NIVERSITY OF The MIT Press VISCONSIN PRESS JOURNALS DIVISION Cambridge University Press International Organization Foundation Economic Structure and International Security:The Limits of the Liberal Case Author(s):Barry Buzan Source:International Organization,Vol.38,No.4(Autumn,1984),pp.597-624 Published by:The MIT Press Stable URL:http://www.jstor.org/stable/2706625 Accessed:20/08/201018:54 Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use.available at http://www.jstor.org/page/info/about/policies/terms.jsp.JSTOR's Terms and Conditions of Use provides,in part,that unless you have obtained prior permission,you may not download an entire issue of a journal or multiple copies of articles,and you may use content in the JSTOR archive only for your personal,non-commercial use. Please contact the publisher regarding any further use of this work.Publisher contact information may be obtained at http://www.jstor.org/action/showPublisher?publisherCode=uwisc and http://www.jstor.org/action/showPublisher?publisherCode=mitpress. Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed page of such transmission JSTOR is a not-for-profit service that helps scholars,researchers,and students discover,use,and build upon a wide range of content in a trusted digital archive.We use information technology and tools to increase productivity and facilitate new forms of scholarship.For more information about JSTOR,please contact support@jstor.org. University of Wisconsin Press,The MIT Press,Cambridge University Press,International Organization Foundation are collaborating with JSTOR to digitize,preserve and extend access to International Organization. 29 STOR http://www.jstor.org
Cambridge University Press International Organization Foundation Economic Structure and International Security: The Limits of the Liberal Case Author(s): Barry Buzan Source: International Organization, Vol. 38, No. 4 (Autumn, 1984), pp. 597-624 Published by: The MIT Press Stable URL: http://www.jstor.org/stable/2706625 Accessed: 20/08/2010 18:54 Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at http://www.jstor.org/page/info/about/policies/terms.jsp. JSTOR's Terms and Conditions of Use provides, in part, that unless you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal, non-commercial use. Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at http://www.jstor.org/action/showPublisher?publisherCode=uwisc and http://www.jstor.org/action/showPublisher?publisherCode=mitpress. Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed page of such transmission. JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org. University of Wisconsin Press, The MIT Press, Cambridge University Press, International Organization Foundation are collaborating with JSTOR to digitize, preserve and extend access to International Organization. http://www.jstor.org
Economic structure and international security: the limits of the liberal case Barry Buzan The theory that a liberal international economy is a necessary factor in sustaining an international security system which avoids major conflict and war is widespread.The economic theory of security rests on arguments that connect economic structure to the use of force:specifically,that a liberal economic system substantially discourages the use of force among states, while a mercantilist economic structure stimulates it. In this article I shall challenge the validity of this theory on two levels. First,I shall argue that the theory is seriously unbalanced in its attempt to associate liberal structures exclusively with benign effects on the use of force, and mercantilist structures exclusively with malign ones.Liberal structures can also,and in their own terms,stimulate the use of force,while mercantilist structures can be benign.Second,I shall argue that the whole attempt to link economic structure,whether liberal or mercantilist,to international se- curity overrates the determining role of economic factors in the broader issues of peace and war.Noneconomic factors provide much more powerful explanations than do economic ones for the major phenomena that are usually cited as supporting the theory. The immediate relevance of these arguments is to the current concern that the decline of American hegemony will lead to a collapse of the liberal economic system and therefore to a renewed cycle of conflict and war along the lines of events during the 1930s.If the arguments made here are correct, then this concern is misplaced.The current liberal system does not have to be maintained for security reasons,and security reasons are not a convincing motive for opposing a transition to some form of mercantilist economic system. I start by examining the intellectual origins of the liberal case,and by identifying which of its supporting arguments still plausibly connect economic I would like to thank Charles Jones,Robert Skidelsky,Chris Farrands,and the reviewers for International Organization for their comments on various drafts of this article. International Organization 38,4,Autumn 1984 0020-8183/84/040597-28 $1.50 1984 by the Massachusetts Institute of Technology and the World Peace Foundation
