Monday, April 11, 2011

More on Hegemony, Stability, and Changes to the System

. Monday, April 11, 2011

Phil Arena also commented on John Quiggin's post that I remarked on yesterday. Quiggin showed up in comments here and there, and raised a few issues that I want to address in a second. I'm putting them into a new post rather than a comment for three reasons: first, I think the points I'm addressing will be interesting to some who might miss them if buried in comments; second, because I want to post some graphs; and third, because I don't have anything else to blog about today. In general I think this conversation has taken a productive turn, partially because we're starting to talk in terms of hypotheses rather than normative impressions. Phil, for example, built a toy model to tease out whether Quiggin or I was making any sense. Please check that out first.

In comments here Quiggin wrote:

I agree with your observations on the fact that the US was never omnipotent, but would say (in agreement with Phil) that the US was relatively more powerful at the beginning of the Cold War than it is now, which implies a gradual decline over time on this measure.

By contrast, at the end of the Cold War and continuing until the Iraq War went sour, there was a great deal of talk of the US as a hyperpower, empire, a Pax Americana and so on. I've been reacting against that ever since I started blogging...

If we are in agreement on the wrongness of these claims, we can narrow the discussion to a more precise focus on hegemony.

We are in partial agreement. I agree that the US was relatively more powerful at the beginning of the Cold War than it is now in many ways. Those were obviously extraordinary circumstances, in which nearly every other industrialized country had been decimated by war, and the US was the only nuclear power. So in terms of relative hard power gap there's no question that the gap is narrower now than then. In terms of global politics I'm not so sure. In 1946 there was no WTO to regulate trade in ways beneficial to the US. There was no IMF that extended American influence into the periphery. There was no UN disseminating norms of self-determination. Indeed, the empire structure that dominated global politics up until that point had not been entirely disassembled yet. Europe was imperiled by Soviet expansionism, the deterrence of which cost the US quite a lot of resources. The US did not yet have powerful regional allies like Japan and Saudi Arabia to further economic interests globally. The US did not have major military bases on every continent. Yes, the US had larger military advantages then than now, but it had far fewer institutional and structural advantages in place to secure major interests.

How about 1972? The US was in the middle of a much larger military quagmire then than now, the Soviet Union had solidified its control over Eastern Europe and parts of Central Asia throughout the 1960s, the nuclear advantage was long gone, and the US economy was in rough shape. Nixon imposed price controls and tariffs in the face of high inflation, and the Bretton Woods monetary system had just collapsed. The country was emerging from a decade of high internal turmoil (race riots, anti-war protest movements, domestic terrorists, and political assassinations), was in the beginnings of the Watergate scandal, and the legitimacy of the government and indeed superiority of the capitalist system was being questioned in many corners.

Fast forward to today. The US has no major rivals in security. Its major economic rivals are interdependent in (mostly) mutually beneficial ways. Market openness is not only a strong international norm, but is embedded in law and governance by the WTO on terms broadly favorable to the US. Democracy has continued to diffuse throughout the system, and the old imperial structure shows no signs of returning. The US still controls much of the international monetary system, or at least is not constrained by others in this regard. All of the world's major powers are US allies in some form or fashion, or at least are not antagonistic. The largest security threat to the US appears to be a few dozen outcasts hiding out in caves in Pakistan, trying to avoid the US's robot bombs. The largest state threat to American interests is probably Iran, which is in the middle of trying to suppress domestic civil unrest and is watching its only allies -- Syria and Lebanon -- perhaps descend into chaos. Its only other real security rival -- N. Korea -- is isolated to the point that it is derisively referred to as the "Hermit Kingdom".

In both political and economic terms, the world is much more to the US's liking now than in 1946 or 1972. Maybe that's not power as Quiggin means it, but it's got to count for something.

In terms of Quiggin's claim about a post-Cold War Pax Americana, well that strikes me as a hypothesis, so let's look at some data. First the number of battle deaths -- including civilian deaths such as those in Iraq, and intrastate conflicts -- over time:

Graph taken from here. According to two different data sets (for part of the series) it looks to me like a fairly strong drop-off from the height of the Cold War to post-Cold War. The difference is more stark comparing now to immediately following WWII. If these figures were adjusted as population shares there would be an even greater disparity, since overall world population has more than doubled over that time period.

Or we could look at trends in global conflicts since WWII:

Graph taken from here. "Societal warfare" is intrastate wars. Again, we see that in the post-Cold War era there has been a steep drop off in war overall, and there have been almost no interstate conflicts at all during that period.

Maybe that doesn't count as a "Pax Americana", but again, it's gotta count for something.

