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The Rise And Fall Of Great Powers
The very attempt to reform an unstable, diminishing-return system often precipitates its collapse.
The Rise and Fall of Great Powers
Our collective interest in the rise and fall of empires is not academic. The meteoric rise of China and the financialization rotting out global capitalism are just two developments that suggest we are entering an era where some great powers will collapse, others will remake themselves and others will gain ascendancy.
In How Empires Fall (April 17, 2013), I discussed Adrian Goldsworthy’s How Rome Fell: Death of a Superpower and an old favorite on the same topic, Michael Grant’s excellent The Fall of the Roman Empire.
Paul Kennedy’s influential book from 1987, The Rise and Fall of the Great Powers, seeks generalizations about what causes the rise and decline of great powers, be they empires or nation-states.
Kennedy avoids the temptation to extract grand theories from history, quietly mocking Wallersteins’s “world systems” and related analyses. In this he follows fellow historian Fernand Braudel, who also hesitated to draw overarching theories from the messy history of capitalism.
Kennedy proposes one mechanism that he claims does hold true over time: it’s not the absolute wealth and power of any one nation or empire that matters, it’s the economic growth rate of competitors and its wealth and power relative to theirs that matter. A nation whose economic base is growing at a lower rate than a competitor slowly become relatively weaker than its rival, even though its absolute wealth is still increasing.
He also notes a tendency for powers in relative decline (i.e. those growing less robustly than their neighbors/rivals) to spend more on military security as their position in the pecking order weakens. This diversion of national surplus to military spending further saps their economic vitality as funds are shifted from investment to unproductive military spending. This creates a feedback loop as lower investment weakens their economic base which then causes the leadership to respond to this weakening power with more military spending.
This feedback creates lags, where an economically weakening power may actually increase its military power, until the overtaxed economy implodes under the weight of the high military spending.
This dynamic certainly seems visible in the history of the Soviet Union, which at the time of this book’s publication in 1987 was unanimously considered an enduring superpower with a military that many believed could conquer Western Europe with its conventional forces.
This debate over the relative superiority of Soviet arms now seems quaint in the light of the collapse of the USSR a mere four years later, but it worth recalling that one of the most influential defense-doctrine books of the early 1980s was The The Third World War: August 1985 a novel by Sir John Hackett, about a fictional Soviet attack on Western Europe in 1985.
It was widely recognized by the late 1980s that the Soviets’ relative power was in decline compared to the U.S., as the U.S. had worked its way through the malaise and restructuring of the 1970s and re-entered an era of strong economic and technological growth in the 1980s, rapidly outpacing the sclerotic Soviet economy.
It’s also worth recalling the truly dismal status of the Soviet and Eastern Bloc economies compared to the Western economies: common inexpensive consumer items such as kitchen toasters were rare luxuries. In other words, while the Soviet economy was probably still expanding in the 1980s, the rate and quality of its expansion was considerably less than the growth of the West.
If one economy grows by 1% a year and another grows by 5% a year, in a mere decade the faster-growth economy will have expanded by more than 62%, while its slower-growing rival’s economy grew only 10.5%.
Many observers (especially on the Left, where suspicion of military spending is never far below the surface) see the U.S. as following this same path to decline and fall, as post-9/11 defense spending has skyrocketed while growth has stagnated. Despite what I see as wasteful spending on overlapping intelligence agencies and insanely costly programs like the F-35 fighter, U.S. defense spending remains around 5% of GDP (Pentagon/National Security budget is around $690 billion, GDP is around $15 trillion).
Though statistics from the Soviet era are not entirely reliable, various scholars have estimated that fully 40% of the Soviet GDP was being expended on its military and military-industrial complex.
During the height of the Reagan buildup, the U.S. was spending about 6% of its GDP on direct military expenditures. If you include the Security State (CIA, NSA, et al.), the Veterans Administration and other military-related programs (DARPA, etc.), the cost was still less than 10% of GDP.
How about America’s position relative to other Great Powers or alliances? Interestingly, America’s decline has been noted (and predicted) since the 1970s. Other nations such as Japan were growing much faster and were expected to overtake the U.S., based on the extrapolation of high growth rates into the future.
Once again the same predictions are being made, only this time it is China that is logging high annual growth rates that are being projected far into the future. The more things change, the more they remain the same.
