The National Interest
Summer 2000

The American Way of Victory

by James Kurth

 

The twentieth century, the first American century, was also the century of three world wars. The United States was not only victorious in the First World War, the Second World War and the Cold War, but it was more victorious than any of the other victor powers. As the pre-eminent victor power, the subsequent strategies of the United States did much to shape the three postwar worlds. They therefore also did much to prepare the ground for the second and third world wars in the sequence. Now, ten years after the American victory in that third, cold, world war, it is time to evaluate the U.S. victor strategies of the 1990s and to consider if they will make the twenty-first century a second American century, this time one of world peace and prosperity, or if they could lead, sometime in the next few decades, to a fourth world war.

The First and Second British Centuries

Like America at the beginning of the twenty-first century, Britain in the early nineteenth century had passed through a century of three wars that were worldwide in scope–the War of the Spanish Succession (1702­13), the Seven Years' War (1756­63) and the successive Wars of the French Revolution and Napoleonic Wars (1792­1815). Britain had been victorious in each of these wars, making the eighteenth century something of a British one. The victor strategy that Britain pursued after the Napoleonic Wars laid the foundations for what has been called "the Hundred Years Peace" (1815­1914), making the second British century as peaceful as the first one had been warlike.

The central elements of the British victor strategy were four; two involved international security and two involved the international economy. The security elements were established immediately after the victory over Napoleon. They were, first, a British-managed balance of power system on the European continent, and, second, British naval supremacy in the rest of the world. The economic elements were established about a generation later. They involved, third, British industrial supremacy operating in an open international economy (Britain serving as "the workshop of the world"), and, fourth, British financial supremacy, also operating in an open international economy (the City of London serving as "the world's central bank").

By the beginning of the twentieth century, however, British naval and industrial supremacy were threatened by the spectacular growth of German military and economic power. When in August 1914 it appeared that Germany was about to destroy the Continental balance of power system with its invasion of Belgium and France, Britain went to war to stop it. The Hundred Years Peace and the second British century came to a crashing and catastrophic end with the First World War.

Victory therefore presents a profound challenge to a victor power, especially to a pre-eminent one: it must create a victor strategy to order the postwar world in a way that does not lead to a new major war. The British victor strategy after the Napoleonic Wars was successful in meeting this challenge for almost a century. But even this sophisticated strategy ultimately proved inadequate to the task of managing the problems posed by the rise of a new and very assertive power. As shall be discussed below, the American victor strategies after the First and Second World Wars were similar to the earlier British one in their efforts to combine several different dimensions of international security and economy; indeed, the American strategies relied upon some of the same elements, particularly naval, industrial and financial supremacy. They did not, however, succeed in preventing the Second World War and the Cold War. The fundamental question for our time is whether the American victor strategies after the Cold War will succeed in preventing some kind of a new world war in the next century.

As it happens, the Spring 2000 issue of The National Interest contained an array of articles that can help us address this question. In considering the lessons that can be drawn from the earlier American experiences of living with victory, I shall be making use of them. In particular, these lessons underline the importance of managing the rise of Chinese military and economic power and of doing so in ways similar to those that Zbigniew Brzezinski advocates in his "Living With China." They also underline the danger but potential relevance of the arguments that Robert Kagan and William Kristol advance in their essay, "The Present Danger."

Living With Victory After the First World War

It took four years of war and the massive engagement of the United States before, in November 1918, the Western Allies succeeded in defeating Germany. But even in defeat, the nation whose rise to military and economic power Britain had failed to manage still retained most of its inherent strengths. The German problem, which had been at the center of international relations before the war, was redefined by the Allied victory, but it was still there, and Western victory still had to focus upon the German reality.

Germany remained the central nation on the European continent. Demographically, it had the largest and best educated population in Europe. (Russia, although it had a larger population, was convulsed by revolution and civil war.) Economically, it had the largest and most advanced industry in Europe. Strategically, it faced formidable powers to the west (France and Britain), but to the east lay only new and weak states (Poland and Czechoslovakia). In this sense, Germany's strategic position was actually better after its defeat in the First World War than it had been before the war began, when to the east it had faced Russia as a great power. It would only be a matter of time before Germany recovered its political unity, gathered up its inherent strengths, and once again converted these into military and economic power. This was the long-term reality that the victorious Allies had to consider as they composed their victor strategies.

