Sunday, December 10, 2017

Hegemonic Abdication Theory




Looks like we need to develop some new theory as Trump/Tillerson/Kushner/etc are now doing something that might unprecedented: simply giving up a country's position as the main provider of public goods that stabilize much of the international system--the hegemon.  Putting aside whether hegemons are benign or not, the basic idea is that stability requires either one actor to provide some key contributions or a small group (but cooperation is hard).*
* I don't do IPE nor have I read any of this stuff in a decade or two, so let me remind the readers this is the semi-spew--things are half-baked here.  If other folks have said this, I invoke Steve Martin of the 1970s

What are these things?  A stable currency that is convertible and can be used as a medium of exchange, a large and open market so that countries can continue to export even in hard times, a willingness to enforce freedom of the seas so that trade can flow with little interruption, and supporting international institutions that facilitate exchanges (minimize the transaction costs). The basic idea is that the hegemon provides a buffer in hard times so that countries do not engage in ultimately self-destructive and other-destructive competitive policies that undermine the stability of the system.

Lots of debate in International Relations whether one needs a hegemon for this stuff to exist.  It is clear that it is easier to maintain the system after a hegemon (so Keohane argued) than perhaps to build a system sans hegemon.  Anyhow, leadership can be costly, but the leader can write the rules in ways that make the system work for them.  The US certainly did so after WWII: the rules were written to help the US but also help its allies, and this "benevolence" was largely aimed at the Soviet Union and Communism--providing the public goods for a capitalist world economy was part of containment.  After the decline of the Soviet Union, it still made sense to provide these goods because the US benefits from stability even if there are some costs.

I had considered long ago something called hegemonic instability theory--that one can cooperate to build bits and pieces of order in international relations (regimes) as long as the hegemon is not hostile to the endeavor.  That cooperation can develop among small groups which can then be enlarged to include most countries as long as the hegemon does not try to disturb stuff.

Well, we are now in need of some hegemonic abdication theory: under what conditions will a leader of the international system simply give up its role?  The obvious answer is: when it is no longer able or interested.  In the aftermath of WWI, the British realized that their role as hegemon was over, as they were exhausted by the war and their growth, their economy was no longer so strong that they could dominate the international economy and provide the goods.  They wanted to hand it over to the US, but the US was largely uninterested... which helped to exacerbate the Great Depression.  The US could have played a role to mitigate the damage, but chose policies that made everything worse.

Now? The US can still play the old role.  Despite decades of declinism, the US could still play this role and did so in 2008-09. Sure, being hegemon means that its economic troubles get exported to the rest of the world (sorry), but it also means that it can lead the cooperation to make sure that things don't get worse.  So, is it no longer in the interest of the US as a country?  Is instability preferred now by American companies and sectors of the economy?  Um, no. Despite the love of "disruption" in the modern business jargon, I am pretty sure that most firms and most sectors prefer stable exchange rates, open export markets, and a general level of stability in all things international.  If Hillary Clinton had won last year, we would not be taking about abdication.

So, Hegemonic Abdication Theory needs to build in an additional variable?  Stupidity? Xenophobia? The Trump Administration seems quite willing to abandon pretty much everything the US has built since WWII--any multilateral effort is fair game, no matter how beneficial for the US or how small the costs.  Tis no accident that the label America First was a thing in the 1930s and now again--it may or may not mean isolationism and withdrawal from the world, but it certainly means a refusal to cooperate, a strong preference for unilateralism.  I guess we need to go back to Ruggie and the social purpose that gets attached to power--that American hegemony (and the British one before it) were inherently liberal enterprises--as in free trade and all that.  The US has lost its social purpose as it is now polarized and led by someone who is illiberal to the core.  The strange thing is that his party is willing to follow him over the cliff, that the stock market is so in love with deregulation and tax cuts that they don't seem to mind the crash that is ahead when markets shut down as the international trading order falls apart.

So, Hegemonic Abdication Theory requires that the most powerful economy (still) is led by those who are illiberal?  I guess so.  That is far as I am getting on a Sunday morning.  Any suggestions for refining this theory?

4 comments:

Brian Urlacher said...

I've been playing with this idea as well. Seems like a couple of different things going on that can explain the pull back of a hegemon.

1) There is a two level game dynamic. Even before Trump it was unclear that TPP was going to survive the 2016 election.

2) I also wonder if we should be thinking about prospect theory scaled to the society as a whole. Lots of people have acclimated to the benefits of hegemony and no longer seem satisfied by things that made them ecstatic two-decades ago.

3) There is a case for a global retrenchment as China rises. Perhaps the US political system is responding rationally to a changing international system but individual level factors are messing everything up. A historical parallel (please forgive me the obligatory WWII reference) might be a resurgent Germany after WWI. The return of Germany was predictable but the individual level craziness of Hitler made that resurgence way worse, both internally and externally, than it had to be.

Steve Saideman said...

2 sounds like relative deprivation theory.

and no, I don't think global retrenchment makes sense. I do think a return to embedded liberalism does--that the pain of globalization should have been offset by government policies, but rise of the right meant reducing rather than improving safety nets. Austerity did that big time and it was the wrong thing to do.

Anonymous said...

I find it to be internal. US internal politics and political culture bring this on. Just finishing American Amnesia, which chronicles how the US truned away from what worked so well (mixed economy) to something that doesn't work for any one involved.

Matthew Krain said...

Long Cycles.