Book Review:

April 1, 2010

The Rise and Fall of the Great Powers

A Rereading

By Paul Kennedy

Published By: Vintage

On: January 15, 1989

Buy Here $15.0

Reviewed By: Mark Gilbert

Paul Kennedy’s Rise and Decline of the Great Powers was first published in 1988. Unusually for a substantial work of historical argument, it enjoyed widespread critical acclaim and large sales. This was perhaps less for its enormous merits as a work of history than for its willingness, in its concluding eighth chapter, to draw conclusions from historical experience to make predictions. In particular, the book won notoriety for asserting that the U.S., like Britain or Spain before it, was running the risk of what Kennedy called, almost in an aside, “imperial overstretch.” This phrase caught on. However, the almost immediate collapse of the Soviet empire and the failure of Japan after 1989 to maintain its post-war record of rapid growth and to transform its economic prowess into political power seemed to disprove Kennedy’s pessimistic prognosis of relative American strength.

Times change. Kennedy’s diagnosis now seems substantially right. Kennedy saw clearly that the United States, for all the excellence of its scientific know-how, unmatched military and deep capital markets, was being challenged by new rivals with larger savings, more engineers and big ambitions. As a result, the bipolar Cold War world was likely to be replaced by a multi-polar one in which the U.S. was first among equals but not necessarily supreme. It is a prediction that has weathered well.

The idea that America was “overstretched” followed on logically from the book’s overall analysis. In brief, Kennedy argued that empires rose and declined as a result of their ability to stay abreast of economic and technological change to achieve relative prosperity and dynamism. Great Powers became and stayed great if they out-produced rivals by innovating more, organizing themselves better and balancing consumption and investment. They declined if they failed in these tasks (or if their rivals were more successful: mere competence is not always enough). Historically, the testing ground of national greatness has been the capacity to wage war on a large scale. In all the major wars of modern history, the decisive element has invariably been economic might: “victory has always gone to the side with greatest material resources.” Nazi Germany lost to Great Britain, the United States and the Soviet Union not because it had worse soldiers (its battlefield prowess was undeniable), but because Germany was matched for productive power by Great Britain alone. Once the colossal productive resources of the U.S. and the USSR were mobilized against Hitler, even the Wehrmacht could only postpone the inevitable, not overturn the result.

The same inexorable logic was visible during the Cold War, where the limitations of the Soviet command economy fatally weakened its challenge to its more innovative and flexible American rival. As weapons systems became more complex and expensive, and as economic growth became about improving productivity and adding value, rather than just turning out larger mounds of cement or steel, the strain of matching U.S. military strength became too much for the Soviet economy. Kennedy did not date the implosion that would end the Cold War within months of his book’s being published, but he did detail succinctly the structural problems that had left the USSR unable to compete with its great rival by the time Mikhail S. Gorbachev came to power in 1985. With only 12 percent of world output, hopelessly inefficient agriculture, a sprawling bureaucracy and huge areas of backwardness in non-military technology, the USSR was simply fighting a losing battle.

Kennedy’s core argument was that although the U.S. had amassed unprecedented war-making potential during the Cold war, its economic leadership, the crucial foundation for its military dominance, was being eroded. The book’s famous last chapter, “To the Twenty-First Century,” implied that three other “power units” (China, Japan and the European Community) were gaining rapidly in relative economic strength, although all three were problematic challengers for the U.S.’s title.

The EC, Kennedy suggested, clearly had the potential to be a Great Power. It had, in the mid-1980s, 320 million people, an economy as large as the U.S.’s, a highly trained population, a military establishment of no small size, including two countries each armed with an independent force de frappe. The EC’s problem was purely political. It was not unified and did not speak with a common voice in international diplomacy. It was, in short, like the German Federation before Bismarck: a would-be giant lacking cohesion, which is a polite way of saying the will to power. Kennedy was pessimistic about Europe’s ability to find unity. The EC was an “enigma,” he asserted. If the member states of the EC could really act together, they would greatly increase their standing in the world; if they did not, which seemed to Kennedy to be the more likely outcome “given human nature,” Europe was doomed to “relative decline.”