There were four basic strategies that different allies employed at different times: territorial dismemberment, military containment, security cooperation and economic engagement. These were not new inventions; they derived from the strategies employed by victor powers after earlier wars. The first two derived from territorial annexations and frontier fortifications, strategies that the Continental powers had used against each other in the eighteenth and nineteenth centuries. The last two derived from the "concert of Europe", or balance of power system, and the open international economy that Britain had managed in the nineteenth century. But these strategies were not obsolescent conceptions; the latter three prefigured the victor strategies that the United States would employ after the Second World War and after the Cold War.

Territorial dismemberment and military containment.

One apparent solution to the German problem was territorial dismemberment. This was the strategy preferred by France. The dismemberment of a defeated enemy can sometimes be carried out by victorious powers, and the Allies did so with that other Central Power in World War I, the Austro-Hungarian monarchy. But while this division destroyed a former adversary, it unleashed a sort of international anarchy in southeastern Europe that still reverberates today. Dismemberment is also what happened to the Soviet Union after the Cold War. Here too, while this division greatly diminished a former adversary, it has unleashed internal and international anarchy in the Caucasus and Central Asia.

Whatever might be the advantages of dismemberment as a victor strategy, they were not applicable to Germany in 1919. By that time, the German nation had become a solid reality with a solid identity; it could not be permanently undone by artificial territorial divisions, unless these were enforced by military occupation (which is how the division of Germany was to be enforced after the Second World War). There are today a few international analysts who argue that the United States should encourage the territorial division of troublesome powers, particularly Russia and China. There are, however, hardly any specialists on China or even Russia who believe that a permanent division of these nations is possible.

An alternative but closely related solution to the German problem was military containment. This was the objective of the Treaty of Versailles, which set up what was known as the Versailles system to carry it out. Military containment was another victor strategy chosen by France, and in the early 1920s the French were quite active at implementing it, as in their military occupation of the Ruhr in 1923.

The Democratic administration of President Woodrow Wilson advanced a kinder, gentler version of the Versailles system in its proposals for a League of Nations and a U.S. security guarantee to France and Britain. The military containment of Germany embodied in the security guarantee would be institutionalized and legitimatized in a collective security system embodied in the League. But, of course, the Republican-controlled U.S. Senate rejected these proposals, and the United States never again considered the strategy of military containment as a solution to the German problem.

Economic engagement and security cooperation.

Instead, a few years later, the United States addressed the German problem (now accentuated by the unstable French occupation of the Ruhr) with a strategy of economic engagement. This took the form of the Dawes Plan, an ingenious project for financial recycling, in which American banks loaned capital to Germany, Germany paid war reparations to France and Britain, and France and Britain repaid war debts to the American banks. The Dawes Plan thus encouraged an open international economy among the most advanced economies, and it sought to integrate Germany into this mutually beneficial system.

The Dawes Plan succeeded very well from 1924 to 1929. It formed the basis for Germany's reintegration not only into the international economic system but into the international security system as well. It encouraged France and Britain to develop a new strategy of security cooperation toward Germany. In 1925 they signed the Lucarno security treaty with Germany, and in 1926 Germany entered the League of Nations. The new American strategy of economic engagement seemed to be working far better than the earlier French strategy of military containment.

But as Charles Kindleberger famously demonstrated in his 1973 book, The World in Depression 1929-1939, an open international economic system requires an "economic hegemon" to keep it running, in bad times as well as good. The economic hegemon performs three essential functions: (1) providing long-term loans and investments (as in the Dawes Plan); (2) providing short-term credits and foreign exchange in times of currency crises; and (3) opening its markets to receive the exports of economies that are passing through recession. Britain had performed these functions before the First World War, and they in turn had provided the economic foundations for the Hundred Years Peace. After the war, however, Britain no longer had the economic strength to play the hegemon role, even though it still had the will. Conversely, the United States now had the economic strength but had not yet developed the will. The Dawes Plan was only one step in the right direction, and it was a step in only one dimension. Still, for a few years in the prosperous 1920s, the international economy seemed to be operating well enough without an economic hegemon.

The prosperous and open international economic system of the 1920s allowed the victor powers to engage in a strategy of security cooperation (or even appeasement, then still an innocuous term). Given the success of the strategies of economic engagement and security cooperation, the strategy of military containment appeared unnecessary or even counterproductive, and it was largely abandoned even by France. But, with the exception of the Dawes Plan, neither Britain nor the United States stepped forward to assume leadership in managing either the German problem or the international economy, in good times or bad.

