How Useful Is The Hegemonic Stability Theory History Essay

The theory of hegemonic stability, as applied to the world political economy, defines hegemony as preponderance of material resources. Resources in this sense; means, control over raw materials, sources of capital, markets and competitive advantages in production of high valued goods (Keohane, 1984, pp. 2). The essence o f acquiring or possessing all of these resources put together dictates the significance and or influence (formal or informal) of the state. In the area of well-functioning capital market, notably, three countries have derived both political and economic importance. Holland in the seventeenth century; Britain in the eighteen and nineteenth centuries; and the United States benefited likewise after the post war period (ibid). Not forgetting what the hegemonic stability theory predicts; the more one such power dominates the world political economy, the more cooperative will interstate relations exercised.

The formulation or concept of hegemony gained more importance after the role United State played in international political and economic order since its involvement in Second World War in 1941 (without neglecting that of the British in 19th century). This is without any doubt, as a scholar puts it, that the representation of hegemony or leadership is more general than limiting it to the British and US cases alone (Kindleberger 1973). Equally before them, couple of important representatives exist in the same regard, which is hardly been mentioned. The fact that hegemon rise and decline remains an essential part of the system of interaction among states, but cannot be ignored, since they posses power to convince, command or force other sovereign governments to comply with their policies for the conduct of international relations (Krasner 1976). In Wallerstein perspective, the concept and or idea of hegemony can be traced to the thirty years war, 1618-1648, (produced Dutch primacy, the war against Revolutionary France and Napoleon). In same vein, 1718-1815, ushered in British dominance and World Wars and unstable Interregnum, 1914-1941, promoted American hegemony. Nonetheless, prolonged armed conflict reorders the power structure, generates war-weariness and produces pressure for hierarchy and leadership, which allows and encourage the dominant power to become hegemonic (Wallerstein 1984).

The British Empire, ‘on which the sun never sets,’ pre 1939 spanned the continents of Asia, Middle East, the Caribbean and Africa. Post 1945, the empire had lost its vitality and, eventually in 1980, its existence. After the war, Britain was completely dwarfed by two new super powers: US and USSR (Darwin john, 1988, pp.332). In this case, with more noteworthy regards to US (Warner Geoffrey, 1995, pp. 99). No doubt she remained important, but with regards to being the third most powerful nation, but the conflict of interest between the USSR and the west (US & W. Europe); the specific trade desire of the US; made ‘her’ super power aspiration anathema to Washington’s global economic policy. Britain was however no match for the US, militarily and economically. A condition which gave the later edge, in Europe (vis-a vis Germany, France and the EEC) and the globe (Warner Geoffrey, 1995, pp. 103). Likewise, in the ensuing war against communist Russia, Britain needs the US in order to limit Russian expansionism in the Mediterranean which threatened British interest in the region and Africa (Kent John, 1990, pp. 177).

It can be argued here that the growing irrelevance of Britain as a (passive) hegemon in European policy might have signalled the decline of the empire (Ellison James, 1999, pp. 185). The fall of the empire involved; loss of colonies and the acceptance of the new international order vanguard by the US through the post war international institutions: security (NATO), trade (GATT), World Bank and IMF, international politics- United Nations (Darwin John, 1988, pp. 333). That the British government did not see it coming, will be a very wrong assumption, they did, and tried to salvage the situation but there just was no way, for the opposition was stronger than Britain and the prevailing circumstances did not help matters (Macmillan in Warner 1995, pp. 103).

Great Britain’s Dominance in Great Power Politics (Hegemonic Practice)

Emerging victorious from the revolutionary and Napoleonic wars with an overwhelmingly large navy, tactically stationed at key maritime bases along all the oceans, seas and waterways of the globe meant that the British state commanded enough power to influence transportation, commerce and warfare by sea in virtually any part of the world (Patrick Karl, 2002, p. 14). Over the long nineteenth century, British naval supremacy seems however to have been benignly exercised and deployed in large parts to promote the free and safe passage of commodities and persons by water (Cox, 1987, pp. 123). Only rarely did the Royal Navy interfere with the overseas trade of other national economies and in 1856 Britain signed the Declaration of Paris which guaranteed the rights of neutral ships to trade even with enemy countries in time of war (see Semmel, B. 1986).

However, Britain still not strong enough, to be able to afford free trade, abolished the income tax it had imposed during the wartime but kept import duties at their wartime heights (Kenneth Fielden, 1969, pp. 81). It’s also important to note, Britain was fully a protectionist state, which she later retreat from decades after, with persuades from William Huskisson in 1820s, when the parliament later allowed ‘a token of the availability of financial credit without political interference’ (Arthur Stein, 1984, pp. 361).

More significantly, the decisions of successive British governments from 1846-49 down to 1914, as rulers of the largest occidental empire since Rome, to keep the markets of the home islands and its dominions and colonies accessible to traders from all over the world cannot be represented as anything less than one important factor behind the growth of international trade. An immeasurable, but nonetheless high share of the world trade in goods and services, of capital flows, of new technology and the movement of migrants overseas passed through the ports of united kingdom and its possessions overseas and thereby maintained the volume of global commerce, evolving within the framework of a liberal economic order, at higher and altogether more stable levels (Fischer et al in Patrick Karl, 2002). With this, security, frontiers, dynasties and above all creating a balance of power in Europe to checkmate further aggressions from France was their concentration (Webster, 1931, p. 24).

