The Trajectory of the United States in the World-System: A Quantitative Reflection

 

Christopher Chase-Dunn, Rebecca Giem,

Andrew Jorgenson, Thomas Reifer, John Rogers and Shoon Lio

Department of Sociology and Institute for Research on World-Systems

University of California, Riverside

http//:irows.ucr.edu

IROWS Working Paper # 8

http://irows.ucr.edu/papers/irows8/irows8.htm

University of California, Riverside.

Riverside, CA. 92521

chriscd@mail.ucr.edu

City lights from satellite photographs

Abstract: Revised estimates of world GDP, population and GDP per capita published by Angus Maddison (2001) make possible a quantitative reexamination of the trajectory of the United States in world historical perspective and comparisons between the U.S. economic hegemony of the twentieth century with the Dutch hegemony of the seventeenth century and the British hegemony of the nineteenth century. We also track the trajectories of challengers to reflect on the future of hegemonic rivalry.

To be presented at the XV ISA World Congress of Sociology, Brisbane, Australia, Wednesday, July 10, 2002, 1:30-5:30pm Sessions on “American Primacy or American Hegemony?” Research Committee on Comparative Sociology, organized by Neil Smelser and Mattei Dogan.

Draft V. 7-2-02, 8969 words)


 

The Evolution of Rise and Fall

 

            Concerns about empire, hegemony and the distributions of power and wealth among the peoples of the world are both au courant and deeply historical. An institutionalized global culture of human rights and equality shines an embarrassing floodlight on the objective rise of within-nation and global inequalities generated by state-corporate globalization. This is producing a renewed reaction against the wave of marketization and commodification of human social relations that is likely to be similar in some respects to the globalization backlash that occurred during the late nineteenth and early twentieth centuries. This Polanyian (Polanyi 2001)  “double-movement” of commodification and the reassertion of political regulation over market forces is an old phenomenon that reinvents itself in unique ways every time it comes around, depending on the exact nature of the problems that need to be solved and the actions of the agents who mobilize to solve them. An important component of this elaborate dance is the recurrent phenomenon of “rise and fall,” the centralization and decentralization of political/military and economic power that is a characteristic of all hierarchical world-systems.

 

Complex interchiefdom systems experienced a cycle in which a single paramount chiefdom became hegemonic within a system of competing polities (Anderson 1994; Chase-Dunn and Hall 1997: Chapter 5). Once states emerged within a region they went through an analogous cycle of rise and fall in which a single state became hegemonic and then declined. Eventually these systems of states (interstate systems), experienced the phenomenon of semiperipheral marcher conquest in which a new state from out on the edge of the circle of old states conquered all (or most) of the states in the old core region to form a “universal empire” (see Figure 1).

 

This pattern repeated itself for thousands of years, with occasional leaps in which a semiperipheral marcher state conquered larger regions than had ever before been subjected to a single power ( Akkad, Assyria, Achaemenid Persia, Alexandrian Hellenism, the Han Empire, Rome, the Islamic Caliphates, the Aztec and Inca Empires, the Manchu Dynasty in China).

Figure 1: Core-Wide Empire vs. Hegemonic Core State

With the rise of Europe and intensified capitalism a modification of this old pattern appeared. In the European interstate system the semiperipheral marcher states were outdone by a new breed of capitalist nation-states. These capitalist hegemons established primacy in the larger system without conquering adjacent core states, and so the core remained multicentric despite the continued rise and fall of hegemonic core powers. Imperialism was reorganized as colonial empires in which each core state had its own peripheral “backyard.” The efforts by some core powers to conquer their neighbors were defeated by coalitions that sought to reproduce a multistate structure among core states. Thus the oscillation between “universal state” and “interstate system” came to end and was replace by the rise and fall of hegemonic core powers. The hegemonic sequence of the modern interstate system alternates between two structural situations as hegemonic core powers rise and fall: hegemony and hegemonic rivalry. This was a new form of the process of rise and fall (see Figure 2).

 

Figure 2: Unicentric vs. Multicentric Core

 

            The Westphalian interstate system, in which the sovereignty of separate and competing states is institutionalized by the right of states to make war to protect their independence, has become a taken for granted institution in the modern world-system. Historians of international relations  (e.g. Kennedy 1987) and theorists of international relations (e.g. Waltz 1979) have come to define this situation as a natural state of being. Authors with greater temporal depth (e.g. Wilkinson 1988, 1999) have argued that the peculiar resistance of the modern interstate system to the emergence of a universal state by means of conquest has been the result of an evolutionary learning process unique to modern Europe in which states realized that in order to protect their own sovereignty they should band together and engage in “general war” whenever a “rogue state” threatens to conquer another state.

