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Unipolar Politics: Realism and State Strategies After the Cold War, by Ethan B. Kapstein and Michael Mastanduno (eds.)
Ethan B. Kapstein
In a recent article I asked, Is Realism Dead? 1 It would seem so, given the pounding the paradigm has taken from a constant barrage of empirical evidence and theoretical arguments. 2 This has left, in the words of Bruce Russett, “a sinking hulk” instead of a disciplinary flagship. 3
The chapters in this volume suggest that Russett’s epitaph may have been premature. In analyzing the grand strategies of the great and middle-sized powers since the end of the Cold War, most of the authors find considerable merit in some variant of the realist paradigm, with its focus on anarchy, pervasive insecurity, and the primacy of state action. Even in such “hard” cases as the refusal of Eastern European countries to acquire nuclear weapons, we find a good realist response: the centrality of alliance relationships to the maintenance of their national security. 4
Given that this book’s chapters are situated mainly at the unit level, it is not surprising to find renewed interest among the authors in classical as opposed to structural or neorealism. Systemic forces, it seems, are too uncertain or indeterminate to say much of value about foreign policy decisionmaking in the post-Cold War era. Indeed, Kenneth Waltz himself explicitly stated that structural realism did not offer a theory of foreign policy.
This concluding chapter, however, relies on an important variant of modern realism—hegemonic stability theory—in analyzing the unipolar distribution of power. I argue that “hegemonic realism” provides powerful insights into the nature of contemporary politics, as states struggle to shape their domestic grand strategies in the face of the inescapable pressures generated by a dominant Washington. From economics to security to culture, it has become almost impossible for countries to hide from the long arm of the United States, or to pursue with any success strategies that are at odds with its preferences or interests.
Since there is little debate about the primacy of U.S. military power in today’s world (although there is certainly debate about the relevance of those assets in influencing many international outcomes), my focus is on international economic relations, an arena that by some accounts is multi- rather than unipolar. Indeed, two decades after “the end of American hegemony” was proclaimed by many scholars, I seek to demonstrate that international outcomes in international trade, finance and investment still generally reflect Washington’s preferences and interests, and are likely to do so for the foreseeable future. 5 My concerns in this essay are thus with the stability of the American-centered economic order, and with the potential challenges to it that appear on the horizon.
The politics of the world economy continue to provide a contested terrain for theorists. For many scholars (including some of the contributors to this volume), the future of the liberal international economy appears grim. As Samuel Huntington has written, “In the coming years, the principal conflicts of interests involving the United States and the major powers are likely to be over economic issues. U.S. economic primacy is now being challenged by Japan and is likely to be challenged in the future by Europe. . . .[T]he United States, Japan, and Europe . . .have deeply conflicting interests over the distribution of the benefits and costs of economic growth and the distribution of the costs of economic stagnation or decline.” 6 This view is echoed by Randall Schweller, who writes in his contribution that “As economic might supplants military strength as the primary currency of national power and prestige, trade talks have replaced arms control as the most contentious form of diplomacy.” 7
Nor is this vision limited to political scientists. International economist Dominick Salvatore has asserted that “Trade relations among the world’s major industrial nations have taken a turn for the worse during the past two decades and are now threatened by new and more dangerous forms of trade restrictions, collectively known as the ‘new protectionism.’ ” 8 Of particular interest from the perspective of systemic stability are those cases in which not only distributional issues are in conflict, but fundamental values also, as when the United States insists on linking trade to human rights.
As a concrete sign of the alleged breakdown of the postwar multilateral trading order, some analysts would argue that we are witnessing the rise of a bloc-oriented international economy centered on the North American Free Trade Area (NAFTA), the European Union (EU), and the awkwardly named Asia-Pacific Economic Cooperation (APEC); these blocs, it is said, will replace multilateralism as the basis for economic decisionmaking. In 1994, regional arrangements already constituted 61 percent of world trade. 9 It remains an open question whether economic regionalism will lead to further liberalization of the international trading system as a whole (that is, whether these arrangements will be “trade creating”), or act as a brake on that process (that is, whether they will be “trade diverting,” in that they divert trade away from the “world” and toward the bloc).
These developments seem to confirm what might be reflexively labeled as the realist vision of the international economy in the post-Cold War world. It is a world, like that of the 1930s, in which competitive geoeconomic blocs reappear, and the multilateral system of open trade and financial flows splinters. Building on this vision, Jonathan Kirshner makes a series of “realist predictions” for the future in his chapter, one of which is that “multilateral economic cooperation among the advanced industrial states will decline.” Kirshner argues that, for realists, the economic order built after World War II by the western allies formed an integral part of their response to the Soviet threat; in essence, that threat was the glue that held the economic system, with its rules and regimes, together. With the passing of the Cold War, the glue has dissolved and concern over relative economic gains is again rising to the fore, leading to renewed struggle and conflict over global markets. 10
Yet a number of counterindicators should give us pause before we accept this bleak assessment. After all, it is since the collapse of the Soviet Union that the Uruguay Round of trade talks has been completed and, in the process, the General Agreement on Tariffs and Trade (GATT) transformed into the more powerful World Trade Organization (WTO); that the Organization for Economic Cooperation and Development (OECD) has expanded its membership beyond its core group of industrial democracies (indeed, Russia has recently applied for membership); that the emergency support funds of the International Monetary Fund (IMF) have been bolstered, especially since the Mexican Peso Crisis of 1995 and Asian crisis of 1997–1998; that international regulation of the financial system has been strengthened by the Basle Committee of Banking Supervisors and the International Organization of Securities Commissions; and, most important, that a number of countries, including China and the former members of the Warsaw Pact, have entered the world economy as they liberalize at home and open their economies to foreign trade and direct investment. Thus, while some observers see a world ready to plunge into economic conflict, regionalism and renewed protectionism, others imagine an era of truly global trade and investment, with the growing insignificance of territorial boundaries for economic actors. 11
One theoretical approach that may help to close the gap between these competing visions is provided by hegemonic stability theory. 12 That theory, it will be recalled, focuses on the role of a single dominant power in establishing and maintaining “the norms and rules of a liberal economic order.” The hegemonic state lays down liberal rules, creates international organizations to monitor them, and acts as crisis manager, becoming a lender of last resort when needed and a market for distress goods in times of economic recession. 13 The system’s openness is a function of the hegemon’s capabilities, and when that powerful state suffers relative decline, “the liberal economic order is greatly weakened.” 14
The starting point for hegemonic stability by most accounts is found in the material capabilities of the would-be international leader. By this reading, it was America’s tremendous military, economic, and political dominance after World War II that gave it the opportunity to shape the international economy in its own interest. By the 1970s, however, many observers believed that America’s relative capabilities in such arenas as energy, trade, and finance had fallen greatly, raising questions about the durability of the postwar regimes. That such regimes remained relatively stable at all in the face of this decline was, according to Robert Keohane and several others, a function of the institutions that the United States had created in its heyday. 15 The more parsimonious but perhaps less obvious alternative, that the United States was still the dominant power across most issue-areas of international importance, was also argued, but by a smaller number of scholars. 16
This essay reexamines the future of the international economy in hegemonic-realist perspective; that is, with a focus on the distribution of power at the systemic level. The issue at stake concerns the system-wide economic pressures being generated on states by the American-dominated order, and what scope governments have for erecting buffers against such pressures (should they want to), either internally or externally through balancing. As Bruce Russett has written, “the international system has been structurally transformed, largely by the United States.” 17 It is the durability of that system that concerns me here.
