Are We Really Going The Way Of The British Empire?

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To some extent free trade is a misnomer. When we look carefully, we notice that all major countries have large areas of protection. The area of protected goods in the United States is probably something like 25 percent of our imports. Europe and Japan also have large areas of protection, and so we all to some extent have neo-mercantilist as well as open trading aspects of our economies.

The key question is whether we are worse off for this. My feeling is that maintaining an open international economy and competing in it is still in our interest. It’s in our interest because it keeps our own industries competitive.

And this means that when you think of an open international economy, you have to think of direct investments as well as free trade as classically defined. In that sense the growing interdependence among Europe, Japan, and the United States, which still represent two-thirds of the world economy, is something that has been a part of our growth, that brings new technology and keeps us competitive. Right now we are in a period of domestic recession, although there is continuing economic growth in Germany and Japan, and it’s interesting to see that the export sector in the United States, particularly manufactured exports, is one of the areas that have stayed buoyant as a result of this interdependence.

I think the general view that we should follow Chamberlain’s advice and give various businesses their own protected market niches when the competition gets tough is mistaken. I think that it would have been a mistake if Britain had fully followed Chamberlain, and it would be a mistake for us today.

The minor qualification is that within an open economic regime you do have to be willing to retaliate when others are being unduly discriminatory; free trade does not proceed on the basis of goodwill alone. I’ll give you an example. Motorola, an American corporation, developed a superior product in hand-held telephones that the Japanese tried to exclude from the Tokyo part of the Japanese market until the American government put enough pressure on them. I think that’s perfectly appropriate in the larger context of international economy.

In your book you make the argument that the extent of British power in the nineteenth century was commonly overstated and that American power, in retrospect, similarly looks to have been greatly overstated after World War II.

Yes, it’s often said by people who use the word hegemony loosely, or simply toss the term around, that the Americans were hegemonic in the period after 1945 just as the British were hegemonic in the nineteenth century. In both cases, if hegemony means the ability to control the international system, it’s overstated.

Britain was hegemonic to an extent in its relationship to overseas developing countries in the nineteenth century because of its naval and financial power. But it certainly wasn’t hegemonic in terms of being able to control the center of the global balance of power, which was Europe. In fact, quite to the contrary, it was constantly being involved in what A. J. P. Taylor called “the struggle for mastery in Europe.”

Similarly, in the period after 1945 the United States was balanced by the Soviet Union. If America had been a truly hegemonic power, one would have expected that it would have prevailed at least in bargaining with its allies. And yet if one notices America’s inability to see European integration go forward on as liberal terms as we wanted, or when one looks at the inability of the Americans to sway the allies to enter into warfare with the Soviets in 1950 or at the inability to prevent France from developing its own nuclear weapons, it becomes a bit odd that we see this as a hegemonic situation.

And this is not even to mention the other types of failures, such as our inability to prevent the communists from coming to power in China, in Vietnam, in Cuba, and so forth. So this picture of the past when America becomes the hegemon bestriding the world, doing whatever we wished, is really a mythological view of postwar history. The reason it matters is that if one has an exaggerated view of the past, then one is obviously going to have a diminished view of the present.

One of the arguments about British decline holds that it was not that British power decreased so much as that the sort of power that Britain held became less relevant. For example, naval power became less critical after the development of railways and the industrialization of the European continent. Do you think there are any analogies to the kind of power the United States has possessed in the postwar period?

That’s the other area where I sometimes disagree with the declinists. Their assumption is that the only power that we have is military. In fact, it’s hard to see any other country that has the same degree of “soft power” the Americans have, in the sense of the ability to project cultural and ideological appeals and to form coalitions.

You mean that our culture is in some sense universally attractive, versus the closed character of Japanese culture?