            A rather different explanation of the modern transition from the pattern of semiperipheral marcher state conquest to the rise and fall of hegemonic core powers points to the emergent predominance of capitalist accumulation in the European-centered interstate system.  Once capitalism had become the predominant strategy for the accumulation of wealth and power it partially supplanted the geopolitical logic of institutionalized political coercion as a means to accumulation. Powerful capitalist core states emerged that could effectively prevent semiperipheral marcher states from conquering whole core regions to erect a “universal state.” The first capitalist-nation state to successfully do this was the Dutch republic of the seventeenth century.

           

New Quantitative Data on Economic Hegemony

 

            Angus Maddison (2001) has published a revision and extension of his long-range estimates of populations, gross domestic products and levels of economic development of countries and world regions. His most recent endeavor presents quantitative snap-shots of economic and demographic change over the past 2000 years. In this paper we combine the more detailed estimates from Maddison’s (1995) earlier publication with the more recent and revised estimates published in 2001 to paint a quantitative picture of the trajectories of economic hegemony in the modern world-system.

Maddison’s estimates make it possible examine the relative sizes and levels of development of the national states and how these have changed over time.  The necessary methodological operation for these economic estimates has been to transform statistical evidence from all over the world and from earlier centuries into a single comparable metric – 1990 “international dollars.”  Maddison (2001:171-175) carefully explains and justifies his use of PPP (purchasing power parity) estimates rather than currency exchange rates to convert country currency data into constant dollars. Purchasing power parity estimates convert GDP estimates denominated in country currencies into one another by estimating comparable purchasing power for consumer goods and the other elements that compose the Gross Domestic Product. Maddison has worked for years on efforts to produce comparable estimates for very different kinds of accounting systems (e.g. the Net Material Product of centrally planned economies) and for different kinds of economies (e.g. highly monetized vs. the partially monetized economies in the periphery of the world-system). Maddison applies all this experience to the most difficult task he has yet undertaken – the valuing of the economic activity of premodern world regions.  These quantitative estimates shed important light on the various contentions of the social scientists and historians who have made comparisons of the modern hegemons.

 

Theoretical Perspectives on Rise and Fall

 

            There has been a vociferous debate over terminology that reflects underlying theoretical and disciplinary differences among those who have sought to compare power processes over recent centuries. As David Wilkinson has said, our concepts contain the bones of our disciplinary ancestors.  Some historians and historical sociologists, while making the requisite comparisons between Dutch, British and U.S. histories, reject the idea that these histories should be considered instances of a single phenomenon(e.g. Mann 1993; O’Brien 2002). In other words, they stress the differences to the extent of trivializing the similarities, though the particular differences they stress are themselves different. Both Mann and O’Brien refuse to characterize the role of Britain during the Pax Britannica as hegemonic, especially as compared with the superpowerdom of the United States in the post-World War II period. Britain is seen as a fore-reacher leading the world in the ways of industrialization and democracy, but not as a controller or exploiter of other countries. The question of the relative size of the British economy in the larger world economy during the nineteenth century compared with relative size of the U.S. economy during the twentieth century is a matter that we shall investigate below.

 

 Among those who are more willing to analyze structural similarities across different historical periods, the ways in which these similarities are defined vary greatly. Several dimensions are at play in these differences. One important distinction among theorists is between the functionalists (who see emergent global hierarchies as serving a need for global order,) and conflict theorists (who dwell more intently on the ways in which hierarchies serve the privileged, the powerful and the wealthy). The term “hegemony” usually corresponds with the conflict approach, while the functionalists tend to employ the idea of “leadership,” though several analysts occasionally use both of these terms (e.g. Arrighi and Silver 1999). Another difference is between those who stress the importance of political/military power vs. what we shall call “economic power.” This issue is confused by disciplinary traditions (e.g. differences between economics, political science and sociology). Most economists entirely reject the notion of economic power, assuming that market exchanges occur among equals. Most political scientists and sociologists would agree that economic power has become more important than it formerly was.  Some of the literature on recent globalization goes so far as to argue that states and military organizations have been completely subsumed by the power of transnational corporations and global market dynamics (e.g. Ross 1995; Robinson 1998).

Rather than reviewing the entire social science corpus of theories, we will describe four contrasting and overlapping approaches in some detail – those of Wallerstein (1984, 2002), Modelski and Thompson (1994); Arrighi (1994) and Rennstich (2001, 2002). Wallerstein defines hegemony as comparative advantages in profitable types of production. This economic advantage is what serves as the basis of the hegemon’s political and cultural influence and military power. Hegemonic production is the most profitable kind of core production, and hegemony is just the top end of the global hierarchy that constitutes the modern core/periphery division of labor. Hegemonies are unstable and tend to devolve into hegemonic rivalry.

