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The conditions that allowed the United States to dominate the Western Hemisphere and exclude other major powers do not exist in Asia today. China may be stronger than any of its neighbors, but several of them are major industrial powers with considerable potential to check Chinese power, and the world’s other major power—the United States—remains committed to helping defend them. India’s population is now larger and significantly younger than China’s and its economy is growing more rapidly. Many of China’s neighbors are already balancing more energetically: Defense budgets are rising sharply, and Australia, India, and Japan are coordinating with each other and with the United States. The greater their fear of Chinese hegemony, the more vigorous such responses will be.

In addition, India already has a nuclear arsenal and Japan or South Korea could acquire a nuclear deterrent if the need arose. Officials in Tokyo and Seoul have previously made it clear that they see this as a viable option should circumstances require, and possessing their own deterrent would further limit China’s ability to intimidate them. If China does not want more of its neighbors to acquire nuclear weapons, therefore, it should limit its ambitions and make such a step unnecessary.

Militarily, meanwhile, most analysts still see China as far from being a global peer of the United States, despite the rapid modernization of Chinese forces. How significant and lasting is the U.S. advantage? Consider the capabilities that give the United States what the political scientist Barry Posen has called “command of the commons”—that is, control over the air, the open sea, and space. Command of the commons is what makes the United States a true global military power. Until China can contest the United States’ dominance in this domain, it will remain merely a regional military power. We have counted 13 categories of systems as underlying this ability—everything from nuclear submarines to satellites to aircraft carriers to heavy transport planes—and China is below 20 percent of the U.S. level in all but five of these capabilities, and in only two areas (cruisers and destroyers; military satellites) does China have more than a third of the U.S. capability. The United States remains so far ahead because it has devoted immense resources to developing these systems over many decades; closing these gaps would also require decades of effort. The disparity becomes even greater when one moves beyond a raw count and factors in quality. The United States’ 68 nuclear submarines, for example, are too quiet for China to track, whereas China’s 12 nuclear submarines remain noisy enough for the U.S. Navy’s advanced antisubmarine warfare sensors to track them in deep water.

A comparison with the Soviet Union is instructive. The Red Army was a real peer of the U.S. military during the Cold War in a way that the Chinese military is not. The Soviets enjoyed three advantages that China lacks. First was favorable geography: with the conquest of Eastern Europe in World War II, the Soviets could base massive military force in the heart of Europe, a region that comprised a huge chunk of the world’s economic output. Second was a large commitment to guns over butter in a command economy geared toward the production of military power: the percentage of GDP that Moscow devoted to defense remained in the double digits throughout the Cold War, an unprecedented share for a modern great power in peacetime. Third was the relatively uncomplicated nature of military technology: for most of the Cold War, the Soviets could command their comparatively weak economy to swiftly match the United States’ nuclear and missile capability and arguably outmatch its conventional forces. Only in the last decade of the Cold War did the Soviets run into the same problem that China faces today: how to produce complex weapons that are competitive with those emerging from a technologically dynamic America with a huge military R & D budget (now $140 billion a year).

The United States and its Asian partners want to maintain a balance of power in the Indo-Pacific, ostensibly to prevent China from becoming a regional hegemon there. They worry that Beijing will gradually persuade its neighbors to distance themselves from the United States, accept Chinese primacy, and defer to Beijing’s wishes on key foreign-policy issues. In 2018, for example, then-U.S. Defense Secretary James Mattis  China is “harboring long-term designs to rewrite the existing global order. … The Ming Dynasty appears to be their model, albeit in a more muscular manner, demanding other nations become tribute states, kowtowing to Beijing.” Former U.S. officials such as  and  and  writing on U.S. grand strategy——have made similar arguments, and China’s stated desire to be a “” and its efforts to alter the status quo in the South China Sea and elsewhere appear to justify these concerns.

The implications of this view are troubling. If China is actively seeking to become a regional hegemon in Asia and the United States is dead set on preventing it, a direct clash between the world’s two most powerful countries will be difficult to avoid.