Kennedy ends his book with a brief chapter looking ahead from 1987. He is careful not to make any outright predictions, but it is fair to say that he completely missed the bursting of Japan’s miraculous high growth economy and the implosion of the Soviet Union a mere four years later in 1991. With the benefit of hindsight, we can discern the dynamics that led to these abrupt declines of relative power. But at the time, Japan’s economy was universally regarded as superior to the U.S. economy and the USSR was widely viewed as a permanent superpower rival to the U.S.
How can we be so wrong about projecting present trends when we have so much data at our disposal? Why can’t we identify the trends that end up mattering? Reading political-economic history books written a few decades ago reinforces our humility: we cannot predict the future, except to say that projecting present trends leads to false predictions.
Virtually no one in 1987 foresaw the limited Internet of the time exploding into a globally dominant technology, yet a mere decade later the web browser, cheaper memory, faster processors and broadband cable and DSL launched a digital revolution.
In 1987, pundits were predicting that Japan’s “5th generation” computing would soon dominate what was left of America’s technological edge. They were spectacularly wrong, as the 5th generation fizzled and Japan became an also-ran in web technology, a position it still holds despite its many global electronic corporations and vast university research system.
Japan’s modern economy was set up in the late 1940s and early 1950s to exploit the world of that time. Sixty years later, Japan is still a wealthy nation, but its relative wealth and power have declined for 20 years, as its political-financial power structure clings to a model that worked splendidly for 40 years but has not worked effectively for 20 years.
The decline is not just the result of debt and political sclerosis; Japan’s vaunted electronics industry has been superseded by rivals in the U.S. and Korea. It is astonishing that there are virtually no Japanese brand smart phones with global sales, and only marginal Japanese-brand sales in the PC/notebook/tablet markets.
The key dynamic here is once the low-hanging fruit have all been plucked, it becomes much more difficult to achieve high growth rates. That cycle is speeding up, it seems; western nations took 100 years to rapidly industrialize and then slip into failed models of stagnation; Japan took only 40 years to cycle through to stagnation, and now China has picked the low-hanging fruit and reverted to financialization, diminishing returns and rapidly rising debt after a mere 30 years of rapid growth.
There is certainly evidence that China’s leadership knows deep reform is necessary but the incentives to take that risk are low. Perhaps that is a key dynamic in this cycle of rapid growth leading to stagnation: the leadership, like everyone else, cannot quite believe the model no longer works. There are huge risks to reform, while staying the course seems to offer the hope of a renewal of past growth rates. But alas, the low hanging fruit have all been picked long ago, and as a result the leadership pursues the apparently lower-risk strategy that I call “doing more of what has failed spectacularly.”
Though none of the historians listed above mention it, there is another dangerous dynamic in any systemic reform: the very attempt to reform an unstable, diminishing-return system often precipitates its collapse. The leadership recognizes the need for systemic reform, but changing anything causes the house of cards to collapse in a heap. This seems to describe the endgame in the USSR, where Gorbachev’s relatively modest reforms unraveled the entire empire.
Director Michael Apted has been filming a remarkable series of documentaries following the lives of 14 English people since the age of 7: The Up Series (Wikipedia) is a series of documentary films produced by Granada Television that have followed the lives of fourteen British children since 1964.(The titles: 7 Up, 14 Up, and so on, the latest being 56 Up.) The Up Series, eight films (Seven Up – 56 Up)
We expect those children with few advantages in life (i.e. lower-class) to do less well than those with many advantages, and this linear expectation is fulfilled in some cases. (This is the expectation of the working-class children themselves.)
But in most cases, the individuals’ lives are entirely non-linear: some decades they do less well, in others they do much better, and the dynamics that arise and dominate each stretch of their lives are not very predictable.
This series reinforces our humility about predicting the life paths of individuals.
So is there a unifying theme here? I would say yes, and it is embodied in this quote from Charles Darwin, co-founder of our understanding of natural selection and evolution: “It is not the strongest of the species that survives, nor the most intelligent, but the ones most adaptable to change.”
10 Comments on "The Rise And Fall Of Great Powers"
Arthur on Sun, 30th Jun 2013 12:19 pm
“some great powers will collapse, others will remake themselves and others will gain ascendancy.”
Although some great powers may collapse faster than others, the idea of ‘Great Power’ itself will be flawed in a shared future of steep decline. Ascendancy is a joke, the challenge will be to keep the joint together in the face of universal centrifugal tendencies. The only ascendancy that can be expected in the future is the rise of the local warlord, challenging the center.