Wallerstein sees a Dutch seventeenth century hegemony, a British hegemony in the nineteenth century and U.S. hegemony in the twentieth century.  He perceives three stages within each hegemony. The first is based on success in the production of consumer goods; the second is a matter of success in the production of capital goods; and the third is rooted in success in financial services and foreign investment stemming from the institutionalized centrality of the hegemon in the larger world-system.

 George Modelski and William R. Thompson (1994) are political scientists whose theoretical perspective contains a strong dose of Parsonsian structural functionalism as applied to international systems. The world needs order and so world powers rise to fill this need. They rise on the basis of economic comparative advantage in new lead industries that allow them to acquire the resources needed to win wars among the great powers and to mobilize coalitions that keep the peace. World wars are the arbiters that function as selection mechanisms for global leadership.  But the comparative advantages of the leaders diffuse to competitors and new challengers emerge. Successful challengers are those that ally with the declining world leader against another challenger (e.g. the U.S. and Britain against Germany).

Modelski and Thompson (1994) measured the rise of certain key trades and industries, so-called “new lead industries,” that are seen as important components of the rise of world powers. They also have measured the degree of concentration of naval power in the European interstate system since the fifteenth century (Modelski and Thompson 1988). Their “twin peaks” model posits that each “power cycle” includes two Kondratieff waves.[1]  Their list of world powers begins with Portugal in the fifteenth century. Then they include the Dutch period of world leadership in the seventeenth century. And they see the British as having successfully performed the role of world leader twice, once in the eighteenth century and again in the nineteenth century. Thus they introduce the possibility that a world leader can succeed itself. They designate the United States as the world leader of the twentieth century.

Giovanni Arrighi’s (1994) The Long Twentieth Century employs a Marxist and Braudelian approach to the analysis of what he terms “systemic cycles of accumulation.” Arrighi rejects any consideration of K-waves as being unrelated to theories of capitalist accumulation.[2] He sees hegemonies as successful collaborations between capitalists and wielders of state power. His tour of the hegemonies begins with Genoese financiers who ally with Spanish and Portuguese statesmen to perform the role of hegemon in the fifteenth century. In Arrighi’s approach the role of hegemon itself evolves, becoming more deeply entwined with the organizational and economic institutional spheres that allow for successful capitalist accumulation. He sees a Dutch hegemony of the seventeenth century, then a period of contention between Britain and France, and a British hegemony in the nineteenth century, followed by U.S. hegemony in the twentieth century. A distinctive element of Arrighi’s approach is his contention that profit making from trade and production becomes more difficult toward the end of a ‘systemic cycle of accumulation” and so big capital becomes increasing focused on making profits through financial manipulations.  Arrighi’s approach is compatible with the idea that new lead industries are important in the rise of a hegemony, but he sees the economic activities of big capital during the declining years in terms of speculative financial activities. These latter often correspond with a period of “growth” in which incomes are rising during a latter-day belle époque of the systemic cycle of accumulation. But this period of accumulation is based on the economic power of haute finance and the centering of world markets in the global cities of the hegemons rather than on their ability to produce real products that people will buy, and so these belle époques are unsustainable and are followed by decline.

Recent research by Joachim Rennstich (2001) retools Arrighi’s (1994) formulation of the reorganizations of the institutional structures that connect capital with states to facilitate the emergence of larger and larger hegemons over the last six centuries. Modelski and Thompson (1996) argued that the British successfully managed to enjoy two “power cycles,”[3] one in the eighteenth and another in the nineteenth century. With this precedent in mind Rennstich considers the possibility that the U.S. might succeed itself in the twenty-first century. Rennstich’s analysis of the organizational, cultural and political requisites of the contemporary new lead industries – information technology and biotechnology – imply that the United States has a large comparative advantage that will most probably lead to another round of U.S. pre-eminence in the world-system. He argues that a hegemon can succeed itself if the rising industrial sectors within the hegemon are able to separate themselves sufficiently from the old declining industrial sectors. Rennstich focuses on the regional and institutional differences between old and new sectors of the U.S. economy.