Drawing on the essays in this volume and other contributions, I examine potential challenges to the “American century,” and make some predictions about its future course. In brief, my argument is that states are facing an overwhelming set of American-generated economic forces (the word “globalization” is really a contemporary euphemism for American economic dominance) that they must adapt to if they wish to modernize and liberalize their economies. The United States, too, is subject to the pressures it unleashed, but it has a unique set of capabilities and “coping mechanisms” that keeps it relatively independent of them, including its production of the world’s major reserve currency, its favored geopolitical setting, and its market size and thus market power. States that wish to counter this order and go their own way in economic policy will likely find the costs of doing so exceedingly high. I thus hypothesize that outcomes in international economic negotiations will closely resemble American preferences and interests.
Still, there is some systemic evidence that efforts are underway to balance against U.S. power. The introduction of a single currency within the context of the European Monetary Union could be analyzed as a challenge to the dollar’s domination of international finance, and the increasing economic and military ties between Russia and China suggest that these countries are seeking to insulate themselves from American pressure. At the same time, in none of these cases can the regions or countries “go it alone” without the assistance of the United States in some critical arena.
Yet there might be another challenge to American leadership that, in the end, is the greatest of all, and that is the challenge coming from domestic politics. It may be that, absent the Cold War, Washington will find itself unable to define much less defend a “national interest” that transcends special-interest groups, and instead will find itself pulled-and-hauled in ways that undermine its ability to act. In this regard, the defeat of “fast-track” trade legislation in 1997 could be seen as a warning shot across the bow, a message that domestic interests will no longer permit themselves to be sacrificed on the altar of national security. Hegemonic stability theorists have long said that a dominant power needs domestic “willingness” to write and enforce the rules of the game, and it is here that the United States appears at its weakest.
Multilateralism and the Postwar Order
As Dan Deudney and John Ikenberry observe in their chapter, the postwar American system of trade and financial liberalization represented a unique policy mixture that they label “structural liberalism.” On the one hand, the ideas that animated the system were profoundly liberal, in that they focused on human liberty and its exercise in free markets; on the other, American leadership was profoundly influenced by fear of Soviet communism. The United States had to fashion a system that would prove the critics of its brand of democratic capitalism wrong; Washington thus had to be not just powerful, but generous and just in its dealings with its allies.
Multilateralism—the promotion of free trade and free investment flows on a multilateral rather than bilateral basis—was at the heart of the American approach toward reconciling these liberal and realist motive forces. It was an instrument designed not just to promote prosperity, but equally important, peace as well. As Michael Mastanduno has written, “the concept that best captures” America’s postwar foreign policy goals is not containment but “multilateralism.” 18 And that is the approach which has transcended the end of the Cold War.
Multilateralism and institution building have proved remarkable supple instruments of foreign and domestic policy. During the Cold War, these regimes, by promising greater prosperity than any alternative form of political economy, formed the economic bulwark against the external Soviet communist threat on the one hand and the domestic communist party threat on the other. Today, the external threat has vanished, and most countries around the world (East Asia is a notable exception) are reducing their defense expenditures. Yet the risk of domestic political disruption, not to mention peaceful changes in ruling parties, remains, making sustained economic growth a top priority for all political leaders, especially those who seek re-election to the offices they hold. In this sense, “membership” in the international economic order continues to provide governments with important domestic political benefits, to the extent that liberalization, openness and wealth creation are viewed as inextricably linked in the majority of voters’ minds.
As hegemonic stability theory suggests, the United States was able to restructure the western economy according to its preferences after World War II because of its market size and its control over hard currency and critical resources, especially food and fuel. One influential report on foreign economic policy written in 1955 stated that “the American economy has a one-sided, or non-complementary, relationship to the international economy . . .The rest of the free world relies upon the American economy to a much greater extent than the American economy depends upon it. Indeed, the rest of the free world could not live without the American economy.” 19 While the world has grown less dependent on America’s natural resources (indeed, the United States has become more dependent on petroleum and raw materials), entry to its domestic marketplace for goods and services still remains essential for export-oriented nations. While often viewed as a weakness, the United States remains by far the largest importing nation in the world, giving it substantial market power.
In order to build a system of multilateral regimes for trade, finance, and investment, the United States and its allies had to develop a set of operating principles or rules of the game. For example, the basic principle of the postwar trade regime, embodied in the GATT, is “most-favored nation” (MFN) status. This means that members of the GATT (now the WTO) must treat one another exactly as they treat their “most favored” trading partner, thus leveling the playing field and putting an end to bilateral favoritism. As a result of this approach, member countries that previously had few commercial dealings with one another now saw a new world of trade opportunities available to them. In this light it is notable that debate over China’s continued MFN status is now at the heart of its bilateral relationship with the United States, and that Russia is applying for membership in the WTO. As Schweller observed, trade talks really have replaced arms control negotiations in world politics.
One of the remarkable aspects of this regime has been the extent to which it has implicated countries in each others’ economic policies. Jock Finlayson and Mark Zacher have written with respect to the international trade regime, “Multilateralism signifies the willingness of governments to participate in rulemaking conferences and to allow multilateral surveillance of, and even a degree of control over, their trade policy. It symbolizes regime members’ acceptance of the proposition that they have a legitimate interest in each other’s policies and behavior.” 20 International organizations like the GATT, the IMF, and the OECD were given surveillance roles in their charters over member countries’ economic behavior, and they criticized domestic policies that were at odds with established international practices. It is a surprising fact that no state has ever left any of these international organizations (with the exception of Peru, which briefly quit the IMF), and many have sought to join.