Economic structure and international security: the limits of the liberal case Barry Buzan The theory that a liberal international economy is a necessary factor in sustaining an international security system which avoids major conflict and war is widespread. The economic theory of security rests on arguments that connect economic structure to the use of force: specifically, that a liberal economic system substantially discourages the use of force among states, while a mercantilist economic structure stimulates it. In this article I shall challenge the validity of this theory on two levels. First, I shall argue that the theory is seriously unbalanced in its attempt to associate liberal structures exclusively with benign effects on the use of force, and mercantilist structures exclusively with malign ones. Liberal structures can also, and in their own terms, stimulate the use of force, while mercantilist structures can be benign. Second, I shall argue that the whole attempt to link economic structure, whether liberal or mercantilist, to international security overrates the determining role of economic factors in the broader issues of peace and war. Noneconomic factors provide much more powerful explanations than do economic ones for the major phenomena that are usually cited as supporting the theory. The immediate relevance of these arguments is to the current concern that the decline of American hegemony will lead to a collapse of the liberal economic system and therefore to a renewed cycle of conflict and war along the lines of events during the 1 930s. If the arguments made here are correct, then this concern is misplaced. The current liberal system does not have to be maintained for security reasons, and security reasons are not a convincing motive for opposing a transition to some form of mercantilist economic system. I start by examining the intellectual origins of the liberal case, and by identifying which of its supporting arguments still plausibly connect economic I would like to thank Charles Jones, Robert Skidelsky, Chris Farrands, and the reviewers for International Organization for their comments on various drafts of this article. International Organization 38, 4, Autumn 1984 0020-8183/84/040597-28 $1.50 ? 1984 by the Massachusetts Institute of Technology and the World Peace Foundation
598 International Organization structure to the use of force within the context of the international system since 1945.Section 2 outlines the nature of the decline in the use of force associated with the post-1945 liberal system,and it argues that noneconomic factors provide more convincing explanations for the observed phenomena than do economic ones.Section 3 argues that the liberal case against mer- cantilism on security grounds is not credible under the conditions of the 1980s and that a good case can be made for a benign view of mercantilism. Section 4 makes the case that liberal systems contain a severe structural instability,which means that they,like mercantilist systems,can stimulate as well as constrain the use of force. 1.The liberal case The essence of the liberal case is that a liberal economic order makes a substantial and positive contribution to the maintenance of international security.Where a liberal economic order prevails,states will be less inclined to use force in their relations with each other than would otherwise be the case.Economics thus gives rise to a structural theory ofinternational security, which posits an unspecified,but significant,level of causal linkage between the structure (basic ordering principle)of international economic relations and the noneconomic behavior of states(the use of force).'The theory is politically influential precisely because the arguments are structural:a liberal system in any historical period should generate significant restraint on the use of force. The intellectual foundations of the liberal case are closely linked to the revolution in economics triggered by Adam Smith.The new political-eco- nomics reflected the interests of the rising commercial class.Its proponents, among them Bentham and Paine,looked forward to a society based on individual rights,in which public opinion would play a major role and the state would be minimal.They believed that a natural harmony of interest both within and between states could be obtained by these reforms and that free trade was the key mechanism by which this harmony could be realized. They opposed the existing system of mercantilism,in which economic and individual interests were subordinated to the pursuit of state power and international relations were corrupted by secret diplomacy.They saw this system as serving the narrow class interests of the aristocracy,and they 1.Some writers,for example,Richard K.Ashley,The Political Economy of War and Peace (London:Pinter,1980),pp.269-86,and Immanuel Wallerstein,"The Rise and Future Demise of the World Capitalist System,"Comparative Studies in Society and History 16,4(1974),pp. 387-415,would take the view that this is too narrow a conception of economic structure:that it represents at best a substructure within a larger framework.Of other theories about the relationship between economic structure and the use of force,Marxism-Leninism is an obvious example.For a summary and critique of the Marxist view,see Robert Gilpin,War and Change in World Politics(Cambridge:Cambridge University Press,1981),pp.75-84
598 International Organization structure to the use of force within the context of the international system since 1945. Section 2 outlines the nature of the decline in the use of force associated with the post-1945 liberal system, and it argues that noneconomic factors provide more convincing explanations for the observed phenomena than do economic ones. Section 3 argues that the liberal case against mercantilism on security grounds is not credible under the conditions of the 1 980s and that a good case can be made for a benign view of mercantilism. Section 4 makes the case that liberal systems contain a severe structural instability, which means that they, like mercantilist systems, can stimulate as well as constrain the use of force. 