           

Previous Research

          Earlier studies have often most often proceeded by designating particular countries or networks as hegemonic during certain periods and dividing these periods up into subperiods. Only a few studies have quantitatively compared the hypothesized hegemons with other core powers or subjected the subperiodizations to quantitative analysis. Modelski and Thompson (1988) examined the distribution of naval power among the “great powers” of the European interstate system since the fifteenth century. This is the most thorough and comprehensive quantitative study that actually measures hegemony by comparing contending countries over a long period of time. Modelski and Thompson’s (1996) quantitative study of new lead industries does not break these down by country.

 

Using economic (total GDP and per capita GDP) and military indicators (military expenditures) to create composite measures of power in the world-economy, Kentor (2000) explores the changes in core power and hegemony by providing snapshots profiles for core countries in 1820, 1900, 1930, 1950, 1970, and 1990.  Results indicate that in 1820, the U.K. was the dominant core power with an overall standardized composite score twice that of its nearest rival, France (Kentor 2000).  The U.K.’s relative strength came primarily from its level of capital intensity (as indicated by GDP per capita), and military strength.  By 1900, relationships between core powers had changed dramatically.  The U.K. still possessed the highest overall score, but its strength was based primarily upon its military power. The U.S. and China had surpassed the U.K. in output, and the U.S. was approaching the U.K.’s level of capital intensity (Kentor 2000).  The shift in hegemony was quite evident by 1930 where the U.S. achieved dominance through its advantage in national output.  In 1950, national output for the U.S. had grown to more than three times that of its nearest rival (USSR), its relative level of capital intensity was twice that of the U.K., and its relative level of military power increased to an almost identical level with the USSR (Kentor 2000).  By 1970 U.S. relative military strength had increased while its advantages in output and capital intensity had declined.  By 1990 the USSR lost its military dominance, Japan had continued its rise in the world-economy with increases in all areas, China had grown to the second largest producer in the world-economy, and the U.S. had increased its global dominance with relative growth in all three power dimensions (Kentor 2000).            

 

 

Demographic Power

          The relationship between population and intersocietal power is complicated and has changed greatly as new techniques of power have evolved. Polities with more people have often been able to exercise power over polities with fewer people because more people means more warriors in a confrontation. But this relationship has been complicated by other factors. Military technology and organization, solidarity within societies, transportation and communication technology, logistics and geography are factors that have influenced geopolitics somewhat independently of demography. And demography itself has several dimensions. A polity may have large numbers, but where are they located and how are they organized and how quickly can they communicate with one another? What are the advantages conferred by geographical location? What kinds of societies can more effectively innovate and implement new strategies and techniques of power?

The phenomenon of semiperipheral development (Chase-Dunn and Hall 1997: Chapter 5) points to a recurrent pattern in which smaller, less stratified, and less population dense semiperipheral societies outcompete older core societies that have higher population densities. These issues need to be sorted out by a systematic comparative study of the relationships between different dimensions of demography (total population, population density, settlement sizes and locations) and different dimensions of intersocietal power relations.  Maddison’s (1995, 2001) revised estimates of population sizes of regions and polities provide us with a fresh opportunity to examine the question of size and power.

 

Figure 3: Shares of World Population, Last Two Thousand Years

            Figure 3 shows shares of the total global population since the beginning of the Common Era two thousand years ago according to Maddison’s (2001) estimates.  The time scale on the horizontal axis of Figure 3 is misleading because the intervals are not equal. Keeping this in mind we can see that the countries that became hegemonic in recent centuries were never very significant and did not change much in terms of their shares of world population. The countries with the big shares, India and China, still have huge shares, though India declined quite a lot until 1950 and then begins to rise again. China peaked in 1820 and has mainly been declining since then. The United States rose above 5% of world population in 1913 and dropped below that level in about 1985.

 

            Is the total population of a region related to its power vis a vis other regions with smaller populations? This is part of the question of demographic power. Other dimensions of demographic power include relative population densities, and the sizes of settlements and cities.  Total population size is obviously partly a reflection of territorial size. The “China” and “India” in Maddison’s data are regions rather than single unified polities through the time span shown in Figure 3.  Another potential problem with Figure 3 is the “systemness” of the included regions. It is usually presumed that China and India were not strongly connected with Europe and the Americas during the whole period shown. In the case of the Americas this is obviously true. The European countries only became linked directly through political/military interactions with India and China in the last few centuries, though pan-Eurasian prestige goods trade was already well developed two thousand years ago. Relative power assumes regularized interaction. We contend that regularized interaction networks should be the proper unit of analysis for studying world-systems (see Chase-Dunn and Hall 1997).

