Yale historian Paul Kennedy’s book has been a great success, but unfortunately with the wrong people for the wrong reasons. Attention has focused on his concept of “imperial overstretch” which comes about when economic resources can no longer sustain military commitments. This heralds a state’s fall.
Liberals love this part of Kennedy’s book and have used it to argue that the U.S. must withdraw from the world because it is no longer capable of doing anything else. An excerpt was used in The Atlantic to spearhead another author’s call to bring American troops home from Europe, and the book was cited in the first paragraph of a major Foreign Affairs essay by David Calleo and Leonard Silk advocating major cuts in defense spending.
In reaction, conservatives have attempted to disparage the book. This is a mistake, for like most histories, more people will cite it than read it. It will slip into the public mind as more proof that history is on the side of the left when, in fact, Kennedy is at pains to argue just the opposite.
To understand this, turn to the other half of Kennedy’s thesis—the rise of the Great Western Powers. In 1500, Europe was inferior to Ming China and Ottoman Turkey and even to Mogul India. But China turned inward and stagnated. Kennedy notes that:
According to the Confucian code, warfare itself was a deplorable activity and armed forces were made necessary only by the fear of barbarian attacks or internal revolts. The mandarin’s dislike of the army and the navy was accompanied by suspicion of the trader. The accumulation of private capital . . . offended the elite, scholarly bureaucrats.
Similarly, the economy of Mogul India was retarded by the “systematic plundering of businessmen and entrepreneurs by tax gatherers.”
Turkey declined as well. “The janissaries were slow to modernize themselves” despite losing battles to the newer weapons and tactics of the Europeans. But again the real problem was the failure to keep up with the economic growth of Europe. These empires didn’t experience “imperial overstretch” at the start of this period. They were superior to their enemies. Weakness developed later when new powers could bring more resources to bear on the frontiers than the old powers could muster to resist. This is the real point of Kennedy’s thesis.
Kennedy is primarily a military historian. His subject: how nations mobilize their strength and defeat their enemies. The bulk of the book is spent examining how wars were won in each time period. Kennedy has made the same points before in a series of essays reprinted as The Realities Behind Diplomacy (1981) and Strategy and Diplomacy 1870-1945 (1983) and in his 1976 book, The Rise and Fall of British Naval Mastery. He has merely expanded his field of view to a fuller examination of powers beyond his native England.
The West achieved global dominance because it excelled at both war and economics. European states developed market economies in which “Bankers and arms dealers and artisans were essential, not peripheral, members of society.” They were states within which “merchants and entrepreneurs would not be consistently deterred, obstructed or preyed upon” as in the Oriental empires. Kennedy’s praise for capitalism is matched by his criticism of socialism, which he equates with the plunder of business practiced by earlier despotisms. He brings the point home when of today’s England he writes that its “decline could intensify if a change in government led to large increases in social spending (rather than productive investment), higher taxation levels, a drop in business confidence and a flight from sterling.”
Those on the left who favor isolation and passivity in foreign policy and who want to shift funds from the military and business into the welfare state will find no support in Kennedy. If they continue to cite his book, it must be considered an act of fraud and deception. This should then serve as a reminder that nations need to guard against a decline in willpower as well as in material power.
Kennedy’s capitalism, however, is not the “pure” theory of the classical liberals like Smith and Ricardo but of mercantilists like Hamilton and List. Governments promoted economic growth as part of the “nation-building” that marked the advance from feudalism during the 15th to 17th centuries, a period that “witnessed a centralization of political and military authority . . . accompanied by increased powers and methods of state taxation.”
Governments needed a larger tax base both to consolidate their authority over local barons and to finance the increasing costs of war that followed the “military revolution” wrought by gunpowder. The size of armies multiplied as professional infantry and artillery replaced knights and feudal levies. Royal navies were formed with heavily armed, long-range warships that no non-European power could match. Wars became longer and ranged over larger areas. They became true tests of strength, fought to the point of exhaustion and beyond; World War I was not the first nor the last global war of attrition.
Governments had to adopt “supplyside” policies to stimulate economic growth or fall behind their rivals. “It sounds crudely mercantilistic to express it this way,” writes Kennedy, “but wealth is usually needed to underpin military power, and military power is usually needed to acquire and protect wealth.”
Falling behind in any part of the equation was deadly. Hapsburg Spain had the finest army in Europe, but its economy could not keep up with the wealth of its many rivals. Its core was the Castillian economy, which was “heavily dependent on imports of foreign manufactures and on the services provided by non-Spaniards.” As its own trade and industry lagged behind England and France, it became dependent on a flow of gold and silver from its American colonies, which proved insufficient.
In contrast, the Dutch were once a Great Power but did not possess the manpower or other internal resources needed to defend their position against their larger rivals. This is the perennial problem of small “trading states.” More disastrous was the fate of Poland-Lithuania, which, despite its large territory, was beset by “an aristocratic anarchy that was to make it a byword for political ineptitude.” It vanished from the map.
This interaction between wealth and power intensified with the Industrial Revolution. Control over technology and manufacturing became the essential elements of national power and imperial expansion. By 1900, Europe possessed 62 percent of world manufacturing, with the United States accounting for another 24 percent. In comparison, the Third World had only 11 percent and was overrun.
