December 2, 2001
By NIALL FERGUSON
ake the long view. What will New York be like on Sept. 11, 2011? It's not
difficult to imagine a rather wretched future. You need only visit one of
those cities -- Jerusalem or Belfast -- that have been fractured by terrorism
and religious strife to get a glimpse. Imagine a segregated city, with a
kind of Muslim ghetto in an outer borough that non-Muslims can enter only
-- if they dare -- with a special endorsement on their ID cards. Imagine
security checkpoints at every tunnel and bridge leading into Manhattan, where
armed antiterrorist troops check every vehicle for traces of explosives and
Does that mean you also have to count on even worse gridlock
on the Van Wyck Expressway? No, because you also need to imagine a decline
in the number of cars on the road. For by 2011, the third and final oil shock
will have heralded the end of the internal-combustion era.
Still, there will be some comfort to be found downtown. There,
rising like a phoenix from the rubble of the World Trade Center, will be
that gleaming monument to American resilience: the twin towers of the Nafta
Center. Even if world trade couldn't be rebuilt after the Great Depression
of 2002-03, at least the city's beloved landmark could. And the new towers
will be even taller -- thanks to the antiaircraft turrets on top.
In its immediate aftermath, the destruction of the World Trade Center looked
like one of those events -- the assassination at Sarajevo, the bombing of
Pearl Harbor -- that set history on a new course. Some excitable commentators
began talking about ''World War III'' almost the same day the twin towers
fell. That's one possible future. Much more likely, however, is the nightmare
scene sketched above. That's because this outcome could arise out of already
discernible trends, all of which predated Sept. 11, 2001. Tragic and
spectacular though it was, that event was far less of a turning point than
is generally believed.
We should be wary, in fact, of ever attaching too much importance
to any single event. It was not Gavrilo Princip alone who started World War
I. In his great novel, ''The Man Without Qualities,'' Robert Musil dismissed
the idea that history moves in a straight line like a billiard ball, changing
direction only when struck. For Musil, history was more like ''the passage
of clouds,'' constantly in flux, never predictable. That quality is what
makes it impossible to predict where exactly we will be 10 years from now.
Yet Musil's analogy of history and clouds illuminates something
else. Though the weather is hard to forecast, the range of possible weathers
is not infinitely large. It may not rain tomorrow, but we know that if it
does, it will rain water, not boiling oil. It may not be quite as warm as
yesterday, but we know that it will not be minus 50 degrees.
In other words, Sept. 11 was the historical equivalent of
a violent and unpredictable storm. But the storm did not alter the fact that
summer was slowly shading into fall. In just the same way, the attacks on
New York and Washington, however shocking, did not alter the direction of
several underlying historical trends. In many respects the world will not
be so very different in 2011 from the world as it would have evolved under
the influence of those trends, even had the attacks not happened.
The first deep trend is obvious enough: the spread of terrorism -- that
is to say the use of violence by nonstate organizations in the pursuit of
extreme political goals -- to the United States. This kind of terrorism has
been around for quite a while. Hijacking planes is certainly not new: since
the late 1960's, when the tactic first began to be used systematically by
the Palestine Liberation Organization and its sympathizers, there have been
some 500 hijackings. As for the tactic of flying planes directly at populous
targets, what else were the 3,913 Japanese pilots doing who killed themselves
and many more American servicemen flying kamikaze missions in 1944 and 1945?
All that was really new on Sept. 11 was that these tried-and-tested
tactics were applied in combination and in the United States. Between 1995
and 2000, according to State Department figures, there were more than 2,100
international terrorist attacks. But just 15 of them occurred in North America,
causing just seven casualties. It was the successful extension of international
terrorism to the United States that was the novelty.
A novelty, yes, but hardly a surprise. Terrorism had been
a fact of life in major cities around the world -- including New York's elder
sister London -- for decades. The only surprising thing was that New York
was spared for so long. Put it this way: if economics could be globalized,
why not political violence? The two are in fact connected. Year after year
it becomes easier for small bands of fanatics to perpetrate mass destruction
because the means of destruction get cheaper and more readily available.
The last time I checked, a used AK-47 assault rifle could be purchased in
the United States for $700 and a new one for $1,395, almost exactly the price
of the portable computer on which this article was written.