Today, belief among the industrial countries in the continued benefits of this international economic structure remains strong. As the leaders of the Group of Seven (G-7) nations proclaimed at their 1996 summit in Lyons, France, “Expanding trade and investment has led to marked increases in global wealth and prosperity and should continue to play this role in the future. Growth in trade and investment will be sustainable and therefore most beneficial to all if conducted within a strong multilateral framework of rules.” The G-7 leaders then went on to praise the work of the such organizations as the IMF, WTO, and OECD, which of course establish these rules. 21
Given this history, one can only wonder why some scholars are so dismissive of the role that multilateral institutions have played in the postwar order. 22 They are part and parcel of the economic structure that the United States built and sustained. To say that they are epiphenomenal points to an important truth about American power, but to take the analysis no further is unsatisfactory. As Daniel Deudney and John Ikenberry point out, these multilateral institutions have played an instrumental role in legitimating that order worldwide, by giving member-states a voice, however small, in decisionmaking about its operations. 23 It is notable that many of these institutions, like the IMF, are not led by Americans at all.
Of course, self-styled realists have not been alone in raising doubts about the future of the postwar economic order. Reports of its demise have been widespread for years. Overwhelming pressures on the international economy were said to be coming from two directions: first, at the systemic level, some specialists argued that new challengers, such as Japan, were acting to undermine the postwar multilateral system or at least to modify it to suit particular national preferences. Second, at the unit level, other observers argued that protectionist forces within the United States were eroding domestic political support for the liberal economic regime. It is to these challenges that we now turn, beginning with systemic stresses.
Unipolarity and the World Economy
In his Theory of International Politics, it is revealing that Kenneth Waltz opened the chapter on “Structural Causes and Economic Effects” with the sentence, “How should we count poles, and how can we measure power?” 24 He asked this, of course, because of his argument that international political structures varied according to the number of great powers in the system. His answer, not altogether scientific, was that states entered the “top rank” according to “how they score on all of the following items: size of population and territory, resource endowment, economic capability, military strength, political stability and competence.” 25
On this basis, it is accepted by many observers that today’s international political structure is “unipolar,” with America’s unique set of material and cultural (or “soft”) capabilities allowing it to achieve its preferred outcomes in the military and diplomatic if not economic spheres (though Schweller raises some interesting questions about the nature of polarity in his essay). 26 What remains disputed are the long-term consequences of this “unipolar moment” for world politics. Are we entering a prolonged period of peace and stability under American hegemony? Or are new challengers to American predominance on the rise? 27
Here we find no common view. In a widely cited essay, Christopher Layne argues that America’s unipolar moment must be ephemeral as smaller states inevitably balance against it, leading to a new multipolar era after 2000. 28 In a powerful rejoinder, however, Paul Schroeder warns us against assuming that historical patterns—like the alleged recurrence of balancing against hegemonic powers—will necessarily repeat themselves. 29 Still others, apparently including American policymakers, believe that at least the economic world is multipolar; for example, President Clinton proclaimed at the Tokyo summit in July 1993 that we now live in “a tripolar world, driven by the Americas, by Europe, and by Asia.” 30
But the President was unduly flattering to America’s allies. The fact is that the United States remains by far the single largest and most influential actor in the international economy. Indeed, making this same point in 1985, after an alleged decade of hegemonic decline, Bruce Russett observed that the United States still had the world’s largest gross national product, military expenditures, and manufacturing production. 31 That still remains the case. In 1993 the U.S. had a gross national product of $6.3 trillion; its closest competitor, Japan, had a GNP of $4.2 trillion. It is the largest exporter and importer; in fact, its share of world exports (12 percent) is the same today as it was during the early 1980s. American military expenditures of $280 billion represented nearly half of what the entire world spent on defense, and more than the European Union, Russia, and China put together. The United States invested a similar percentage of the global total on research and development, and its high technology industries continue to dominate in such areas as computer science and genetic engineering, not to mention in a wide array of military-related fields like stealth technology. Similarly, its industrial output has remained the world’s largest, staying ahead of Japan’s.
By other indices, the United States is also dominant. For example, its stock market capitalization in 1993 of $5.2 trillion was nearly twice the Japanese level, and more than ten times that of Germany! 32 Further, the dollar remains the international reserve currency of choice, and in every single country with a currency board system (e.g. Hong Kong and Argentina) the dollar provides the monetary base.
The dominance of the American economy is all the more remarkable in light of the widespread judgment of only a few years ago that its performance was dismal and its decline irreversible; today, in contrast, the United States is generally regarded as resurgent. As Ernest Preeg points out, “the widespread pessimism of only two to three years ago about being surpassed by Japan is greatly muted. Leading-edge developments . . .are firmly concentrated in the United States.” He argues that to the extent U.S. “hi-tech” firms face any serious competition (and it should be noted that several such firms hold near global monopoly positions in their sectors), “their rivals are American.” 33 Between 1986 and 1992, Preeg observes, the U.S. trade balance in high technology more than doubled, and American exports during the 1990s have increased at an average rate of 13 percent per year.
Following hegemonic stability theory, we would expect these capabilities to serve the United States in advancing its agenda of what was once called “free multilateralism.” From this perspective, it would be puzzling if the trade and financial systems evolved in a way that was clearly at odds with Washington’s preferences; that is, toward closure rather than openness. This does not mean that the United States can or will dictate solutions to every problem; indeed, such a strategy might not be attractive to a liberal hegemon even if it were conceivable. It simply means that trade and financial relations will generally be consistent with the American view of how the international system ought to function.
Despite the growing scholarly attention devoted to regionalism, a few recent examples suggest that the global economy continues to evolve in an American-led direction. Perhaps of greatest prominence, the United States played a leading role in completing the Uruguay Round of trade talks, and the subsequent creation of the World Trade Organization (WTO) in 1994. The transformation of the GATT into the WTO—a topic still relatively unexplored by students of international political economy—is especially notable because of the strengthened dispute settlement mechanisms created in the new organization. This revised mechanism reflected American concerns about the former system. According to one report, “As the most frequent user of the dispute settlement mechanism, the United States often found the old system ineffective and slow. Despite reports in favor of the United States, other countries often refused to adopt panel decisions or to fully implement their obligations. The new mechanism, strongly supported by the United States, will enable more rapid and enforceable resolution of trade disputes.” 34
On other trade fronts, through its regional agreements in North America (NAFTA) and Asia-Pacific (APEC), the United States has sought to open markets long closed by protectionist forces. These developments suggest not a return to the bloc-oriented economies of the 1930s, as some have feared, but an unprecedented opening of the world to trade and investment—one that goes well beyond that achieved by Great Britain during its hegemonic period in the nineteenth century. And it should not be assumed that Washington is continuing to assume the leadership role of market-opening for path-dependent historical or liberal ideological reasons: it is also because American industries are as competitive today as at any time in recent memory. 35
Another example of America’s dominant role is provided by international finance, allegedly the most global and anational of economic realms. Yet the development of a more liberal financial regime during the 1980s was “the result of deliberate political decisions,” in which the United States instigated liberalization by substantially deregulating its own domestic marketplace and then seeking market openings overseas. Far from creating a “borderless” world for finance, however, the United States insisted on the creation of a new international regulatory structure based on the concept of “home country control” of financial institutions, culminating in the 1988 Basle Accord on bank capital adequacy (the Basle Accord sets a single international capital adequacy standard for all major banking institutions). According to one recent study of the international financial regime, “the US Federal Reserve Board has been instrumental in developing initiatives in respect to (international) governance and regulation.” 36
With respect to crisis management, the United States also retains a unique position in systemic maintenance. The debt crisis of 1982 provides only the most obvious case where American resources were mobilized on behalf of the global financial structure. A more recent example is provided by the Mexican peso collapse of late 1994 and early 1995. As the U.S. Council on Economic Advisers wrote in a recent report, “The President responded swiftly to Mexico’s crisis, leading a $50 billion multilateral effort to assist in Mexico’s stabilization and making available $20 billion in U.S. credit. This effort helped attenuate the impact of the crisis on other emerging markets.” 37
Similar actions were taken by the United States and the International Monetary Fund during the Asian financial meltdown of 1997–98, which also prevented its global spread. In fact, while most Asian stock and bond markets fell to record lows during this period, the Dow Jones Industrial Average reached record highs, while long-term interest rates on U.S. treasury bonds reached their lowest levels in a generation. Incredibly, despite its immediate interest in the Asian crisis, given the exposure of its banks to such countries as Thailand and Indonesia, and its foreign investment and trade relations in the region, Japan acted like a deer caught in a car’s headlights, seemingly incapable of action. Nor can it be argued that Japan lacked the resources to quell the crisis; despite its ongoing recession, it remains a wealthy country, holding among the largest foreign exchange reserves in the world. The Asian case shows clearly that, even where a potential “challenger” to its hegemony would seem to exist, crisis management remains the uncontested domain of the United States.
