. "All the US can do is shout – and not even shout that loud."

Yet it remains unclear exactly what Americans would be adjusting to – since in many key categories, the US remains rungs above any other world power.

"Keep in mind how extraordinarily broad and sweeping America's claim to global leadership has been," says Lieven of the New America Foundation. "Whatever decline that leadership experiences will be relative to the weaknesses of others, and likely to leave it with reduced but still unrivaled power for some time to come."

That picture of reduced yet still unrivaled power is one that pops up in a wide variety of discussions. As David Kay, a nonproliferation expert and former US weapons inspector, said at an Iran forum recently, "I hate to agree with [Iranian President Mahmoud] Ahmadinejad on anything, but the American empire is gone." He then added, "But we can lead," and on issues like Iran's nuclear program or international nonproliferation efforts, "We probably have the most important leadership role."

How will the US and world adjust?

Regardless of whether one sees an American eagle of clipped wings or one that is simply flying closer to the pack of world powers, much appears to ride on how both America and the world adjust to the new era for world leadership ahead.

On one hand, Wallerstein says, how the US manages its "descent" from global hegemony will go a long way in determining how damage-free the process is for America and the world. He finds the process has recently taken a promising tack: Compare, he suggests, the unilateral muscularity of President Bush's first term with a greater reliance on diplomacy in the second.

Coming from a different perspective, Lieber of Georgetown notes that many world powers still choose to "bandwagon" with the US – take India and the watershed alliance it recently forged with America.

But for the moment, it's the financial crisis that is providing a gauge of America's enduring leadership capacity. With many economists citing international coordination as key to righting the global economic ship, one test will come Friday when finance ministers of the world's seven major economies meet in Washington.

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