On American Hegemony, Part I

Note: as some of our readers know, I’m supposed to be writing a book (with Alexander Cooley) on the unravelling of American hegemonic order. This book is due… much sooner than I would like. I’ve been suffering some degree of writers block. Part of the problem is that the ‘voice’ of the book is hybrid trade/academic, and that’s not a voice that comes naturally to me outside of the “compose window.” So, with apologies, I’ve decided to try to break the mental logjam by writing a series of “seeds” for the book.

Specialists use many different terms to describe the period that began in 1992 and that may be in its twilight years.

Some, following Charles Krauthammer, call it the unipolar moment or talk about a unipolar system with the United States as its sole superpower. The idea is that the United States, in at least the three decades that followed the dissolution of the Soviet Union, stood as the only first-rank great power. No politically feasible coalition of second-rank great powers—such as China, France, Germany, Russia, and Japan—could form to check, or match, American power.

Others talk about a time of “American Empire,” and if they use the term approvingly, a Pax Americana. While mostly critics called the United States an empire before September 11, 2001, afterwards it became temporarily fashionable to speak of the United States as an imperial power, with the attendant burdens and responsibilities.

Of course, in the 1990s Secretary of State Madeline Albright called the United State the “indispensable nation”: the only country with the combination of military power, economic wealth, and moral vision to decisively shape world politics. The label doesn’t sound quite so arrogant in the context of the Balkan conflicts of the 1990s, where the Europeans emerged looking incapable of handling mass violence in their own backyard without close American involvement.

These kinds of labels capture features of American relative power over the last thirty years. But, to be blunt, the period is best characterized as one of “American hegemony.” People define hegemony in a lot of different ways, but I prefer one close to its early meanings: as a position of leadership over distinct political communities. As Alexander Barder writes, hegemony “refers to the mobilization of leadership.”

Why choose “hegemony” over “unipolarity?” After all, the two aren’t mutually exclusive. If a state wants to achieve and maintain a position of hegemonic dominance, than it certainly helps to enjoy overwhelming military and economic power. Indeed, from the 1990s onward, the United States did have a significant military advantage over the next tier of great powers. This advantage finds reflection in outsized American military spending (as of 2018, still at least that of next seven highest-spenders combined), but it derives as much from a decades-long window of asymmetric operational and technological capabilities, as well as a currently unparalleled network of overseas bases, alliances, and security partnerships.

This last source of American relative power starts to explain my discomfort with the idea that unipolarity really captures what we need to understand about the post-1991 international system.

Let’s start with American economic power. There’s no question that the United States had the largest economy in the world for most of the period. In nominal terms, America remains wealthier than China. But, as the chart below shows, the United States has enjoyed around 20-25% share of  total global gross domestic product (GDP) for most of the past twenty-five years. What it doesn’t show is that the American and combined European Union (EU) economies have been in a horse-race for much of that period. This raises questions about whether American market power, among other aspects of international economic influence, were really quite as overwhelming as some analysis implies.

Now, between a quarter and a fifth of global GDP is nothing to sneeze at. But note that the concentration becomes truly impressive is when we combine some of the economies of the ‘greater west.’ In 1993, the year that the Maastricht Treaty went into effect, the EU, along with the United States, Australia, Canada, Japan, and the Republic of Korea accounted for around 80% of global GDP. In 2017, even with nearly two decades of shifting economic gravity, these political communities controlled nearly 60%.

The first lesson: in economic terms, the world has not been unipolar at any time during the post-1992 period. Economic governance looked more like a multipolar cartel, with the wealthiest advanced industrialized democracies controlling the World Bank, the International Monetary Fund (IMF), and setting regulatory standards. Indeed, scholars noticed that conditions associated with development aid became more effective in the 1990s. The reason was precisely because of the existence of a cartel among advanced-industrial democratic donors, and the lack of exit options for aid recipients. The World Trade Organization (WTO), which people usually point to as the major economic institution of the post-Cold War phase of American hegemony, was less an American product than one that the United States ultimately swung behind. But it would not have happened without American support.

The status of the United States as less the “sole superpower” than primus inter pares does look less convincing in the military realm. Military spending is a crude measure, but it serves well enough to illustrate this point. In the figure below, we see that America’s share of total world military spending hovers around 40% for the entire period between 1993 and 2017. That’s an astounding datapoint. To the extent that military spending does proxy for military power, then it supports the notion of a unipolar system with the United States as the country lacking peer competitors.