Figure 3 tells an important story despite its temporal and spatial problems. East Asia and South Asia were the population centers of the Earth, but have become less so over the past two millennia. But total population size is not very useful indicator of demographic power. Population density, urbanization (the proportion of total population living in cities (urbanization), and the sizes of the largest cities are much better reflections of the kinds of power that greater population confers. A recent study of the sizes of the largest cities in world regions over the past four millennia has demonstrated that the largest European cities began increasing their shares of population of the world’s 20 largest cities in the thirteenth century of the Common Era (Chase-Dunn and Manning 2002). Contra Andre Gunder Frank (1997), the rise of Europe was not a last minute development that occurred in the late eighteenth century. Formerly peripheral Europe had been developing its own internal core region and expanding its cities and the power of its states for hundreds of years by the time China was finally eclipsed in the nineteenth century.

 

Shares of World GDP

 

            Total GDP combines both economic development and economic size. It rises simply because there are more people. Thus a graph of shares of world GDP over the last two millennia looks quite similar to Figure 3 above until the beginning of the nineteenth century. This is to say that India and China contained most of the world’s GDP because they contained most of the world’s population. But after 1800 CE this began to change because of the rapid increase in GDP per capita in certain European countries and the United States. Figure 4 (below) shows the shares of world GDP held by the core countries of the European interstate system since 1820. Maddison (1985) provides estimates for 1820 and 1850, and then yearly estimates from 1870 on. We have interpolated his estimates of total world GDP in order to calculate the yearly shares after 1870, and we have added data from Maddison (2001) for the years after 1994. 

 

 

Figure 4:  Shares of World GDP, 1820-1998

Sources: Maddison 1995, 2001.

 

            The first question is whether or not shares of world GDP are really a good indicator of hegemony. Obviously GDP does not capture the military, political or cultural aspects of hegemony. And it is perhaps not the best indicator even for economic hegemony because, as we have pointed out above, a strong component of GDP is merely demographic. With these qualifications in mind let us discuss the features revealed in Figure 4.

            The most striking feature of Figure 4 is the rapid ascent of the U.S. economy in its size relationship with the world economy as a whole from less than 2% in 1820 to a peak of 35% in 1944. The U.S. share slumped precipitously from 1929 to 1933, and then rapidly ascended again to its highest point in 1944. A rapid post-World War II decline was followed by a slight recovery that began in 1949 and then, beginning in 1951, a decline until 1958, then a plateau until 1968, then another decline until 1982, followed by another plateau until 1998 at between 21 and 22%. The U.S. GDP share trajectory supports discussions of U.S. hegemonic rise and decline in the world economy, but the details contradict some versions of this trajectory. By the measure of share of world GDP the U.S. decline began in 1944, not in 1970 as some world-systems analysts have claimed. There were three steps of U.S. decline, the first beginning in 1944, the second in 1951 and the third in 1968.

            What are the implications of Figure 4 for our understanding of the British hegemony? Figure 4 shows the British ascent from 5% in 1820 to a peak of almost 9% in 1870, some wobbling and then a full 9% in 1899, followed by a slow decline to 3.3% in 1998. Those observers who have emphasized the difference in scale between the huge U.S. primacy and much smaller British component of the world economy are correct. At its highest peak in 1899, during the Edwardian belle époque, the British economy only constituted 9% of the world economy. Recall that the U.S. peak in 1944 was 35%. The U.S. passed Britain in 1870 with respect to share of the world GDP. 

            The French economy peaked in 1872 and then entered a slow decline. The German economy fluctuated between 3 and 5½%, with its most recent peak in 1962. The Japanese economy rose from 1820 to a peak of 4.6% in 1941, then fell after World War II and rose again to a peak of 8.8% in 1991, from whence it fell back to 7.5% in 1998.

            Of interest for the question of hegemony is the size of the European Union, [4] an emergent core polity that has changed the terrain of global geopolitics (Boswell 2002). The countries that were to become the European Union contained 26% of the world’s GDP in 1963, but have declined since then to slightly less than 20% in 1998. The recent trajectories, since 1992, of Japan and the European Union have been down, while the U.S. has remained on a plateau since 1974. These differences may have implications for future trajectories and for the question of possible hegemonic rivalry among core states. We will return to this issue after considering another measure of economic hegemony, the ratio of national GDP per capita to the average world GDP per capita.