American Primacy in Great power Politics (Hegemonic Practice)

Just as the revolutionary and Napoleonic wars (1793-1815) consolidated and perpetuated conditions for Britain’s relative economic success, in outcome, the world wars of the twentieth century operated to improve the wealth and power of the United States and to impede the economic and development of all its European contenders, except Switzerland (O’ Gorman, 1997). In comparative terms, Americans benefitted massively from both wars. They may also have been mercifully preserved from aristocratic values, social immobility, class conflicts and tastes for distinctions and differences- perceived to have hampered the efficient reorganisation of European business into large-scale corporations producing a homogeneous range of products for sale on mass market (Teece D, 1993, pp. 201). However, it remains complex to find many historical examples of European firms resisting the logic of ‘American’ ways and institutional arrangements that were demonstrably profitable to adopt (Alford B, 1994, pp. 631-43). It is important to note, that after 1875, the rise of American economy occurred within the context of territorial expansion, rapid population and income growth, the discovery and exploitation of cheap supplies of energy and metallic ores, linked to an evolving but specific array of corresponding technologies (see, Wright G, 1900).

Since World War II, US government played a decisive role in great-power politics and in stabilising the international economic order that in scale, persistence and intensity bears only an impressionistic similitude to the foreign, strategic, commercial and monetary policies pursued by successive British governments from 1815 to 1914 (Patrick Karl, 2002, pp. 27). In same comparisons with British economic strength in the nineteenth century, when at the Zenith of its power, possessed 32 percent of the global distribution of industrial production, the US held 48 percent of the global share in 1948 (John Ikenberry, 1989, pp. 380). The scope of their respective era is often found to be comparable; thus, in terms of preponderance of material resources, American power was much greater.

As a hegemon, US did employ its resources to assist in the shaping of global political and economic order. The oil reserves were used in the 1950s and 1960s in making up for global shortcoming triggered by series of crises and embargoes in the Middle East. Likewise lend-lease agreement and loans were used to influence British commercial policy immediately after the war as well as foreign aid to influence European monetary policy in the 1950s (Krasner in Williams and David, 1982, pp.32). An entire range of post-war rulemaking and institution-building exercises were influenced and supported by the American resort to inducements and coercion, all backed by US resource capabilities

In diverse commercial dialogue after the war, the United States was unable or unwilling to pursue consistent liberal policies. An example of such was the ambitious effort made at trade liberalization, embodied in the international trade organisation proposal, which was blocked by the United State Congress. The General Agreement on Tariff and Trade (GATT) that did survive was less extensive, which contained escape clauses and likewise left agricultural trade outside the multilateral framework. As noted by Susan Strange, US pursued less than liberal policies in areas such as maritime rights and shipping (see John Ikenberry, 1989, pp. 381).

The unprecedented opportunity for the United States to construct a post-war international order agreeable with its interest and ideals was not wasted. The order took shape in the late 1940s, although, was not what wartime planners had predicted or required to implement during and immediately after the war (Ibid). The one world planning of American wartime paved way for efforts to building Europe into an independent centre of global power; these improved plans, indicated by the Marshall plan, in turn gave way to a bipolar system and the active courtship by Europe of American hegemonic leadership (Otto Hieronymi, 1973). The principal focus of wartime planner was the construction of a post-war economy based on liberal, multilateral designs. In which, the dominance of economic planning reflected both principle and prudence. The American role as economic hegemon, like the British in the 19th century, was to make an asymmetric bargain.

Furthermore, after WW II, US utilised the opportunity to knit commercial agreements of political coalition, democratic, capitalist societies. Nevertheless, European and Japanese economic resurgence was important to America’s political interest, both short and long term (Arthur Stein, 1984, pp. 380). The United State released its borders considerably in return for an easing of protectionism by others, in which, she assured not to retaliate against others’ departure from free trade as long as these exceptions remained within specified bounds (Lynn Goldstein, 1983). Its continental scale, diversity and persistently superior productivity meant that even more advanced European and Asian economies experienced severe difficulties in narrowing the ‘dollar gap’, that is, the disparity between export and import of goods and services required from the United States. Over time, through convergence in productivity standards, that difficulty diminished (Patrick Karl, 2002, pp. 40). Meanwhile, the free world’s excess demand for dollars could only be met in form of aid, credit loans, extended to non-communist societies in Europe, Asia, Africa, and the Middle East through diverse means; direct but unequal negotiations, through international agencies such as UN, IBRD and IMF, and lastly through loans from American financial intermediaries who recognised their dependence on diplomatic persuasion and ultimately on military power to protect American-owned assets located beyond the frontiers of the United states (Scammel W, 1980).

