02/11/2012 12:39 GMT | Updated 23/01/2014 18:58 GMT

This Presidential Election Is About One Issue - American Decline

It's been a struggle to convince myself that this year's US presidential race matters very much. In 2004 and 2008, I followed every twist and turn of the campaign, every new poll, on a daily and sometimes hourly basis from the convention season to the result. This time I have come to the party late and without any enthusiasm. I paid no attention to the convention speeches, didn't stay up to watch any of the debates and have only recently and sporadically started following the polls.

I still care about the result, but not in the way I used to. A decade ago America was the "indispensable nation", the world's sole remaining superpower, the country around which the entire post-Cold War international order had been built. Decisions taken in the White House were life-changing events of global significance, as the War on Terror showed. But all of that is now for the history books, because the unipolar moment has passed and America is now a country in decline.

I need to be clear about what I mean. America's decline is relative, not absolute. Despite the blow of the financial crash, it is not about to stop growing, inventing and trading. The point at which China overtakes it as the world's largest economy is now as little as a decade away, but America will remain the wealthiest country per capita for a long time after that. Its military dominance is assured for the foreseeable future and it will continue to be a pole of attraction on the strength of its values and its openness for longer still.

What has gone is the pre-eminence that allowed America to write the international rulebook according to its own design. The mighty dollar is now balanced by the financial and manufacturing power of China and other emerging economies. The G7, IMF and World Bank, the traditional instruments of American economic hegemony, have been downgraded in favour of the G20. America's ability to deal with rogue states like Syria and Iran now depends on multilateral diplomacy, not unilateral force. If we consider the rise of Asia and the revolutionary changes sweeping the Arab world, it seems that the most important world-changing events today are happening in spite of America, not because of it.

Two things changed to make that happen. The first was the War on Terror itself. Intended to bolster American power by emboldening allies and demoralising enemies, it achieved the opposite by undermining confidence in the wisdom of American leadership and exposing the limitations of American military power. The greatest beneficiary of the Iraq War turned out to be Iran, while Afghanistan shows signs of reverting to Taliban rule once America leaves. The $3 trillion costs, effectively underwritten by the People's Bank of China, have contributed to record US national debts and become a textbook example of 'imperial overstretch'. America continues to enjoy an immense preponderance of military strength, but it no longer seems able to translate it into favourable political outcomes on the ground.

The second thing to have changed is that the financial crisis has put an end to the Washington Consensus as the ideological basis of globalisation. Ten years ago George W Bush boasted that American-style capitalism constituted the "single sustainable model for national success". Today it no longer looks either successful or sustainable. While America has been struggling to find the road to recovery, China has been busy developing bilateral economic ties and expanding its portfolio of global investments. Angela Merkel has made two trips to China this year, hoping that its deep pockets will part-fund a solution to the eurozone debt crisis. Earlier this year the African Union unveiled its new $200 million headquarters, built and paid for by China. The financial crisis didn't create these trends, it merely accelerated them; so economic recovery will not mark a return to the status quo ante. Political influence follows money, and just as surely as the fall of the Berlin Wall ushered in the unipolar moment, the fall of Lehman Brothers drew it to a close.

American decline is an established reality and Barack Obama and Mitt Romney offer competing ideas about how to respond. Obama the realist wants to reconfigure American power and manage the process of decline in order to preserve as much American influence as possible in a multipolar world. He is reducing military commitments and spending, prioritising Asia over Europe, minimising points of unnecessary conflict with countries like Russia, taking multilateralism seriously, strengthening America's soft power potential and emphasising the need to rebuild economic competitiveness.

Romney the idealist wants to reverse decline and restore American primacy. Believing that power is a matter of will alone, he calls for a return to the assertive foreign policy of Bush the Second, a more adversarial relationship with China, the designation of Russia as "number one geopolitical foe", higher military spending and a willingness to use unilateral force against rogue states. But these are fantasies divorced from any understanding of real world. Take his idea to contain Russia by developing closer ties to the countries of Central Asia. These countries do indeed want to balance their relations with Moscow, but it is to China that they now look as their balancer of choice. Likewise the faith in American military leadership. It is impossible to imagine any major ally overruling public opposition to fight alongside President Romney, as Blair did for Bush.

It is the manner of America's decline, rather than its dominance, that makes Tuesday's election important to us. An America that remains globally engaged and powerful, albeit in reduced circumstances, under Obama, is very much in Britain's interests. We and the rest of Europe are also in relative decline and we will need to work more closely with each other and America in the future to preserve a broadly liberal international order. President Romney would pull the old levers of American power only to find them break in his hands. The reaction to disillusionment could easily be a reversion to a Republican tradition far older than neoconservatism - a narrow and resentful form of isolationism. That would make the world a more difficult and dangerous place for all of us.

In the two decades following the end of the Cold War, US presidential elections became, in effect, contests to elect the President of the World. Many of us without a vote hated that fact, but it was a fact nonetheless. Those days are gone forever. The result on Tuesday still matters, but it is now only one factor among many determining the course of global politics. If you are looking for an event that is likely to impact directly on our interests over the next decade, we should probably pay more attention to next year's Bundestag elections. Can someone please tell me who Germany's Nate Silver is?