Tuesday, February 1, 2011

The Atypicality of U.S. Power and Influence, con.

. Tuesday, February 1, 2011

My previous post criticizing John Quiggin for his views on the decline of the US attracted responses from him both here and at Phil Arena's place. To a large degree I think the disagreement between Quiggin and I (plus the other academic IR folks who have responded to him, every single one of which -- that I've seen -- has disagreed with him) stems from the fact that we're speaking different languages and seeing different worlds. For example, Quiggin asserts that the US has more or less the same amount of power and influence that any developed state with a comparable population would have. Ignoring the question of how it secured that level of development, I might agree with him if he'd said instead that the US has more or less the same amount of power and influence that any developed state with a comparable population would have, that also had the same preferences as the US has had, and that emerged victorious from the two major conflicts of the past century (the European wars and the Cold War) would have. In other words, I'd agree with him if he'd said the actual US has the same level of power and influence that a hypothetical country that resembled the US in every significant way would have. But these qualifications explicitly exclude the EU, Japan, China, or any other state/group of states.

In his comment on my previous post he writes:

As regards your claim that "the system was largely created and maintained by the US", I think the British might have something to say about that, as well as about the fact that there is life after decline.

To anyone with a basic understanding of the power politics that got the US into the WWII, and the system it set up afterwards, this is patently absurd. Quiggin is an economist, so I'm assuming he's talking mostly about economics, but even there he's still thinking in a too-narrow, reductionist way. What would the British "life after decline" look like if the US had not created and maintained a credible postwar order? Would British standards of living be different if it faced constant security threats from Germany and Russia during the past 60 years without a US alliance? Has Britain not benefited greatly, in economic terms, from the special relationship? To ask these questions is to answer them. Previous imperial declines were not so comfortable.

For the best treatment on this I'll refer readers and Quiggin to Ikenberry (esp. chapter 6). Summarizing, the US always intended to drastically revise the British order following WWII, and it did so. This was obvious at least as early as the 1941 Atlantic Charter and the terms of the Lend-Lease agreement, a precondition for the end of US neutrality which demanded the dismantling of the imperial preference system (and thus the empires themselves) and an institution of a rules-based, multilateral, non-discriminatory order centered on economic openness and national self-determination. These principles were sometimes honored in the breach, but this was nevertheless in stark contrast to the imperial competitions that led to the European wars, and Churchill knew that he was selling the British empire in exchange for the end of America's neutrality (although he tried to walk it back later, until the US rebuffed him). Britons that wish to dispute this characterization can take it up with their Bulldog if they like. The resulting postwar institutions -- UN, GATT, IMF, -- were based on these principles, as well as rehabilitation of the defeated Axis and the establishment of anti-imperial norms. All of these were insisted on by the US, and none of them were possible without it.

In other words, the postwar order the US established was focused on accommodation and reciprocity. So Quiggin's next challenge -- "There isn't a single one of these examples where the US has in fact prevailed over the united opposition of the EU and Japan." -- is completely missing the point. Setting aside the fact that it is far too early to consider the EU as a unified political bloc, or that the existence of the EU itself is inconceivable without the US's security blanket for the past 60 years, the EU and Japan have never put up a united opposition to the US on any critical matters because the system the US built and maintains rewards cooperation rather than conflict. This is, again, a reversal of previous imperial systems. And it's created a cessation of major-power war, and a level of international cooperation that is unique to history.

The result of that history is the present, where it's easy to highlight data points indicating pervasive US influence: the US has significant military bases in all of the countries Quiggin highlights as its supposed peers, including the EU and Japan, and many besides. None of them have significant bases in the US or anywhere else outside their territory. Is there not a significant asymmetry here? Some of the US' rivals have regional economic or political influence -- Germany within the EU, e.g. -- but none have significant sway beyond their neighborhoods, and none have decisive political or military influence even within them. To illustrate: if the US announced tomorrow that it would slash its military budget, the result of which was the complete withdrawal of all troops and closing of all bases in Europe, and ceded its security role to Germany, France, the UK, and Russia, does Quiggin actually believe that European relations would not change dramatically? What happens when Germany controls EU monetary policy and has the biggest military in Western Europe? What happens when Serbia moves back in for Kosovo? Note that (I infer, from suggestive things he's written) Quiggin actually supports some version of this scenario.