These leave out other major instances of international cooperation, such as the re-integration of Central and Eastern Europe into strong relationships with the West, the institutionalization of European cooperation more generally, the rise of ASEAN and other regional cooperative institutions, the expansion of the WTO, etc. All of which have happened since the end of the Cold War. It leaves out the large increases in global GDP/capita, trade, and technology.

That doesn't prove anything about the U.S.'s causal role in all of this, but if Kindleberger is right that the international system requires a hegemon in order to be stable, and the world has gotten more stable since the end of the Cold War, then what does that tell you? Maybe this has nothing at all to do with the fact that there has only been one superpower during this time, but then that would be some coincidence wouldn't it. In fact, if we look at the reverse we see much the same pattern: the biggest instabilities in the system over the past twenty years have hinged on US actions -- the military interventions in the Middle East and removal of support for authoritarian regimes, and the subprime crisis -- or inactions where the US has the least global reach -- sub-Saharan Africa, mostly. This is not to say that other actors or factors aren't important. Just that the US plays a much greater role in global developments than any other state, and it's not even particularly close.

(Another IPE scholar is working on a paper suggesting that US monetary policy led somewhat-directly to the revolutions in N. Africa. Basically, the argument is that QE1 and QE2 led to depreciations in US real interest rates, which drove up commodity prices, which are in turn highly correlated with civil unrest. The timing of QE2 in particular maps onto the N. Africa unrest pretty well. Not sure how it will hold up to strong scrutiny, but he has some suggestive early results.)

None of this is to suggest that America is omnipotent; far from it. It's just to say that it isn't as obvious as it might appear that America is, or has been, in steep decline.


Phil Arena said...
This comment has been removed by the author.
Phil Arena said...

Some very good points. I didn't think enough about institutions and economic relations, since I know less about that.

I would say that it is possible both for a unipolar system to be more stable and for the US to be declining gradually over this period. That is, something more or less like a Pax Americana need not be inconsistent with the claim that the US is less powerful today than it was in the past, to some degree, given that Russia is a *lot* weaker today than the Soviet Union was. If you look at CINC scores, for example, the US had almost 50% of the international system's material capabilities in 1946, versus approximately 15% in 2001. The Soviet Union plummets at the end of the Cold War, while the US only gradually dips a little lower each year from 1989 to 2001, but even so, if we think capabilities matter (and a great deal of literature seems to suggest that they do), the US was in a dominant position after the Cold War, yes, but it was still *less* dominant than it was during much of the Cold War, particularly the early period.

Though as you point out, the 70s weren't exactly halcyon days, and relatively to time point, the comparison with today is a bit murkier. And, in fairness, conflict types such as myself are probably a bit *too* focused on capabilities.

Kindred Winecoff said...

Here's why I think a single-minded focus on CINC scores (or some other measure of capabilities) is probably not the best:

If the US wanted to maximize its CINC advantage, as a Waltzian presumably thinks it should have, what would it have done in 1946? It would have nuked Moscow, somehow sublimated Paris, abolished Britain's financial industry, kept Japan and Germany down, etc. etc. It had basically absolute power at that point since it was the only state with nukes, and essentially no reliance on the rest of the world.

Instead, the US seems to have done as much as possible to strengthen then rest of the world as quickly as possible, with the caveat that the strengthening was done on terms the US preferred. I.e., no more empires. This is why I prefer Ikenberry's squishy realist interpretation over a more strictly realist, or realpolitik, account.

According to the squishy realist account, the *goal* of US post-war policy was to make its CINC score drop, in a sense. Because it wasn't interested in capabilities, it was interested in outcomes. And it determined that the best way to get the sort of outcomes it was interested in was to build a more accommodative, multilateral order organized on broadly liberal principles. To the extent that they succeeded, it extended US influence far beyond where it otherwise would be. And while this sounds like extreme post hoccery, Ikenberry does a very good job of sorting through contemporary accounts during the mid-1940s to present a clear picture of what was going through US policymakers' minds.

All said, I agree with your second paragraph. I'm just not sure how relevant it really is.

Phil Arena said...

I think there's a lot of truth to that. I don't believe states maximize CINC scores. I think CINC scores are a crude measure of resources states have available at their disposal for accomplishing goals -- and we're definitely talking a crude measure -- not a goal unto itself.

My point was simply that *some* of what you're talking about is consistent with the claim that the US has declined in power. That may in fact be something the US anticipated and was willing to live with, as long as the international system that emerged by the time it lost most of its power advantage was a desirable one. I think that's actually a very plausible story.

