Yet the break-up of a few big stars may not matter if the galaxy as a whole is thriving. According to one argument, the process of political fragmentation has as its corollary the growth of supra-national organizations. Economic globalization, so the theory runs, is being accompanied by political globalization.
Certainly, the growth of supra-national trading blocs like the European Union and the North American Free Trade Area, and the increasing influence of the World Trade Organisation (formerly the General Agreement on Tariffs and Trade) mean that more small countries are economically viable than was the case in the era of protectionist national trade policies. There is, in other words, an inverse relationship between global trade liberalization and the size of countries.39 At the same time, the International Monetary Fund and the International Bank for Reconstruction and Development (or World Bank) have acted as sources of capital for new states; for all their defects,40 they have been far more successful than their predecessor, the Bank of International Settlements.41 And these are only the best-known organizations: between 1952 and 1984 the number of intergovernmental organizations in the world rose from 123 to 365.42 Nor should we overlook the growing importance of international non-governmental organizations. According to the Yearbook of International Organisations, there were 6,000 of these in 1990; now there are around 26,000. Membership of the Worldwide Fund for Nature has increased tenfold since the mid-1980s to 5 million; while Greenpeace has 2.5 million members and Amnesty International 1 million members. If critics see these as the missionary societies of a new Western imperialism, others hail them as the foundations of an international civil society.43
In addition to delegating aspects of economic and social policy to such organizations, small states can also seek to enhance their own security by adhering to existing military alliances: the rush by East European states to join NATO in the 1990s provides an obvious illustration. Indeed, it could be argued that the more power accrues to international organizations, the more illusory the sovereignty of the small states becomes. The more utopian internationalists – and the more paranoid of conspiracy-theorists – look forward, with respectively eagerness and dread, to an era of world government under the auspices of the United Nations, which will extend its original remit to include the defence of human rights, regardless of national sovereignty. In this vision, the remaining multi-ethnic states will eventually dissolve into autonomous regions, until every ethnic group, from the East Timorese to the English themselves, is left in possession of its own more or less impotent statelet.
There is, however, a difficulty with this scenario; and that is the fundamental weakness of most supra-national organizations. In financial terms, these behemoths – including the biggest of all, the United Nations – are midgets. The total operating expenses of the UN, the World Bank, the IMF and all UN programmes and agencies amounted to $18.2 billion a year in 1999.44 The US federal budget was approximately a hundred times larger. The same kind of calculation should be borne in mind when the idea is floated that the European Union could become a federal ‘super-state’. The EU’s total expenditure in 1999 was little more than 1 per cent of EU GDP; expenditure by national governments accounted for around 48 per cent.45 Global purchasing power remains concentrated in the rich nation-states, a fact symbolized by the $1.7 billion owed by the United States to the United Nations. Even the international NGOs are more powerful than their governmental counterparts. The World Trade Organisation’s annual budget is £43 million, less than a quarter of the Worldwide Fund for Nature’s and half that of Oxfam.
This helps to explain the very patchy record of the United Nations as a global policeman. The UN is usually compared favourably with its predecessor, the League of Nations. But the League also had some successes, and faced bigger problems. Of sixty-six international disputes it had to deal with (four of which had led to open hostilities), it successfully resolved thirty-five and quite reasonably passed twenty to the channels of traditional diplomacy. It failed to resolve just eleven conflicts – unfortunately, the most serious ones.46 The UN’s record is not much better; it only looks better because it has never faced threats to compare with 1930s Germany, Italy and Japan. For most of the Cold War, the UN Security Council was deadlocked, and achieved little more than a series of truce-maintaining interventions in minor civil wars and border disputes. Only in the exceptional circumstances of 1991, with the Soviet Union in its death throes, was it possible to overturn Saddam Hussein’s annexation of Kuwait on the basis of an unequivocal UN mandate. Since then its record has been dismal. Between 1992 and 1999 the Security Council authorized a series of humanitarian interventions in Somalia, Bosnia, Rwanda, Haiti, Cambodia, Albania and East Timor. The last of these operations was successful; but the majority of these operations were at best ineffective, and at worst disastrous. The fiasco of the US Rangers’ mission to Mogadishu in 1993; the abject failure of the Security Council to reinforce the French contingent in Rwanda in 1994; the Dutch impotence and possible complicity in the massacre at Srebrenica in 1995 – these episodes cast grave doubt on the ability of the UN to react rapidly and effectively enough to crises.47
Nothing illustrates more clearly the limits of the power of supra-national institutions than the events of 1999, when ethnic cleansing was once again unleashed by a government – that of the rump Yugoslavia – against a minority, the Albanians of Kosovo. Because Kosovo was and remains an integral province of Serbia, the Yugoslav government was legally protected from external intervention by Article 2(4) of the UN Charter, which states that ‘all Members shall refrain … from the threat or use of force against the territorial integrity or political independence of any State’; and Article 2(7) which prohibits intervention ‘in matters which are essentially within the domestic jurisdiction of any state’. It was also covered by the General Assembly’s 1970 Declaration on Principles of International Law, which denies members ‘the right to intervene, directly or indirectly, for any reason whatever, in the internal affairs of any other state’. Under the UN Charter, force may be used only in self-defence or with the explicit authorization of the Security Council in response to an act of aggression (Article 51 and Chapter III).48 No such authorization could be obtained because of Russian opposition on the Security Council – the old story.