Ukraine is a case in point. In going to war, Russia showed a willingness to test its revisionist potential. But the very fact that Russian President Vladimir Putin felt the need to invade is itself a sign of weakness. In the 1990s, if you had told his predecessor, Boris Yeltsin, that in 2023, Russia would be fighting a war to sustain its sphere of influence over Ukraine, which Russian officials back then assumed would end up as a reliable ally, he would scarcely have believed that Moscow could sink so low. It is ironic that now, when unipolarity’s end is so frequently declared, Russia is struggling to try to get something it thought it already had when U.S. primacy was at its peak. And if you had told Yeltsin that Russia would not be winning that war against a country with an economy one-tenth the size of Russia’s, he would have been all the more incredulous. The misadventure in Ukraine, moreover, has greatly undermined Russia’s long-term economic prospects, thanks to the massive wave of sanctions the West has unleashed.

But even if Russia had swiftly captured Kyiv and installed a pro-Russian government, as Putin expected, that would have had little bearing on the global distribution of power. There is no denying that the outcome of the war in Ukraine matters greatly for the future of that country’s sovereignty and the strength of the global norm against forceful land grabs. But in the narrow, cold-hearted calculus of global material power, Ukraine’s small economy—about the same size as that of Kansas—means that it ultimately matters little whether Ukraine is aligned with NATO, Russia, or neither side. Further, Ukraine is not in fact a U.S. ally. Russia would be very unlikely to dare attack one of those. Given how the United States has reacted when Russia attacked a country that is not a U.S. ally—funneling arms, aid, and intelligence to the Ukrainians and imposing stiff sanctions—the Kremlin surely knows that the Americans would do much more to protect an actual ally.

But this view is wrong. The world is neither bipolar nor multipolar, and it is not about to become either. Yes, the United States has become less dominant over the past 20 years, but it remains at the top of the global power hierarchy—safely above China and far, far above every other country. No longer can one pick any metric to see this reality, but it becomes clear when the right ones are used. And the persistence of unipolarity becomes even more evident when one considers that the world is still largely devoid of a force that shaped great-power politics in times of multipolarity and bipolarity, from the beginning of the modern state system through the Cold War: balancing. Other countries simply cannot match the power of the United States by joining alliances or building up their militaries.

Nonetheless, structurally speaking, the core of US monetary power, and by extension the lack of China’s capacity to challenge it, lies in its ability (and willingness) to run large balance of payment deficits to supply the world with its currency. The US remains the consumer of last resort of the world economy, with a current account deficit of US$943.8 billion (or 3.7% of GDP) in 2022, and the fact is that the world is ready to provide it with the necessary credit (and thus generate a large demand for dollars) to continue to perform this role –at least for now–. This would, of course, change if the political deadlock in the US Congress should prevent lifting the debt ceiling and the US were to enter into default. Conclusions What next?

To sum up, the dollar remains dominant, but there are many powers that want to move away from it. Nonetheless, the truth is that all the alternative arrangements are still much smaller in scale and scope than the dollar network. The BRICS called many times to de-dollarise, but the dollar remains the currency of choice for governments, firms and financial institutions around the world to conduct trade and investment. The RMB, the currency with most potential to rival the greenback, is still not very important in its international use and it could take a while before it reaches the dollar, or even the euro, as an international currency, if at all. So, as Susan Strange would put it, we are again discussing the persistent myth of lost US dollar hegemony.

The obvious advantages for the buck are familiarity and scale. Size matters: Around 40% of global trade is invoiced in dollars, four times larger than the US share of global trade. The greenback accounts for 42% of volume across the SWIFT network for interbank transactions. The yuan’s share is 2%. The euro conducts an impressive 36%, but this is mostly intra-euro zone business between the common currency’s 20 members. The euro’s share of global trade is a more modest 16%. There simply isn’t traction for alternatives to the dollar outside respective domestic zones of influence.

The domestic necessity of controlling one’s own currency hugely outweighs the elusive charms of being part of a supranational network; witness the doubts that still cling to the euro’s fitness for purpose given the economic gaps between its member nations. Until and unless the major Asian powers of India, China, Japan and Korea decide to create a new currency, the dollar will remain the world’s currency of first resort.