With the beginning of the Great Depression (which Kindleberger ascribed to the failure of the United States to act as an economic hegemon), the prosperous and open economic system of the 1920s collapsed and was replaced with the impoverished and closed economic system of the 1930s. Whereas the prosperity system had permitted a strategy of appeasement, the poverty system required a strategy of containment. But for political reasons (polarization between the Left and the Right), France in the 1930s no longer had the political will to provide leadership for such a strategy.

Leadership in managing the German problem fell by default to Britain, which had never been a strong believer in the strategy of military containment. It chose instead a modest version of the strategy of economic engagement, at a time when the conditions of the Depression made this no longer adequate and attractive for Germany. Further, economic engagement seemed to imply a strategy of security appeasement, which was now even less appropriate for Germany. As for the United States, with the collapse of the Dawes Plan it gave up on any effort to manage the German problem at all.

Thus, by the early 1930s, none of the three victor powers from World War I–France, Britain and the United States–was pursuing a coherent and consistent strategy to preserve its victory. With the coming to power of the National Socialist regime, Germany decided to manage the German problem in its own way. The Second World War was the result.

On the other side of the world in East Asia, the United States pursued a quite different strategy. Here it faced the rising power of Japan, which had been an ally of Britain since 1902 and which was one of the victor powers in the First World War. Japan's growing military and economic strengths and its ambitions in China presented a serious challenge to the dominant powers in East Asia in the early 1920s, the United States and Britain.

The Republican administration of President Warren G. Harding, and particularly his secretary of state, Charles Evans Hughes, took the lead in designing an innovative strategy of security cooperation to deal with Japan.4 It convened a conference in Washington in 1921­22, out of which came the following security elements: the Washington Naval Treaty, an agreement between the United States, Britain and Japan to limit the numbers of their battleships; the Four-Power Treaty, which provided for consultations on security issues among these three powers plus France; and the Nine-Power Treaty, which provided for common principles and cooperation in regard to China. These arrangements, which were later called "the Washington system", were an elaboration of the U.S. strategy of security cooperation. However, the United States did not develop a comparable strategy of economic engagement for Japan, to serve as the basis for this security strategy. Instead, it largely relied on conventional international trade between the two nations, which seemed sufficient in the prosperous and open international economy of the 1920s. But with the beginning of the Great Depression, this international trade largely collapsed, and the collapse of the Washington system of security cooperation soon followed.

Thus by the mid-1920s, the United States had conceived of some important elements for a victor strategy. In Europe, the Dawes Plan echoed the nineteenth-century British use of financial power in an open international economy. In East Asia, the Washington system echoed the nineteenth-century British use of naval power and balance of power management. But there was not much of a U.S. security strategy in Europe or of a U.S. economic strategy in East Asia. The U.S. victor strategies after the First World War had not added up to a grand design. They failed to prevent the Great Depression and the ensuing Second World War.

Why did the United States fail to adopt a coherent and consistent victor strategy after World War I? The traditional explanation blames American immaturity and "idealism", and the resulting "isolationism." A related explanation blames the isolationism and protectionism of the Republican Party. However, the Dawes Plan and the Washington system were quite sophisticated projects (even by British standards) that can hardly be described as isolationist–and these were projects advanced by Republican administrations.

The main reason why the United States did not have a coherent and consistent victor strategy was that its victory in 1918 was too complete. As a result, in the 1920s the United States faced no obvious great power adversary or "peer competitor", which could have concentrated the American mind and provided the desirable coherence and consistency. Conversely, in the 1930s the Great Depression produced a real American isolationism. It also produced real great power adversaries (Germany and Japan), but these posed quite different strategic threats in quite different regions. This too made it difficult for the United States to compose a coherent and consistent strategy.

Living With Victory After the Second World War

The United States learned profound lessons from the failure of the Versailles and Washington systems to manage the German and Japanese problems and to prevent the Second World War. As it turned out, these lessons were largely expanded versions of the lessons that the Wilson administration, the Harding administration and the American bankers had already learned from the First World War. As World War II was drawing to a close, the United States took the lead in establishing a number of international institutions that would complete the first but abortive steps taken after the previous war.

