The Persistent Myth of Lost Hegemony Author(s): Susan Strange Source: International Organization, Vol. 41, No.

4 (Autumn, 1987), pp. 551-574 Published by: The MIT Press Stable URL: http://www.jstor.org/stable/2706758 . Accessed: 19/10/2011 16:10
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of myth losthegemony The persistent

SusanStrange

Myrdal, once commented Gunnar Swedisheconomist, The distinguished in in and on of ruefully thefailure socialscientists general economists particWhywas it,he to themselves. of ularto applythemethods social science abouttheir of bothered ask thesort questions to they seldom so asked,that usually and and behavior thatsociologists anthropologists own activities either of and remote from world thepresent, the askedabouttribes societies to occurto them investinever Whydiditapparently or indistance intime? Why givenin social scienceto someissuesabove others? gatethepriority or of didcertain absorbtheinterest a wholegeneration schoolof questions Why unnoticed? went puzzling, just whileothers, as intrinsically academics while questioning assumptions, did academics accept some underlying in taught literature the others?In economics,particularly, conventional coursesshowsthatmosteconoand of thousands graduate undergraduate of abouttherationality assumptions fundamental mists sharecertain tacitly of or and in buyers sellers themarketplace, abouttheeasyavailability inforfor to that happen be convenient ecoand mation supply demand regarding 1 experience. everyday do accordwith nomic but argument which notalways in which couldbe summarized thecommand, "PhyMyrdal's injunction, relaof appliesequallyto thestudy international thyself!" sician,diagnose time I economy. shallarguethatit is high political tionsand international of to indeedthatwe pay muchmoreattention the sociology international of myth-that studies,and especiallyto the reasonswhyone particular in rootso strongly theUnitedStatesacaAmerica's losthegemony-took demiccommunity aboutfifteen yearsago and whyit has been so generally and unquestioningly acceptedsince-so muchso thatit has even gained
of version thisarticle presented the30th Annual Conference theJapan of was to An earlier Helpful comments suggesand Relations Tokyo, in October 1986. Association Intemnational of Richard DeAngelis, Jesper others, SteveKrasner, Lars Mj0set, tions havecomefrom, among for journal. CGrolin twoanonymous and reviewers this
1. G. Myrdal, Objectivity Social Research (London: Dudworthy,1970). in InternationalOrganization41, 4, Autumn1987

? 1987bytheWorld of Institute Technology and Peace Foundation theMassachusetts

Organization 552 International seems in I beyond North America. do so becausehistory credence theworld can powerful, attractive myths be extremely to showthatsome speciously and Think thatcertain women old onlyofthebelief persistent, dangerous. and couldcastmagicspellsorputtheEvil Eye on had supernatural powers thateating enemy Or, madeone strong virile. and an people,or themyth of considerthe consequencesforwildlife the thinking again of virility, horn myth rhinoceros was an aphrodisiac. that pathetic, still but persistent, political Morerecently, there havebeenno less destructive myths a more of that example, but nature-invented, perhaps, nonetheless powerful-for Aryan race; or thatIranian a German-speaking people came from distinct for country would go suicidemissions their boy-soldiers who undertook to straight heaven. the that In itsextreme form, myth theUnitedStatestodayis just a little old country muchlikeany other and has, in somesuddenand miraculous thando someof powermayseemmoreplausible way,lost its hegemonic But to scrutiny, theseother myths. whenitis subjected close and searching itisjust as farfrom analysis undermines truth. unlesscool andrational And it bit and itspowerto moveminds shapeattitudes, can be every as dangerous. In living the of memory, optimism theUnitedStatesgave Americans and othersa visionof a new, better future the world; for and attainable only is today, myth losthegemony aptto inducein everybody pessithe of and circumstances, that, mism, despair, theconviction intheseinauspicious else and look after yourown the onlything do is to ignoreeveryone to individual national or coninterests. Thus, some of the same American of persuaded the tributors International to Organization arepersonally who resolution, paramay cooperation conflict and benefits more of international be environment subscribing by to doxically contributing a less cooperative power. the of to and perpetuating myth lostAmerican which havegained notions fashionable academic rapid popularTwo other its in States,havemultiplied powerandinfluence. ity, especially theUnited the of derived from theory publicgoods,thatwe can One is the notion, the economic the cooperation applying theby explain lack ofinternational in of of political power.And oryto thebehavior states conditions dispersed theother thenotion-now,I wouldguess,at thevery is peak ofacademic of can Game Theory be usefully appliedto an analysis state fashion-that socialandeconomic in transnational problems, policies thefaceofcommon of to of from including everything thecontrol banking the stabilization oil that with conviction theUnitedStateshas perthe prices.Whencombined a notionsoffer bothfashionable lost manently its powersof leadership, lack an convincing explanation-even excuse-forthepresent of speciously Esand of international organizations.2 cooperation feebleness international
UniverN.J.:Princeton (Princeton, After Hegemony, R. example, 0. Keohane, 2. See, for Also theory. of versions game the painstoexplain simpler goestogreat which Press,1984), sity

Lost hegemony553 in facts ignored overlooked; is all theeasier are or it pecially GameTheory, deal with because the vulgarrepresentations Game Theoryhabitually of in situations whichthe "players" are engagedin one gameat a time;in and whichtheplayers limited two,or some quitesmallnumber; in are to by which gameis playedin vacuo andtheplayers motivated precise the are of and singular of goals. These situations theveryopposite thereality are "bit international political economy, whichtheplayers in (including playin games, ers") are engagedsimultaneously a whole seriesof bargaining and and by somedomestic someinternational, aremotivated a complex and motivations. shifting tapestry interacting, of sometimes contradictory, I to examiFor present purposes, however, shallconfine myself a critical that hegemony nation thetwopolitically of important propositions regarding thesetheories supposedly sustainand explain.These are thatthe United thisloss is a Stateshas lostitshegemonic poweroverthesystem, that and and political major reasonfortheinstability aimlessness theinternational of of This examination requireattention the origins these will economy. on stability propositions, testing the historical a of evidenceforhegemonic of theory, finally, and, somediscussion thenature exercise poweron of and which theory to the implicitly rests.Such assumptions crucial explanaare torytheory because the outcomes an international in societythathas no by legitimate, overriding authority necessarily are determined relationships ofpowerand farless by law, custom, socialconvention is thecase than or within national societies. I that critique to my Contrary conventional American wisdom, shallargue ofhegemonic concluding propostability theory leadstofive quiteimportant sitions. These are: * The greatgameof stateshas changed in overthelast quarter-century not a veryfundamental forreasonsthatare primarily economic, way, primarily political. * In thisnewgreat gameof states,structural powerdecidesoutcomes and muchmorethanrelational powerdoes, (bothpositive negative) and theUnitedStates' structural powerhas, on balance,increased. * Therehas alwaysbeen an inherent in policybeconflict U.S. foreign and tweenitsgoals ofliberalism thepursuit itscommercial for of financial and of in of interests theexigencies realism thepursuit political and military pernational interests. Now, in a worlddepression, in of ceptions U.S. national interests moreapt to be perceived are terms theshort thanofthelong,so that"realism,""unilatrun of

D. Snidal,"Hegemonic Stability Theory Revisited," International Organization (Autumn 39 1985).He follows comprehensive a review thetheory of with cautious the verdict game that theory "a useful is beginning rather than reliable a conclusion."