The centrality of the U.S. dollar in world affairs is mainly determined by economic factors, but geopolitical forces are threatening to weaken its top spot in the currency hierarchy. U.S. sanctions in response to Russia’s invasion of Ukraine have pushed some countries to further reduce their reliance on the dollar. The geopolitical tug of war between allies and foes, liberal and illiberal states carries high stakes. “Great powers have great currencies,” quipped the Nobel laureate Robert Mundell. If the currency system were to become multipolar, U.S. monetary perks would recede, as would the United States’ global economic influence and its ability to use dollars as an alternative to military force when policing international order.

A more fragmented global economy in which security partnerships determine economic relations is coming into view. But an end to the dollar’s dominance is still unlikely. Countries participating in the sanctions against Russia or benefiting from U.S. currency coercion aimed at upholding the liberal international order’s core principle of nonaggression have no incentives to diversify away from the dollar. Even countries opposing Western sanctions are likely to stick with the dollar to preserve their own security and U.S. security guarantees in a hardening geopolitical climate.

Given the country’s recent domestic convulsions, these exhortations for the centrality of the United States in the coming century might seem odd. Today, the United States looks more beset with problems than at any time since the 1930s. Amid the polarization and dysfunction that plague American , it is easy to offer a narrative of U.S. decline. But what keeps the United States afloat, despite its travails, is its progressive impulses. It is the idea of the United States more than the country itself that has stirred the world over the last century. The country’s liberal ideals have inspired leaders of liberation movements elsewhere, from Mahatma Gandhi in India to Vaclav Havel in Czechoslovakia and Nelson Mandela in South Africa. Young people in Hong Kong protesting against the Chinese government have routinely waved U.S. flags. No other state aspiring to world power, including China, has advanced a more appealing vision of a society in which free individuals consent to their political institutions than has the United States.

The story that the United States presents to the world is one of an ongoing enterprise to confront and overcome painful impediments to a “more perfect union,” starting with its original sin of slavery. The United States is a constant work in progress. People around the world held their breath when Americans voted in the 2020 presidential election and again during the January 6 attack on the U.S. Capitol by supporters of President Donald Trump. The global stakes of these moments were profound.

The US Senate’s overwhelming ratification on Wednesday of Finland and Sweden’s accession to NATO was a vote of confidence in those countries, in the Alliance itself, and in the US role as leader of the free world—just as two authoritarian powers, Russia and China, are challenging the international system the United States has led since 1945.

Bringing the two Nordic nations into NATO will not only strengthen transatlantic security amid threats from Russian strongman Vladimir Putin, but also signal the continuing political viability—regardless of the bipartisan doldrums on the home front—of American leadership in the free world.

For over a century, people around the world have lived through an American era: a period dominated by U.S. power, wealth, institutions, ideas, alliances, and partnerships. But many now believe this long epoch is drawing to a close. The U.S.-led world, they insist, is giving way to something new—a post-American, post-Western, postliberal order marked by great-power competition and the economic and geopolitical ascendance of China.

Some greet this prospect with joy, others with sorrow. But the story­line is the same. The United States is slowly losing its commanding position in the global distribution of power. The East now rivals the West in economic might and geopolitical heft, and countries in the global South are growing quickly and taking a larger role on the international stage. As others shine, the United States has lost its luster. Divided and beleaguered, melancholy Americans suspect that the country’s best days are behind it. Liberal societies everywhere are struggling. Nationalism and populism undercut the internationalism that once backed the United States’ global leadership. Sensing blood in the water, China and Russia have rushed forward to aggressively challenge U.S. hegemony, liberalism, and democracy. In February 2022, Chinese President Xi Jinping and Russian President Vladimir Putin issued a joint declaration of principles for a “new era” when the United States does not lead the world: a shot across the bow of a sinking American ship.

The flat tax revolution also suggests that the politics of class warfare is waning. For much of the 20th century, policymakers subscribed to the notion that the tax code should be used to penalize those who contribute most to economic growth. Raising revenue was also a factor, to be sure, but many politicians seem to have been more motivated by the ideological impulse that rich people should be penalized with higher tax rates. If nothing else, the growing community of flat tax nations shows that class‐​warfare objections can be overcome.

National conversations about wealth inequality in the United States have led to proposals for a wealth tax. The motivation is to tax concentrated wealth to raise revenues for public programs and redistribution.