Security cooperation and economic engagement.

On the security dimension, the United Nations was to succeed and perfect the League of Nations. On the economic dimension, three organizations were to help the United States perform the role of economic hegemon, one for each of the three functions identified by Kindleberger. The task of long-term lending would be promoted by the International Bank for Reconstruction and Development (the World Bank); the task of short-term currency support would be promoted by the International Monetary Fund; and the task of opening trade would be promoted by an International Trade Organization (ito). Together, the three organizations were known as the Bretton Woods system. As it happened, the Republican-controlled U.S. Senate rejected the ito treaty in 1947, but a less institutionalized arrangement, the General Agreement on Tariffs and Trade, took its place. (Almost fifty years later, the World Trade Organization was established, and this at last completed the original grand design.) The overall victor strategy of the United States was one of security cooperation based upon economic engagement.

This strategy–and its elaborate United Nations and Bretton Woods systems–might have been perfect for dealing with the German and Japanese problems that existed after the First World War. But the problems that now existed were altogether different. Whereas after the first war Germany was not defeated enough, after the second it was defeated too much. The victorious allies, including the United States, could easily, and almost automatically, impose the alternative and simpler victor strategy of territorial division and military occupation, and at first they did so.

Conversely, whereas after the first war Russia was in a sense doubly defeated (first by the German army and then by the chaos of the Russian Revolution and Civil War), after the second it was doubly victorious (first by defeating Germany and then by occupying or annexing–along with its soon-to-be involuntary allies, Poland and Czechoslovakia–the eastern half of it). The German problem suddenly ceased to be the central problem of international security and instead became a subordinate part of the new central problem, which was the Russian one.

The United States initially tried to apply its overall strategy of security cooperation and economic engagement to this new Russian problem. But it was crucial to this strategy that it be implemented through international institutions led by the United States, i.e., the United Nations and the Bretton Woods system. Both the strategy and its systems were incompatible with the interests of the Soviet Union, as those were defined by Stalin. Security cooperation and economic engagement required some degree of an open society and a free market, and these contradicted the closed society and command economy that characterized the Soviet Union. Instead, the worldwide reach of the American system was aborted by the Cold War and the establishment of the Soviet bloc.

The United States therefore was only able to apply its strategy and system to the Free World, especially the First World. In Europe, the United Nations was replaced by nato, and the Bretton Woods system was reinforced by the Marshall Plan. nato represented a sort of second coming of Wilson's abortive security guarantee to France and Britain, as was the Marshall Plan a second coming of the Dawes Plan. In East Asia, the United States concluded a series of bilateral security treaties and bilateral economic aid programs (including the Dodge Plan for Japan). The ensemble of security treaties echoed the earlier Washington system, and since it was based upon U.S. naval supremacy in the Pacific, it also echoed earlier British strategies based upon naval supremacy.

This American strategy and this system, whose prototypes had been aborted after the First World War and whose applications were confined to only half the world after the Second World War, were extraordinarily successful where they did operate. They certainly helped to solve a good part of the old German and Japanese problems. However, they could not solve the new Russian problem (some historians think that they even accentuated it). The result was the Cold War.

Military containment.

The Russian problem was addressed by a version of the alternative victor strategy, military containment–in this case, containment not of the recently defeated enemy but of the victorious ally. By 1948 there had already been the sudden reversal of the alliance between the Western Allies (Britain and the United States) and the Soviet Union against Germany into an emerging alliance between the Western Allies and Germany against the Soviet Union. The rapidity of the transformation was quite breathtaking, but it was readily accepted by the American public. (In his famous novel, 1984, written in 1948 as this transformation was being completed, George Orwell portrayed the sudden reversal of the alliance between Oceania and Eastasia against Eurasia into an alliance between Oceania and Eurasia against Eastasia.)

When the communists came to power on the Chinese mainland in 1949, they presented a new security problem. For a brief time, the Truman administration was inclined to hope that some version of the strategy of security cooperation (perhaps based upon traditional Chinese suspicions of Russia) and economic engagement would work to solve this new Chinese problem, but this hope was aborted by Mao's alliance with Stalin in January 1950, the Chinese entry into the Korean War in November 1950, and the closed society and command economy that characterized communist China.

