Dan recently commented on how the decline in US economic power will likely lead to a rewrite of the post-war global order. Additionally, there are reports that a new intelligence assessment by US agencies is set to be released after the upcoming elections which notes the coming relative decline of US predominance, particularly in the economic realm, by 2025. Now, there have been numerous predictions of US decline that, like the death of Mark Twain, have been greatly exaggerated. But the current panic in the US economy is on par with the very worst crises we’ve seen since the Great Depression (e.g. Stagflation, Black Monday, post-9/11, etc.), and there seem to be real structural problems that are unlikely to abate any time soon. That combined with the true rise of new economic players (e.g. China, India, and the continued productivity of the EU) means that for the first time since WWII we are seeing even more economic parity on the world stage.
Let’s assume for a moment that we will finally see a significant decline in US economic predominance and the rise of a more multipolar world order–is this necessarily a good thing? The answer I think is that polarity isn’t really the most important factor.
There has long been a debate in IR circles on what types of great power systems create the most stability–from a military and economic perspective. Balance of Power theory suggests that stability is dependent on the relative parity of great powers, as power imbalance between the great powers provides opportunities for both defensive and offensive balancing actions that can lead to war. There are only two possible systems, bipolar and multipolar–depending on who you ask, one or the other is preferrable from a stability standpoint. Hegemonic Stability Theory predicts an opposite scenario, where a single predominant economic and military power creates conditions necessary for peace and for an open economic trading order (Peter has certainly provided insightful commentary on HST in this space). The two theories are difficult to reconcile–however, Ed Mansfield tried to do just that in “Power, Trade, and War“. The book was based on his dissertation and was an attempt to determine which theory had it right–was the world more peaceful and prosperous when there was a more even distribution of power amongst great powers, or when there was a high imbalance of power with a single great power dominating the system?
The data suggests the answer was, well, yes. Mansfield found that in addition to looking at the polarity of a system (how many great powers exist in a system) it is equally important to examine the concentration of power in the system, where concentration is a combination of the number of great powers as well as the relative inequality of economic and military capabilities among those powers.
Mansfield finds a U-shaped relationship, rather than a linear relationship, between the concentration of power and openness of trade, and an inverse-U relationship between the degree of concentration and the outbreak of war [see figure below for a representation of both relationships].
What is most interesting is that the most dangerous times in terms of war and the least prosperous times occur in systems where the concentration of power appears in flux, or in a middle state–stability in trade and peace comes when power is most concentrated or most evenly dispersed.
I bring this up because if we are seeing the emergence of a more multipolar order (and that is debatable), whether or not this is a good outcome will depend more on how this effects the concentration of power in the system. The rise of new great powers and their effect on the relative concentration of power in the global system may have a net negative effect on peace and stability if we transition into that middle state. US economic power will decline in a relative sense, but militarily speaking it should remain predominant. Yes, China is growing economically and would like to convert those gains into military power, but the gap is large and a global economic slowdown will no doubt hamper those plans. Same with Russia–with global oil and gas prices dropping, Putin is less likely to catch up (if that is even the goal) with the US. And I will believe that Europe is dedicated to seriously enhancing their military aresenal when I see it. However, more important is the US’s ability to actually use that power and convert it into influence. While our spending will remain high (regardless of who is elected, just check the historical data), we have serious issues with our ability to translate that power to favorable battlefield outcomes as well as diplomatic victories. The main reason of course is the damage done and the vulnerability demonstrated since 2003 with the Iraq escapade. Not only did it stretch resources too thin, but it also demonstrated that a large budget doesn’t easily translate into dominance in practice.
I don’t have a prediction as of yet, but the economic and military trends do worry me–not because I am only comfortable with the US being a global hegemon, but depending on how dispersed power becomes in the next 20 years we could see far more turbulence in the system than we have for decades.
Just a thought.