After Hegemony, I
On infrastructure and architecture
American hegemony has ended.1 How should we assimilate that?
One recourse would be to lapse into fatalism—acceptance of destructive economic conflict as a result of political fragmentation. Although this is a logically tenable position for those who believe in the theory of hegemonic stability, even its most powerful theoretical advocate shies away from its bleak normative implications (Gilpin, 1981).
That’s Keohane, After Hegemony, pg 50. I’ll not “shy away from bleak normative implications”, don’t worry. And I’ll have more to say about the likelihood of “destructive economic conflict as a result of political fragmentation” soon. In fact there will be a series of posts on fragmentation and how we can measure it.
Yet, like Keohane in the next line, “A fatalistic view is not taken here.” We have work to do, but there’s a viable project if we are willing to confront the world we’re gaping at.
People want projects. Yet I seldom see discussion of international, multilateral projects discussed in my feeds. Why not? We have all these institutions, we have all these agreements, are they not good for anything without hegemonic support?
We’ve got all this “regime” infrastructure, a thickly interconnected system of institutions and adjudication mechanisms at all levels. There’s an architecture to world politics… how can we use it? We didn’t have all this stuff in the 1930s, shouldn’t that matter?
Let’s think through it, and assume that many states want to maintain cooperation with each other even if the US does not participate. Is it possible? What effect would it have?
Keohane goes on:
Cooperation is possible after hegemony not only because shared interests can lead to the creation of regimes, but also because the conditions for maintaining existing international regimes are less demanding than those required for creating them.
In other words, international organizations might be hard to birth but they’re also hard to kill. Those words were published in 1984. The observable persistence of many “regimes” (agreements, norms, arrangements between countries) is evidence that he is right?
Kinda. According to Mette Eilstrup-Sangiovanni, international organizations die fairly regularly. But they are formed even more regularly, so the population has grown in the post-WWII era:
According to Eilstrup-Sangiovanni, the IGOs that die tend to have smaller and more homogenous membership (think of Cold War IGOs “dying” as post-Communist countries left them) than those that survived (e.g., the World Bank, or United Nations).
The post-WWII trend of IGO growth did not persist far into the 2000s. The number of IGOs is similar today to what it was in 1984. In my opinion that was a leading indicator for “our present moment”: institutional stagnation, expressing an increasing unwillingness to locate shared interests and pursue them. We need some institutional innovation, some new IGOs. Big ones. I have some ideas to explore later.
For now, let’s emphasize that IGOs aren’t the only “international regimes” Keohane described. There are bits of infrastructure laying around all over the place: climate agreements, tax treaties, defense cooperation agreements, investment dispute mechanisms, diplomacy networks, central banking swap lines and currency pegs, you name it. Look at the explosion in preferential trade agreements alone, remembering that each agreement has multiple parties to it (via):
In 1984 there were hardly any of these, this is primarily a post-Cold War regime. Within this regime, almost every country is connected to every other country through a PTA, if only indirectly. The global economy contains many more pathways now than it ever has, something that was encouraged by previous iterations of the American hegemonic project. The US has structural power, but other states (and markets) have infrastructural power.
It is already clear that 47’s attempt at trade “liberation” via tribute payments has failed miserably. The full reckoning with this fact will take a long time and will likely involve much pain. But what is less discussed is why it failed so immediately. One potential answer is that the regime of PTAs described above protected enough of the key members within it that the “divide-and-conquer” approach 47 pursued simply wasn’t feasible. The dominos were too tightly connected, they held each other up instead of falling over in sequence.
In 1984, roughly when Trump’s ideas about trade policy seem to have been formed? It might’ve worked. The international trade regime then was dominated by the GATT/WTO process. But not now, the regime is too complex. You can’t conquer if you can’t divide.2
Below is the global distribution of PTAs, per DESTA.3 The US does not rank in the top-20, it has fewer PTAs (22) than Cuba (27). That is half as many PTA partners as Mexico — which is deeply embedded in global manufacturing supply chains, giving Dr. Claudia Sheinbaum leverage with which to be patient — and about 20% as many as the European Union (which is, in and of itself, a giant free trade zone).
The US is simply not as connected as the primary countries it attacked.4 They have other options, so long as the PTA regime holds together. It might even be harder for them to acquiesce to the US, if doing so would betray not just one of their partners but dozens of them. The existence of a regime complex complicates even negotiations that are intended to be bilateral, because there is a thick multinational structural context within which those negotiations are taking place.
Not just thick, but thickening. DESTA also measures the “depth” of PTAs, i.e. how extensive they regulate the economies of the signatories to those agreements. That has also increased… the trade system is more regulated now than ever in both quantity and quality.
International regimes like the PTA thicket create mechanisms to resist 47’s imperialism even if they weren’t originally designed for that purpose (weaponized interdependence, from a different vantage point). But once upon a time they were designed for that purpose:
The 19th century saw feudal ideas being opposed and, with the rise of a national spirit, nationalities asserting themselves. Our [20th] century, that has witnessed the catastrophes resulting in the unending clash of nationalities and nationalisms, must attempt and succeed in reconciling nations in a supranational association. This would safeguard the diversities and aspirations of each nation while coordinating them in the same manner as the regions are coordinated within the unity of the nation.
The world capitalist system has outgrown American hegemony, like ivy overwhelming a wall, one tendril at a time. Like paper smothering rock in a children’s game. Not through a high-stakes, edge-of-the-cliff power transition, like many expected, but through the proliferation of technology and the emergence of an institutional thicket created to manage it.
Infrastructure has to be used, it doesn’t generate activity by itself. Bridges have to be crossed, maybe expanded for wider loads, maybe buttressed for heavier use. Is there an appetite for this? The recent conclusion of EU-Mercosur trade negotiations — after 20 years — provides one indication that there is. Another is the election of Mark Carney, largely on the basis of his experience as an international coordinator during crisis episodes and on a campaign of global open trade leadership. Yet another is the re-election of Anthony Albanase, who negotiated tariff reductions and increased market access with China while also improving economic relations with Europe.
I will not shy away from bleak implications. The US’s structural power is significant. The chaos factor is not trivial. Crossing some of these bridges will burn others, there will be a price.
For that price we get a ticket to the future, and if we get this right it can be a future less bound by power. New forms of cooperation will produce new forms of inequality, but they might be less egregious than the ones that came before it. There is an opportunity to build off of the existing patterns of complex interdependence to create a system of great polycentricity; which is to say, a system more robust to power.
We have the infrastructure, a lot of it anyway. Let’s use it.
I am aware that this is a contentious claim.
Which brings us back to the question of fragmentation. Stay tuned.
https://www.designoftradeagreements.org/visuals/. If you click thru the map is interactive.
Here we see why Brexit was so harmful: it left the most central position in the trade network. That is also why it is scrambling to add more PTAs, both with the EU and with its former colonies (one announced with India, and a concept of a plan with the US… a cunning plan).