The prosperous and open international economic system of the 1920s had permitted a strategy of security cooperation or appeasement toward Germany and Japan. But this was because these two nations had capitalist economies and were willing to engage with a prosperous and open international economy. When the international economy ceased to be so, the basis for a strategy of security appeasement disappeared; the only effective alternative would have been a strategy of military containment.

The Soviet Union and communist China in the 1940s­50s, on the other hand, were command economies. Because of this, they were not willing to engage with an open international economy, even one that was prosperous. Consequently, there was no basis for a strategy of security cooperation (or appeasement). The alternative strategy of military containment therefore became necessary. But although containment of the Soviet Union and communist China was necessary, it did present problems of its own. Military containment once led to defeat for the United States (the Vietnam War) and once led to near disaster for the world (the Cuban Missile Crisis). And military containment by itself was not sufficient to defeat the Soviet Union, to reform communist China, and to bring about a U.S. victory in the Cold War. The successful and sustained operation of the free market and open international economy in the First or Free World, in contrast with the gradual but steady exhaustion of the command and closed economic systems in the Second or Communist World, exerted a magnetic force upon the Soviet Union and China, and drove them by the 1980s, each in its own way, to reform their economies and to engage in the American-led international economic system. But of course this did not happen quickly or easily. Forty years of Cold War and military containment were the price.

Why did the United States succeed in adopting a generally coherent and consistent victor strategy after the Second World War? The main reason was that its victory was in some sense a Pyrrhic one. The German enemy was replaced almost immediately by the Russian one, and the Japanese enemy was soon replaced by the Chinese one. Even more, since both enemies were communist and initially were in alliance, they could easily be seen as one enormous enemy. This wonderfully concentrated the American mind into a generally coherent and consistent strategy in the late 1940s and 1950s.

Living With Victory After the Cold War

The circumstances of victory and defeat after the Cold War had more in common with those pertaining after the First World War than those after the Second.

The redefined Russian problem.

Russia was more defeated after the Cold War than Germany after the First World War (but less defeated than Germany after the Second). As the Soviet Union was reinvented as Russia, it lost a quarter of its territory and half of its population. The Russian economy in the 1990s was beset both by deep depression and by high inflation, and the Russian military was beset by weakness and incompetence, with only an arsenal of nuclear weapons remaining as the legacy from the era of Soviet power. The strategic position of Russia was removed from the center to the periphery of the European continent, and it remained the central nation only in the emptiness of Central Asia. The Russian problem was redefined from being one of organized power into one of organized crime. Only in 2000–with a new president, Vladimir Putin, modest economic recovery and ambiguous military success in the Chechnya war–are there signs that Russia may have begun a revival to the degree that Germany did in the mid-1920s.

The U.S. victor strategy toward this "Weimar Russia" has been a variation of that adopted toward Weimar Germany, a new version of the strategy of security cooperation and economic engagement. Russia's generally positive role in the United Nations echoes Germany's role in the League. However, the enlargement of nato into Eastern Europe (really a form of military containment of Russia) echoes Wilson's abortive security guarantee to Western Europe (really a form of military containment of Germany). The extensive U.S. and international economic aid to Russia echoes the Dawes Plan (although it has not been nearly as extensive and effective as the Marshall Plan). But just as the U.S. victor strategy toward Germany in the 1920s depended upon integrating that nation into an international economy that remained open and prosperous, so too does the contemporary U.S. victor strategy toward Russia. It would fail if either the international economy collapsed into one that was closed and depressed (like the 1930s), or if the Russian economy reverted into one that was closed and command (like the 1940s­70s).

The new Chinese problem.

In East Asia, the United States faces the rising power of China, a situation not unlike that it faced with Japan after the First World War. China's growing economic and military strengths, and its goals regarding Taiwan and the South China Sea, have presented a serious challenge. Indeed, the Chinese problem after the Cold War has been an even greater challenge for the United States than the Japanese problem was after the First World War (although it is not nearly as threatening as the Russian problem was after the Second).

The U.S. strategy toward China that evolved in the 1990s has in some sense been an inversion of the U.S. strategy toward Japan in the 1920s (and an expansion of the U.S. strategy toward Weimar Germany). Whereas the strategy toward Japan provided for an elaborate system of security cooperation (the Washington system) but only for relatively simple economic engagement (conventional international trade), the strategy toward China provides for an elaborate system of economic engagement ("the Washington consensus", including the admission of China into the World Trade Organization), but for relatively simple security cooperation (conventional military visits). In a more important sense, however, the U.S. strategy involves an innovative combination of economic engagement and military containment (particularly in respect to Taiwan and the South China Sea). But since China thinks of Taiwan as being properly part of China, what the United States perceives as its strategy of military containment, China perceives as a strategy of territorial dismemberment.

