Economic strength, rather than military force, will determine the global balance of power during this century.
At the Cold War's end, some pundits proclaimed that "geo-economics" had
replaced geopolitics. Economic power would become the key to success in world
politics, a change that many people thought would usher in a world dominated by
Japan and Germany.
Today, some interpret the rise in China's share of world output as signifying
a fundamental shift in the balance of global power, but without considering
military power. They argue that a dominant economic power soon becomes a
dominant military power, forgetting that the United States was the world's
largest economy for 70 years before it became a military superpower.
Political observers have long debated whether economic or military power is
more fundamental. The Marxist tradition casts economics as the underlying
structure of power, and political institutions as a mere superstructure, an
assumption shared by nineteenth-century liberals who believed that growing
interdependence in trade and finance would make war obsolete. But, while Britain
and Germany were each other's most significant trading partners in 1914, that
did not prevent a conflagration that set back global economic integration for a
half-century.
Military power, which some call the ultimate form of power in world politics,
requires a thriving economy. But whether economic or military resources produce
more power in today's world depends on the context. A carrot is more effective
than a stick if you wish to lead a mule to water, but a gun may be more useful
if your aim is to deprive an opponent of his mule. Many crucial issues, such as
financial stability or climate change, simply are not amenable to military
force.
Today, China and the US are highly interdependent economically, but many
analysts misunderstand the implications of this for power politics. True, China
could bring the US to its knees by threatening to sell its dollar holdings. But
doing so would not only reduce the value of its reserves as the dollar weakened;
it would also jeopardise US demand for Chinese imports, leading to job losses
and instability in China. In other words, bringing the US to it knees might well
mean that China would bring itself to its ankles.
Judging whether economic interdependence produces power requires looking at
the balance of asymmetries. In this case, it resembles a "balance of financial
terror", analogous to the Cold War military interdependence in which the US and
the Soviet Union each had the potential to destroy the other in a nuclear
exchange. In February 2010, a group of senior Chinese military officers, angered
over US arms sales to Taiwan, called for China's government to sell off US
government bonds in retaliation. Their suggestion was not heeded.
Economic resources can produce soft-power behaviour as well as hard military
power. A successful economic model not only finances the military resources
needed for the exercise of hard power, but it can also attract others to emulate
its example. The European Union's soft power at the end of the Cold War, and
that of China today, owes much to the success of the EU and Chinese economic
models.
Economic resources are increasingly important in this century, but it would
be a mistake to write off the role of military power. As US President Barack
Obama said when accepting the Nobel Peace Prize in 2009, "We must begin by
acknowledging the hard truth that we will not eradicate violent conflict in our
lifetimes. There will be times when nations - acting individually or in
concert - will find the use of force not only necessary but morally
justified."
Even if the probability of the use of force among states, or of threats of
its use, is lower now than in earlier eras, the high impact of war leads
rational actors to purchase expensive military insurance. If China's hard power
frightens its neighbours, they are likely to seek such insurance policies, and
the US is likely to be the major provider.
This leads to a larger point about the role of military force. Some analysts
argue that military power is of such restricted utility that it is no longer the
ultimate measuring rod. But the fact that military power is not always
sufficient to decide particular situations does not mean that it has lost all
utility. While there are more situations and contexts in which military force is
difficult to use, it remains a vital source of power.
Markets and economic power rest upon political frameworks, which in turn
depend not only upon norms, institutions, and relationships, but also upon the
management of coercive power. A well-ordered modern state is one that holds a
monopoly on the legitimate use of force, and that allows domestic markets to
operate. Internationally, where order is more tenuous, residual concerns about
the coercive use of force, even if a low probability, can have important
effects - including a stabilising effect.
Indeed, metaphorically, military power provides a degree of security that is
to order as oxygen is to breathing: little noticed until it becomes scarce, at
which point its absence dominates all else. In the twenty-first century,
military power will not have the same utility for states that it had in the
nineteenth and twentieth centuries, but it will remain a crucial component of
power in world politics.
Joseph S. Nye, Jr, a former US assistant secretary of defence, is
a professor at Harvard University and the author of The Future of
Power.