554 International Organization in eralism," "domesticism" U.S. policyis nowmuchmoreevident or thanliberal internationalism.3 * The use ofhegemonic structural powerin waysthatare destructive of international order and cooperation beenan important has cause of worldeconomic instability continuing and crisis. * A necessary condition, therefore, greater for stability cooperation and lie within UnitedStates,rather the thanin theinstitutions mechaand nisms international of cooperation. These conclusions support, though somewhat on different grounds, arguments madeby BruceRussett, Giovanni and Gill.4 Arrighi, Stephen Origins I a The theories shallchallenge notconstitute single do bodyof homogeand neousor consistent ideas. Rather, they a bundle concepts explaare of or the nations centering around notion theroleofthehegemon leader, the of between the dominant statein an international system, theconnection and hegemon and the stability that system.Firstof all, the conceptof of both and hegemony loose andambiguous is regarding itsattributes itsapplias cation.Opinions differ to howyoucan recognize hegemon, on how a and use hegemons their power. to have that Manycontributionstheliterature chosenindicators areeither tradeas a proportion GNP) or imprecise irrelevant (monetary reserves, of of or (shareofworldtrade,shareofworldGNP, production rawmaterials made thevaliddistinction between a Russetthas usefully manufactures). It that state'spowerbase and itscontrol overoutcomes.5 follows whileone indicators theformer, of control overoutcomes maylook forquantitative task. from evidence-a moredifficult Hegecan onlybe inferred historical been advancedbothas a as monicstability theory, it is referred has to, law of and to general applicable widely separated periods world history as a owntimes.The theory of takes for specific explanation thedifficulties our a will which twoforms: "strong" a order version, saysthat hegemon produce
"The with Nau inhisexchange FredBergsten, usedbyHenry is 3. "Domesticism" theterm is "Unilateralism" used 1985). 59 Policy (Summer Foreign of State theDebate:Reagonomics," Academics," of and Unilateralism Adaptation American by Pat Sewellin "The Congenital SepScienceAssociation, Political of conference theAmerican at paperpresented theannual 1986. tember or Hegemony; Is MarkTwainReally Case of Vanishing "The Mysterious 4. B. Russett, in "A 1985).G. Arrighi, CrisisofHegemony," 39 Organization (Spring Dead?" International 1982);S. Gill, "U.S. of SamirAminet al., Dynamics Global Crisis(London:Macmillan, A 1986). useful 15 Era," Millennium (Winter in and Its Hegemony: Limits Prospects theReagan (University Compared Modern Hegemonies is still work inprogress LarsMj0set'sforthcoming of ofOslo, Department Sociology). "Is 5. Russett, MarkTwainReallyDead?" p. 208ff.

Lost hegemony555 in in order and stability an and stability theworld-and, morespecifically, order on it interdependent economy-when uses itspowerto enforce world is and which saysthat hegemonic power a necesothers; a "weak" version, words,the for condition order.In other sary,butnotalwaysa sufficient, answerswhyorderand onlypartially presenceor absence of a hegemon in haveprevailed sometimes theinternational at economic system stability at and disorder instability others. and understood alternative the ways One reasonis thatwe have notclearly their power may uses powerandthealternative towhich hegemons exercise hegemony distinction between be put.DuncanSnidalhas madetheuseful hegemony and is (that by that beneficent is, exercised example persuasion); that but and by that beneficent exercised coercion; hegemony is coercive is that United the Statesat itshegemonic andexploitative.6 Russett concludes but the peak diduse coercivepowerto exploit system, it also beneficently The economicprosperity. aboutpostwar paid some of the costs to bring orderhas also beenassociated thatinternational "regimes"sustain notion the are than international with roleofthehegemon. the Theseregimes more though multilateral cooperation, or institutions up to administer facilitate set and theinstitutions theGATT (General like Agreement Tariffs Trade)or on the International Fund (IMF) often reflect well as servethe as Monetary of the and habits behavior regime. The word"regime"embraces customs a withtheformal and provide meaagreements institutions, that, together in of transnasureof continuity stability relations statesand of other and and banks.7 For many American tional actors, such as corporations it that decline order theworld of in econthe scholars, seemedno accident witha timeof coincidedin the mid-1970s system omy and its financial in States foreign policy and, of weakness humiliation theconduct United and of of came to think, American power. as many them of begantogrow aboutthetime of Thus,thepopularity thissetoftheories at thebreak-up theconvertible of dollarand thegoldexchange system the and of of Kindleberger's scholarly beginning the1970s thepublication Charles the This historical analysischallenged study,The Worldin Depression.8 in U.S.-bounded of depression rather interpretationthecauses ofeconomic in studyby Milton the 1930sthathad been expounded the monumental Friedman the and Schwarzhad heavilyemphasized weaknessesof U.S. and to (as monetary regulation in thefreedom deal in shareson margin) the
(New York: MultinationalCorporation: The Political Economy of Foreign Direct Investment

Friedman and Anna Schwarz, A MonetaryHistoryof the United States.9

Revisited."Cf. R. Gilpin,U.S. Powerand the Theory 6. Snidal,"HegemonicStability

p. Basic Books,1975), 34. Press,1983). University (Ithaca,N.Y.: Comnell Regimes ed., 7. S. Krasner, International Press,1971). University N.J.:Princeton (Princeton,

8. C. P. Kindleberger,The Worldin Depression, 1929-1939 (London: Allen Lane, 1973). 9. M. Friedman and A. Schwarz, A Monetary History of the United States 1867-1960

Organization 556 International by management theFederalReserveBoardat of perversity U.S. monetary too, Kenneth Galbraith, in in John moments thecrisis years1929-31. crucial bankers the and of the The GreatCrashl' had emphasized folly American politicians officials. and of and vacillation American weakness prices Commodity that. there No, said Kindleberger, was moreto itthan of to in the had started falling 1927and soonafterwards flow funds primary of in had But to countries begun slacken. instead acting a counterproducing boomtodraw the the Stateshadallowed WallStreet fashion, United cyclical barriers had and U.S. fundsback from Europe,had raisedprotectionist to its whenpanicset in. Whatsuchan intesystem failed support banking of saidKindleberfinancial neededat suchtimes crisis, really system grated an for which wouldmaintain open market ger,was a leader,or hegemon, in The hegemon products. especially primary othercountries' surpluses, investment a of wouldalso maintain steadyoutflow capitalforproductive wouldkeepan opendiscount lender lastresort, of and,as an international that Britainhad windowfor distressedbanks. These were functions fulfilled beforeWorldWar I and AmericaafterWorldWar II. But bein able to takethis was tweenthewars,Britain, herself trouble, no longer to role and the UnitedStateswas unwilling do so. Hence the prolonged was of edifice argument madeby to contribution thisbeguiling Another The United in rather titled States misleadingly Robert Gilpin a neat study 12 in a exposition, Corporation. Setting trend academic and theMultinational to and explained different the approaches worldpolitics Gilpindescribed in and mercantilists terms), Marxists.13 (realists, political taken liberals, by based on an interpretationBritof He wenton to makea realist argument, the ain's long decline,thatthe UnitedStates shouldavoid making same of overseasto thedetriment itsownnational of mistakes investing heavily aboutitsown argument brought said, Gilpin's Hegemonic power, economy. the develof destruction theoutflow precious as capitalsustained economic base. owneconomic of opment rivalstatesat theexpenseofthehegemon's to The argument (later referred as the hegemon'sdilemma)appealed of who are traditionally suspicious bigbusito liberals, strongly American
1980). The 10. J.K. Galbraith, GreatCrash,1929(London:Deutsch, in (ironically agreepp. World Depression, 291-94.WaltRostow in 11. C. P. Kindleberger, than rather and the has analysis) also emphasized global systemic with much neo-marxist ment Economy: The W. depression; W. Rostow, World domestic causesoftheinterwar thenarrowly works. and of University Texas Press,1979), other (Austin: and History Prospect See relations. R. courses international on university in 13. Thetrend beenfollowed many has Pinter, 1979), Order (London:Frances and GlobalPatterns World Little R. D. McKinlay, and M. edited R. Little, Politics by course, for World Readings an OpenUniversity andtheearlier 1986) Pinter, (London: Frances Economy ModelsinPolitical Brown, See 1981). also M. Barratt Press, Whatis PoliticalEconomy? (New Haven,Conn.:Yale University and M. Staniland,
1985). Shackleton; and M. Smith,Perspectives on WorldPolitics: A Reader (London: Croom Helm, 12. Gilpin, U.S. Power and the MultinationalCorporation.