How would Quiggin characterize Japan's international influence? Perhaps he could consider the recent Korean kerfluffle. The Japanese response was to strengthen ties with the US, and not much else. How about the EU's response to Russia/Georgia? Inconsequential, if not non-existent. Which countries in the EU or Asia have any substantial role in Egypt, or elsewhere in the Middle East? France, perhaps, but it's the US that gives the country a third of its military budget and other aid too. Why do that? To ease security dilemmas (and it works!). None of these countries have any presence or influence in the whole Western hemisphere, and most have no significant influence outside of former colonies, if that. Etc.

In some cases counterfactuals are easy. It used to be said that when the US sneezes the world catches a cold. Now it seems clear that when the US reaches for a kleenex the world catches pneumonia. When the US has a financial crisis the European monetary union is brought to its knees, global equity markets drop precipitously, global GDP drops off a cliff, etc. When Japan had a similar crisis in the 1990s, were the effects similar? Has the EU's ongoing debt crisis had the same global effects? This is not just a question of population size. The US is central to the global economic network in a way that the EU and Japan are not.

Quiggin asks for specifics. I had mentioned in passing: financial regulation, climate change, arms control/missile shield, invasion of Iraq, monetary policy/exchange rates, integration of China into the global economic community, Israel. I further noted "But the point is even broader than that. If the E.U. and Japan agree with the U.S. on many or most major issues, isn't that evidence that the U.S.'s influence is greater, not lesser?" He responded:

The concession at the end says it all. There isn't a single one of these examples where the US has in fact prevailed over the united opposition of the EU and Japan.

In most cases, I don't even know what you are claiming. Are you suggesting that
*the (disastrous) outcome of the various Basel rounds was dictated by the US?
*Or that the mess in Copenhagen counts as a success for US policy?
* Or that the missile shield was imposed over the objections of, say, the Poles
* Or that the EU and Japan opposed the Iraq war (Japan and about half the members of the EU sent troops)

etc. Feel free to spell out at least one of the examples, and I'll be happy to respond

It's not clear what Quiggin means when he says "prevail" against some hypothetical union of the US' best allies against it. In order to prevail there must first be conflict. If the US creates and maintains a system in which conflict is Pareto-inferior, then there will never be conflict. I'll probably regret this analogy (I've never been good with them), but if parents provide an environment for their children in which it is better to heed instruction than to rebel, are we really to say that the parents have lost influence because they aren't fighting with, then defeating, their kids? That would be absurd. So if the US created a postwar order in which recovering and developing states alike can thrive and grow, is it to the US' discredit that they do not rise up against it? Seems like a non sequitur.

Are there minor quibbles about technical language in trade agreements, etc.? Of course. Interests are not perfectly aligned and US power is not infinite. But can Quiggin point to a single example in which a major revision of status quo rules in the WTO, IMF, UN, or any other significant international interaction/institution has shifted in a way that is significantly disadvantageous to the US? Any major power military conflicts? Any large-scale reorganizations of global politics in ways that violated US interests? Well, there's a challenge for him. I can't think of one, although I can think of plenty of the opposite. Even the invasions of Iraq and Afghanistan -- widely considered to be the height of American overreach -- have succeeded in their primary objectives of dismantling al Qaeda and removing Hussein. Did the US get everything it wanted at a cut-rate price? Nope. But to the US, are Iraq and Afghanistan in 2010 preferable to Iraq and Afghanistan in 2001? Perhaps it's cynical, but I think that that's obviously true.