But the balance of power is never stable. England, once the leader, fell behind in manufacturing during the second half of the 19th century. In 1880, England still led the world in industrial potential but by 1913 had slipped to third place behind the U.S. and Germany. This relative decline has now become an absolute decline in industrial output. In a century, England has moved from its peak as a global superpower to one of the poorest states in Europe. Kennedy has spent most of his career examining this British collapse, and he fears the same ominous fate awaits America. This is what has made his book so popular, but this question must be viewed against his broader historical landscape.
The U.S. share of world GNP declined from 25.9 percent in 1960 to 21.5 percent in 1980. Kennedy believes it will decline further to about 18 percent by the year 2000. More dangerous than the decline in overall GNP is the relative decline of American industry, which is the foundation of the country’s strength. Though U.S. industrial output continues to increase, it now suffers large trade deficits in such strategic fields as machine tools, steel, oil, automobiles, computers, and electronics, indicating that the industrial base is not keeping up with the demand even in peacetime. Indeed, both the USSR and the EEG outproduce the U.S. in basic manufacturing, and Japan is closing the gap. Judging from the past, such shifts “have a decisive impact upon the military/territorial order. This is why the move in the global productive balances toward the “Pacific rim” which has taken place over the past few decades cannot be of interest merely to economists.”
This does not mean that the U.S. is about to drop out of the ranks of the Great Powers. The U.S. has problems, but so does everyone else. Indeed, from Kennedy’s survey of the other power centers, the U.S. has the strongest “natural” position. Western Europe is divided, making it impossible for it to muster its aggregate strength with the kind of coherent strategic vision necessary to act as a Great Power. And in the 1980’s its rate of real economic growth is slower than that of any other power center.
Japan is likely to grow “much richer” in the future, particularly in high technology; but its wealth depends on trade. This makes it vulnerable to external events. Nations in such a position must either seek control over areas crucial to their economy or follow an appeasement policy. Japan has chosen the latter. It is the perfect Cobdenite state incapable of acting as a Great Power.
But there is good news as well, mainly that the Soviets have even greater problems. Their share of world manufacturing is also falling. Furthermore, the coalition it heads is markedly inferior to NATO in economic potential, even if it is currently superior in deployed military strength. Also, Moscow must worry about China and Japan. This means that the odds are against Moscow in any long-term contest during which the West mobilizes its potential strength into actual power. The USSR is a classic example of “imperial overstretch.”
Several things can be done to exploit this. The most obvious is to supply every enemy of the Soviet Empire with the means to resist. Aid to the Afghan rebels has cost the Soviets dearly. There are rebel movements in Africa and Central America where we could do the same.
The Soviets lag in technology and need time to acquire/copy advances made elsewhere. Gorbachev’s desires to “stabilize” the arms race and block new systems like SDI while pursuing internal economic reforms and increased trade make perfect sense as a strategy to maintain Soviet power. Rather than welcome Gorbachev’s program and offer to aid it, every effort should be made to disrupt it. Just because the Soviets have problems does not mean that the U.S. can relax—the USSR “will not take decline gracefully,” and Moscow still has military capabilities that only the U.S. can match.
But a negative policy towards the USSR is not enough. The industrialization of the Third World, particularly China, India, and Brazil, poses new multipolar challenges. The U.S. must adopt policies to expand its own economic base to meet these challenges. In Kennedy’s framework resources can be used for military strength, investment, and consumption (including social spending). Mercantilists place consumption last as a reward for the successful provision of the first two. However, a decadent America has placed consumption first and relegated the other two to picking up the scraps. The only real debate has been over how much consumption will be public as opposed to private. This is a prescription for decline.
Unlike the liberals who rush to quote him, Kennedy cannot find any place from which it would be safe for the U.S. to withdraw. He predicts that threats to American security will increase, particularly south of the border. And to survive in the long run, a state must first survive in the short run.
Instead, he argues for greater help from allies in the Western coalition and notes that in times of decline “patriots call for renewal.” Kennedy is concerned that it seems politically impossible to get U.S. defense spending above 7.5 percent of GNP, a figure slightly higher than the most ambitious effort of President Reagan and $50 billion more than the current budget.
What is needed is better leadership and wiser policies, neither of which can be expected to come from liberals. The lesson of history is that all Great Powers have had problems and faced challenges. Victory goes to those who find the best solutions. If Kennedy appears pessimistic about the ability of the American political system to respond, it is a sentiment with which conservatives can sympathize.
Recovery means reducing consumption (both private and public) or holding it steady, so that resources obtained from the present slow rate of economic growth can be invested back into the system to stimulate faster growth in the future. Taxes on consumption should be substituted for taxes on investment and production. Budgets should be balanced and debts paid down. Curtailing imports to redirect demand back into the domestic economy would be a major boost to industry. Kennedy notes “that Japanese firms have a virtual guaranteed home market” as a base while U.S. firms do not. This must change. A protectionist policy would also encourage foreign firms to locate within the U.S., thereby not only increasing capacity within American territory but also bringing technological advances made elsewhere into the American economy.
The future United States will not have the power to play “world policeman” as it did immediately after World War II. But that was a foolish desire anyway — most of the world is beyond redemption and is best left to stew in its own juices. The U.S. can, however, maintain itself as the strongest of the Great Powers, with a share of world wealth not far removed from England’s at the height of its empire and resting on a more secure base. But this will not happen automatically; it will have to be worked at. America will need all the strength it can muster to defend its national interests in a hostile world. For conflict will mark the 21st century, as it has all the centuries before.
[The Rise and Fall of the Great Powers: Economic Change and Military Conflict from 1500 to 2000, by Paul Kennedy (New York: Random House) $24.95]
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