Given this American economic juggernaut, the important question for scholars is not why Washington is continuing to promote free trade and global finance, but how the rest of the world is responding. Are states trying to balance against that overwhelming force, or are they bandwagoning with it? Are any visible challengers to the United States yet visible on the horizon?
New Challenges?
It has been said of the British Empire that it was like a Model T Ford; easy to build and cheap to run. Perhaps this is what the postwar leaders had in mind as they designed the new, American-led international economy. Yet the British Empire ultimately collapsed. What threats now exist to the American order?
The most popular challenger in recent years, of course, has allegedly been Japan. While now somewhat passe in light of that country’s severe financial difficulties (certainly not aided by American exchange rate and banking regulation policies), it is still instructive to consider this case for the theoretical illumination it provides. Indeed, it provides an excellent example of unit and systemic-level analyses becoming confounded, for even if Japan had wanted to overturn or disrupt the American-dominated order, the distribution of power would stand in the way of its domestic desires and actual international outcomes.
A good example of such exaggeration of Japanese power is found in an essay by Samuel Huntington. Huntington argues that Japan “has been and is, constantly, operating in classic realist fashion to increase its power, but only in the economic area. In the new world environment, however, economic power is what counts.” 38 And speaking at Princeton University, he asserted that “America and Japan are engaged in an economic cold war . . .[and] Japan has been doing better than we in that war.” 39 He calls Japan an “economic power-maximizing state.”
Japan, however, lacks at least two essential ingredients for a potential economic power-maximizer; first, the ability to link economic and military power to advance national interests; second, a sufficiently large internal market to shape the behavior of its principal trading partners. To the extent that a state wishes to shape international economic outcomes, it may have to rely implicitly or explicitly on a variety of instruments, military power among them. Protection of trade routes and oil flows come to mind in this respect. 40
Second, in contrast to the United States, Japan does not control a sufficiently large or dynamic domestic market for goods and services to give it monopsonistic power in world trade. Time and again the United States has successfully threatened closure of its marketplace in an effort to advance special or national interests in international economic negotiations. So long as the United States remains the world’s biggest market for traded goods and services, it will have substantial leverage over its commercial partners (but here, watch out for China). 41 Ironically, Japan’s alleged strategy of generating trade surpluses only undermines its international power in terms of its ability to exercise market leverage. Yet the Japanese-American relationship points to the strengths of the postwar order as much as its weaknesses. Despite their unbalanced trade relationship, and occasional periods of acrimony, U.S.-Japan bilateral disputes have never spilled over to the wider trading arena. Further, the U.S.-Japan security relationship has not only remained shielded, but it has actually retained its primacy, even with the collapse of the Soviet Union.
In contrast to Huntington, I would argue that, far from losing an “economic cold war” with Japan, the United States remains by far the world’s largest and most powerful economy, where power is defined in terms of the ability to shape international outcomes. 42 Japan, in contrast, is struggling; the Wall Street Journal is close to the mark when its editorial page writes, “Today’s Japan is not the economic powerhouse that gripped the conventional wisdom five years ago. Instead, it is the most fragile major member of an interdependent world economy.” 43
Ironically, what is missing from many accounts of Japan’s economic strategy is the fundamental insight of structural realism: that the structure of world politics, with its given distribution of power, intervenes between national policies and international outcomes. This means that we need to examine not only the stated goals of Japanese economic policy, but also the results of the country’s international interactions.
From a systemic perspective, I would suggest that the end of the Cold War has placed Japan in a delicate position, for it is now more vulnerable to U.S. economic pressure than it was in the past. At the same time, the United States is more likely to use such pressure against its allies. Further, new regional powers—chiefly China—threaten Japan’s economic and security position in East Asia. All told, Japan faces an increasingly inhospitable international environment. Japan’s contemporary challenge is hardly the achievement of regional hegemony, but rather the maintenance of its status as a relatively prosperous and secure nation-state.