Given the choice between living in a world in which the US is by far the most powerful state, but resource competition is severe and security risks are acute, versus a system in which the US is weaker than a few of its allies, but all the larger states are satisfied with the systemic status quo and resource competition is minor, I think the US might choose the latter. I think many states would. But I don't think we'd look at that latter world and say the US has the same power.

I guess the point I'm making is that it seems like some of what you're saying is that the US is in a good place, it succeeded in accomplishing what it wanted to accomplish in lots of ways. That's reasonable. But not necessarily inconsistent with the simple claim that its ability to exert influence over those states that do not share its preferences is less today than it was at some points in the past.

Kindred Winecoff said...

"My point was simply that *some* of what you're talking about is consistent with the claim that the US has declined in power."

I agree. But that doesn't establish the claim that US has actually declined to the point that Quiggin believes it has. I.e., to where it's "just another state" roughly equivalent to other industrialized countries.

"Given the choice between living in a world in which the US is by far the most powerful state, but resource competition is severe and security risks are acute, versus a system in which the US is weaker than a few of its allies, but all the larger states are satisfied with the systemic status quo and resource competition is minor, I think the US might choose the latter. I think many states would. But I don't think we'd look at that latter world and say the US has the same power."

I think it depends on interests. Power only makes sense in the context of pursuit of interests. So if by "power" we mean "capacity to ensure a wealthy, secure existence now and into the future" I think we might say that US power has been remarkably durable. If by "power" we mean "ability to subjugate everyone else" then obviously the US has less power now than it did in 1946, mostly because that was the most exceptional moment in modern history.

That's what I was hoping to hone in on in my comparisons of 1946, 1972, and today. It seems to me that the US's foreign policy is (and has been) organized primarily around avoiding major (i.e. World War type) conflicts, and preserving open markets. It also seems to me that those goals are at least as easily achievable now as in 1946 or 1972. Partially this is because other states have similar preferences to the US. But *that itself* can be thought of as a realization of US power, since changing international norms was a major part of the US's post-war agenda.

So, e.g., many see China's rise and conclude that US power is decreasing. In terms of CINC or whatever that's true. But I see China's rise as accepting the US's post-war order of open markets and non-aggression. That, to me, indicates that the US has more influence now than it did in 1972, when China was an enemy of the US, still in the throes of the Cultural Revolution.

Phil Arena said...

Yeah, I fully agree that the US is not just another state. I also agree that it's useful to distinguish between 1946, which was a unique moment, and 1972. Good point. Relative to 1972, it's not clear that the US is much less able to influence the behavior of other states today.

Your point about the US achieving its goals is well-taken. And it's also a point that is often lost in debates about the decline of the US. A lot of the arguments about the decline of the US miss the point that, as you say, the US largely chose policies that it knew would decrease its relative capabilities.

John Quiggin said...

I think the core argument begs the question. It's true that the world is much more to the liking of the US than it was in 1972, but that's equally true for Australia (more so, since we had actual reason to fear our neighbors as well as the threat of nuclear obliteration). So the claim that the US has brought this about rests on the assumption that such outcomes require a hegemonic power, which is what is to be proved.

John Quiggin said...

As regards changes since the early 1970s, in economic terms, the US has gone from being a creditor with a current account surplus to a debtor with a deficit. That's reflected in the declining global salience of US-owned firms, and very evident here in Oz. Rightly or wrongly, concern about US multinationals was a huge deal in the 1970s, now it's a non-issue and the corresponding worries are about Asian sovereign wealth funds.

Obviously you could argue that such things don't matter, but that seems to be inconsistent with the general idea that concepts like hegemony are meaningful in a market economy.

Phil Arena said...

I don't know anything about current accounts, so I won't comment on that, but the point that it's hard to infer causality from the changes we've observed in the international system is a valid concern. In a lot of ways, one could argue that the international system we observe today aligns quite well with British preferences as well as US or Australian preferences, but even though the UK once dominated the system, I'm not sure anyone would claim they are responsible for the outcomes we observe.

I do think it helps that some folks have articulated actual mechanisms by which the US has translated its influence into particular outcomes, mechanisms that would not apply equally to the UK or Australia or whoever else. But these arguments are not airtight, and as an empirical matter, it's very difficult to pin down. I think the arguments Kindred made are plausible, but I agree that they leave room for skepticism.

It sure would be nice if we could randomly assign resource endowments, military allocations, war outcomes, etc, so that we could solve the identification problem...

Kindred Winecoff said...

John, are you suggesting that I have to prove that the US has more influence in the international system than Australia? If not, then the core argument does not beg the question. I believe I can, but I'd rather not waste my time on the self-evident.