depressionof the 1930s.11

Lost hegemony557 in corporations Latin of ness and critical the partplayedby American 14 America. and by been refined reinforced a much has Gilpin'sargument recently to pieceoftheorizing more (andthusmoresusceptible question) generalized titled Rise and The Mancur Olsoninthegrandiosely economist byAmerican

Decline of Nations. 15In The Logic of CollectiveAction, Olson had earlier

and aboutfreeriders the reasoning an developed austerelineof economic alliescouldcontinue howAmerica's goods.He explained of provision public by provided theWestern on as impunity freeriders thesecurity to act with alliance,leavingthe UnitedStatesto pay thelion's shareof the defense hison by bill.16 Encouraged thissuccess,Olsonthenembarked economic Olson power, of The theory. enjoyment hegemonic with newgeneral a tory groups, social and economic on conferred specialbenefits certain argued, and a preferto resistance change a developed natural which consequently and A of familiar privileges. kindof economic ence forthe comfort their and delaythe was socialsclerosis thusaptto setin,clogging arteries fatally lost, hegemon first, whytheformer Thiswouldexplain change. ingadaptive power,to rivalsunencumand its economicleadership, thenits political the interests; self-preserving the of beredwith samecoalition conservative, of in to rivalswere therefore a better position take advantage successful of demands themarket. advancesand thechanging technological tastes. political most to theory suit of are Today,there variants hegemonic an has Immanuel Wallerstein developed alternative For American radicals, on laid building foundations in rise of theory hegemonic anddecline, general blazed the following trail (itself The System hislargestudy, ModernWorld World The In Braudel).17 a seriesof essays entitled Capitalist by Fernand to hegemony meanmorethanmilidefines usefully Wallerstein Economy, yet shareof theworldmarket, or the tary predominance capturing largest existin an intersays he which rightly cannot less thantotalomnipotence, he to: refers statesystem. Hegemony, asserts, inter primus thatone poweris truly 'great powers'is so unbalanced imposeitsrulesand itswishes(at is, pares; that one powercan largely milipolitical, veto theveryleastby effective power)in theeconomic, arenas. and tary, diplomatic even cultural
the GreatBritain, UnitedStates,and the 14. See A. Stein,"The Hegemon'sDilemma: 1984). 38 Organization (Spring International Economic Order," International

...

between the so-called thatsituationin which the ongoingrivalry

The States, the Movementsand the 17. 1. Wallerstein,The Politics of the World-Economy: et Civilizations (1984). See also his antecedents, F. Braudel, La Me'diterrane'e le Monde a Mediterrane'en l'epoque de Philippe (Paris: ArmandCollin, 1986) and F. Perroux,Le capi-

Press,1965). University Harvard (Cambridge:

Stagflationand Social 15. M. Olson, The Rise and Decline of Nations: Economic Growth, Rigidities(1982). 16. M. Olson, The Logic of Collective Action: Public Goods and the Theoryof Groups

de (Paris:PressesUniversitaires France,1948). talisme

Organization 558 International producin edge Thatpowerhas a simultaneous in efficiency agro-industrial are "thatall alliedpowers defacto so and tion, commerce infinance great in and frustrated highly feelrelatively powers client statesand opposedmajor 18 the power." vis-a-vis hegemonic defensive powerwas exercised hegemonic perspective, In Wallerstein's historical world Provinces in by occasionsin themodern system: theUnited on three Statesinthe in and by themid-17th century, Britain the19th, bytheUnited in the was centuries. each case, there a short In period which hegemon 20th In endeavor. each fields economic of in hadan edgeoverall others all three dewas war; case, thehegemony securedby a thirty-year and hegemonic the had which hegemon created. clineerodedthealliancesystem Meanwhile, Americanrealists,StephenKrasnerfollowedGilpin, for of declineand thecollapseor disintegration hegemonic closelyconnecting powerto build use peak,hegemons their "regimes."At their international of and usagesthat will institutions, customary rules, frameworks acceptable influence But declines, order money trade. as their in and maintain economic are also wanesandthey more economic order their for appetite international 19 interest. with their national ownparticular concerned of interpretationsrereachedvia thesepost-hegemonic The conclusion Wallerstein consistent. are centhistory, however, by no meansmutually (NATO) of Treaty Organization foresees break-up the NorthAtlantic the upswing takesholdin the and a diplomatic reshuffle a new Kondratiev as stateof as he a to predicts return what perceives thenormal 1990s.Krasner Keohanecomesnearto society-a Hobbesianall-against-all. international that is to preferable none.(For cooperation always arguing anyinternational on Arrangement the illiberal MultiFiber he the instance, defends notoriously to actionleading escalating curious that thanunilateral grounds it is better But is discord.20 the factis thatthe agreement onlya coverforbilateral and exporters, thatbecause between and importers would-be agreements at thelatter powerless bargain, are their discordis, if not silent, least to is by half-legitimizedtheagreement infact thus, inconsequential; theaction that Hegemony, unilateral.) RobertKeohane argues,at the end of After will America'sallies and partners have to without American leadership, in or framework order the renew their collective effort rebuild collapsing to and theinternational to economy. According Keohane: "Shared interests but of institutions itpossibleto cooperate theerosion Amerimake existing makesit necessary do so in newways."21 to can hegemony fewAmerican the voiceshavequestioned twobasicproposiOnlya very rests.These are, tionson which theforms thisconventional all of wisdom
18. Ibid.,pp. 37-44.

19. S. Krasner, ed., InternationalRegimes. 20. Keohane, AfterHegemony, p. 216.

21. Ibid.,p. 244.

Lost hegemony559 that first, proposition theUnitedStateshas lostpowerin and overthe the thatthisreasonaccountsforthe the system; and secondly, proposition thatthedeclineofAmerican Russett asserted has disorders thesystem. in has likethepremature reports MarkTwain'sdeath, beengreatly of power, that Economy thegenin exaggerated.22 David Calleo argues TheImperious as in power attributable a decline American to eraldisorder notso much was since attempt successiveU.S. administrations of it was to the persistent bothmilitary is, pot,that to finance Eisenhower geta quartoutofa pint to rewithinadequate budgetary welfare programs supremacy national and tenHenry Nau argued thatit was the"domesticist" sources.23 Similarly, rather that dencyin U.S. policymaking was therootoftheglobaltroubles, hegemonic power.24 thanthedeclineofAmerican out viewshavebeen drowned bytherest.Thisis the Buttheseminority but stream moresurprising thelastfewyearshaveseena small steady since ofjournalarticles in States,many them younger of by published theUnited of validity hegewho have triedto testthehistorical American scholars, system. monic as law stability theory a general oraxiomoftheinternational gravedoubts thebasic on Theirconclusions themostparthave thrown for of assumptions thetheory. The recordof history One basic assumption thisliterature thathegemonic is powersat their of are The and by leadership liberal inclination. secpeakofstrength economic others wereable to influence benefited becausethey ondis that system the of to be moreliberal otherwise wouldhavebeen.The result both thanthey was economy influence that international was the their liberalism their and of leadership. much But as morestableand moreprosperous a result their of by recent work-to saynothing paststudies economic American research of the in countries-hasdenied validity hegemonic historians many different American of century, backintherecords the19th stability theory. Searching scholars thatBritain thehegemonic as leaderofthetimehad notin found imporof In fact beenconsistently liberal itsmanagement trade. thethree in tantportsof theArabian by peninsula controlled Britain-Aden,Muscat, and Mocha-compellingstrategic had to considerations led Britain adopt leadIn British commercial attitudes.25 WestAfrica, increasingly restrictive at of is with agreement the reached theCongress Berlin ership often credited to maintain opendoorpolicyin trade, David Laitinfound politan but that
"Is 22. B. Russett, MarkTwainReallyDead?" University Press,1982). Harvard Economy (Cambridge: 23. D. Calleo,TheImperious 24. Nau, "Reaganomics." A TradeRe-assessed: View of and 25. F. Lawson,"Hegemony theStructure International

fromArabia," InternationalOrganization37 (Spring 1983).