Probably the most difficult single challenge facing the contemporary U.S. victor strategy is how to sustain this innovative and complex combination of economic engagement and military containment in regard to China. The article by Zbigniew Brzezinski, "Living With China", is a sustained and eminently sensible analysis of this problem. In essence, he hopes that the Taiwan independence question can be dissolved into the World Trade Organization, that the tensions from military containment can themselves be contained by the rewards of economic engagement. His proposals are thus very different from those of Robert Kagan and William Kristol in "The Present Danger", who hardly consider the international economy at all. Consequently, they advocate a pure strategy of military containment toward China, including U.S. efforts to bring about a "regime change."

We have seen that the U.S. strategies toward Germany and Japan in the 1920s depended upon integrating those nations into an open and prosperous international economy, and that the U.S. contemporary strategy toward Russia depends upon the same. To an even greater extent, the U.S. strategy toward China has as its foundation the integration of that giant nation–one with more and more of a nationalist mentality–into such a global economy. If the global economy were to exclude China from its benefits, or if it were to become a closed and depressed one, the entire complex U.S. strategy toward China would collapse. The United States would be driven, at best, to the classic alternative, a simple strategy of military containment, or, at worst, as was the case in the 1930s in regard to both Germany and Japan, to no strategy at all. At that point, the proposals of Brzezinski would become obsolete, and the proposals of Kagan and Kristol could appear to be necessary. The management of the new China problem therefore depends upon the management of the new global economy, and the development of any real Sino-American security cooperation depends upon the performance of the United States as the global economic hegemon.

Challenges to the Victor

The culminating point of victory.

Even when a victor power conceives a victor strategy that is sound and appropriate to the military and economic realities of the time, there will be challenges that arise from how it is implemented. The first of these challenges is to determine what is, in Clausewitz's phrase, "the culminating point of victory", and to not go beyond it. Victor powers are prone to succumb to "the victory disease"; they continue to pursue the strategies that brought them victory in the utterly new and inappropriate circumstances that the victory has created. Concentration in war becomes compulsion in victory. The most famous example of the twentieth century was Hitler following his successful blitzkriegs of Poland and France with his disastrous invasion of the Soviet Union. The most familiar American example was MacArthur following his successful landing at Inchon and recovery of South Korea with his disastrous drive to the Yalu River and the Chinese border, resulting in China's entry into the war.

A contemporary American example of going beyond the culminating point of victory could be the enlargement of nato. Although the admission of Poland, the Czech Republic and Hungary may not have passed that point, a "second round of enlargement" including the Baltic states and reaching the most sensitive borders of Russia probably would do so. This kind of victory disorder may also be developing with the U.S. promotion of human rights over national sovereignty, and especially with the use of military force for the purpose of humanitarian intervention. The 1995 U.S.-led humanitarian intervention in Bosnia was accepted by all of the other major powers. The 1999 U.S.-led humanitarian intervention in Kosovo was greatly resented, and in some measure rejected, by Russia and China. A third such intervention anytime soon, especially in a country traditionally in the sphere of influence of Russia (e.g., the Caucasus and Central Asia) or of China (e.g., the South China Sea), very likely would go beyond the culminating point of victory; it would represent a humanitarian disease.

The realistic range of opportunities.

The second challenge for the victor power is in some sense the opposite of the first. It is to determine what is the realistic range of opportunities resulting from victory. The victor power is suddenly in a position where all things seem possible, where there are too many options. It may erratically pursue this objective, then that, and then another. Versatility in war becomes diffusion, even dissipation, in victory. This is an error to which pluralist democracies, with their different interest groups, are especially prone.

It has often been argued that Britain succumbed to this victory disorder in the nineteenth century. The British continued to expand their colonial empire, one of the opportunities that came with their victory in the Napoleonic Wars, until they entered into the condition of "imperial overstretch." One result was that Britain had to undertake numerous and continuous military operations on "the turbulent frontier." Another result, more serious in its long-run consequences, was that the ample British investment capital was diffused across a wide range of colonies and foreign countries, rather than concentrated upon the development of new technologies and industries within Britain itself. Such new technologies and industries would have better suited Britain for its competition with Germany.