Only by ignoring the UN Charter (or, in the words of Tony Blair, ‘qualifying … the principle of non-interference … in important respects’) could the military intervention by NATO on behalf of the Albanians of Kosovo be justified. In this respect, Kosovo forms part of a pattern. Massive human rights violations were stopped when India intervened in Pakistan in 1971, when Vietnam invaded Cambodia in 1978 and when Tanzania invaded Uganda in 1979. Not one of these operations was authorized by the UN. The intervention of the Economic Community of West African States in Liberia in 1990 was only retrospectively authorized by the UN. The decision by the United States, Britain and France to establish a ‘safe haven’ for the Kurds of Northern Iraq was not authorized at all.49
The prevention of mass expulsions and massacres of minority populations is without doubt a good thing. Unfortunately, as long as there is cross-border migration, and as long as there are ethnic differentials in economic performance, it is a phenomenon likely to go on repeating itself, no matter how often the map of the world is redrawn; no matter how many times the story of Tschernowitz is re-enacted. But history suggests that there is little point expecting the United Nations to prevent ethnic cleansing. Not only does it lack the right to do so; it lacks the means. The question is whether the United States and her allies are willing to devote sufficient resources to defend minority rights effectively. As we shall see in the final chapter, there is reason to doubt it.
14
Understretch: The Limits of Economic Power
Go, bind your sons to exile
To serve your captives’ need;
To wait in heavy harness
On fluttered folk and wild …
KIPLING1
Why is the Unite
d States so powerful? Why is the United States not more powerful?
Many commentators would answer the first question with a single word: economics. There is, Paul Kennedy argued in his influential Rise and Fall of the Great Powers, ‘a very significant correlation over the longer term between productive and revenue-raising capacities on the one hand and military strength on the other’. To be sure, Kennedy warned against ‘the trap of crude economic determinism’, and acknowledged ‘geography, military organisation, national morale, the alliance system … individual folly … and extremely high battlefield competence’ as factors that can influence military outcomes too. But he nevertheless insisted on ‘a very strong correlation between the eventual outcome of the major coalition wars for European or global mastery, and the amount of productive resources mobilized by each side … victory has repeatedly gone to the side with the more flourishing productive base’:2
The fact remains that all of the major shifts in the world’s military-power balance have followed alterations in the productive balances; and further, that the rising and falling of the various empires and states in the international system has [sic] been confirmed by the outcomes of the major Great Power wars, where victory has always gone to the side with the greatest material resources.3
Thus the rise of Habsburg Spain, the Dutch Republic, the British Empire, Russia and, finally, the United States had their roots in the realm of economic history; as did the failure of Germany and Japan to achieve the global power to which they aspired in the 1930s and 1940s.
However, Kennedy argued, the decline of great powers can also be understood in economic terms:
Wealth is usually needed to underpin military power, and military power is usually needed to acquire and protect wealth. If, however, too large a proportion of the state’s resources is diverted from wealth creation and allocated instead to military purposes, then that is likely to lead to a weakening of national power over the longer term. In the same way, if a state overextends itself strategically … it runs the risk that the potential benefits from external expansion may be outweighed by the great expense of it all. Great powers in relative decline instinctively respond by spending more on ‘security’, and thereby divert potential resources from ‘investment’ and compound their long-term dilemma.4
The point was that if a power became strategically overextended, the costs of defending its empire would ‘leave less room for “productive investment”’, leading to a ‘slowing down’ of economic output which could only have ‘dire implications for [its] long-term capacity to maintain both its citizens’ consumption demands and its international position’.5 It was ‘increasingly difficult’, according to Kennedy, ‘to argue against the proposition that excessive arms spending will hurt economic growth’:
There looms today a tension between a nation’s … search for strategic security … and … its search for economic security, which depends upon growth (which in turn flows from new methods of production and wealth creation), upon in creased output, and upon flourishing internal and external demand - all of which may be damaged by excessive spending upon armaments…. A top-heavy military establishment may slow down the rate of economic growth and lead to a decline in the nation’s share of world manufacturing output, and therefore wealth, and therefore power.6
Kennedy left his readers in no doubt that this general proposition had specific relevance to the United States, which he claimed already ran ‘the risk … of what might roughly be called “imperial overstretch”’. The US, he noted, spent too much on military research and development compared with Germany and Japan, which were able to concentrate on more productive civilian R&D.7 The implication was clear: that Germany and Japan, relatively unburdened by military commitments, would sooner or later outstrip America economically; after which a shift in the balance of economic power would be more or less inevitable. ‘In the largest sense of all,’ he concluded, ‘the only answer to the question increasingly debated by the public of whether the United States can preserve its existing position is “no”.’8