Few people who have studied the history of the European Union (EU) since the 1992 Maastricht Treaty will find Kennedy’s diagnosis anything other than convincing. Despite enlargement to 27 states and the introduction of the Euro, both of which generated loose talk of an emerging European superpower, the EU today is visibly losing momentum. Its leadership structures are contorted and it has still not learned to speak with a single voice in foreign affairs. Its economic performance has been mixed: the best performers in northern Europe are among the most competitive economies in the world; the worst, in the Mediterranean, are stagnant and/or debt-ridden. One has to wonder for how long Denmark and Italy can stay in the same organization. Its military capacity has weakened since the 1980s and, except for a handful of peacekeeping missions, is not used under the EU flag.

According to Kennedy, Japan was akin to the EC. Like the EC it was mighty in economics, puny in politics. Japan had prospered since 1945 behind an American military shield. Tokyo had been able to spend even less on defence than the Europeans and had generally taken a low profile in international affairs: “For the past quarter-century…Japan has been able to enjoy all of the advantages of evolving into a global economic giant, but without any of the political responsibilities and territorial disadvantages that have, historically, followed from such a growth.” But Kennedy argued that such political escapism was unlikely to last. What if a second Korean war broke out? What if an overextended America began withdrawing from the Far East? What if a “declining and nervous” USSR began behaving aggressively? Would Japan be able to find the political will to meet such challenges? Kennedy was doubtful.

This analysis seems even more apposite in the wake of Japan’s lengthy depression in the 1990s, which sent the national debt to astronomic levels, and the series of ineffectual governments that have made little impact on international opinion since the 1980s. Japan has become Asia’s Italy, rather than the would-be Pacific hegemon of East Asia that inspired so many alarmist works in the 1980s.

Above all, Kennedy predicted the rise of China. “Peking” was a “candidate super-power” in its own right. Its 1.3 billion people, rapidly rising GDP, impressive achievements in military technology, stable (albeit oppressive) government and willingness to say “no” to the superpowers all boded well for its future. China had the Great Power mentality. It was “only a matter of time” before China’s sheer size and political will began posing geopolitical problems for the rest of the world: “the more that China pushes forward with its economic expansion in a Colbertian, étatiste fashion, the more the development will have power political implications.” This was a prediction that was by no means as obvious in the 1980s as it seems now. Many scholars doubted that China could transform itself into a largely market economy without political disruption and social breakdown. Kennedy’s confidence in China’s emerging prowess was based upon his conviction that China had got its priorities right. Chinese leaders had made enhancing the military only the fourth of the “four modernizations” after agriculture, industry and science; they were concentrating, in short, on building up their economic power before attempting military adventures. This was just as well since China would remain a poor country even if its economic growth remained high. Its great weakness was that it could easily overstretch itself if it tried to do too much.

This precocious diagnosis of China’s rising power was an impressive intellectual feat. China has surpassed even Kennedy’s expectations and is now the second-largest economy in the world and the world’s largest exporter of merchandise. Its insatiable demand for resources is causing it to expand its influence in the Pacific, in Africa and the Middle East. It has amassed vast reserves of U.S. dollars; dollars that it needs to use or potentially lose as the dollar erodes in value. It is surely only a question of time before its economic clout is turned into greater military power and its financial reserves are switched from T-bonds into other investments.

Recognizing that the U.S.’s decline would not be military, or even economic, but financial and political was a shrewd insight. The sheer size of the U.S. landmass, economy and military meant that it would be first among equals for the foreseeable future; Kennedy did not dispute this: indeed, he stressed the point. But Kennedy was already worried in the mid-1980s about U.S. deindustrialization and its implications for U.S. power and, in effect, doubted that the U.S. could wean itself off over-consumption. By the 1980s, the U.S. was turning itself into
the world’s biggest debtor: it ought to have been, like Britain before it, the biggest creditor. The only, hardly encouraging, precedent that Kennedy could find for such laxness was France before 1870. Kennedy perceptively saw that it would be hard for the U.S. economy to detox from its habits of over-consumption and debt, though he forgivably did not contemplate that the U.S. would spend most of the 1990s and 2000s binging on private and public debt in way that made the Reagan years seem almost lacklustre.