Organization 560 International much broader study British liberalism.26 another, In icalissueshadmodified century, McKeown Tim ofrelative tariff levelsin Europein thenineteenth hegemony influenced had besides British foundthatmanyotherfactors 1870, away statestowards moreliberal trade policies-and, after European from them.27 Trade policytendedto be moreliberalwhenbusinesswas regardless thepower of or than (as booming whenithita slump inthe1870s), emerged economic power.Muchthesameconclusion attitude theleading of analysis PeterCowhey EdwardLongof by and from pieceofcomparative a growth slowedin trade which found that, economic as policiesinthe1970s, responded disto governments the mid-1970s, European and American trademeasures.28 The withsubsidiesand protectionist tressedindustries hegemonic power,as had notbeen thedeclineof American crucialfactor as but the stateoftheworld Keohaneargued, rather depressed economy, I of history thebasic assumptions bothweak on The evidenceof postwar damaging. is nothardto It and strong stability theory just as is hegemonic beforeit) has not consistently show thatthe UnitedStates (like Britain liberalobjectives, has it successfully persuaded others join to nor pursued that pursuit. the to In thelate 1940s,theUnitedStatesSenaterefused ratify Havana was to administration obliged settle so that Charter persistently theTruman in in contained theGATT. Andlater, themidfortheless extensive regime waiverclause to exempt 1950s,the UnitedStates used the agreement's thus tariff tradefrom processesof multilateral bargaining, the agricultural of farmers thelower-cost competition Argentinian American from protecting and and sugar citrus, various beef,New Zealandwooland lamb,Caribbean other products. the Statestookan was While HavanaCharter being the negotiated, United initiative-in Truman the on shelf-extending Declaration thecontinental was which was farfrom liberal. Thisdeclaration thefirst state jurisdiction, and copiedby Latin enclosure, was quickly stepin a processof maritime to to rights the same 200-mile American fishing governments extendtheir their for had within jurisdiction oilexploralimit theAmericans declared that and every other tion. The Soviet Union, the European Community, in move. Whether thelongrunthe the maritime statefollowed American as enclosureof the highseas is regarded good (because it may help to
Economy," and Yorubaland theInternational and 26. D. Laitin,"Capitalism Hegemony: Tariff Levels in Theoryand the 19thCentury 27. T. McKeown,"HegemonicStability Declineor Change:Hegemonic Theories Regime of and E. Long,"Testing 28. P. Cowhey

argued in The InternationalManagement of Surplus Capacity.29

InternationalOrganization36 (Autumn 1983).

Europe," InternationalOrganization37 (Winter1983).

1981). (London:Allen& Unwin,

Surplus Capacity?" InternationalOrganization37 (Spring 1983). 29. S. Strange and R. Tooze, eds., The InternationalManagement of Surplus Capacity

Lost hegemony561 on competition or stocks) bad (becauseitis a limitation free conserve fishing in is The factis that fortheocean's resources themarket) besidethepoint. authority of and the policy to assert primacy federal for reasonsofdomestic step,extending illiberal Statestookthefirst the overstateauthority, United of the statepowerand limiting old "freedom theseas." shipyards thesubsidiand of In a recent study theprotection American on that Alan Cafruny concluded the zationof shipsflying UnitedStatesflag, had onlychangesin technology led the UnitedStatesto oppose the imby system proposed boththeUNCTAD Code ofConduct plicitly restrictive by Package,approved theEuropean on LinerConferences theBrussels and eye a At stagetheUnitedStateshad turned blind to Community. an earlier system had allowed and of theilliberal cartelarrangements theconference to just to in itsownfleet takepart them as italloweditsownairlines join the in IATA cartel air transport.30 backed powers, Statesuseditspersuasive the After war,whentheUnited liberaleconomic to up by coerciveleverage, get othersto help establish of on throws evenmoredoubt theeffectiveness the arrangements, evidence havebeenin a U.S. hegemonic dominance. United The Statescouldhardly of to powerthanat thebeginning the stronger position exercisehegemonic weapons monopoly atomic of The Program. American EuropeanRecovery spreadof barrier a further to gave theWestEuropeanstheonlyeffective the offered onlyhopeof American dollars and Sovietinfluence domination. to werenecessary keep of goodswhich imports foodandcapital maintaining in wrought after reconstruction thedamage of up themomentum economic and winter shortage cold likethatof 1946-47wouldhave of war. Another Franceand Italy.Yet, of threatened stability at leasttwogovernments, the the between Americans of as AlanMilward's recent study thenegotiations and theEuropeanshas shownin considerable detail,theWestEuropeans were successful resisting in attempts insiston a full-blown to American Aid. Weddedby history customs the of unionbetween recipients Marshall to and sentiment theirparticular conceptof the role of the statein the Statesto set a of foiled theefforts theUnited all the economy, Europeans respective governments.31 authority their over supranational liberalizing overtheliberalizaactionshad beenfought Similar successful rearguard were in their at tion of air transport Chicago in 1945. The Americans inmanufacturing ever:they had theonlyviableaircraft strongest position as in homemarket a base for thriving dustry existence;an exceptionally network bases andoperating of experiand foreign operations; a worldwide of air the operations itsstrategic comthrough wartime ence,bothacquired
39 1985).See also Organization (Winter the "Ruling Waves,"International 30. A. Cafruny,

chap. 8. S. Krasner, StructuralConflict, 31. A. Milward, The Reconstructionof WesternEurope 1945-1951 (London: Methuen,

1984).

Organization 562 International and freedoms an openmarket demand thefive for mand.Yet theAmerican up statessetting theICAO.32 by defeated theother was successfully in liberalism to resistance American Nor did theEuropeanscease their refuse extend to couldindividually Article oftheGATT they 35 Under trade. on already negotiated the the Party privileges to anynewHighContracting The to principles all theothermembers. basis of themost-favored-nation powerin the was that though UnitedStatescoulduse itshegemonic result the of on to theorganization insist theadmission Japan, Europeanscould on competitors Japanese had whenthey toadmit the years moment delayfor colonial)markets. often sheltered to domestic (and their equal terms their reasonsto for still Andby 1962,whentheAmericans, concerned strategic the first short-term admitted the"richman'sclub," proposed to getJapan wouldassurea which TextileAgreement, Cotton and thentheLong-Term access, it was able to do so withonlylimited of steadyexpansion market even markets were concerned; success as far as EuropeanCommunity which of the have succeededwithout support Britain, it then, couldhardly of the others problems adjustto for haditsownreasons wanting sharewith in producers Indiaand textile from ingto pricecompetition Commonwealth considerations madetheAmericans But HongKong.33 whilesomestrategic considstrategic other at the actliberally toward Japan leastuntil late1960s, whenit came to American overliberaldoctrine erations tookprecedence had as states. Just theBritish polittowards trade with communist the policy in restrictive commerce Arabianports,so the ical reasonsforpreferring influence tradeon politics of wereconvinced thatthebeneficial Americans especially After mid-1950s, Europeans, the the at stopped theIronCurtain. and trade regime, theAmericans liberal a favored more theWestGermans, opposedit. in liberalism thetwenty-five after years it In short, is hardto see American thatis, a rather thanas an ideology, doctrine WorldWar II as a genuine the and perception to doctrine be usedwhenitwas convenient fitted current whenit did and interest one to be overlooked forgotten and ofthenational it if doctrine, is hardto explainwhyit not. Moreover, it were a genuine in abandoned thespace ofaboutfive have been quiteso summarily should had by bureaucracy, contrast, yearsbetween1968and 1973.The British in had beenbrought longafter up they doctrines which clungto theliberal let had British economicdominance fadedaway even in finance, alone in hegemony The and manufacturing in agriculture.34 declineof American shift a have been so steepthatit brought fundamental in the couldhardly
International Air 37 "International Transport," Organization (Summer 32. C. Jonsson, 1983).