 

Ratio of National Level of Economic Development to the World Average

 

            As we have mentioned above, shares of world GDP indicate a combination of size and economic power. Large and populous countries such as China and India are high on this measure, and this is why we consider them to be in the semiperiphery. But power status in the modern world-system is more than just a matter of size. It is fundamentally a matter of economic development, meaning the ability to produce capital-intensive products and to specialize in types of production that employ highly skilled labor. A better indicator of this is GDP per capita, though GDP per capita is not ideal. A better estimate of average capital intensity is GDP per worker or per labor hour. GDP per capita is a fair proxy for capital intensity in crossnational comparisons. Some countries have high per capita GDP because they hold great natural resource wealth. Thus Saudi Arabia and Libya have relatively high per capital GDPs because of their huge oil exports. In order to indicate this important difference the World Bank and the United Nations often presents data for the oil-exporting countries separately. For the countries we are examining in Figure 5 below -- the upper tier of the core -- this is not an issue. Figure 5 shows the scores of countries based on the ratio between their national GDP per capita and the average world GDP per capita based on Maddison’s revised estimates presented in Maddison (2001). Figure 5 begins in 1500 CE, but again beware that the horizontal axis does not have equal temporal intervals. As with Figure 3, the earlier time intervals are allotted less space on the horizontal axis than are the later intervals. Keep this in mind as you interpret Figure 5.

 

Figure 5: Country GDP per Capita as a ratio to Average World GDP per capita, 1500-1998

Source: Maddison 2001

            The first thing we can notice about Figure 5 is that all the core countries show a general upward trend in the ratio of their national GDP per capita to the world average GDP per capita. This is an indication that the trend toward greater inequality between the core and the periphery that has been noted in recent decades is in fact of long standing. But this is not our main concern in this paper. Rather we are investigating changes in relative differences among countries within the core and upwardly mobile semiperipheral challengers.

            The seventeenth century economic hegemony of the Netherlands is indicated by its peak ratio of 3.4 in 1700. Interestingly, the Netherlands has returned to this same high point in 1998. The difference is that in 1700 the Netherlands was far ahead of its closest competitor, the United Kingdom, while in 1998 it was bunched together with all the other countries, save the United States, which was much higher.

            The British hegemony of the nineteenth century is much more evident in Figure 5 than it was in Figure 4, and its high point appears to have been in 1870 (but see Figure 6 below). Maddison’s books do not contain estimates of British GDP per capita between 1700 and 1820 and so we are not able to see if the Modelski and Thompson contention of a British power cycle in the eighteenth century would be borne out by comparative economic data.

            Figure 5 indicates the long ascent of the United States to an apparent peak in 1950 (ratio = 4.52), then a decline to 4.06 in 1973, and rise back to 4.78 in 1998 (but see Figure 6 below). The U.S. ratio in 1998 is significantly larger than that of the second country as gauged by the GDP per capita ratio, Japan (ratio = 3.57). The story of Germany and France is a similar long rise, except for Germany’s dip in 1950. Figure 5 Japan shows no rise in the GDP per capita ratio until after 1950, contradicting all the literature about Japanese development after the Meiji restoration (but see Figure 6 below). Japan’s ascent after 1950 is quite rapid and in 1998 it is higher than any of the other core countries, save the United States.

            In order to more closely examine the temporality of the changes indicated in Figure 5 we have combined estimates from Maddison’s (1995) earlier presentation with his updated estimates (2001) to produce Figure 6.  Figure 6 uses Maddison’s new estimates from 1950 on and his yearly estimates from 1870 to 1950 to calculate the ratio of country GDP per capita to the average world GDP per capita.

Figure 6: Country GDP per capita as a ratio to World GDP per capita, 1820-1998

Sources: Maddison 1995, 2001.

 

            Figure 6 can be compared with Figure 4 above to see the differences between shares of world GDP and the ratios of country GDP per capita to world GDP per capita. Figure 6 shows that British capital intensity was already significantly higher than French capital intensity in 1820, whereas their shares of world GDP were nearly the same (Figure 4). The French economy was demographically and territorially larger that the British economy, and this accounts for their similar size and share of world GDP. But the British economy was GDP per capita ratio to average world GDP per capita was 2.6, whereas the French ratio was 1.8. This indicates a significant advantage in average capital intensity for the British.   Figure 6 shows that the British economic hegemony as indicated by relative capital intensity peaked in 1871, when the British ratio was nearly 3.9. The British ratio then decline slowly until 1918, when it took a dive to a low point of 2.6 in 1921, from whence it wobbled around below 3 until 1932 and then experienced a revival to 3.7 in 1943 and then another slow decline to 2.8 in 1977 followed by a slow rise to 3.3 in 1998.