Anyway, to go point by point on a few specifics so it doesn't look like I'm ducking:

1. Yes, although I wouldn't put it quite that way. As it happens I've blogged about Basel III a lot. I've argued that the Basel accords had little to do with what economists like Quiggin think they were about, which is preserving financial stability. Basel is about politics, not technocracy. Anyway, it's clear that the US was opposed by Germany and Japan in the creation of the rules, and the recent revision of them, and that the US got its way in both cases. This is the pattern of Basel negotiations. For more info, type "Basel" into the search bar in the top right. If you prefer your arguments to be peer-reviewed, see the Stigler-Peltzman model extended into an international context with power dynamics, using Basel I as a case study, here. When US interests butt up against German/Japanese interests, the US wins.

2. Yes. The EU and Japan have wanted a comprehensive global climate change agreement since at least Kyoto. The US has not. Which one has gotten its way?

3. Missile defense was probably not the best example, but after resistance towards ground-based missile defense from Europe, the US decided instead to just use warships. No other country in the world has the capability to make that choice, and no country in the world has the capability to prevent the US from making it.

4. The major powers that did oppose the Iraq invasion (Russia, China, Germany, France) did nothing more to stop it than give speeches and veto UN resolutions. Certainly none tried to do anything tangible to curtail the US' activity.

5. When the U.S. engages in a relatively conservative monetary expansion in the face of depressed, deflationary, and imbalanced economy, other countries shriek like they've been set on fire. The U.S. shrugs. Meanwhile, the nominal and real exchange rates of major export-biased economies are rising, which will likely end up forcing a realignment similar to that which occurred at the end of Bretton Woods. Which country (or group of countries) could force a similar adjustment from the US?

In my previous post I cited instances of demonstrative US influence in the IMF, World Bank, and UN. I cited peer-reviewed research in each case. I talked about its leverage over Egypt and other Middle Eastern states. I talked about the pacifying effect of the European and Asian security blankets, which is a common theme in IR theory. None of these have been rebutted.

I could go on, but either I've made my point by now or I haven't. Quiggin has argued that the US is not only in decline, it has already declined to the point that it is a typical power. In fact it is an exceptional power, with global reach in nearly every substantial issue area in global politics. The US has no peer. Normatively, that might be a bad thing. But positively it's practically inarguable.

None of this is to say that the US is omnipotent. Plenty of states and non-state actors do things that it doesn't like, and the US cannot force everyone to conform to its preferred behavior all the time. Perhaps its capabilities in this regard have deteriorated as other states have grown to rely less on the US for security and economic well-being. But to say that the influence of the US is typical -- even if its output-per-hour-worked or employment/population ratio is similar to other countries, to use Quiggin's examples -- is just wrong.


John Quiggin said...

OK, some responses on the examples. I asked for cases when the EU and US were opposed and the US prevailed. Obviously, as you point out in 4, Iraq doesn't fit, since the EU was divided. Same for Basel 1, on the account you cite, since it lined up the US and UK against France and Germany.

On Copenhagen, your claim "the US has not wanted an agreement" contradicts the stated position of the US Administration. This is an example where, as I pointed out in my original post, the weak and divided nature of the US executive/legislative structure prevents it from putting forward a coherent position. Since climate change negotiations require broad agreement, that causes them to fail.

On point 5, if you want shrieks how about US commentary on the exchange rate policies of China and, before that, Japan. And you must be aware that the collapse of Bretton Woods was forced on the US by the development of the eurodollar market in the 1960s. The idea that the US economic ship sails on unaffected by the rest of the world is just silly.

To offer some examples going the other way

1. Bush steel tariffs. Humiliating climbdown forced by the EU on the US
2. International Criminal Court. US opposed, but Court was established anyway.
3. Law of the Sea - ditto
4. MAI - US supported, but French vetoed (admittedly, EU was not united on this, but the case is comparable to Copenhagen - the outcome reflects the existence of veto points, not some power specific to the US)

Kindred Winecoff said...

Rather than go point by point through selective examples that we each handpick to try and prove our points, let's take a step back and think more broadly.