Eco33. G. and V. Curzon, Politics and Trade, vol. 1, of A. Shonfield,ed., International Press, 1976). nomicRelations of the WesternWorld1959-1971 (London: OxfordUniversity 34. R. Gardner,SterlingDollar Diplomacy: The Originsand the Prospects of Our Interna-

2d University Press,1980). tional Economic Order, ed. (New York:Columbia

Lost hegemony563 of direction U.S. policyin less thana decade. It wouldseemthathistory, more has economic leadership, beenrather British American and under both suspected. thanGilpin, Keohane,or even Kindleberger complicated of in Liberalism trade,I would argue,bothas an attribute hegemonic and to world economic factor growth stability, powerand as a contributing of other two attributes than has been muchless important Kindleberger's of and investment the provision a outflow capitalfor of hegemony-the of (that by supported discounting is, lender last currency stable international of crisis.The influence hegemonic in timesof financial facilities resort) was century at best statesin the 19th poweron thetradepoliciesof other Emeffect theAustro-Hungarian on It little verymarginal. had singularly little the on and precious empires, and pire,or on theTurkish theTsarist werethestatutory restrictions States.Far moreimportant, perhaps, United from Act British of government theBankCharter of1844 on thepower every was that relative money. The result up to 1914to pay itsdebtsby printing in little changes thepurchasing in affected by trade prices international were weremostly denominated. in billsofexchange powerofthecurrency which in ofBritain, in and thevalueofmoney, thepolitical in stability Confidence (like other countries Japan) provided capital of outflow British thecontinued peThe growth. shorter to with necessary the confidence pursueeconomic in it though beganwithconfidence the same hegemony, riodof American It threeimportant factors, provedmuchmore short-lived. was strongly and soonfollowed dollar glut, inthe dollar by marked byacute first shortage, by of followed an equally depreciation thedollar bya rapid lastfifteen years, a from policiesproducing resulted This depreciation rapidappreciation. creditexpansionthatwas geared,not to trade as in the 19th-century Euromarket the through uncontrolled but system, to banklending British has suchmonetary volatility provided The by produced system. uncertainty to institutions develop for incentive banksand otherfinancial a powerful risk the thatshift consequent on to others. newinstruments operations and the of in and has But theshift, turn, servedto complicate frustrate efforts a financial to system.35 changing governments manageso rapidly Power and wealth of betweenthe reality the Another pointconcerns divergence important in hegemonic stability and international relations its biasedrepresentation that is signifiassumption there notmuch theories. Theymaketheunspoken in of the between worldeconomy the 19th century, which cantdifference and in later leader(first industry, in commerce fiBritain theeconomic was States inwhich United the of and economy ourowntimes, nance), theworld
1986). (London:Blackwell, 35. S. Strange, CasinoCapitalism

Organization 564 International While differences. is the economicleader. But thereare veryimportant of still the relations portray international system texts international on many stillto be sovereign-as of states-or rather, statesclaiming sovereign has its a permanent feature, economicenvironment alreadysubstantially to and changed, willcontinue changein thefuture. eachother bringare societies with integrating national Economic changes gamebetween statesis of The nature thecompetitive ingpolitical changes. (because land was the for notwhatit was. Insteadof competing territory powerforthe wealthand political primesourceof wealth,and therefore statesare nowencontrol overterritory), statecouldbe achievedthrough for in are competitive game:they competing gagedincreasingly a different wealthand therefore sharesas the surestmeansto greater worldmarket however provided, security, economic security. True,somemilitary greater But today'scostly security. with a condition economic for is often necessary can be andfast-changing economic security no longer assured technologies, alone. The LDCs who markets for, on, by producing and selling national found outthehard this tried as a strategy import-substitution development who countries, havebeenthose too, successful industrialized way.Themost for have been able to gain,and keep, a larger shareof theworldmarket has goods or services,or both.This truth been obscuredforthe United the market was so much Statesbecause, in manysectors, U.S. domestic and of by than other national sucha largepart, itself, markets formed larger In was U.S. industry the worldmarket. the 1950sand 1960s,moreover, the of often beneficiary U.S. defense Contracts theU.S. Defor spending. products, fense developnewhigh-technology helped companies Department risks.36 the By withno downside like computers integrated and circuits, developed milifor whether technologies 1980s,it becamemoreuncertain so tarypurposeswill be so easily adaptedto civilianmarkets, thatthe be costs of diverting efforts in future may research corporate opportunity thanthespillover for benefits U.S. industry. greater the of without benefits such defense States,like Japan,whichstarted and meansto apply wereobliged find to other existing technology contracts, of so the to finance development new technology thatnational enterprises marworld to market their sharesand adaptflexibly changing couldenlarge ketconditions. is correct, If thisanalysisof changein theinternational system broadly statesit is not thenit follows gamebetween that,in the new competitive textbooks thepower as realist relational power-describedin conventional do-but structural it of A to get B to do something wouldnototherwise powerthatcounts.It is thispowerthat,I shallargue,the UnitedStates to of still description overwhelmingly possesses,andI shallnowturn a brief thatstructural power.
36. An argument madein Europe.E.g. G. Junne, often "Das amerikanische Rustungsprogramm: Substitut Industriepolitik," ein fur Leviathan (1984). 13

Lost hegemony565 power Four aspects of structural of poweris thepowerto chooseand to shapethestructures the Structural instituwithin whichotherstates,their economy political globalpolitical people professional and economic enterprises, (notleast)their tions,their have to operate.This meansmorethanthe powerto set the agenda of the "rephraseology) international or discussion to design(in American gime"ofrulesand customs. in but not structure, rather four poweris tobe found, ina single Structural structures. Theyare likethefoursidesof a pyrabut separate interrelated Thesefour structures mid.Each is heldup andsupported theother three. by are not peculiarto the global politicaleconomyor worldsystem.The powerare the same in verysmallhuman structural sourcesof superior as and village community, they like or groups, thefamily, a remote isolated powerlies: are in theworldat large.In each ofthese,structural * with personor group over-that is, to able to exercisecontrol the to people's security threaten to defend, denyor to increase-other or violence; from * withthose able to controlthe systemof production goods and of
services;

* with and of the thoseable to determine structure finance credit it which(in all butthemostprimitive economies) is possible through to acquirepurchasing having either workor to trade to powerwithout it; * with whether is it over thosewhohave mostinfluence knowledge, in or knowledge, leadership ideas,and technical religious knowledge, and communication, storage the or who control influence acquisition, and ofknowledge information. poweris onlycommon of Thisbreakdown thecomponents structural of of aboutthenature sense.Butitis often discussions obscured theoretical by far or the stateor of powerthatare either too abstract fartoo narrow. from or Structural powerhas fouraspects,each reinforcing detracting the other three.In theinternational all economy, fourare important, political poweris the and thestatewhichis dominant mostaspectsof structural in mostpowerful. of So structure. longas thepossibility powerin thesecurity Take, first, offers protection the which security, state threatens personal violent conflict the exercisespower-and does so even though same againstthatthreat to be of defense forcethatgivesprotection mayitself something a threat the Statescontrols decades,theUnited Today,as inthepastthree security. thatare nuclear warheads missiles carrying onlyforceof intercontinental from Moscow. for forcecontrolled any sortof a match thecorresponding and Sovietpowerinthesecurity structure onceinferior, is nowroughly was