            The trajectory of U.S. relative capital intensity is similar in many respects to U.S. GDP share as shown in Figure 4 but there are also some interesting differences. The U.S. rise during the nineteenth century was steeper by the GDP share measure than by the relative capital intensity ratio. This is because the U.S. population and territory were growing as fast as was its relative capital intensity during the nineteenth century. The capital intensity ratio shows the same peak in 1944 as was revealed in the GDP shares in Figure 4. But after that the U.S. trajectory is a bit different. The post-war plummet is followed by a recovery, as was the GDP share indicator, but the successive plateaus and declines after that are less evident, and there is a new upward movement that begins in 1982 and reaches a rather high level of 4.8 in 1998. This last might be interpreted as indicating a renewal of U.S. economic hegemony as hypothesized by Rennstich, but another aspect of Figure 6 needs to be noted. Beginning in the middle of the 1970s all the core powers have been increasing their relative capital intensities. This is because global inequality has been increasing for the last three decades, with the core countries experiencing greater growth in GDP per capita than most of peripheral and semiperipheral countries. The rise in relative capital intensivity for the core countries shown in Figure 6 is probably due to increasing global inequality of development.

            What we need to do in order to examine relative trajectories of the core countries is to calculate the country ratios to the average GDP per capita of the core group. These calculations will be reported in the next revised version of this paper.

           

Conclusions

 

            Maddison’s (1995, 2001) new estimates are not the best possible measures of relative economic power of core countries, as discussed above. But they do make it possible to make some long run and large-scale quantitative comparisons, and the results of have implications for future research on the problem of hegemony. It should be noted that the hegemonic rises of the Dutch, British and United States constitute a continuation of the phenomenon of semiperipheral development in which a formerly semiperipheral society transforms institutional structures and ascends to the top of a world-system. All of the hegemons were former semiperipheral countries before the rose to hegemony.

            The shares of world population based on the total population sizes of regions presented in Figure 3 demonstrate the shift of global demographic weight away from East and South Asia, but do not tell us much about the question of hegemony.

The shares of world GDP (Figure 4) tell us more. The United States became the 800-pound gorilla of the world economy in a rapid ascent after 1850. Figure 4 supports those who emphasize the important difference in scale between the Pax Britannica and the Pax Americana (Mann 1993, O’Brien 2002).  And this difference may have significant implications for the possibilities of future hegemonic developments. Market size is clearly a valuable advantage that might facilitate the possibility of another round of U.S. hegemony. Figure 6 shows a milder difference between the British and U.S. hegemonies in terms of relative capital intensivity. The British peak in 1871 was 3.9, while the U.S. peak in 1944 was 6.1. This is a sizeable difference, but the U.S. peak was an unusual spike due to the extremities of World War II.  The U.S. plateau varied between 4 and 4.8, a level that was higher than the British level in the 19th century, but not greatly higher.

 Figures 4 and 6 also show that the rise of the European Union adds another gorilla of similar size to the global geopolitical landscape. The recent GDP share trajectory of the E.U. is down, while that of the United States is flat (see Figure 4). But when we examine relative capital intensity both the E.U. and the U.S. are rising. The U.S. ratio in 1998 is 4.8 while the E.U. average is 3.1 (Figure 6).

            Figures 5, based on the ratios of country GDP per capita to the world average GDP per capita, shows the seventeenth century Dutch hegemony, the nineteenth century British hegemony and the twentieth century U.S. hegemony in relative levels of economic development. Figure 6, the same indicator but with finer temporal resolution, shows a slow Japanese ascent from 1820 to 1942, a collapse, and then a rapid Japanese ascent after 1949.  Since 1992 the Japanese capital intensity ration has decline from 3.8 to 3.5, reflecting the East Asian economic crisis.

            The big question raised by our analysis of Maddison’s data is the future trajectory of the United States. The Maddison GDP data indicate that the U.S. decline after World War II reached a plateau and flattened in the early 1990s. The question is whether or not this is a hiatus in the U.S. decline that might turn out to be the beginning of a new phase of U.S. hegemony, or is only a temporary phenomenon similar to the Edwardian belle époque of British hegemony in the last decade of the nineteenth century.

            Ultimately, only the future will tell. But in the meantime a close examination of other indicators of the U.S. position in the world economy can shed more light on this question. Trends in the U.S. balance of trade and balance of payments are germane. It is well known that the United States economy has increasingly imported more goods than it has exported. And there has been a huge increase in the amount of foreign direct and portfolio investment in the U.S. economy since the early 1990’s. Proponents of the belle epoque thesis can argue that slowing of decline of general indicators of U.S. position such as those found in the Maddison data may be the result of stock bubbles and over investment in housing and commercial real estate created by the influx of foreign capital investment. Much of the recent foreign investment has come from East Asian investors seeking greater returns than the ailing East Asian economies have been able to generate in the last decade.

