Tuesday, August 02, 2011


"The geography of power is being transformed, in particular by the rise of China. What are the consequences of the rise of major new powers for the structure and the functioning of the international system? In the past, seismic changes, associated with great wars or great financial crises, led to a disorientation about the moral foundations of society, domestically and internationally; led to confusion and uncertainty about values, not just in a technical sense (we can believe in gold as money, in the pound sterling, in the US dollar?) but also in a broader sense....

An international order is not just an exercise in power projection. It is also built around a set of ideas. We often like to think of past versions of order as generated by particular countries which propagated a grand vision of order: for example, the nineteenth-century British view of John Bright or Richard Cobden about the universalization of an American vision of commercial prosperity in the second half of the twentieth century. But even visionary international orders do not last for ever. Some events or dates---1688, 1776, 1789, 1914---mark an epochal shift. We are now at one such great historical caesura. What historians will call the 'long twentieth century' ended not with the terrorist attacks of 2001 but with the financial crisis that started in 2007.

On particular historical example offers a powerful analogy to the current transition of economic leadership and also political power. Great Britain's economic position took a bad tumble in the financial crisis of 1931, when the pound was taken off the gold standard, but it was only some 25 years later that the full implications for power politics were really felt. In 1956, the humiliating fiasco of the Suez Crisis combined military incompetence and failure with vulnerability to financial pressure, and marked the end of Britain's claim to be an arbiter of the international order....There is an obvious parallel between Great Britain at the time of the Suez and the travails of the United States after the 2003 invasion of Iraq and its confusion at the prospect of a shift in the geography of economic influence and political power. Moreover the parallels have become even closer in the aftermath of the ill-prepared and politically divisive intervention in Libya....

The swing back to a world in which the advantage lies with the strong, who can muster large concentrations of economic and demographic resources, was already visible before the 2007 financial crisis. It has become much more evident since then. It was enunciated in Europe, rather brutally, by Germany's Chancellor Angel Merkel on 19 May 2010, when she laid out the conditions for aid to Greece in the crisis of that spring. She stated that 'the rules must not be oriented towards the weak, but towards the strong. That is a hard message. But it is an economic necessity.' On the global scene, we are now becoming obsessed with the BRICs (Brazil, Russia, India, China) as new giants. The continuation of the crisis will turn them into Big Really Imperial Countries. The future of globalization is thus one in which power politics rather than markets will drive events....

The real challenge for China's leaders will be to develop a coherent view of the world that does not scare its neighbors---and others. The Chinese dilemma today is not unlike the American one of the mid-twentieth century. How can a new superpower
maintain and extend its power in a world playing by commercial rules?"

Harold James, "International Order after the Financial Crisis" International Affairs, (May 2011), pp. 525-537. Originally delivered as a lecture at Oxford University on 4 November 2010 as the Cyril Foster Memorial Lecture. Unfortunately, the article cannot be accessed via the Internet.

"Discussions of U.S. decline usually assume that there exists a successor waiting in the wings to take over from the failed hegemon. In the 1980's, the successor was generally held to be Japan or Europe; today the answer is more likely to be India or China (though Europe still has its advocates, who think that Europe is experimenting with a new kind of nontraditional power), India or China are clearly much farther removed from being able to mount an effective challenge to the major technological, social or military dimensions of U.S. strength than were the Europeans or the Japanese in the 1980's."

Harold James, The Roman Predicament: How the rules of International order creates the politics of Empire (2006), p. 71.

Allow me to say that notwithstanding my criticisms to follow of Professor Harold James, formerly of Cambridge now of Princeton University, I actually have always had a high opinion of his academic work, and like of lot of graduate students in the late 1980's & early 1990's, I was highly impressed by his work on entre-deux-guerre Germany, 'the German Slump' 1. And having seen him deliver what can only be described as one of the most humorous and at the same time insightful, reading of his friend, Richard Overy's paper on 20th century economic history at the American Historical Association conference back in 1990, I can only say that time will never quite remove that positive opinion of his overall oeuvre. Unfortunately, I cannot say that I am highly impressed with his latest endeavor at contemporary economic and geopolitical analysis, as presented in the May 2011 issue of the Royal Institute of International Affairs house journal, International Affairs. With its rather jejune message of inexorable Western & American decline, James' piece puts one in mind of the fact as Heather Conley expressed it recently: 'a painful and disorienting process’ is what one experiences when reading all too many simplistic articles and essays on this oversubscribed topic 2. And unfortunately, James' contribution is very much more of the same, with its erroneous history (viz: H.A.R. Philby was never the Head of the American Department at the Foreign Office) and equally erroneous statements about contemporary events (Chinese purchases of European sovereign debt did not put a stop to the Eurozone crisis this past Spring, something which has become all too clear subsequently)3. The real problem with James essay is the reductionist supposition correlating the soon to be fact (how soon by-the-bye?), that the PRC shall soon have a higher GDP than the USA. The first time since the 1870's, that the USA shall not have the largest GDP on the planet. As per James this coming factum, following from the financial crisis of 2007 to present, shall have the same repercussions in international affairs and geopolitics as the Great War, Britain's going off the Gold Standard and the Suez Crisis of 1956. In this instance, just as in previous episodes, what we have or are about to have is a passing of hegemony from the soon-to-be ex-hegemon the United States, to the soon-to-be future hegemon, the Peoples Republic of China.