(I interpret things like steel tariffs and Copenhagen and the collapse of Bretton Woods and EU political unity, or the lack thereof, much differently than you do anyway. Most of the things we've mentioned are very small potatoes in any case. We can continue those discussions if you like, but I doubt it will be productive.)

If the US had a significant power advantage, what state of the world would we expect to see? One in which there were many disputes of substantial importance between major states, or one in which there were few? IR people have argued about this, but I think the empirical/historical evidence as well as internal logic shows that major confrontations are less likely when power differentials are great, and more likely when they are not. I think, at this point, that most of the discipline agrees.

In other words, if I couldn't point out a convincing example where the US had subjugated the Japan, this is probably better evidence of the US' influence than if I could. Unless you think the US-Japan relationship is best described by mutual deterrence.

Now, what state of the world do we have now? I think (hope) we can agree that it is one in which the relationship between major powers is not conflictual. There are occasional disagreements on the margin, but no major disputes that could threaten stability. In other words, we're arguing about how much agricultural subsidies should be lowered, not whether there should be a more-or-less open trading system. Indeed, international cooperation has arguably never been higher.

I contend that this state of affairs exists because the US's power advantage is so large, and because the US has used that power to establish and maintain an international order that is accommodative, rather than exploitative, for the most part. Because of this, few states have an interest in challenging that order. So a lack of confrontation is itself evidence of pervasiveness of US influence. For more detail, I'd again recommend Ikenberry's After Victory.

As I've said several times already, this is not to say that the US' power is unlimited, or that states can't resist the US. Of course US power is limited, in many very important ways. *But so is everyone else's*. And the US' power is much less limited than everyone else's. Its reach is farther, its capabilities deeper, its centrality to the system without parallel.

If this wasn't true, then why does the international system by and large represent the US' values?

Anonymous said...

As a non-IR specialist, I have some questions for K. Winecoff:

1. Taking your notion of 'decline' as a given, I would say the USA's decline is due to developments within the USA, particularly the increase in income inequality since WWII, high unemployment, low wages coexisting with high managerial incomes, and poverty of a non-trivial part of USA citizens. My question is, how does IR theory and policy take these observables into account?

2. I take as given, your propositio that the USA is interested in getting international banking regulations which shifts costs to foreigners. My question is, how does IR theory and policy deal with the USA based rating agencies who rated junk bonds as investment quality paper? Furthermore, how does IR theory and policy deal with the credibility problem created by the series of USA originating financial crises?

Kindred Winecoff said...

Not sure if this is what you're looking for, but here's how I'd respond:

1. I don't actually think this is a great categorization. The US has a problem with stagnant median incomes, increasing inequality, etc. But these problems are probably more easily dealt with than the macro problems in China, Japan, or even much of the EU. If we're talking in relative terms, I'm not sure the US's position is really eroding all that much. If we're talking future prospects, I'll still take the US over the EU or Japan.

I'm also not too sure what you mean by "how does IR take these observables into account". Do you mean in a comparative context, looking at US inequality relative to Germany's? If so, there's a lot of research done on those types of questions. Or do you mean in terms of macro structure and power dynamics? If so, I think you're asking the wrong questions. An increase in the Gini from .40 to .45 (or whatever) just isn't that big of a deal when you're thinking in a global context.

2. Define what you mean by "credibility". Following the recent crisis everyone in world poured into T-bills. ("flight to safety") The US gov't borrowed at record low rates. The US poured liquidity into the international financial system, and mobilized the IMF to put out fires. Now US corporate profits are sky-rocketing, US equity markets are recovering quickly. US banks are better-capitalized than their foreign competitors. Meanwhile the euro is on the verge of collapse, the EU is enacting austerity, Japan's still in a depression but now with debt-to-GDP over 200% and rising, and China has a huge property bubble and inflation problem. Things are perfect in the US, but they're not great among most of the US' peers either.

Ratings agencies? Seriously? The problem wasn't ratings agencies. They were just one of the passengers on the ship when it went down.

The Atypicality of U.S. Power and Influence, con.

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