As noted above, Huntington and other scholars assert that Japan has adopted a power-oriented or neomercantilist trade policy. Perhaps the most prominent regional expert associated with this view is Chalmers Johnson, whose work has been widely influential. In a recent article, Johnson argued that Japan is “a mercantilist trading state . . .Japan assuredly has a grand strategy . . .The essence of the strategy is to build in the Asia-Pacific region a new version of the Greater East Asia Co-Prosperity Sphere.” 44 While he does not explicitly address the question of how the Japanese have implemented this strategy, or what they hope to gain from it, presumably he believes that Tokyo sees long-term economic and political benefits from becoming a regional hegemon. Unfortunately, he fails to tell us why a country which has allegedly been so successful at “free-riding” would wish to change places and assume hegemonic burdens. 45
In the event, the essays in this volume by Eric Heginbotham and Richard Samuels, and by Joseph Grieco, provide a contending perspective. Heginbotham and Samuels report that, with respect to the internal Japanese debate over “the economic and political organization of East Asia, the America-first camp has prevailed.” 46 Grieco similarly tells us that since 1991 every Japanese prime minister has refused to support any East Asian economic initiative that excluded the United States. He writes that “Japan was highly disinclined to pursue regionalist policies during the Cold War, and this has not changed since 1989.” He suggests this is largely because “since the late 1980s, Japan has faced a . . .serious array of security challenges” in the region. 47
Again, since Japan is sometimes viewed as a potential regional hegemon, we ought to remind ourselves of what this role entails before dismissing it as a possibility. For Gilpin, hegemony requires control over the “three sources of power in the modern world: nuclear weapons, monetary reserves, and petroleum.” 48 Similarly, Robert Keohane has suggested that in order to play the hegemon a state must control, in addition to military power, a “preponderance of material resources. Four sets of resources are especially important. Hegemonic powers must have control over raw materials, control over sources of capital, control over markets, and competitive advantages in the production of highly valued goods.” 49
These analyses suggest that Japan lacks several of the crucial ingredients required to play the hegemon. In terms of military power, although Japan has by far the largest defense budget in Asia, it currently lacks the power projection capabilities required to maintain the sea lanes and freedom of navigation; and of course (unlike China and India) it does not possess nuclear weapons. Second, Japan is dependent on imports for nearly all its energy, food (it is the world’s largest importer of foodstuffs), and raw materials—and its last attempt to seize control over these resources ultimately met with military disaster.
What is still open to question is whether Japan “controls” a large enough market to exercise anything like hegemonic power, if only at the regional level. Grieco argues that “Japan enjoys a much more pronounced overall hegemonic power in East Asia than does Germany in Western Europe,” but this analysis only reflects trade flows. Here it must be recalled that an important source of German economic power in Europe flows from the position of the Bundesbank as the arbiter of monetary policy, a position that the Bank of Japan has not achieved (or even sought) in East Asia (again, hegemonic stability theory emphasizes the importance of monetary resources). If anything, the inability of Japan to respond to the financial crisis in its very backyard reminds us of Tokyo’s international weakness.
Far from challenging the United States, Japan has worked hard to maintain and strengthen its bilateral alliance. As Michael Mastanduno emphasizes in his contribution to this volume, there is no evidence that it has engaged in a strategy of external balancing, and there is no indication that it is preparing to do so. This is not only because the United States remains a necessary ally in a dangerous neighborhood, but also because the U.S. market remains the single most important to that now fragile economy.
If Japan has any fear, it is of a renewed trade dispute with the United States as its external surplus again hits record levels in the face of a prolonged domestic recession. As The Economist has written: “Japan’s . . .diplomats worry that trade friction will undermine America’s commitment to defend Japan. This anxiety has only increased in the aftermath of the Cold War.” 50
It appears that analysts are now recognizing Japanese weakness in the international system, and fears of a Japanese challenge to American hegemony have largely receded in recent years. But they have been replaced by the supposed “threat” now emanating from China. China is a continental county with the world’s largest population and fastest-growing economy. It is, in Samuel Huntington’s phrase, a unique “civilization.” It is investing in its military power and intimidating its neighbors. It has an abysmal human rights record. Isn’t China priming to establish its own sphere of influence in Asia, and one that could be hostile to the United States? 51
Such an evolution is unlikely. For as China continues to grow, it is also becoming increasingly dependent on the world economy for needed inputs. As James Shinn of the Council on Foreign Relations writes, “the Chinese economy depends on international markets for two of the essential factors for economic growth, capital and technology, as well as two critical commodities, petroleum and food grains. This external market dependence is increasing at a remarkable rate.” 52
Shinn argues that the “tyranny of markets” will force China to adopt more moderate political behavior. Capital markets, for example, “are not eager to deal with belligerent states, and firms that would otherwise be eager to invest in China and transfer their technology can get cold feet.” And from a domestic political perspective, “the tyranny of markets is unleashing a host of forces within China that bolster the market access principle.” 53 The source of that global “tyranny”? The American-designed liberal economy, with the pressure it is placing on trade and financial policies. If a country as large as China now finds that it must play by the rules of the game if it is to succeed economically, what other challengers to the United States could possibly exist?
If it is true that China has powerful incentives to respect the international economic system in order to maintain access to needed inputs, the big question then revolves around the United States and whether it will allow China to become a player on equal terms. Political forces within the United States wish to deny that country its MFN status as punishment for its human rights record and for its proliferation of military technology. The Clinton Administration, however, has remained in favor of MFN for China, recently approving renewal of that status.
This trade debate is consequential. As Dale Copeland argues, it is a country’s expectation of future trade opportunities that plays a vital role in its calculation of whether to maintain peaceful relations with its partners and neighbors or seek military solutions to its economic requirements. He writes that “for any expected value of war, we can predict that the lower the expectations of future trade, the lower the expected value of trade, and therefore the more likely it is that war will be chosen.” 54 In short, the liberalization policy is prudent in the Chinese context.
What about Russia? By all accounts, the honeymoon between Moscow and Washington has ended, despite President Clinton’s active support of Boris Yeltsin’s re-election. Russia has not only waged a brutal war in Chechnya, it has increasingly thrown its weight around in the near abroad. Indeed, with the proposed confederation between Russian and Belarus, parts of the Soviet empire appear to be reemerging.
Yet Russia is far from providing the sort of global challenge to the United States that the Soviet Union once did. As Neil MacFarlane writes, “Although the economic performance of the Soviet Union . . .left much to be desired . . .the USSR nonetheless was the center of one of two competing economic systems in the global economy. . . .The position collapsed in 1991 with the implosion of the Soviet state. . . .Russia is now substantially dependent on Western financial resources to stabilize its budget, and resuscitate its economic base.” 55 Further, those states that once constituted the Council for Mutual Economic Assistance (CMEA) are even more dependent on western capital, technology and markets than Russia is. This makes it impossible for Russia to exercise anything like economic hegemony over its former empire.
This leaves, then, the European Union as perhaps the greatest potential—if not actual—challenger to the American economic order. The EU boasts a greater population and than the United States and similar level of GNP, and it is a major trading power which will soon have a single currency. While not a federal state, the EU does negotiate as a single actor in many economic settings, such as the trade rounds. Indeed, EU opposition to proposed agricultural liberalization doomed that initiative in the Uruguay Round.
Yet the EU also has glaring weaknesses that prevent it from challenging the United States as leader or even co-director of the world economy. Most obviously, Michael Loriaux reminds us that from a realist perspective, it does not have a unified foreign or defense policy, missions that remain under national jurisdiction. It is incapable of protecting its trading routes and oil supplies, as demonstrated during the Gulf War, much less maintaining the peace in its own backyard, as in the former Yugoslavia. In fact, neither the EU as a whole nor any of its constituent states have any independent power projection capability. To the extent that the global economic system still needs a military foundation, the EU certainly is not in a position to provide it.