            But other analysts stress the advantages that the U.S. has been able to develop in new lead industries such as information technology and biotechnology. Rennstich (2001, 2002) argues that the huge size of the U.S. economy has made it possible for these new lead technologies to become relatively autonomous from the older declining industries within the United States, and that these will be the basis for a new round of U.S. economic leadership and another power cycle in which the U.S. will maintain its central location in the global economy. Indeed, bubbles are often incubators of new lead industries and, while most of these businesses fail, the few successful firms that survive can become the basis for hegemonic leadership. More detailed research on the comparative advantages and vicissitudes of the new lead industries, especially biotechnology, would be helpful for assessing the probabilities of a new round of U.S. hegemony (e.g. Chase-Dunn and Reifer 2002).

            What are the implications of this study for our understanding of the potentialities of the contemporary globalization backlash? An important part of the last globalization backlash was an increase in hegemonic rivalry that was only resolved by the long World War between 1913 and 1945. A potential renewed period of U.S. economic primacy might be understood as good news regarding its implications for future violent conflict among core states resulting from hegemonic rivalry. Such a potential future conflict among core states is only likely if U.S. hegemony continues to decline. The current situation of a single superpower is eminently stable as regards the problem of conflict within the core.         

But the last globalization backlash had another major component – the rise of anti-systemic movements that challenged the domination of core capital. These rebellions against increasing inequalities resulted a global revolutionary wave, including the Mexican revolution, the Bolshevik revolution, the Chinese revolution and anti-colonial movements that eventually succeeded in decolonizing almost all of Asia and Africa. The phenomenon of increasing intranational and international (North-South) inequalities is also an important dimension of the contemporary emerging globalization backlash, and we can expect important antisystemic movements to emerge that will challenge the power of transnational corporations and global elites. Semiperipheral countries with strong labor movements will probably develop democratically elected regimes that pursue self-reliant models of development once it becomes clearer that all boats will not rise on the tide of capitalist globalization. Here, the lead in the polls of Lula, the candidate of the Workers Party in Brazil, is perhaps one indication of what may be a growing trend.

            Indeed, the reconstitution of U.S. hegemony on narrower social foundations that has occurred since the rise of neo-liberalism in the 1970s means that, despite the seeming monopoly of U.S. power in the last few decades, challengers to hegemonic leadership can be expected to increase. This is especially likely if the U.S. continues blocking reform on addressing pressing problems of the global system:  poverty reduction, human induced climatic change and environmental degradation, the spread of weapons of mass destruction and growing politico-economic instability and deadly conflict (see Reifer, 2002).  The increasing backlash against globalization has already generated a global justice movement, as well as extremist movements against U.S. power such as Al Quaeda.  The growing economic chasm between North and South could conceivably create enough world-economic and politico-military turbulence so as to become an impetus for U.S. core allies to initiate efforts to provide for their own security. They might also support reforming the system of global governance in ways that challenge the policies of the United States (e.g. Camilleri, Malhotra and Tehranian 2000).

It might be supposed a still-powerful United States would automatically resist and suppress such developments. But it is also possible that political struggle resulting from increasing inequalities within the United States will challenge the use of U.S. power to suppress democratic movements in the semiperiphery and efforts to democratize global governance.  The people of the United States will likely be challenged to live up to the discourse about equality and democracy that has been promulgated by their leaders for so long, albeit on a global rather than a national scale.

           

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[1] The Kondratieff Wave (K-wave) is a 40-60 year business cycle. The “A-phase” is a 20 to 30 year period of higher average growth rates in the world economy, while the “B-phase” is a 20 to 30 year period of lower average growth rates. The best evidence for the existence of the K-wave is to be found in price histories, but considerable evidence also exists for a production long wave (Goldstein 1988).

[2] Many of the political scientists who analyze K-waves spurn any analysis of capitalism (e.g. Goldstein 1988; Modelski and Thompson 1994), but Marxist economists such as Ernest Mandel (1980) and David Gordon (1980) have provided important theorizations of the K-wave.

[3] “Power cycle” is Modelski and Thompson’s term for what Arrigui (1994) calls “systemic cycles of accumulation” and Chase-Dunn (1998) calls the “hegemonic sequence.”

[4] The European Union in Figure 4 is composed of France, Germany, Greece, Ireland, Italy, Netherlands, Portugal, Spain, Sweden and the United Kingdom. The share of world GDP of these countries is calculated from 1950-1998 despite that the European Union only emerged as an effective confederation in the last decade. This is to show the trajectory of this emergent state’s position in the world economy.