A contemporary American example of the error of diffusion or dissipation seems to be developing with the U.S. promotion of every aspect of the American way of life in every part of the world. The promotion of economic globalization may be inherent in the U.S. performance as economic hegemon, but it does weaken the economic conditions and social bonds of many Americans. Even more, the promotion of social and cultural globalization–of the American way of expressive individualism, popular culture and the dysfunctional family–has generated resentment and resistance in a wide arc of countries in the Middle East, South Asia and East Asia. This, it seems, is the American way of producing a turbulent frontier.

The balancing effect.

The third challenge is the most familiar and the most fundamental, although Americans are inclined to think that they are exempt from it. It is derived from the well-known balancing effect. Victory brings the pre-eminent victor power hegemony, which in turn can initiate a realignment of the lesser victor powers against it (perhaps joined by the defeated one). The balancing effect was always especially pronounced among the continental powers of Europe. However, since Britain was an offshore power with no ambitions for territorial acquisitions on the continent, its victories did not initiate this balancing process. Indeed, its role as an "offshore balancer" helped it on occasion to exercise a sort of offshore hegemony.

The United States has served as an offshore or rather overseas balancer for Europe and also for East Asia. Even more than Britain, its remote position has permitted it to exercise an overseas hegemony over the nations of Western Europe (while balancing against the Soviet Union) and over those of East Asia (while balancing against China). Indeed, the United States continues to exercise this overseas hegemony, now over all of Europe, even with the collapse of the Soviet Union and with no other power to balance at all. By historical comparison with the European past, this hegemonic security system is an extraordinary achievement on the part of the United States. Were America located on the continent where France is, or even thirty miles offshore where Britain is, it probably would not have occurred; it can exist because the United States is located an ocean away and in another hemisphere. The U.S. hegemonic security system in East Asia continues to include Japan, South Korea, the Philippines and the problematic Taiwan; it provides the basis for any strategy of military containment of China.

The overseas location of the United States thus enables it to avoid the balancing effect and instead to perform the role of security hegemon in Europe, parts of East Asia and, in more complicated conditions, parts of the Middle East (as in the Gulf War and the continuing air strikes against Iraq). Of course, the United States also acts as the security hegemon in Latin America, where there is no prospect of a balancing effect against "the colossus of the North" (a case of an opposite phenomenon, which international relations specialists call the "bandwagoning effect").

Hegemony versus hyper-victory.

The U.S. role as the security hegemon in several regions of the globe complements the U.S. role as the economic hegemon in the global economy. America's security hegemony is acceptable because of its unique overseas location and the sustained peace that it has provided. Its economic hegemony is acceptable because of the unique economic functions that it performs and the sustained prosperity that it has produced. The United States has operated the security and economic dimensions of hegemony together to consolidate and preserve its great victory after the Cold War. It does so in ways reminiscent of Britain coordinating the security and economic dimensions of its supremacy to consolidate and preserve its great victory after the Napoleonic Wars.

This splendid achievement of the United States could be undermined, however, by its own actions. The victory disorders of compulsion and dissipation could eventually overcome even the powerful U.S. advantages of overseas position and economic performance, and drive some major powers–most obviously China and Russia–into the balancing effect and even into a sort of containment policy directed at the United States. This was the prospect put forward by Samuel Huntington in his famous argument about the "clash of civilizations." Huntington was concerned that American excesses could bring about a Sino-Islamic alliance or even "the West versus the Rest." These prospects would become even more likely if the prosperous and open international economy should turn into a poor and closed one–if the "New Economy" of the 1990s, based upon the computer and the Internet, should suddenly collapse, as the "New Era" economy of the 1920s, based upon the automobile and the radio, had done.

Whatever form a balancing effect or containment coalition might take, however, at its core would be China. It would be the new Central Power on the Eurasian land mass, just as it was once the Middle Kingdom. The arrival of this coalition on the international scene would mean that the U.S. victory after the first cold war would have been followed by a second cold war (or worse), and this in turn would mean another war on a global scale. This alone makes living with China the single most important challenge facing a United States that is still living with victory, and which is still expecting to do so for decades to come.