In sum, the United States has no international challengers to its position as the leader of the international economy it built after World War II, and which it still maintains through its contributions to the major international institutions, and through the openness of its marketplace. Countries that need balance-of-payments support must go to the IMF, and those that wish to become full members of the trading system must seek membership in the WTO. Companies that seek to become world-class must enter the American marketplace, which continues to serve as the testbed for almost every good and service imaginable. Further, the dynamic American financial system provides most of the world’s venture capital to those start-up companies that will become the future leaders in their respective sectors. Any country or group of countries that would challenge this American-dominated order face enormous systemic pressures, and there is little evidence that balancing against the United States is in fact emerging anywhere in the world. To the contrary, the global economy has become an enormous bandwagon, as more and more countries seek to join the international marketplace.
Globalization and American Power
How are these same economic forces affecting the United States? Students of hegemonic stability theory have traditionally been pessimistic about the hegemon’s ability to maintain its relative position. As Robert Gilpin has written, “The unleashing of market forces transforms the political framework itself, undermines the hegemonic power, and creates a new political environment to which the world must eventually adjust. With the inevitable shift in the international distribution of economic and military power from the core to rising nations in the periphery and elsewhere, the capacity of the hegemon to maintain the system decreases. Capitalism and the market system thus tend to destroy the political foundations on which they must ultimately depend.” 56
Economic theory would seem to provide some support for the view that unfettered international market development—globalization—will itself undermine the unipolar structure of the world economy. If we accept that the economies of the great powers are becoming increasingly interdependent in trade and finance, then there are a number of “convergence hypotheses” that we must take seriously. Taken to their logical extreme, these could mean that economic integration itself will lead to a change in the international distribution of power, from unipolarity to multipolarity. These include hypotheses about the effects of trade and the spread of technology on productivity and domestic wage rates, and the effects of capital market integration on monetary policy and interest rates. Paul Samuelson’s theory of “factor price equalization,” for example, suggests that trade between countries A and B will lead the wages in each country toward convergence. In short, as integration proceeds, we should expect to see such economic variables as productivity levels, wages, interest rates, and ultimately growth rates converging toward some common values. 57
For a structural realist like Waltz, in which systemic stability is a function of polarity, this growing equality would not be a good thing for the existing distribution of power and thus the chances for world peace. As he has written, “extreme equality is associated with instability. . . .The inequality of states, though it provides no guarantee, at least makes peace and stability possible.” 58 Of course, convergence in economic performance would not in itself make all states equal, since most of them would not possess the other capabilities (e.g. population, military forces, “competence”) needed to reach the “top rank” of great powers. However, to the extent that economic power provides the foundation for military power, it would mean that a growing number of states could conceivably acquire sophisticated conventional and nonconventional weapons, including weapons of mass destruction.
In a truly global economy we would also have to question the inherent advantages of national “size” that Waltz discussed. He observed, for example, that the size of the American domestic marketplace gave its producers the capacity to “operate on a large scale and to generate resources that can be used abroad to compete with or to overwhelm native industries. . . .The disadvantages of foreign firms relate directly to the smaller scale of their national economies.” 59 On this basis he suggested that only such continental countries as Russia and China (one could add India and a truly unified Europe to the list), with their large domestic markets, could ever pose an economic challenge to the United States.
The question is whether this size advantage would still be consequential in a truly global economy, a world that was borderless from the transactions perspective. After all, if enterprises had equally open access to all markets, the distinction between “domestic” and “foreign” would be limited to a matter of differing cultures (in terms of language and tastes) rather than governments. To be sure, culture could constitute an important barrier to trade, but presumably another element of globalization—and one that is particularly threatening to many countries from France to Iran—is the increasing uniformity of tastes, as generated in Hollywood, on Madison Avenue, and at McDonald’s Hamburger University.
In the event, we remain far from such a world, and the evidence points to the continuing importance of the domestic marketplace for even the largest firms. 60 A recent study of the activities of multinational corporations (MNCs), for example, concludes that they “still rely upon their ‘home base’ as the center of their economic activities, despite all the speculation about globalization.” 61 This, incidentally, is as true of European-based firms as it is for those based in the United States and Japan. Even in finance, the penetration of foreigners into domestic markets is slight. For example, for the eleven largest members of the Organization of Economic Co-operation and Development (OECD), only 15 percent of outstanding domestic bonds were held by foreigners. 62
A study of the data would suggest that American economic performance since 1945 appears to refute the grim predictions of hegemonic stability theory, which in its traditional variants did not admit the possibility of hegemonic regeneration. But alternative theories offer more optimistic prospects. Raymond Vernon’s “product cycle theory,” for example, suggests that firms can remain ahead of their competitors so long as they continue to invest in leading-edge research and development. The theory posits that every new technology goes through a three-stage development: (1) introduction of the technology or new product; (2) maturation and domestic market saturation; (3) product and process standardization. In each of these phases, different economies will possess differing comparative advantages. A country that has an advantage in initial innovation, for example, may not keep it when the product and process become standardized. 63 Vernon’s lesson was that firms should keep investing in R&D and continually generate new technologies if they wish to stay ahead.
By way of analogy, this theory suggests the possibility for states to avoid inevitable decline by promoting those investments that provide the underlying conditions for ongoing national innovation. Investing in education, research, and infrastructure would seem to be among the most useful targets for national policy. While the United States clearly has a mixed record in this regard, in several areas it remains well ahead of any challengers. The American research university, for example, has no serious global competitors, and I have already noted that U.S. spending on research and development is about half the world total. The point is that hegemonic stability theory may have been unduly pessimistic, confounding a natural degree of relative decline (e.g. American decline between 1945—when the rest of the world was in ruins—and 1970) with a trend toward collapse.
Still, when we focus on the domestic conditions necessary for international leadership, there are plenty of reasons for pause in the American case. After all, pressures on a system can also come from the inside. As the leaders of the G-7 said at Lyon, “the development of a more global economy and advances in information technology are engines of economic growth and prosperity. But they also may be seen by some as a source of dislocation and insecurity.” 64 The domestic concern of these elected officials is to ensure that the political voice of the “haves” continues to dominate the debate over liberalization.