The global economy has obviously changed quite a lot in the past 40 years, but I don't think it's obvious that US economic influence has declined all that much. Have you noticed how a local US crisis -- a decline in home prices and rise in loan defaults -- triggered a global recession, a collapse in trade, massive declines in equity markets everywhere, and the possible restructuring of the Eurozone? Arguably, these dislocations have been *greater* than when the US closed the gold window in 1971. Not quite apples to apples, but not too far off either. Other financial crises, even the Asian financial crisis, had nothing like this effect on the global economy.

Or observe the actions of the Fed in providing liquidity to the entire global financial system during 2008-09, or the flight to safety in US gov't bonds, etc. If anything, the recent crisis revealed just how central the US is to the global economy. (If you're interested, I'm co-author on a paper that really drives this point home. We're making final revisions right now.) Or observe China's actions, which appear to be self-defeating: why plow so many billions into assets that are practically guaranteed to under-perform? Much of the world is currently subsidizing US consumption, at practically zero interest. How does this demonstrate US decline?

Phil, actually in certain key respects the intl system does *not* resemble the UK's interests. I think we've covered this ground in previous iterations, but the Atlantic Charter included an insistence on the end of empires, over Churchill's objections. As part of that, the US insisted on the end of the imperial preference trading system, which culminated in GATT, again against the will of the British.

That said, the UK does still punch above its weight, particularly in global governance, and remains much more central to e.g. the global financial network than Japan, China, or even Germany. We argue in the paper I mentioned above that this is due to network externalities that have positive feedback loops that reinforce structure. But that opens up another can of worms.

Phil Arena said...

Right, colonialism is the big and obvious exception (and I'm sure there are others). I didn't mean to suggest there's no difference between the preferences of the US and UK. Perhaps that was a poorly chosen example.

After all, I agree with you that there is nonetheless good reason to believe that at least in many respects, the system is shaped in important ways by the US. And if you take any given aspect of the international system that is largely to the liking of both the UK and the US, the odds that it is as it is because of actions taken by the UK *independent* of the US strike me as being pretty dang low.

All I meant was that, while my intuition aligns well with the arguments you are making, I think it's worth acknowledging that it's very hard to establish the precise causal impact of US influence. We can make some good educated guesses. But we don't have 1000 international systems to study that look precisely like this one but for the US's foreign policy choices, defense spending, etc. You alluded to the difficult of establishing causality here in your original post. I was just putting more emphasis on that point.

Kindred Winecoff said...

I completely agree, Phil, but at this point we literally have no competing hypothesis to "the US largely shaped the post-WWII order". If we had 1000 runs, what would we be running it against? John, I assume facetiously, mentioned in his previous comment something akin to "Australia largely shaped the post-WWII order" which is so implausible that no one would think to test it. He also offered "there is no post-Cold War Pax Americana" which seems false just based on a cursory look at summary data. (That doesn't answer the question of *why* there's been a Pax Americana... maybe it's not hegemony, but again we have no other plausible competing hypotheses.)

To me, "who established the current order" is the foundational question that must addressed before we can say too much about how powerful the US is now. If the US largely made the status quo, likes it, and is able to maintain it, then it remains very influential. Not omnipotent, but then it never was.

John Quiggin said...

To clarify, my point is "the current order is to the liking of the US" has zero evidentiary value in support of the proposition "the current order was shaped by the US", since the premise is equally true for Australia but the conclusion, obviously, is false.

And similarly, the observation that the post Cold War period has been relatively peaceful is just as consistent with the obviously false hypothesis of a Pax Australiana.

To make the argument work, you have to show that the US can and does take effective action to promote stability. My observation regarding the inability of the US to influence events in Yemen (even though it looks like a client state, and the forces are very evenly balanced) is a point against this claim.

Kindred Winecoff said...

Yes, John, which is why i've gone to such great lengths to argue that the post-WWII institutional arrangements, as well as alliance structures, have reflected US interests. And that the embeddedness of the US in both security and economic networks is still unparalleled.

Also, who says the US isn't able to influence Yemen (which, if a client, has only been so far for the past couple of years)? The US demanded Saleh step down. He immediately agreed, provided that he is provided safe haven and a guarantee against prosecution. The rebels declined, the US removed support, and the regime now looks more susceptible than it ever has.

And Yemen per se is not a country that the US has all that much interest in. The US gave Saleh $ in exchange for him not pitching a fit about us flying drones in his country to knock out AQ. That's the extent of the relationship. The US has never been in the business of propping up his regime.

But even if it was, the internal politics of Yemen have basically nothing to do with hegemony, the way that term is generally used.

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