Organization 566 International Statesand NATO/Europe forces:United TABLE 1. Nuclear

United States Missiles ICBM Intermediate Tactical Aircraft Longrange Medium range strike Land-based Carrier-based strike Nuclearsubmarines (1984) budgets Totaldefense 1,010 278 144 199 55 1,182 666 85 $237billion US NATO excluding

18 171

1,236 38 16 $40billion

pp. Balance, 1986-87, The Studies, Military for Institute Strategic Source.International 200-212.

in involved theNATO alliance,the equal. But amongthe othercountries as UnitedStatesis stillpre-eminent, Table 1 shows. weapons in weaker nuclear NATO alliesso much NotonlyareAmerica's is their on thattheyare dependent U.S. protection, dependence increased to PactalliesinconveninferioritytheSovietUnionanditsWarsaw bytheir be on tionalweapons,especially land and in theair. It need hardly added evento it in of that is force terms armaments; is inferior Japan a negligible structure in asymmetrythesecurity fundamental SouthKorea. Anditis this in and world ofthenon-communist thatis often easilyoverlooked contemeconomicissues. Alwaysin the backdiscussion international of porary by of the there thecontrast is between provision security theUnited ground, uponthem.The of Statesdefense forcesand thedependence its partners operates structure poweroftheUnitedStatesin thesecurity preponderant in on land,at sea, in theair,and (mostmarkedly) space. Thereis no comnaval basic forceand the verylimited parisonbetweensuch a universal powerin economic to whichwas the mainbacking British preponderance theearlier periodof supposedhegemony. domination theUnitedStatesof by is Almost important thecontinued as how Whodecideswhoshallproduce what, structure. theworld's production in a question as has alwaysbeenalmost fundamental whatreward, andwith as who decides whatdefenseshall be offered against politicaleconomy has choiceof indicators misled threats. Some American analysts' security decline.It is not economic that is suffering them intothinking their country Statesnor madeintheUnited manufactured theshareofindustrial products markets counts. that to We of theshareofU.S. exports manufacturesworld of at of world production goodsand should lookinstead theproportion total ultimately services a) produced: in theUnitedStates,and b) by enterprises in to in the UnitedStatesand responsible the government headquartered

Lost hegemony567
TABLE 2. Percentage of total outputproduced in 1970 1980

UnitedStates
1985 (est.) 1990 (est.)

Manufacturing Hightech Capital goods Consumer durables Consumer nondurables Basic goods
Services

37.7 4.1 4.0 4.8 9.4 8.4

48.1

36.8 5.7 4.0 4.4 8.8 7.4

51.5

36.4 7.1 3.2 4.8 8.2 6.6

52.2

36.9 8.5 3.3 4.6 7.6 6.4

52.1

All others

14.3

11.7

11.4

10.9

Source. Data Resources, Inc.; Business Week, 14 January1985.

lead, rather thantheperWe corporations Washington. shouldnotewhich of States, theshare world or produced theUnited in centage world of output of corporain States.For example, thelargest exports produced theUnited of as the tionsproducing computers, top six are American, are twelve the producof world them, they produce 62.3percent total toptwenty. Between the tionand have over50 percent world IBM of turnover. alonedominated market 35.6percent world with though is nowan open it of turnover 1983, in The competitors. will question whether some of themarket go to smaller by that is significance thisdominance underlined estimates thepresent of by willquadruple (estimated $200billion) at worlddemand computers for and Texas Instruments withintegrated circuits. 1991.It is the same story In IBM are theleading worldproducers, evenahead oftheJapanese. teleinterms of too, communications, AT&T andITT arethetoptwocompanies domestic sales. Both are sustained thegreatsize of thehomogeneous by market-an asset the Americans inclined forget one of which but to are otPhillips Dr. W. Dekker, aware. are Corporapresident Europeans acutely that couldnotcombine warned European governments ifthey tion, recently a like to provide comparably companies Philuniform homebase, European to and wouldbe unable Bell,ICL, Ericsson, Olivetti lips,Siemens, Nixdorf, survive certainly and couldnotstaybased in Europe."If Europedoes not innovation pass Europeby," he concluded.37 will unite, industrial Table 2 that, whiletheU.S. Brokendownintocategories, see from we paper)and consumer sharesof basic products (including steel,chemicals, technolbetween the 1970and 1980, U.S. shareofhigh goodshavedeclined will that is larger. And,itis estimated thisshare more ogyproducts actually thandoublethe 1970levelby 1990.Similarly, industries American service willholdtheir market.38 share-50 percentor more-of thewholeworld
Davos,Switzerland, February Forum, Management to 37. W. Dekker, a speech European in 1986. (New Industrialization 1985,andBeyond 38. R. Shelp,"The ServiceEconomy,"mimeo, 1981). York:Praeger,

568 International Organization In theoil business, which remains lifeblood theworld'sindustries the of andtransport system, sevenAmerican the major companies oil the dominate top ten,together outnumbering overpowering fareven thelargest and by European Japanese OPEC enterprises.39theaircraft and and In business, the bignamesare still and American-Lockheed, Boeing, McDonnell Douglas. Six of the top ninecompanies, the including two largest, American. are Although thereare big Swiss and British namesin pharmaceuticals, the with corporations thebiggest research are and budgets American; three of thelargest companies American. five are Among bigindustrial the conglomerates, hedging their betsacrossa variety sectors, is againtheAmeriit of cans wholead. In short, perusalof anylistof thetop 100,500,or 1,000corporations a for that producing a worldmarket quickly will bearoutthecontention the structure lies,notin still decision-making powerovertheworld's production Europeor Japan, intheUnited in but States.Oftheleading enterprises 300 theworld,142are U.S.-based. One reasonforthisdominance overproduction that UnitedStates is the provided first the largemassmarket manufactured for consumer goods.The laws and policiesof U.S. governments therefore shapedthecorporations that first that the techexploited market. discovered managerial Theythen niquesforcontrolling international networks foreign of subsidiaries. The and world modeofoperations themoresoftoday'sbusiness werefirst made in America; developments theUnitedStatesstillinfluence morethan in it else.40 developments anywhere The thirdleg of Americanstructural power is almostas important. America theability control supply has to the and availability credit of denominated dollars, thusto exert in and predominant influence goodorill for overthecreation credit theworld'smonetary in In of system. thisrespect, theconventional indicators all turned are upsidedown.How much goldand the foreign holds to or exchange U.S. government compared Germany Japan is besidethepoint when United the Statesis theonly government capableof In dollarassets thatare acceptedand saleableworldwide. some creating a financial sense, in system largely operating dollarshas no need of reserves.41 most In whether balance-of-payments surplus the is in or countries,
dominated market the in the ever 39. A common mistake to suppose oilcompanies entirely is with market, the briefly lost when OPEC, inalliance that they oilprices, that set or they power profits of oil. U.S. out purposeis profit, in making and did so. The oil companies' prime companies lead. still overtheMultinationals R. Storm Harvard Uni(Cambridge: 40. See, for example, Vernon,

1962-1983, (Lonversity Press, 1977); J. Dunning,The World'sLargest IndustrialEnterprises don: Macmillan, 1985); M. Casson, The Growthof InternationalBusiness (London: Allen &

Unwin, 1983). in but Statesnowholdsresources other 41. The United currencies, onlybecauseitis more the Reserve BankofNewYorkdecide(as in 1986-87) should Federal and convenient lessrisky value. to a in to buydollars order arrest decline their in