Combining insights from macroeconomic models, James Feigenbaum and Austin Brooksby examine the effects of different wealth tax proposals on wealth inequality. The two models of the economy that they consider are infinite-horizon model and the overlapping-generations model. Infinite-horizon models assume that households never leave the economy and exist forever. The overlapping-generations model assumes that households move in and out of the economy in the same way that generations of people do. Generations share time together in the economy as a new generation enters and the older generation begins to die off.

Tim Newbold of University College London and his team conducted what may be one of the most comprehensive biodiversity analyses to date. They analyzed a database of more than 2.3 million records of more than 39,100 species living in 18,600 sites, representing a far more comprehensive dataset than those included in previous studies of the state of global biodiversity.

"We focused on species abundance because loss of abundance from ecological communities is likely to impair the functioning of ecosystems," explained Newbold.

The democratic peace—the observation that democracies are less likely to fight each other than are other pairings of states—is one of the most widely acknowledged empirical regularities in international relations. Prominent scholars have even characterized the relationship as an empirical law (Levy 1988; Gleditsch 1992). The discovery of a special peace in liberal dyads stimulated enormous scholarly debate and led to, or reinforced, a number of policy initiatives by various governments and international organizations. Although a broad consensus has emerged among researchers regarding the empirical correlation between joint democracy and peace, disagreement remains as to its logical foundations. Numerous theories have been proposed to account for how democracy produces peace, if only dyadically (e.g., Russett 1993; Rummel 1996; Doyle 1997; Schultz 2001).

At the same time, peace appears likely to foster or maintain democracy (Thompson 1996; James, Solberg, andWolfson 1999). A vast swath of research in political science and economics proposes explanations for the origins of liberal government involving variables such as economic development (Lipset 1959; Burkhart and Lewis-Beck 1994; Przeworski et al. 2000; Acemoglu and Robinson 2006; Epstein et al. 2006) and inequality (Boix 2003), political interests (Downs 1957; Bueno de Mesquita et al. 2003), power hierarchies (Moore 1966; Lake 2009), third party inducements (Pevehouse 2005) or impositions (Peceny 1995; Meernik 1996), geography (Gleditsch 2002b), and natural resource endowments (Ross 2001), to list just a few examples. Each of these putative causes of democracy is also associated with various explanations for international conflict. Indeed, some as yet poorly defined set of canonical factors may contribute both to democracy and to peace, making it look as if the two variables are directly related, even if possibly they are not.

Decades after they were supposedly banished from the West, the dark forces of world politics—illiberalism, autocracy, nationalism, protectionism, spheres of influence, territorial revisionism—have reasserted themselves. China and Russia have dashed all hopes that they would quickly transition to democracy and support the liberal world order. To the contrary, they have strengthened their authoritarian systems at home and flouted norms abroad. Even more stunning, with the United Kingdom having voted for Brexit and the United States having elected Donald Trump as president, the leading patrons of the liberal world order have chosen to undermine their own system. Across the world, a new nationalist mindset has emerged, one that views international institutions and globalization as threats to national sovereignty and identity rather than opportunities.

The recent rise of illiberal forces and leaders is certainly worrisome. Yet it is too soon to write the obituary of liberalism as a theory of international relations, liberal democracy as a system of government, or the liberal order as the overarching framework for global politics. The liberal vision of nation-states cooperating to achieve security and prosperity remains as vital today as at any time in the modern age. In the long course of history, liberal democracy has hit been hard times before, only to rebound and gain ground. It has done so thanks to the appeal of its basic values and its unique capacities to effectively grapple with the problems of modernity and globalization.

Presidential candidate Joe Biden has made it clear he would increase taxes as president. His tax plan calls for increasing the top corporate tax rate and the top personal tax rate, removing the cap max for social security, and ending the preferred tax rate for capital gains for wealthy Americans.

The Tax Foundation and the Tax Policy Center project that his tax plan would generate somewhere between $3.2 to $4 trillion over the next ten years.