Kennedy is typically cast as a “realist.” Relative power is the key determinant of world politics. Kennedy does believe this, but it is not the whole story. Unlike the many theorists who speak as if nations are entities that reason and act without human interference, Kennedy never forgets that states are led by leaders who make good and bad decisions. His realism is founded upon the historical pessimism of Machiavelli, not the abstractions of IR textbooks. Like Machiavelli, Kennedy regards fragility as the essence of history. Empires rise and fall unpredictably, as social changes and technological advances enable some countries to advance faster than others, and leave other nations floundering. But his argument is not deterministic. We are not wholly in the lap of the gods. Political leaders can make a “friend of fortune,” to use Machiavelli’s famous phrase, by following sound economic policies, living austerely and investing in the military. Statesmen possessed of virtù, who are capable of steering the craft of the state along the “stream of time” without running into a backwater or, worse, heading over the rapids, are indispensable. Leadership is the true wild card: poor helmsmen can drive even the sturdiest craft on to the rocks, though even the most inspiring cannot prevent a craft from being overtaken. Historians may one day conclude that the United States experienced this fate between 2002 and 2012.

Such a picture of the world may seem a bleak one. Is this really how we should be looking at the future? As a Darwinian struggle between states in which only the fittest will thrive, and then only temporarily? What about using power collectively to slow the pace of global warming, or to alleviate world poverty? Should we not be empowering international institutions to ensure greater reliance on legality and to promote mutual trust? The EU’s more vocal supporters make great play of its supposed “normative power” as a transmitter of the values of democracy, human rights, ecological awareness and free trade (except in agricultural products) to neighbouring nations and peoples without these good things. Surely all the great powers should take a leaf from its book?

Perhaps they should, but they probably won’t. That is the explicit message of Paul Kennedy’s book. The future is likely to be like the past. China is rising and threatening the U.S. just as Germany challenged Britain and France superseded Spain; as its economy grows in technological prowess and accumulates greater stocks of dollars its challenge is likely to intensify. How will the U.S. or Japan react if the Chinese state’s financial clout is diverted from keeping yields low on U.S. bonds? What will happen if China imposes client rulers in resource-rich countries in Africa and Latin America? What will happen if Beijing refuses to allow the yuan to float upwards for any length of time? What would be the consequences of a trade war between China and either the EU or the U.S.? Just to state the questions is to grasp how the potential for tension between the U.S. and China exists. Questions of power politics, in short, do matter and will continue to matter. Nor, incidentally, is China the only power capable of being assertive. Russia, Turkey, India, Brazil, and the EU all have the economic power and political ambitions to set their own agenda even when they conflict with those of the United States.

Rereading Kennedy’s book, one realizes that he got far more right than he got wrong. The more gung-ho neoconservatives, with their at times delirious assertions of a U.S. “empire,” were the ones whose world view was erroneous. As Kennedy predicted, the world has become a more complicated place and the U.S.’s dominant position has visibly diminished. It is the inevitable concomitant of being in hock to the rest of the world. Not so long ago, questions such as “If post-withdrawal Iraq collapses into turmoil, what will the U.S. do?” “If North Korea implodes, what will the U.S. do?” “If China and Taiwan get into a shooting war, what will the U.S. do?” would have been answered in military terms. They now emphatically have an economic dimension. Such questions can only be answered by also answering “how big a deficit can Americans stand?” Or, perhaps more accurately, “how big a deficit are foreigners prepared to fund?” Another major international crisis, with Iraq-style costs, would deliver the coup de grace to the U.S.’s credit rating with predictable and dismal effects on the dollar, on relations with trading partners, especially in Europe, and on American public opinion, which would not be willing, or even able, to pay the price of greatness if it meant cuts in Medicare just as the baby-boomers retire.

The overall conclusions derived from rereading Paul Kennedy’s Rise and Decline of the Great Powers induce anxiety. This article has made the argument that Kennedy got the big trends right indeed, more right than he himself dared to speculate. The Soviet Union did succumb to its economic failings, fortunately with a whimper, not a bang; the EU is a flower that faded before it bloomed; China has become a candidate superpower; Japan’s politicians steered along the stream of history with insufficient verve; the U.S. has, as Kennedy predicted, squandered much of the economic and political patrimony that it inherited at the end of the Cold War. There is no world policeman or even a single nation able by moral suasion or economic clout to set the global agenda. This situation, in historical terms, is normal but dangerous. Recognizing that perhaps unpalatable fact is a precondition for resolving the issues of climate change, freer trade and global poverty that world leaders have made their priorities in recent global forums.