In the same way, the real cost of a nuclear warhead -- and
certainly the real cost of a kiloton of nuclear yield -- is lower today than
at any time since the Manhattan Project achieved its goal. That cost two
billion 1945 dollars. Converted into 2001 prices, that figure rises roughly
tenfold, which is enough to buy more than 400 Trident II missiles. (Let's
face it: if nukes were expensive, Pakistan wouldn't have them.) It seems
reasonable to assume that the same process has reduced the cost of biological
weapons like refined anthrax.
The bad news is that no amount of warfare against the states
that harbor terrorists will rule out further attacks. The Western European
experience of combating leftist and nationalist terrorism shows that the
real war against terrorism has to be fought on the home front by domestic
intelligence agencies, police forces and humdrum security guards around all
So, welcome to the world of the daily security check, the
fortnightly bomb scare and the annual explosion. Ten years from now, New
York firefighters and Washington postal workers will feel the same weary
resignation that Londoners developed during the I.R.A.'s bombing campaign.
he second trend that Sept. 11 did nothing to change is the economic downturn.
The asset bubble of the late 1990's peaked a year and a half before the terrorists
struck. And despite their proximity to Wall Street, the real crashes of Sept.
11 did not cause a metaphorical crash on the stock market -- just its temporary
Admittedly, in the immediate aftermath of the attacks, investors
had to grit their teeth as prices threatened to go into free fall. Yet so
far, the deflation of the late 1990's asset price bubble has been a gentle
affair compared with the cataclysmic meltdown that followed the bubble of
the 1920's. To give some orders of magnitude, a crash on the 1929-32 scale
would take the Dow down from over 11,723 -- where it stood at its peak in
January last year -- to about 1,266 by November next year. On Nov. 15, it
stood at 9,872, less than 3 percent down from Sept. 10. When Alan Greenspan
coined the phrase ''irrational exuberance,'' the index was 6,473. In this
light, the most striking thing about the economic consequences of Sept. 11
would seem to be their insignificance. A 3 percent drop in the Dow is nothing.
Oil prices, too, have continued their yearlong decline. And there has been
virtually no movement in long-term interest rates, which might have been expected
at a time of increased political risk.
Nevertheless, the world economy has two serious economic
weaknesses -- also predating Sept. 11 -- that cannot be ignored.
The first is the nonglobal nature of globalization. Far
from being perfectly integrated, the world's markets for goods, capital and
labor appear to have become remarkably segmented. Thus, the overwhelming
bulk of American, Canadian and Mexican trade now takes place within the North
American Free Trade Area, just as most European trade takes place within
Europe. Back in 1913, international capital was truly international: about
63 percent of foreign direct investment in 1913 went to developing countries.
But in 1996, the proportion was just 28 percent. Labor mobility is also distorted,
with the United States able to cherry-pick the best-qualified and most-talented
workers from European and Asian economies under its various visa programs
while letting in many more unskilled (and untaxed) Latino workers through
the Mexican back door.
This is one key reason that the process we call globalization
has tended to result in widening inequality between nations. In the 1960's,
the richest fifth of the world's population had a total income 30 times as
great as the poorest fifth's; in 1998, the ratio was 74:1. In 1965, real
gross domestic product per capita in Chad was one-fifteenth of the
U.S.'s ; in 1990, one-fiftieth. If there was a substantial measure of convergence
of incomes during the first age of globalization, in this age there is a pronounced
divergence. And such inequality seems likely to increase the resentment felt
in poorer countries toward the super-rich United States. (That said, we should
not make the mistake of assuming that this poverty is the principal cause
of support for organizations like Al Qaeda, most of whose recruits come from
relatively prosperous backgrounds.)
Even more worrying is the medium-term outlook for global
energy supplies. The rise of the S.U.V. as a status symbol shows how complacent
Americans are about their supply of oil and petroleum. They should not be.
True, oil prices are low right now: a barrel of West Texas crude sells for
about $20, less than half the price (in real terms) as at the peak of the
oil crisis in 1982. But what made prices go through the roof in the 1970's
and early 1980's was political instability in the Middle East: the anti-Israel
Arab oil embargo, the Iranian revolution and the Iran-Iraq war. It's no great
stretch to imagine something similar happening again. (Even the demand-side
shock of the recent U.S. boom trebled the oil price between December 1998
and October 2000's $33 peak.)
The realities are stark. The Middle East accounts for 31
percent of world oil production but just 6 percent of consumption. North
America accounts for about 18 percent of world oil production but consumes
30 percent. Even more sobering, however, are the figures for world oil reserves:
North America has just 6 percent of them; the Middle East 65 percent.
