The entire fabric of world order that the United States established after 1945 — the Pax Americana — rested on the foundation of U.S. military and economic preponderance. Remove the foundation and the structure crumbles. The decline of American power means the end of U.S. dominance in world politics and the beginning of the transition to a new constellation of world powers.

The result will be profound changes in world politics. Emerging powers will seek to establish spheres of influence, control lines of communication, engage in arms races and compete for control over key natural resources. As America’s decline results in the retraction of the U.S. military role in key regions, rivalries among emerging powers are bound to heat up. Already, China and India are competing for influence in Central and Southeast Asia, the Middle East and the Indian Ocean. Even today, when the United States is still acting as East Asia’s regional pacifier, the smoldering security competition between China and Japan is pushing Japan cautiously to engage in the very kind of “re-nationalization” of its security policy that the U.S. regional presence is supposed to prevent. While still wedded to its alliance with the U.S., in recent years Tokyo has become increasingly anxious that, as a Rand Corp. study put it, eventually it “might face a threat against which the United States would not prove a reliable ally.” Consequently, Japan is moving toward dropping Article 9 of its American-imposed Constitution (which imposes severe constraints on Japan’s military), building up its forces and quietly pondering the possibility of becoming a nuclear power.

Although the weakening of the Pax Americana will not cause international trade and capital flows to come to a grinding halt, in coming years we can expect states to adopt openly competitive economic policies as they are forced to jockey for power and advantage in an increasingly competitive security and economic environment. The world economy will thereby more closely resemble that of the 1930s than the free-trade system of the post-1945 Pax Americana. The coming end of the Pax Americana heralds a crisis for capitalism.