Decreasing support for globalization and the policies it requires for support is as evident in the United States as in any other industrial country. As Michael Mastanduno writes, “How long domestic constraints will permit U.S. officials to pursue a comprehensive strategy is an open question.” 65 James Kurth concurs, suggesting that it is unlikely that the United States can continue to act as the world’s leader in the absence of a credible threat to its national security. 66
Indeed, in countries around the world there is a rising risk of backlash by voters against the process of economic globalization. Double-digit unemployment in Europe and rising income inequality and job insecurity in the United States are hardly conducive to sustained political support for trade and financial liberalization, while in East Asia, once the poster child of globalization, whole populations now face a return to poverty. But in the context of shrinking government budgets everywhere, a phenomenon that is also a product of the global pressures unleashed by mobile capital, it is difficult to launch new programs that might help working people cope with economic change. 67
Domestic politics is thus the global economy’s achilles heel, for should voters turn against globalization—as may be happening in many places around the globe, including the United States—the postwar liberalization project could be in for a jolt. After all, the “foundation for American leadership in the Bretton Woods system . . .was the most productive and competitive industrial economy in the world, and the high employment, economic prosperity, and social cohesion that were the result. Without these, there would not have been the political consensus necessary to sustain American leadership.” 68 That consensus may be breaking down, since there are increasing doubts about the distribution of globalization’s benefits. If liberalization only makes the rich richer and the poor poorer, it will inevitably produce rising social strains everywhere it is advanced.
Yet despite these tensions, social disruption aimed at stopping globalization has thus far been minimal; nowhere in the world is there evidence of a profound “backlash” against liberalization. If anything, the multilateral structure of trade and finance built by the United States and its allies has not only endured but even prospered in the post-Soviet era, as the formerly communist states seek to join it as “members,” and as China and East Asia continue to focus on an export orientation in their economic policy. There are certainly stresses in that system, but we must ask whether these are profound and destabilizing, or episodic. For now we can conclude the latter, since there is really no alternative available to the American-dominated multilateral system. And in the absence of alternatives, it is difficult to overturn the status quo.
Conclusions
Realism, it is said, presents an essentially pessimistic view of world politics. Security is scarce in the anarchic international environment, leading states to engage in economic and military competitions that must inevitably lead to conflict and war. With the collapse of the stable bipolar system, the world has entered a new, uncertain era, one that could prove more dangerous than anything we have known since World War II.
This essay presents a contending vision, drawn from insights generated by hegemonic stability theory. By focusing on the distribution of power at the systemic level, I have tried to show that there really are no obvious alternatives to the American-dominated economic structure that now governs international trade, finance and investment. Japan has shown no interest in rebuilding an Asian co-prosperity sphere, while China is becoming increasingly dependent on world markets. Russia is an economic pygmy that needs capital, technology, and food from the West, while it must export its energy and raw materials to earn desperately needed hard currency. The EU is not a unified actor in foreign or security policy and lacks military capability.
Why is this vision of the world economy seemingly so different from that presented by other self-defined realists? I would offer two answers. First, by focusing on the role of the external Soviet threat in building and maintaining the postwar economic order, they overlook the transcendent importance of the multilateral institutions established after World War II. These were designed not solely to promote Western military security, but Western prosperity as well. So long as they contribute to that process better than any alternative arrangement, they will endure.
Second, by devaluing American power, they fail to appreciate the unique position the country still holds in the international system; a focus on the outcomes of international economic interactions remains illuminating in this regard. The United States is far from a normal state; no country in modern history has ever held such overwhelming power across so many dimensions. It not only possesses the single largest, wealthiest, and most dynamic market for every good and service imaginable, but is also home to the world’s strongest military forces. Its culture is incredibly dynamic, as it opens its doors to the best and brightest from every continent. In short, despite growing domestic doubts about the role, it remains the hegemonic power.
This state of affairs should be welcomed by those countries that seek to play by the rules of the game and liberalize their economies, but it’s certainly bad for any would-be challengers. Those countries that seek to protect their domestic marketplace, perhaps for extremely valid political or cultural reasons, will find the pursuit of such policies extremely costly. Yet balancing against the United States is not a likely outcome, since in economic terms there is no good alternative to the American order, while in military terms it spends as much on defense as the rest of the world combined.
From all this, one can only conclude that the American century has just begun. How long it endures will be a function of whether an alternative form of political economy emerges that is capable of mobilizing widespread support. Policymakers would do well to pay greater attention to that distant possibility, by ensuring that the benefits that come with “free multilateralism” are widely distributed.
Endnotes
Note 1: Kapstein, “Is Realism Dead? The Domestic Sources of International Politics,” International Organization 49 (Autumn 1995): 751–774. Back.
Note 2: See, for example, the essays in Richard Ned Lebow and Thomas Riss-Kappen, eds., International Relations Theory and the End of the Cold War (New York: Columbia University Press, 1995). Back.
Note 3: Russett, “Processes of Dyadic Choice for War and Peace,” World Politics 47 (January 1995), p. 269. Back.
Note 4: See Mark Kramer, “Realism, Nuclear Proliferation, and East-Central European Strategies,” this volume. Back.
Note 5: For an earlier essay with a similar perspective, see Bruce Russett, “The Mysterious Case of Vanishing Hegemony; or, is Mark Twain Really Dead?” International Organization 39 (Spring 1985): 207–231. Back.
Note 6: Huntington, “Why International Primacy Matters,” in Sean Lynn-Jones and Steven Miller, eds., The Cold War and After: Prospects for Peace (Cambridge, Ma.: MIT Press, 1993), 310–311. Back.
Note 7: Schweller, “Realism and the Present Great-Power System: Growth and Positional Conflict over Scarce Resources,” this volume. Back.
Note 8: Salvatore, “Protectionism and World Welfare,” in Salvatore, ed., Protectionism and World Welfare (New York: Cambridge University Press, 1993), 1. Back.
Note 9: C. Fred Bergsten, “Globalizing Free Trade,” Foreign Affairs 75 (May/June 1996): 106. Back.
Note 10: Kirshner, “The Political Economy of Realism.” Back.
Note 11: See, for example, Kenichi Ohmae, The End of the Nation-State (New York: Free Press, 1995). Back.
Note 12: I thank Michael Mastanduno for emphasizing this point. Back.
Note 13: See Charles P. Kindleberger, The World in Depression (Berkele: University of California Press, 1973). Back.
Note 14: Robert Gilpin, The Political Economy of International Relations (Princeton: Princeton University Press, 1987), 72. Back.
Note 15: Robert Keohane, After Hegemony (Princeton: Princeton University Press, 1984). Back.
Note 16: See, for example, Russett, “The Mysterious Case,” and Susan Strange, “Still an Extraordinary Power: America’s Role in a Global Monetary System,” in Raymond Lombra and William Witte, eds., Political Economy of International and Domestic Monetary Relations (Ames, Iowa: Iowa State University Press, 1982), cited in Russett, “The Mysterious Case.” Back.
Note 17: Russett, “The Mysterious Case,” 208. Back.
Note 18: Mastanduno, Economic Containment (Ithaca: Cornell University Press, 1992), 89. Back.
Note 19: Woodrow Wilson Foundation and National Planning Association, The Political Economy of American Foreign Policy (New York: Greenwood, 1968; orig. 1955), 47. Back.
Note 20: Finlayson and Zacher, “The GATT and the Regulation of Trade Barriers,” in Stephen D. Krasner, ed., International Regimes (Ithaca: Cornell University Press, 1983), 298. Back.