Although, the new international liberal trading order adopted was actually sub systemic, which excluded fascist states in the 1930s and the soviet bloc beginning in the late 1940s, unlike that of the 19th century. Besides, there were differences between the two orders; thus, on one hand, trade agreement and trade disputes reflected political competitions among rival European states in the 19th century. On the other hand, after World War II, both commercial disagreement and commercial accords reflected the political conditions of alliance formation and maintenance within group of states for whom the greatest threat came from outside ranks.

Having identified the main issues and or progress of international order in which US hegemony played a significant role, scholars often disagree about the intended aim of US policies in the sense of it been (benign or exploitative). Some definitely view, US action in trade, money, politics, security, and resources as a means to provide many nations with the generalised benefit of peace and prosperity, sacrificing her short-term interest for the good of the world community with regards to providing collective good (Kindleberger, 1973). On the other hand, some are of the opinion, that collective benefits of international order will be supplied if the dominant state can extract a disproportionate amount of the benefits. Which in turn suggest US, to use influence to gain special privileges or to compel member states to make contributions to the cost of the world order, as well as to make providing international order a profitable venture (Robert Gilpin, 1987).

American Hegemonic Decline

American economic hegemony began to hit the rocks in the early 1970s, following the triple crisis (finance, trade, and energy regime) which is mostly attributed to the inefficiency of the Bretton Wood system at that point. The post-war economic order was transformed by simultaneously instituting an import surcharge and refusing to exchange gold for dollars (Lairson D and Skidmore, David, 2003 pp. 92). Thus, adopting such measures knocked out the monetary and commercial underpinnings of post-war international economic relationships. Hence, the rest of the decade was marked by constant fears that protectionism was soon to rise. The relative decline in American economic power did not mean it had a lessened ability to impose openness; rather, the increased strength of others might lead to its unwillingness to continue with carrying out such large burden. The import surcharge of 1971 demonstrated that US would not maintain that commitment at any price; instead, it would require a renegotiation of the original asymmetric bargain (Arthur Stein, 1984, pp. 382). Thus, the 1960 and 1970 have seen movement by others towards greater openness under American pressure. The Tokyo round trade negotiations of the late 1970s further lowered tariff barriers and included codes limiting nontariff barriers. This issues, simply made some scholars to conclude and expect the return of protectionism.

Conclusion

The power exercised in the past few decades by the United States government over the international system as hegemon, was indeed well noticed and impactful compared to others and to refuse the extension of that term to all other states which, in totally different historical contexts and circumstances, can be represented as simply holding some preponderance of coercive and persuasive power over allies, clients and potential rivals (Obrien, 2002, pp. 49). No Italians city, Dutch republic or industrialised Britain, ever provided its rulers with fiscal bases and market for loans that came anywhere near of being equivalent to the richly endowed diversified and highly productive continental economy taxed by federal governments in the twentieth century Washington (Arrighi, 1994). Indeed, in their days, guilders, ducats and pounds operated as key currencies, but unlike the dollar they never became the basis for an international monetary system which allowed monarchs in Iberia, republican oligarchies in Genoa, Venice, Florence and the Netherlands, let alone cabinets in London, to run fiscal deficits years after years (Tracey, 1991).

Clearly, both Britain in post 1846 and the United States after 1934 or 1941 supported free trade. American governments have surely carried far greater weight in sustaining that cause for the world at large and they could, besides, function through the modern international institutions (GATT and WTO) in which the Americans set up in 1947 to offset and reverse national tendencies towards protectionism wherever they appeared. In addition, and unlike the government in Victorian and Edwardian London, Washington never avoided ‘hard bargaining’ in favour of that peculiarly British idealised and ineffectual version of unilateral free trade (Howe A, in Patrick Karl 2002, pp. 50).

Between 1846-1941 Great Britain with all the availability resources and wealth acquired due to the aftermath of the war, never considered running a budget deficit in peacetime or seriously aspired to occupy positions of global hegemony. Moreover, within those ‘metropolitan’ elite, serious opposition to Britain’s more circumscribed imperial role, especially among economists, remained far stronger and more persistent. Over the last half century, the American elites appeared more confident about strategy and hegemony than the British aristocrats did about their nation’s civilising mission and responsibilities towards the rest of the world (Mann M, 1990).

In geopolitical and economic negotiations with allies, neutral states, rivals and even enemy states, American leaders and their advisers have carried with them inestimably greater cultural advantages than anything embodied and represented by the those of Britain politicians and officials in charge of foreign strategies and commercial policies before 1914 (Coker C in Obrien 2002 pp. 53). Of course, the British political elites did negotiated and bargained on behalf of great powers whose image and culture conveyed attractions for their cosmopolitan counterparts in European cities.

In sum, the hegemonic stability theory, as been exercised and practiced to a high admiration, by the United States than Great Britain, reason to this are not far fetch and still obvious in today’s world. Even though, attributes of ‘cultural, political, and economic foundation’ can be traced to the British (empire). Majorly, the idea of international institution by the US set the tone as well as reorders the nations engulfed by the two world wars experienced. This is not to say or avoid the significant impact of Britain in the world during the nineteenth century, but because less or nothing was done in Europe, thus, the impact is often not referred to and likewise second to that of US in international system.

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