This argument owed a substantial debt to the British experience of imperial ‘overstretch’ and economic decline from the late nineteenth century onwards. Kennedy himself pointedly remarked that ‘maps of “Major US Military Deployment Around the World” [in the 1980s]… look[ed] extraordinarily similar to the chain of fleet bases and garrisons possessed by that former world power, Great Britain, at the height of its strategic overstretch.’9 His words of warning to the United States were therefore a conscious echo of those Victorian and Edwardian critics of British imperialism, who insisted that the cost of maintaining naval bases, colonial armies and subsidized governments across a vast proportion of the globe was higher than any economic benefits could justify. The same point has been made with the benefit of hindsight by a number of economic historians, who argue that Britain could have enjoyed the advantages of free trade without the expense of formal empire; and, more importantly, that the money that taxpayers would have saved as a result of an Edwardian decolonization could have been spent on electricity, cars and consumer durables, thus encouraging industrial modernization at home.10
Kennedy’s is only one of a number of economic theories of power. In his Rise and Decline of Nations (1982), Mancur Olson suggested that strength or weakness might have more to do with the internal structure of a country’s political economy than its external commitments. It was the growth of ‘parochial’ cartels and special-interest lobbies that tended to undermine the vitality of an economy: hence the relative success of post-war Germany and Japan, whose various vested interests had been smashed by the experience of dictatorship, total war and defeat, compared with Britain’s decline into the stagflation of the 1970s.11 One somewhat counter-intuitive inference from this is that occasional military defeat may be economically preferable to consistent victory. Certainly, Olson’s policy prescriptions – the ‘repeal [of] all special-interest legislation or regulation and … [the application] of rigorous anti-trust laws to every type of cartel or collusion that uses its power to obtain prices or wages above competitive levels’ – are more likely to be achieved by an army of occupation than the normal democratic process.12
What is not clear from such economic theories of power is how far the rise and fall of states are due to a self-equilibriating or cyclical mechanism, with prosperity leading to power, and then overstretch or internal sclerosis leading inexorably to decline. In the ambitious models of Modelski and Wallerstein, the cycles of global hegemony have a strongly deterministic character. According to the former, there have been five cycles of ‘relative naval power’ since 1500 – the Portuguese, the Dutch, two British and the American – and in each there have been four phases: ‘global war’, ‘world power’, ‘delegitimation’ and ‘deconcentration’. In Wallerstein’s model, which takes a Marxist view of capitalist development, there have been four cycles since 1450 – the Habsburg, the Dutch, the British and the American – and again, within each of these, four phases: ‘ascending hegemony’, ‘hegemonic victory’, ‘hegemonic maturity’ and ‘declining hegemony’.13 However, Kennedy’s argument (like Olson’s) seems to have a policy implication: namely, that governments should try to restrain defence spending to avoid economic, and ultimately military, decline.
Kennedy has been much criticized for exaggerating the danger of decline facing the United States in the 1980s. Yet such criticisms overlook the fact that politicians in the US, and indeed throughout the NATO alliance, have apparently heeded this advice. As we saw in Chapter 1, defence spending among the Western powers has sunk to historically low levels in the years since Kennedy published The Great Powers. The 1997 defence expenditure to GDP ratios for the major Western powers – 3.4 per cent for the US, 3 per cent for France, 2.7 per cent for the UK, 2 per cent for Italy and just 1.6 per cent for Germany – were the lowest since the 1920s, and in the French and Italian case since the 1870s. At the same time, the growth rate of the American economy has risen significantly, suggesting that
hopes of a post-Cold War ‘peace dividend’ have been fulfilled. But does that mean that the United States has solved the problem of incipient decline?
The answer to that question depends on three things: the scope of American foreign policy; the scale of foreign opposition to it; and the use America is able to make of her unmatched economic resources. The follow-up question posed here is how far the United States and her allies now run the risk of understretching themselves: spending too little on their military establishments to achieve their foreign policy goals in the face of what are best described as multiple nuisances.
Under President Clinton, the aims of American foreign policy have been extended beyond the defence of allied states – the number of which has increased as a result of NATO enlargement – to include the termination of civil wars in a number of politically sensitive regions, and the occasional use of military force to protect the rights of persecuted minorities in certain countries. Whatever one may think of these objectives, it is worth asking how far recent cuts in Western defence establishments are compatible with their effective realization. The United States, it is suggested here, has no shortage of economic power. But economic power is mere potential if it is not harnessed. That requires not only a readiness to divert resources from civilian consumption to military use – to turn butter into guns, in the old image, or taxes into divisions. It also requires the moral resolve to make the optimal use of military resources to deter or defeat the opponents of US policy. Without legitimacy – in the case of a democracy, public support – the foreign policy of a Goliath can be thwarted by a David, particularly if there is more than one David.
The Cash Nexus: Money and Politics in Modern History, 1700-2000 Page 46