But if we glance back at the GDP data, and then look again at the military-spending data, a different picture starts to emerge. Military unipolarity does not explain hegemony; hegemony explains military unipolarity.

To begin with, there are clearly enough second-tier great powers to mount a credible challenge to the United States. An alliance that included, among others, the major European economies, Russia, China, Japan, and India could, if its members diverted significant resources to cooperative military mobilization, check American power. But most of those countries lack any incentive to do so. Why? At least for now, they view American leadership as less threatening than the alternatives.

Some, including Trump, complain that American allies spend too little on defense, at least compared to what they would likely allocate if the lacked American security guarantees. In the scholarly literature, this concern derives from accounts of hegemonic decline that focus on hegemonic overextension: the processes whereby a dominant power expends too much blood and treasure trying to defend its preferred international order, and thereby undermines domestic growth through some combination of overtaxation and economic underinvestment.

One issue here, as I hope to discuss more in a later post, is that the United States is, at least in relative terms, undertaxed. It has financed its twenty-first century was through debt and, unlike the Spanish Monarchy and other hegemonic powers of the past, the United States has more than enough excess capacity to raise revenue to pay for its military and military deployments. Just as American fiscal weakness is a matter of political choice, so is its underinvestment in infrastructure, human capital, and other engines of long-term economic growth. So it makes little sense to talk about strategic overextension per se. I prefer the phrase “political overextension”: Americans don’t want to pay for current commitments, let alone additional ones, but are willing to put them on the credit card.

But another issue, one more directly relevant, is that depressed military spending by other great powers helps to maintain American relative military power, makes it difficult for its allies to seriously contemplate balancing against the United States, and thus contributes to the institutionalization of American military leadership. This is not simply a matter of balance-of-threat dynamics. The United States, along with its partners, has created significant military interdependence across the alliance system, such that it makes sense to count the capabilities of core allies as, directly or indirectly, contributing to American global power. Using share of global military spending as a proxy, that adds around another 20-25% of global military spending (see above) to the total for the “American order.” The chart reflects a conservative estimate, insofar as it excludes a number of partners, some of which are very close American allies.

There is another advantage to thinking in terms of “American hegemony,” especially in comparison to phrases like “American Empire” or “the indispensable nation.” If we define hegemony as the mobilization of leadership, than it leaves open the question: what kind—or, more accurately, kinds—of leadership. When states exercise hegemony, they create international orders—specifically, hegemonic orders. Hegemony can take more or less coercive forms. Hegemonic powers can arrange relations among other political communities along lines more resembling, say, imperial command or confederative multilateralism. We see variation not only between, but also within, hegemonic orders.

For example, the overall structure of American relations with NATO member-states in the 1980s looked rather different than that of Washington’s relations with many Central and Latin American states in the same period. The style and character of American hegemony has also shifted over time. In fact, we tend to think of NATO as the poster child for American-led liberal order, but the relationship between the United States and many of its NATO allies initially took a much more imperial form. By the 2000s, the American relationship with NATO was clearly that of the leading state in a security confederacy, but the American occupation of Iraq created—albeit temporarily—an imperial form of control.

I’ll discuss what this means, in greater detail, for discussion of “liberal order” in the next installment, but I hope this discussion makes a few things clear:

• Trump is not proposing an end to American hegemony. Rather, he seeks a change in how the US exercises leadership and a consequent shift in international and regional orders. If your primary beef with American hegemony has been its hypocrisy—its failure to live up to its rhetoric about liberal order—then Trump wants to solve your problem: by making the order less liberal.
• America’s strategic position—its hegemonic leadership—is not a story about a colossus striding the world on its own two feet. It’s a function of the strength of its strategic partnerships and core allies. The post-1992 order—for good or for ill—was very much a collective achievement. On its own, the United States is much less impressive than discussions of “unipolarity,” or the fantasies of certain flavors of nationalists, would have you believe.
• The immediate consequence of the rise of China and of Russian assertiveness lies in the breaking of the ‘greater west’s’ dominance over international-order making. For good or for ill, countries now have more options about where to go for development aid, security assistance, and geopolitical support.
• Because the concentration of raw power among the ‘core allies’ remains very impressive, their major problem lies in maintaining cohesion. But here they are doing very poorly, and right-wing populism (with the encouragement of Russia) is the major immediate threat. The longer-term challenge is renegotiating the bargain to reflect contemporary challenges.