Before we review our approach in detail, it may be useful to explain why this type of analysis has not been pursued successfully in the past and what makes our effort different from other, broadly related projects. We are not the first to apply an IV framework (more specifically) or multi-equation models (more broadly) to the democratic peace. However, previous attempts suffer from two major problems. First, previous studies have typically used a dyad (country pair) as the unit of observation in analyzing conflict, which requires some summary measure(s) of democracy for a pair of countries rather than the state-level (monadic) democracy measure. 6 Use of a dyadic aggregate to represent regime type creates a discrepancy between the first stage regression (predicting democracy at the country level) and the outcome stage regression (predicting conflict at the dyad level). 7 We avoid this problem by using the directed dyad as the unit of observation in predicting conflict, distinguishing between the potential challenger and target in a dispute. This allows us to connect the first stage equations (predicting the challenger’s and target’s regime types) and the outcome stage equation seamlessly. Doing so has several benefits: the outcome stage model could directly include country-level covariates (such as challenger’s and target’s democracy) without having to convert them to a dyadic summary. This also allows us to estimate the system of equations jointly rather than relying on the “forbidden regression.” 8

Second, a more daunting challenge in applying an IV approach to democratic peace research is the difficulty of finding a plausible instrument for regime type — a variable that is strongly correlated with regime type but is unrelated to war. This is the challenge that has plagued empirical researchers in many fields. For example, a recent study of the effect of regime type on economic growth uses a diffusion-based measure of democracy (i.e., average value of democracies in a given region) as an instrument for democracy (Acemoglu et al. 2019). However, diffusion-based instruments such as this are unlikely to be a valid instrument, due to spatial spill-over, interdependence, and, most importantly, simultaneity (Betz, Cook, and Hollenbach 2018). Recognizing problems with spatial instruments, McDonald (2015) seeks to exploit the very discrepancy between country-level and dyad-level designs as the source of identification. His discussion, however, lacks a clear explanation as to why some determinants of regime type do not influence conflict. 9

We now turn to the results from the outcome stage, where militarized conflict initiation is regressed on democracy measures and other covariates. The univariate clog-log model 32 that ignores the endogeneity, shown in column (1) in Table 1, successfully replicates the standard, dyadic democratic peace finding that democracies are peaceful, though only toward other democracies. Note that, while individual democracy measures have either a positive or insignificant coefficient, joint democracy has a negative coefficient that overwhelms the positive coefficients of individual democracy measures in the univariate model. As a result, the univariate model produces a result that, while democracy may increase conflict against a non-democracy, it decreases conflict against a democracy.

To illustrate this, we calculate the average treatment effect of joint democracy for the challenger and for the target based on the univariate model. These effects are calculated by comparing the predicted probabilities of conflict initiation when changing the regime type of self (challenger or target) from non-democracy to democracy, holding constant the regime type of the other (target or challenger) as democracy. 33 Gray, hollow circles in Figure 4 show the treatment effects of challenger’s and target’s democracy. We can see that both effects are negative and statistically significant at the 95% confidence level.

The democratic peace—the observation that democracies are less likely to fight each other than are other pairings of states—is one of the most widely acknowledged empirical regularities in international relations. Prominent scholars have even characterized the relationship as an empirical law (Levy 1988; Gleditsch 1992). The discovery of a special peace in liberal dyads stimulated enormous scholarly debate and led to, or reinforced, a number of policy initiatives by various governments and international organizations. Although a broad consensus has emerged among researchers regarding the empirical correlation between joint democracy and peace, disagreement remains as to its logical foundations. Numerous theories have been proposed to account for how democracy produces peace, if only dyadically (e.g., Russett 1993; Rummel 1996; Doyle 1997; Schultz 2001).

At the same time, peace appears likely to foster or maintain democracy (Thompson 1996; James, Solberg, andWolfson 1999). A vast swath of research in political science and economics proposes explanations for the origins of liberal government involving variables such as economic development (Lipset 1959; Burkhart and Lewis-Beck 1994; Przeworski et al. 2000; Acemoglu and Robinson 2006; Epstein et al. 2006) and inequality (Boix 2003), political interests (Downs 1957; Bueno de Mesquita et al. 2003), power hierarchies (Moore 1966; Lake 2009), third party inducements (Pevehouse 2005) or impositions (Peceny 1995; Meernik 1996), geography (Gleditsch 2002b), and natural resource endowments (Ross 2001), to list just a few examples. Each of these putative causes of democracy is also associated with various explanations for international conflict. Indeed, some as yet poorly defined set of canonical factors may contribute both to democracy and to peace, making it look as if the two variables are directly related, even if possibly they are not.