“Director Michael Apted has been filming a remarkable series of documentaries following the lives of 14 English people since the age of 7: The Up Series (Wikipedia) is a series of documentary films produced by Granada Television that have followed the lives of fourteen British children since 1964.(The titles: 7 Up, 14 Up, and so on, the latest being 56 Up.) ”
A little off-topic, but this was one of the most remarkeble documentaries I have ever seen. A valuable lesson for life from that series was that you always need to pay carefull attention to what people are saying if you want to predict their future. The image that remained from that program was that in hindsight the vast majority of the children were living a perfect continuity through 7-14-21-28 years old. They verbally professed themselves accurately. Characters do not change. Very impressive program, recommended.
Arthur on Sun, 30th Jun 2013 1:04 pm
Never could stop being fascinated about predicting the future (probably missed a calling in becoming an astrologer rather than a techie).
Read Andrei Amalrik, “Will the Soviet Union Survive Until 1984?” (1970) in the mid seventees. He was wrong seven years.
Have read Peter Bender, – “Das Ende des ideologischen Zeitalters. Die Europäisierung Europas (1981)”, as a student in 1982. He predicted the rollback of the USSR from Eastern Europe, without a time frame, and political integration of Europe, 8-12 years before the fact (EU 1993).
Remember the electrifying moment (1997) of discovery of Samuel Huntington’s “Kampf der Kulturen” in a Munich bookshop. Spent three hours reading the book in the bookshop before taking it home. He is correct in identifying “culture/tradition” as the defining issue of future politics, but he is wrong in believing that the West will hold and overestimating the cultural distance between Europe and Russia. In the last years of his life he realized his mistake and wrote “Who we are”, as a warning that the WASP-US could disintegrate as a consequence of mass immigration. What Huntington also missed entirely is that the resource depletion situation entirely plays into the hand of his theory. End of oil means end of growth means end of 20th centuries leftist progressive globalist politics, causing everybody to return to his roots. Socialist Baath in the ME has to make room for the Muslim Brotherhood. In the Europe the rise of deeply anti-Islamic rightwing parties. In Russia socialism is replaced by traditional Russian semi-autocratic Orthodox Christianity. Could happen in western Europe as well: return to fundamentalist archaic Catholicism and ethnocentrism and nationalism.
Have read Buchanan’s “Death of the West” and “Suicide of a Superpower”, where he pulls a US Amalrik by predicting that 2025 could spell the end of the US. Paul Craig Roberts btw does the same as he says that by 2024 the US will be a “third world country”.
From the above I arrive at the following expectations:
– balkanisation of the US, initiated by a financial collapse, followed by ethnic clashes leading to secesion from Washington
– replacement of the EU with a looser ‘Europe of the Fatherlands’, including Russia (Paul Craig Roberts last week started to advocate this, article: “A New Beginning Without Washington’s Sanctimonious Mask”); the prominent jewish-american sociologist Wallerstein, mentioned in the article above, see a Paris-Berlin-Moscow axis as ‘inevitable’:
http://www.iwallerstein.com/parisberlinmoscow-axis/
BillT on Sun, 30th Jun 2013 4:00 pm
While I agree that Russia will be the next power over Europe, possibly sharing it with China, I don’t see it as much of an ‘Axis’. France is broke, Berlin is going to crash under the drain of it’s resources south and it’s bank collapse when the US goers down. The UK is already toast.
Arthur on Sun, 30th Jun 2013 4:58 pm
“France is broke”
What does that mean, ‘broke’?
Is it going to default? Is France going to evaporate? Fall over? Implode? Going to be occupied by Kozaks, Natzis?
State debt 93%
Current fiscal deficit: nearly 4%
Solution: deep cuts, like everywhere else, but France will not seize to exist.
“Russia will be the next power over Europe”
Sure. EU economy 8 times Russia. Russia has 10-20 years fossil and then it is game over and Russia will have to concentrate again on the icon, kaviar and matroshka business.
Russia is not going to take over Europe or the other way around. Been there, done that. Russia is in reality afraid it might lose 10m Siberia to 1300m China, that is a far more realistic prospect. Hence the logic of the coming axis, with Germany at the technological and economic core.
GregT on Sun, 30th Jun 2013 5:04 pm
Growth, growth, growth. Mentioned in this article 16 times by my count.
When will these economists finally figure out that infinite exponential growth is an impossibility in a finite environment?