Now dear reader, what is wrong with this very much over-subscribed picture? Well leaving aside the issue of when exactly the PRC shall overtake the USA (nota bene: as per the latest statistics available the PRC's global percentage of GDP is only 7.5% versus the USA's 26%), to my mind the most problematical aspect of James (and all too many others in this regard) are the facts that: i) when the USA overtook the UK as the nation having the world's largest GDP, the USA also had a higher per capita income than the UK 4. Something which no one has suggested that the PRC will be able to do within the next half-century; ii) the mere fact that the USA had a greater GDP than the UK, did not for almost fifty years have any significant geopolitical ramifications. Indeed, sans the tremendous struggle put up by Kaiserreich Germany in the Great War, one is tempted to say that it would have been another fifty years before the greater American economic size, would have made itself felt geopolitically speaking. In the case of the PRC and the USA, the likelihood that the former will be able to oust the latter from its pinnacle as the leading hegemonic power is not something that is easy to fathom in either the near or mid-term future. Vis-`a-vis both the PRC as well as every other military power on the planet, the Americans still enjoy unparalleled military and strategic superiority. Far greater than what the Americans enjoyed during the Cold War, much less what the UK enjoyed vis-`a-vis the non-European world during the so-called Pax Britannica 5. And while one may argue that the PRC has now acquired the economic ability to outspend the Americans on arms, the fact is that history shows (the best example being the USA circa 1880-1940) that the mere circumstance of the ability to spend does not necessarily indicated that power x, y or indeed z shall indeed spend monies on armaments. As the Lord Selbourne, the First Lord of the British Admiralty noted in 1900, the Americans could at that point have easily outspent the UK on naval spending 6. For reasons relating to American political culture and geopolitical ambitions and traditions, the USA failed to do so. In the case of the PRC, I would surmise that due to the fact of the its endemic political instability (for which see reports in yesterday's & to-day's Financial Times), the regime in Peking while quite likely to bluster for purposes of domestic consumption on matters relating to foreign affairs, will not wish to spend precious resources in a society which by most available data can only still be described as poor one, on building what another British First Lord of the Admiralty once described as a 'luxury fleet,' or for that matter a luxury army & air force 7. What the above comments highlight I do believe is the fact that Professor James' essay is merely another, not very cogent argument about Western and and American decline. Such arguments can be made and indeed one hopes to find in the future, very good attempts at so doing. But, unfortunately Professor James' endeavor was not a successful one. Finally, need one add the fact that he in essence almost completely negates the argument that he himself made in his last book published as recently as 2006?

1. Harold James, The German Slump: Politics and economics, 1924-1936 (1987).

2. Heather Conley, "Review Article, The end of the West: the once and future Europe," International Affairs(July 2011),p. 975. For recent discussions of the whole 'declinist debate' and how it for the most part reflects aspects of internal Western / American domestic politics as opposed to say
realities of contemporary international politics, see: Michael Cox, "Is the United States in decline again?" International Affairs (July 2007), pp. 643-653; Josef Joffe, "The default Power: the false prophecy of America's decline." Foreign Affairs (September-October 2009), pp. 21-35.

3. The erratum as per 'Kim' Philby occurs on page 526. And that relating to Chinese purchases of Europe-zone government bonds occurs on page 532.

4. For 2010 figures on world GDP for both the USA and the PRC, see: Amitav Acharya, "Can Asia Lead? Power Ambitions and global governance in the twentieth-first century," International Affairs (July 2011), p. 858. For the
data concerning the UK versus the USA circa the period in which the USA became the world's largest economy, see: David Landes, The Wealth and Poverty of Nations. (1998), p. 307. Paul Kennedy,The Rise and Fall of the Great Powers. (1988), pp. 242-243.

5. For the current situation and that going back to the late 1980's, see: "Trends in U.S. Military Spending," 28 June 2011, The Council of Foreign Relations . Available in www.cfr.org. For historical comparisons with the UK see: Bernard Porter, Empire and Superempire: Britain, America and the World. (2006) and John Darwin, The Empire Project:the rise and fall of the British World System, 1830-1970 (2010),pp.26-36 and passim which delineates the matter extremely well in terms of the military limitations of the British Empire during the era of Pax Britannica.

6. For Lord Selbourne's quote, see: D. George Boyce, Edited. The Crisis of British Power: The Imperial and Naval Powers of the Second Earl of Selbourne, 1895-1910(1990), p. 115, in which he states on the 19 April 1901: "It has not dawned on our countrymen yet, but doubtless it has on you as it has on me, that, if the Americans chose to pay for what they can easily afford, they can gradually build up a Navy, firstly as large and then larger than ours."

7. See: Patti Waldmeir, "Xianjiang unrest leaves 14 dead." The Financial Times. 1 August 2011, in www.ft.com; Patti Waldmeir, "Chinese taxi drivers stage violent protest over rising cost of fuel." The Financial Times. 2 August 2011, in www.ft.com. For the difficulties that China faces in making a 'leap to world power', much less hegemonic status, see: Acharya, op. cit., pp. 854-860 and passim. See also an important article by Martin Wolf in the Financial Times: "How China could yet fail like Japan," 14 June 2011, in www.ft.com. The phrase 'luxury fleet,' was of course coined by Winston Churchill on the 7th of February 1912, when comparing the British and the German navies. See: Bernadotte E. Schmitt, England and Germany, 1740-1914, p. 345.


Post a Comment

<< Home