Lost hegemony569 the With position. of or indicates strength weakness itsfinancial the deficit can be true.Indeed,to runa persistent UnitedStates,theexact converse weaknot indicates American with of deficit a quarter a century impunity for mornTo in power thesystem. decideone August American ness,butrather from into be can dollars no longer converted goldwas a progression ingthat was the privilege; U.S. government to exorbitant privilege super-exorbitant couldnot(save that money others right the exercising unconstrained toprint And to at unacceptable cost)refuse acceptinpayment. in theperiod1973ratebecameevenmorevolaexchange whenthedollar-deutschmark 1983, to intervene banksshould or tile,thepowerto decidewhether whencentral restedsolelywiththe UnitedStates.WestGermany trends checkmarket just was The asymmetry quitestriking, as itwas later alonewas powerless. rate.42 exchange in the 1980sforthedollar-yen has of The significance the dollar'spredominance also been well illusEuropeandebtin the and Eastern of trated theexperience ThirdWorld by and to in bankswereforemost lending LatinAmerica were American 1980s. in to bankswereforemost lending Polandandwerenot. bailedout;German When in bankloansweredenominated dollars. of Thegreat majority foreign their to wereunable service and Argentina, therest first Brazil, Mexico,then than powerful thoseof Statespossessedtwoweaponsmore the debt, United to it government: couldmakeadvancesin dollars meetan emeranyother banksin influential and of and the gency; itcouldtwist arms thelargest most credit.The medium-term the system followits examplewithrenewed to is financial system plentiful of of evidence American domination theworld's enough. for Statesresponsible thelion'sshare Not onlywerebanksin theUnited like world more something bankassetsintheindustrial important, but, oftotal indollars.43 ability The of three-quartersall theseassetsweredenominated By is of the UnitedStatesto move thismarket unequalled. its unilateral of BankingFacilities(IBF) legislation 1981, decision,the International transac"offshore" to which allowedU.S. banksthesamefreedom conduct assets in of haltedtheexpansion Eurodollar tionsfrom home,practically in by U.S. bankbranches abroad.Theseassetshadgrown 1980 $126billion. A to In 1982,thegrowth a mere$20 billion. 1975decision deregulate was madecomin charges) to markets allowing stockbrokers compete their (by as forJapan. for in parablechanges policyirresistible Britain, America continued in already cited, of implicit much theevidence Finally, is Knowledge power,and structure. to dominate world'sknowledge the by that whoever able to developor acquirea kindofknowledge is sought is it and the can by others, whoever control channels which is communicated
Rates;TheCase oftheD-Mark/ Exchange of "The Management Floating 42. H. Feddersen, Florence, Institute, University Ph.D. thesis, European unpublished DollarRate 1973-1983," 1987. loansowedto a bankare assets. parlance in 43. Notethat banking

Organization 570 International In is and theaccess to storesof knowledge, able to dominate. past times, overkings generals. and suchdominance exercised priests sages often and knowledge restricted and guarded their which priesthoods Thejealousywith Today,the feature all greatreligions. of access to it has been a common military power wealth, or by mostsought after thosewhopursue knowledge as of technology newmaterials or corporate leadership, technology-the is storof and newproducts, new systems collecting, wellas newprocesses, Overall, of and information newsystems communication. ing, retrieving and sectors-including theUnitedStatesstillleads in theadvancedtechnology intelligence (space,ecology, stage,suchas artificial thoseat thedeveloping of and new and ocean mining, biotechnology) thefast-growing technologies robotsand factory telecommunication, microelectronics, microcomputers, and The majorflowsof data stillgo to data automation, data processing. banksin theUnitedStates.44 in Statesthisleadership to have combined givetheUnited Threefactors uniform nearly under (or One homemarket operating knowledge. is thelarge The in and criteria. laws and regulations standards performance uniform) U.S. comdo Japanese have this,too, buttheEuropeans not.As a result, while of corporations comparaEuropean easilyspecialize, paniescan more R&D too often spread their but to ble size are tempted diversify, inso doing in market semiconthin. shareoftheworld Europehad a 15percent Where A Office 8 as as todayithas less than percent. recent ductors recently 1977, in to on ofTechnology Assessment report Congress prospects biotechnology by concludedthatthe old worldof Europe "will be outspent the new, " sun and rivalry. by outplanned therising (ofJapan), fragmented national by States in United technology sectors which of all The sameis true almost high and Japaneseshareshave increasedwhileEurope's have declined.The monoby by field, telecommunications dominated procurement national of disunity's is polies(usuallystate-owned), a classicexample thepolitical fatal on performance. consequences economic and a support, headstart largedefense The secondfactor thestimulus, is It IBM gained lead incomputers developing by its offers. is true that budget largenumbers commercial of to the marketing techniques necessary find the boost came in 1954from U.S. defense program, buyers.But thefirst the of international 60 financed percent IBM's R&D. Similarly, first which and for exclusively defense the circuits werebuiltin 1962and 1963almost Even as late as 1968,37 percent U.S. production of was space program. and and absorbedby the NationalAeronautics Space Administration the the carriedmuchless of Department Defense. Ordersfrom government of beachhead theconquest commercial for an riskand provided invaluable markets.45
on "Transborder Flows," (1979). Data Corporations, 44. UN Centre Transnational at into Times-International Research Multina45. H. Nefiodow, Paperpresented Financial on and Munich, April1986. tionals Conference Multinationals Innovation,

Lost hegemony571 of and adaptability American is factor thegreatsize, wealth, The third has the history, university beenthetradiIn universities. Europe'spolitical has This and dissidence opposition. situation someof tional bastion political so and government business, to attitude both an times produced arm'slength American have oftenbeen slowerthantheir thatEuropeanuniversities by offered bothto expandresearch. to counterparts seize theopportunities as that has University found inbiotechnology, in of GerdJunne Amsterdam spentmore in fields,the Europeanmultinationals some pharmaceutical to universities thanin the ones at homein Europe. According American European morethanin othernew technology, "In biotechnology, Junne: or research America payAmerican in havelocatedmuchoftheir managers for to researchers do research them."46 of factor reallyrelatesmoreto the dominance the United One further both capitalmarkets, and Statesoveraccess to thelargest mostinnovative They Euromarkets. Statesandabroadintheso-called at homeintheUnited eventheSwiss rather moreeasilythan new areable to finance development whenit spent$5 behind IBM its or Japanese corporations. left competitors enterprises New, small of generation computers. billion the developing third capitalin the UnitedStates venture easierto find it in SiliconValleyfind wouldin Europe. thanthey structural aboutthecombined question is there little All in all, therefore, the structure, production thesecurity from the Statesderives power United structure. and structure, theknowledge the (or structure, credit financial) acrossall norJapan equal theAmericans' can performance Neither Europe and three, the withtheother of them interacts Since each four structures. it are so farbehindmilitarily, seems likelythat Europeanand Japanese to for will the to America enjoy power actas hegemon sometime come.How is a different question. thepoweris used

The alternative explanation

we in poweris conceded, can look OnceAmerican predominance structural and disorder theproliferaother ofinternational economic for explanations issues like thatof conferences-of unsolved tion-despiteall the summit and rates commodity exchange and Third World volatile unpredictable debt, of banks,themultiplicationprotheprecariousness international of prices, and continued overtradein agriculture trademeasures, conflict tectionist and services. international of A farmore for explanation theerosion so-called plausible the lies in power within Amerthedecline American hegemonic than regimes
1985. of mimeo, University Amsterdam, in "Developments Biotechnology," 46. G. Junne, N.J.:Ablex,1983). (Norwood, Financeand Information See also C. Hamelink,