BillT on Mon, 1st Jul 2013 4:16 am
Russia does not need the economy, Arthur, it already has a chain around the neck of Europe. So, next winter, say January, it cuts off all natural gas. Then it makes it’s demands. That is the reason Russia is going to interfere in the Syria event. They want to prevent a pipeline to Europe, that would cut into their power.
Europe has nothing left to fight with. No military that can defeat Russia. No Resources to even build one without outside help. And a Citizenry that is falling into the 3rd world and will soon rebel all over Europe and not support another ‘war’.
The US? Nope! Broke and burning up the printing presses trying to ignite inflation in a deflating world. They have their own problems and if they do get into it, Europe will be radioactive rubble when it is over.
If I am wrong, then so be it, but that is what I see at this point in time.
Arthur on Mon, 1st Jul 2013 6:11 am
“Russia does not need the economy, Arthur, it already has a chain around the neck of Europe. So, next winter, say January, it cuts off all natural gas. Then it makes it’s demands.”
Lol. So Russia is building one pipeline after the other to Europe… In order to close them down?! Rofl. Russia is in no position to take on the US and EU. Russia is pushed in the corner by the US and hence has an unnatural marriage of inconvenience with China that will break apart at the first opportunity.
Russia is getting the highest prices for its fossil fuel from Europe. It is the largest source of income for Russia, so why on earth would Russia put a chain around Europes neck, other than in a situation of desperation? That would only happen in case Europe would side with the US in a frontal attack against Russia, but that is not In the cards. The Iraq drama has shown the opposite: France/Germany siding with Russia, not with the US. And in the unlikely case that the US will attack Iran, Europe will stay neutral again. The developing situation between Europe and Russia is one of growing interdependance, exactly as Wallerstein describes, a marriage. Euro-Siberia is one of the next great geopolitical developments, after the Islamic Spring.
DC on Mon, 1st Jul 2013 8:18 am
What a weak hypothesis, that ‘great powers’, never truly decline, but rather, its rivals that ‘catch up’.
What nonsense. Ive this line of foolishness out of amerikans before. They will insist amerika is not declining, not really, but that its rivals’ are catching up. Amerikans using this line will always drop WWII in the mix, as if WWII happened 10 years ago, and everyone is just now starting to rebuild. Empires can and do, often fall, even when no significant external ‘rival’ exists. The Roman empire more or less dissolved, and was overrun by xtian barbarians that on there own, were not that powerful. Many empires have fallen due to environmental and resource constraints, central America is a good example. Unsustainable empires can simply collapse, or come apart though civil wars, where no outside power exists or is simply insignificant.
In fact, this fellow seems blissfully unaware that the US is spending a great deal of its remaining capital simply to prevent others from gaining any of power on the world stage. The US is spending nothing to make things better in the ‘homeland’, but rather is spending all its ill-gotten ‘wealth’ to oppress its own people and cause as much death and destruction as they can. All with the single goal of preventing other nations from doing business as they see fit.
J-Gav on Mon, 1st Jul 2013 8:48 am
It’s hard to map what’s going to happen in terms of Great Power shifts, though Germany and Russia getting cozier seems almost a given. Not sure France will be part of any such ‘axis.’
Two things stand out for me: 1 – Pipelinistan (Pepe Escobar’s term) will continue to play an important role and 2 – As mentioned in some comments here concerning potential candidates to “take over” from the U.S. as hegemon, they all have their own major issues to confront (pollution, economic blow-out etc) and I see no clear ‘winner’ emerging. Mostly ‘losers’ no matter how things play out …
Arthur on Mon, 1st Jul 2013 9:09 am
“Not sure France will be part of any such ‘axis.’”
That is indeed the most troublesome part of the equation:
http://lewrockwell.com/margolis/margolis347.html
De Gaulle was in Europe the most prominent advocate of this axis, but he is long gone, although Gaullism, until Sarkozy the zionist and hence Atlanticist, remained the most prominent French political reflex. Marine le Pen also has revealed that she favours a better relationship between Paris and Moscow, but she seems to want to blow up Europe, an almost inescapable consequence of too much nationalism. The rise of China and Russian resources would dictate the logic of a Paris-Berlin-Moscow axis. That is why it is so important that Berlin allows Paris to punch above it’s real economic weight and accept Paris as it’s political equal. Something better will France alone never achieve and Berlin-Paris is what keeps the EU-project going.