Feeling comfortable? Total U.S. energy consumption -- of
which petroleum accounts for about two-fifths -- has risen about 27 percent
since 1972, while oil reserves have fallen by about 30 percent. Right now,
the United States depends on the Persian Gulf -- mainly Saudi Arabia -- for
about 12 percent of its oil imports, but that figure is bound to rise as
OPEC countries account for an ever-increasing share of the world's available
The time frame may be much tighter than S.U.V. manufacturers
realize. Kenneth S. Deffeyes of Princeton University predicts that global
oil production will start to decline from 2004. At a conference at the Royal
United Services Institute in London in October, experts warned that from
2008 supplies of non-OPEC oil will fall steeply -- reaching close to zero
in 2040 -- and that, barring some major technological breakthroughs, there
will be an effective world shortage from 2010.
Yet even that estimate could prove to be overoptimistic if
there is a regime change in Saudi Arabia. Like ''the coming oil crisis,''
the fall of the Saudi monarchy has been prophesied so often that many people
have stopped believing it could ever happen. Don't be so sure. The position
of the ruling dynasty increasingly resembles that of the shah of Iran in the
late 1970's. Low oil prices may have been good for the West, but they have
produced a significant fall in per capita income in Saudi Arabia, creating
a reserve army of disenchanted young men who are the natural recruits of Al
Make no mistake: radical Islam -- especially the Wahhabist
strain found in Saudi Arabia -- is a revolutionary movement that has set the
Middle East ablaze before now (in the 1880's for example, when a Sudanese
holy man calling himself the ''Mahdi,'' or ''expected guide,'' emerged as
the Victorian Osama bin Laden). A revolution in Saudi Arabia would be as traumatic
a blow to the world economy as the Iranian revolution of 1979.
The days of the S.U.V. -- perhaps even the days of the internal-combustion
engine -- are therefore numbered. American car manufacturers have less than
a decade to come up with an alternative and affordable energy source to gasoline.
If they fail, the world economy could well find itself reliving the stagflation
of the 1970's.
There is a third trend that has been at work for more than
a decade: the transition of American global power from informal to formal
Since 1945, the United States has largely been content to
exercise influence around the world indirectly: exercising economic leverage
through multinational corporations and international agencies like the International
Monetary Fund and political power through ''friendly'' indigenous regimes.
As Britain discovered in the 19th century, however, there
are limits to what can be achieved by informal imperialism. Revolutions can
overthrow the puppet rulers. New regimes can default on their debts, disrupt
trade, go to war with their neighbors -- even sponsor terrorism.
Slowly and rather unreflectively, the United States has been
responding to crises of this sort by intervening directly in the internal
affairs of faraway countries. True, it has tended to do so behind a veil
of multilateralism, acting in the name of the United Nations or NATO. But
the precedents set in Bosnia and Kosovo are crucial. What happened in the
1990's was that those territories became a new kind of colony: international
protectorates underwritten by U.S. military and monetary might.
Since the United States and Britain went to war against Afghanistan
-- with the avowed intention of replacing the Taliban regime -- I have found
myself quoting Rudyard Kipling on ''the White Man's Burden,'' particularly
those lines (written just over a century ago) that enjoined Americans to
fight what he called ''the savage wars of peace'' while at the same time
filling ''full the mouth of Famine.'' (Kipling would certainly have grasped
the rationale of simultaneously dropping cluster bombs and food parcels.)
Of course, no one today would be so politically incorrect as to call governing
Afghanistan ''the White Man's Burden.'' Even in his messianic speech at the
Labor Party conference in October, British Prime Minister Tony Blair talked
innocuously about ''partnership,'' ''the politics of globalization'' and
''reordering this world.'' Yet the underlying message of that speech was
There are good reasons to wonder how readily Americans will
assume the Victorian burden, of course. The strengths of the U.S. economy
may not be the strengths of a natural imperial hegemon. The British Empire
relied on an enormous export of capital and people, but since 1972 the American
economy has been a net importer of capital (to the tune of 15 percent of
G.D.P. last year), and the United States remains the favored destination
of immigrants from around the world, not a producer of would-be colonial
emigrants. Moreover, Britain in its heyday was able to draw on a culture
of unabashed imperialism dating back to the Elizabethan period. The United
States -- born in a war against the British Empire -- will always be a reluctant
ruler of other peoples.