Organization 572 International thanin the role of the UnitedStates in the rather ican politicalsystem above all, some Stability theseregimes in requires, international system. on participant. UnitedStatesis illThe consistency thepartof theleading in by this partly reasonofits suited sustaining consistency policymaking, to and thanks thecoalition-building to pracconstitutional provisions, partly The hallowed doctrine theseparaof ticedby itsdominant political parties. againstthe abuse of tion of powers has been an excellentsafeguard in executive power.But it has tendedto makepolicymakers Washington of of lobbiesandinterest groups operatevermindful thecapacity powerful strategies frustrate, evenreverse or Congress distort, to inguponor within world.47 House towards outside the adoptedby theWhite to post-OPECstrategy strengthen Henry Kissinger's Take, forexample, the of countries power the thehandsoftheoil-consuming against organized fanwas setup with much The oil producers. International Agency Energy But structure. all itsefforts with elaborate an institutional fare endowed and have taken of whichwoulddoubtless (save the expansion oil stockpiles, of ineffective theinability the wererendered by practically place anyway) in opposition, Nixonand Carter administrations,thefaceofCongressional and to high enough fastenough affect priceofenergy to raisethedomestic theshort-term of on impact demand supply.48 export restricthe strategy introducing voluntary of Again, disruptive the of trade has responsiintotheconduct international relations beenmost tion ble for decline a multilateral, the of non-discriminatory basedon the regime from the GATT rulebook. And this,too, was thedirect result pressure of on Congress successiveadministrations.4 even its own surprised too, theReaganadministration By all accounts, NationsConference theLaw oftheSea when, on delegations theUnited to it text the negotiated which at thevery moment, decidedto reject draft last and diplomatic effort. This,at least,couldnot had consumed muchtime so to so be attributed theneedto placatetheCongress muchas to a reassessin ment United of States'interest theprospects exploiting technolfor new ogyfordeep-seamining. of comesto a similar evenwhileit conclusion, study shipping Cafruny's eximperatives themarket of changeand the shifting notesthattechnical
47. See for the example analysis policymaking of processes I. M. Destler, in American Trade of Policy: System under Stress (Wade:Institute International Economics, 1986).On this point, that is Snidal observes "Hegemonic (in Stability Theory Revisited") when hegemony exercised in waysthat notbenefit weaker do the states, they chafe will under domination may the and work thedemise thehegemon. in security finance, for of But and their weakness inhibit will their opposition. 48. EvenKeohane, whogives peculiarly a favorable account theIEA, concluded ruleof that oriented solutions wereproposed notimplemented. Hegemony, 234. but After p. the to 49. M. Hudson "The U.S. strategy toactfirst, render trade was noted earlier, patterns offoreign countries function itsowntrade a of GlobalFracture, 135.A chapter controls," p. evidence "America'sSteelQuotasHeralda New Protectionism," detailed for entitled, gives thisstatement.

Lost hegemony573 Policy, says,hasbehe conflicts domestic interests. among existing acerbate enforcement anti-trust ruthless from "ranging comeevermoreincoherent, Most trademinister.) a is (The to protectionism." quotation from British policy to politics explain to says,"refer domestic Cafruny analysts, industry and officials shipowners and European American indeed, most incoherence; policy.'" In the same has that rejecttheproposition America a 'shipping the contradictory, left is trade policy often that way,thecomplaint American handbangsdowna free card a handplaying protectionist whilethe right neither nor has that assertion America is trading trump, metbytherevealing maybelievethis,butno policy." Americans seeksto have an "industrial in indusespecially hightechnology one else does. Europeancompanies, have thatU.S. corporations tries,are acutelyaware of the advantages for procurement Government of contracts. as enjoyed a result fatdefense sectors for protection olderindustrial and advanced technology government for in though thelongrunit maynotbe thebest strategy is notirrational, interests. national economic safeguarding there tradepolicyacrosssectors, of Besidestheinconsistency American reversethe entire policy-to suddenly is the tendency-as in monetary has the system political notethat American direction. Here,we must policy No president U-turns. American farless built-in resistance suchpolitical to in party has to consider riskofrevolt theparliamentary and theconsethe have As scientists earlyelections. political of quentprospect unwelcome a may system evenencourage the certainties theAmerican of observed, very to instance, relieveunemcertain of cyclicalrepetition policyshifts-for In there at at ployment one stageor to checkinflation another. Washington, are as senior bureaucrats, there inLondon,Paris, arefewifanypermanent in ensconced positions considerable of blocking Bonn,or Tokyo,so firmly and whims a to counterweight political powerthattheyprovide deterrent clearto non-Americans Fromoutsidethe UnitedStates,it seemsfairly to academicsis palatable American whythissortofexplanation notvery either admit to It andevenless so to American policymakers. is noteasyfor has the towards restoftheworld been the of policy that conduct American and and fickle, unpredictable, thatUnitedStatesadministrainconsistent, While to tionshave oftenacted in flatcontradiction theirown rhetoric. they the for of pronouncing virtues liberalism all in tradeand investment, and their ownand protection discriminatowards partiality have practiced like newcomers Japanor Taiwan.Whilepreaching tionagainstsuccessful they decision-making, have and theideals of internationalism multilateral surunilateralist to Sewell has written, spring neverhesitated, Patrick as felt Nor friends wellas on itsopponents.50 havethey as on prises America's in in about indulging suddenventures bilateralism-with any inhibitions
50. Sewell,"Congenital Unilateralism."

fancies.

574 International Organization Israel,Mexico,or Canada,forexample.Theyhave done so becausethere conflict between the and is-and alwayshas been-an inherent unresolved ever American haveinfluenced twosetsofideasthat policymakers sincethe end of WorldWar LI-between the liberalism preachedby neoclassical and scientists therealism pracpolitical economists by internationalist and ticedby theU.S. Departments Stateand Defense. of to has the necessary anygreat power, The conflict beenbetween realism necessary a to powerpolitics, theliberalism and which leadsto unilateralist which leadstointernationalism on markets, great economy dependent world realismand domesticpoliticspermit). CharlesKrauthammer (whenever are to but on conflict, its implications unlikely has remarked thisinherent As in circles.51 K. Holstiobintellectual gainreadyacceptance American in to and the served documented recently, trend parochialism theAmerican in has beenincreasing. Booksorarticles literature world on politics actually are never reador cited.Onlya fewnon-American foreign languages almost in to evenin English, regularly are assigned students U.S. univerwriters, see of sities.52 American awareness how others thefailure international of in Statesis actuto poweroftheUnited cooperation relation thecontinuing it havebeena generation Thismaybe because ago. allyless nowthan might whilemanyof theolder Americans, therising generation native-born are in American academicswerebornand educated Europe;they occasionally languages. Theseold readatleasttwoEuropean returned visits, most on and the men-therewerefewwomen-are nowpassing from scene. to It is mucheasierforAmericans assertwithKeohane,FredBergsten, and others thatthedeclineofAmerican goals powermeansthatcollective is and if require collective collaboration that, thisis elusive,there nothing tend the moretheUnitedStatescan do. Theirarguments to overlook fact that collective actionis still Statestakes possiblebutonlywhentheUnited thelead-when, in short, still it history choosesto actas leader.The recent rate after 1985 ofexchange stabilization, thePlaza accordofSeptember and the in after Groupof Seven meeting Parisin February 1987,easilydemonthis of strates conclusion. can also see it in thefield policieson ocean We or After to Bhopal,theUnitedStatesis likely lead the pollution whaling. accidents. Its worldin setting of liability chemical for standards corporate vitalto therescheduling MexicanandBrazilian debt.The was of leadership United States initiated-and forced others to follow-action against and financial fraud insider maybe too fewandfar dealing. These examples between,but they are enough to reject the mythof America's lost hegemony. it Thatis whyI think legitimate talkofthe"myth"oflosthegemony. to
1986. 17 of "The 51. C. Krauthammer, Poverty Realism,"NewRepublic, February 1985). (London:Allen& Unwin,
52. K. Holsti, The Dividing Discipline: Hegemony and Diversityin InternationalTheory