Note 21: ”Economic Communique,” G-7 Summit, Lyons, France, 28 June, 1996. Back.
Note 22: See, most prominently, John Mearsheimer, “The False Promise of International Institutions,” in Michael Brown, Sean Lynn-Jones, and Steven Miller, eds., The Perils of Anarchy (Cambridge: MIT Press, 1995), 332–76. Back.
Note 23: Deudney and Ikenberry, “Realism, Structural Liberalism, and the Western Order,” this volume. Back.
Note 24: Waltz, Theory of International Politics (New York: Random House, 1979), 129. Back.
Note 25: Waltz, Theory of International Politics, 131. Back.
Note 26: On America’s “soft power,” see Joseph Nye, Bound to Lead (New York: Basic Books, 1992). Back.
Note 27: For the debate over unipolarity, see Sean Lynn-Jones and Steven Miller, eds., The Cold War and After: Prospects for Peace (Cambridge: MIT Press, 1993). Back.
Note 28: Layne, “The Unipolar Illusion: Why New Great Powers Will Rise,” in Lynn-Jones and Miller, The Cold War and After: 244–90. Back.
Note 29: Schroeder, “Historical Reality vs. Neo-realist Theory,” International Security 19 (Summer 1994): 108–148. Back.
Note 30: Cited by Schweller, this volume. Back.
Note 31: Russett, “The Mysterious Case,” 212. Back.
Note 32: See Statistical Abstracts of the United States: 1995 (Washington, DC: Government Printing Office, 1995). Back.
Note 33: Preeg, “Who’s Benefiting Whom? A Trade Agenda for High-Technology Industries,” in Brad Roberts, New Forces in the World Economy (Cambridge: MIT Press, 1996), 147. Back.
Note 34: Jim Sanford,” World Trade Organization Opens Global Markets, Protects U.S. Rights,” Business America (January 1995): 5. Back.
Note 35: For a review of these developments, see Ernest Preeg, “The Post-Uruguay Round Free Trade Debate,” in Roberts, New Forces in the World Economy, 79–91. Back.
Note 36: Hirst and Thompson, Globalization in Question, 131; see also Kapstein, Governing the Global Economy: International Finance and the State (Cambridge: Harvard University Press, 1994). Back.
Note 37: U.S. Council of Economic Advisers, Economic Report to the President: 1996, box 8–5. Back.
Note 38: Huntington, “Economic Renewal,” p. 16. Back.
Note 39: Huntington, “Economic Power in International Relations,” (Princeton Center for International Studies, Research Program in International Security, Monograph Series No. 1, 1993), p. 12. See also Huntington, “Why International Primacy Matters,” International Security 17 (4) (Spring 1993): 68–83. Back.
Note 40: Quoted in Ethan B. Kapstein, The Insecure Alliance: Energy Crises and Western Politics since 1944 (New York: Oxford University Press, 1990), 174. Back.
Note 41: On U.S. threats to close its domestic banking market to foreign competitors, see Ethan B. Kapstein, Governing the Global Economy: International Finance and the State (Cambridge: Harvard University Press, 1994). Back.
Note 42: For a comparative analysis of international competitiveness, based on several different statistical measures, see The Economist, “Survey: The Global Economy,” p. 46, October 1, 1994. Back.
Note 43: “Japan, Eek,” The Wall Street Journal Europe, June 1, 1995, 6. Back.
Note 44: Chalmers Johnson, “The State and Japanese Grand Strategy,” in Richard Rosecrance and Arthur Stein, eds., The Domestic Bases of Grand Strategy (Ithaca, NY: Cornell Univ. Press, 1993), 216. Back.
Note 45: See, for example, Peter Katzenstein’s discussion of Japan in “Conclusion: Domestic Structures and Strategies of Foreign Economic Policy,” in Katzenstein, ed., Between Power and Plenty (Madison: University of Wisconsin Press, 1978), 313 ff. Back.
Note 46: Heginbotham and Samuels, “Mercantile Realism and Japanese Foreign Policy,” this volume. Back.
Note 47: Grieco, “Realism and Regionalism: American Power and German and Japanese Institutional Strategies During and After the Cold War,” this volume. Back.
Note 48: Robert Gilpin, U.S. Power and the Multinational Corporation (New York: Basic Books, 1975),103–4. Back.
Note 49: Keohane, After Hegemony. Back.
Note 50: The Economist, “Japan Gives Its Answer,” May 13, 1995, 63. Back.
Note 51: James Kurth raises interesting questions about U.S. policy toward regional spheres of influence in his article, “American Grand Strategy.” Back.
Note 52: Shinn, “Conditional Engagement with China,” in Shinn, ed., Weaving the Net: Conditional Engagement with China (New York: Council on Foreign Relations, 1996), 35. Back.
Note 53: Shinn, “Conditional Engagement,” 37–38. Back.
Note 54: Copeland, “Economic Interdependence and War: A Theory of Trade Expectations, International Security 20 (Spring 1996): 19. Back.
Note 55: MacFarlane, “Realism and Russian Strategy after the Collapse of the USSR,” this volume. Back.
Note 56: Gilpin, Political Economy, 77–78. Back.
Note 57: On these convergence hypotheses, see James R. Golden, “Economics and National Strategy,” in Brad Roberts, ed., New Forces in the World Economy (Cambridge: MIT Press, 1996), 15–37. Back.
Note 58: Waltz, Theory of International Politics, 132. Back.
Note 59: Waltz, Theory of International Politics, 149. Back.
Note 60: For further elaboration of this point, see Ethan B. Kapstein, “We are US!: The Myth of the Multinational,” The National Interest (Winter 1991/92): 55–62. Kenneth Waltz made a similar argument years earlier in “The Myth of National Interdependence,” in Charles P. Kindleberger, ed., The International Corporation (Cambridge: MIT Press, 1974). Back.
Note 61: Paul Hirst and Grahame Thompson, Globalization in Question (Cambridge: Polity Press, 1996), 95. Back.
Note 62: Hirst and Thompson, Globalization in Question, 42. Back.
Note 63: Raymond Vernon, “International Investment and International Trade in the Product Cycle,” Quarterly Journal of Economics 80 (1966): 190–207. Back.
Note 64: G-7, “Economic Communique.” Back.
Note 65: Mastanduno, “Security Engagement,” this volume. Back.
Note 66: Kurth, “America’s Grand Strategy.” Back.
Note 67: For an elaboration of this point, see Ethan B. Kapstein, “Workers and the World Economy,” Foreign Affairs (May/June 1995). Back.
Note 68: James Kurth, “America’s Grand Strategy: A Pattern of History,” The National Interest (Spring 1996), 18. Back.
Unipolar Politics: Realism and State Strategies After the Cold War
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