But reluctance isn't the same as renunciation. And the obvious
lesson the United States can draw from the British experience of formal empire
is that the world's most successful economy can do a very great deal to impose
its preferred values on less technologically advanced societies. It is nothing
short of astonishing that Great Britain was able to govern about a quarter
of the world's population and land surface -- and to control nearly all of
its sea lanes -- without running up an especially large defense bill (an
average of just 3 percent of net national product between 1870 and 1913,
lower for the rest of the 19th century). And today the United States is vastly
wealthier relative to the rest of the world than Britain ever was. In 1913,
Britain's share of total world output was a shade over 8 percent; the equivalent
figure for the United States in 1998 was just under 22 percent. Nor should
anybody pretend that, at least in fiscal terms, the cost of expanding the
American empire -- even if it meant a great many little wars like the one
in Afghanistan -- would be prohibitive. Last year, American defense spending
stood at just 2.9 percent of G.D.P., compared with an average for the years
1948-98 of 6.8 percent.
have not yet raised one trend, much commented on -- the supposedly inescapable
''clash'' between a democratic West and an intolerant Islam. From this viewpoint,
Sept. 11 was a moment of revelation rather than redirection, as America
belatedly woke up to a struggle the Muslim world has been fighting for years.
I don't buy this.
Primarily that's because the most striking features of modern
Islam are its amazing heterogeneity and geographical dispersion. Violence
between ethnic or religious groups is not dividing the world into great blocs.
As we have already seen in the Balkans (where we were inclined to side with
the Muslims, don't forget), the tendency is for existing political units
to fragment. So any clash of civilizations will occur not on conventional
battlefields but in the streets of multicultural states like Bosnia -- or
even cities like Bradford in England, where gangs of Muslim youths rioted
Think of it as deglobalization: for one of the great
paradoxes of our time is that the economic integration of the world has coincided
with its political disintegration. Excluding sub-Saharan Africa, there were
64 independent countries in the world in 1871. Forty-three years later, on
the eve of World War I, imperialism had reduced the number to 59. But since
World War II, there have been sustained increases. In 1946, there were 74
independent countries; in 1950, 89. By 1995, the number was 192.
In this context, the main significance of movements like
Islamic fundamentalism may lie in their centrifugal as opposed to centripetal
effects. Rather than anticipating a clash between monolithic civilizations,
we should expect a continued process of political disintegration as religious
and ethnic conflicts challenge the integrity of existing multicultural nation-states.
Civil war has, after all, been the most frequent kind of war since 1945: something
like two-thirds of all postwar conflicts have been within rather than between
states. From Yugoslavia to Iraq to Afghanistan, what the United States keeps
having to confront is not a united Islam but a succession of fractured polities,
racked by internecine war. (The same could be said about Somalia, Sierra
Leone and Rwanda.)
Why has economic globalization coincided with political fragmentation
in this contradictory fashion? One possible answer is that globalized market
forces increase regional inequalities within traditional nation-states. Another
is that the superficial homogenization of popular culture -- through Hollywood,
the pop-music industry and the Anglicization of technical communication --
promotes an accentuation of parochial identities as a kind of a reaction.
But the best answer may be that as more and more ethnically heterogeneous
countries adopt (with American encouragement) the combination of economic
openness and political democracy, their rationale simply falls away. Central
government loses its legitimacy as the planner of the economy, and ethnic
minorities vote for separatist parties.
These, then, are the four deep trends shaping the early 21st century. First,
the globalization of terrorism. Second, the approach of a second energy crisis.
Third, the formalization of American imperialism. And finally, the fragmentation
of the multicultural polity.
What are the implications for the world of Sept. 11, 2011?
With the caveat that this is only one of a number of possible futures, let
me repeat my earlier predictions. Terrorism will be a part of everyday life.
Meanwhile, American troops will be patrolling both Kabul and Kosovo. And
the divisions between ethnic and religious groups in the United States --
indeed throughout the world -- will be even more pronounced. So much for
the bad news. The good news? There will be fewer S.U.V.'s clogging up the
Let me conclude with a fifth prediction. Most people will
regard all of these things as direct consequences of the terrorist attacks
10 years before. Indeed, The New York Times
Magazine will carry an article saying that Sept. 11, 2001, was one of the
great turning points of modern history.
Wrong. The unpalatable truth is that it would all have happened
Niall Ferguson is a professor of political and financial
history at the University of Oxford. He is the author of ''The Cash Nexus''
and a contributor to ''The Age of Terror,'' to be published this month by