1. The liberal case The essence of the liberal case is that a liberal economic order makes a substantial and positive contribution to the maintenance of international security. Where a liberal economic order prevails, states will be less inclined to use force in their relations with each other than would otherwise be the case. Economics thus gives rise to a structural theory of international security, which posits an unspecified, but significant, level of causal linkage between the structure (basic ordering principle) of international economic relations and the noneconomic behavior of states (the use of force).' The theory is politically influential precisely because the arguments are structural: a liberal system in any historical period should generate significant restraint on the use of force. The intellectual foundations of the liberal case are closely linked to the revolution in economics triggered by Adam Smith. The new political-economics reflected the interests of the rising commercial class. Its proponents, among them Bentham and Paine, looked forward to a society based on individual rights, in which public opinion would play a major role and the state would be minimal. They believed that a natural harmony of interest both within and between states could be obtained by these reforms and that free trade was the key mechanism by which this harmony could be realized. They opposed the existing system of mercantilism, in which economic and individual interests were subordinated to the pursuit of state power and international relations were corrupted by secret diplomacy. They saw this system as serving the narrow class interests of the aristocracy, and they 1. Some writers, for example, Richard K. Ashley, The Political Economy of War and Peace (London: Pinter, 1980), pp. 269-86, and Immanuel Wallerstein, "The Rise and Future Demise of the World Capitalist System," Comparative Studies in Society and History 16,4 (1974), pp. 387-415, would take the view that this is too narrow a conception of economic structure: that it represents at best a substructure within a larger framework. Of other theories about the relationship between economic structure and the use of force, Marxism-Leninism is an obvious example. For a summary and critique of the Marxist view, see Robert Gilpin, War and Change in World Politics (Cambridge: Cambridge University Press, 1981), pp. 75-84
Economics and security 599 castigated it for both its economic inefficiency and its encouragement of unnecessary conflict.The classical liberal case thus amalgamated political and economic reforms.Free trade was central to the case,but only its most extreme advocates argued that free trade alone was a sufficient condition for peace.2 The great free-trade campaigner Richard Cobden probably represents the high point in the making of the classical liberal case.Liberal assumptions about harmony of interest lead naturally to the conclusion that a liberal economic system would be substantially less war-prone than a mercantilist one.But Cobden connected the two politically during the 1840s by bringing the peace movement into the free-trade coalition.This alliance sealed the connection between free trade and peace,a connection that still underlies the economic theory of international security.The belief that free trade was good for peace as well as good for prosperity was bolstered by the subsequent half-century experience of the Pax Britannica.So strongly embedded did it become that even the catastrophe of the First World War did not greatly diminish its intellectual and political appeal.3 The economic crisis of the interwar years finally destroyed the political reign of free trade in Britain.But the experience of neomercantilism during the 1930s,and of the world war that seemed to result from it,stimulated a powerful revival of the free-trade and peace connection in the United States. Whatever the historical merits of this interpretation,Cordell Hull and others in the Roosevelt administration were strongly committed to the liberal case, believing that "If goods can't cross borders,soldiers will."4 With America finally acting as heir to Britain's role,Hull and his colleagues had both the will and the means to create an international order in which the hope for peace was strongly tied to the rebuilding of an open trading system among countries that were either democratic by tradition or else made so as a result of occupation and reform. This orthodoxy has dominated and legitimized American hegemony for the past four decades.Commitment to it underlies the current sense of crisis created by America's inability to maintain the liberal order.Protectionism, and the demand for it,is everywhere on the rise,creating the fear that another neomercantilist revival will once again set the world on the path to war. The arguments used to support the liberal case have not remained constant 2.The extreme liberal position has already been adequately dismissed,for example,in Lord Robbins,Money,Trade and International Relations (London:Macmillan,1971),chaps.9 and 11. 3.On the intellectual history of liberal thinking,and its connection to free trade,see F.H. Hinsley,Power and the Pursuit ofPeace(Cambridge:Cambridge University Press,1963),chaps. 5 and 6.On the history of free trade up to the 1930s,see Norman McCord,ed.,Free Trade: Theory and Practice from Adam Smith to Keynes (Newton Abbot:David Charles,1970). 4.Richard N.Gardner,Sterling-Dollar Diplomacy:The Origins and Prospects of Our Inter- national Economic Order (New York:Columbia University Press,1980),pp.7-9.See also pp. 101-12,382-84
Economics and security 599 castigated it for both its economic inefficiency and its encouragement of unnecessary conflict. The classical liberal case thus amalgamated political and economic reforms. Free trade was central to the case, but only its most extreme advocates argued that free trade alone was a sufficient condition for peace.2 The great free-trade campaigner Richard Cobden probably represents the high point in the making of the classical liberal case. Liberal assumptions about harmony of interest lead naturally to the conclusion that a liberal economic system would be substantially less war-prone than a mercantilist one. But Cobden connected the two politically during the 1 840s by bringing the peace movement into the free-trade coalition. This alliance sealed the connection between free trade and peace, a connection that still underlies the economic theory of international security. The belief that free trade was good for peace as well as good for prosperity was bolstered by the subsequent half-century experience of the Pax Britannica. So strongly embedded did it become that even the catastrophe of the First World War did not greatly diminish its intellectual and political appeal.3 The economic crisis of the interwar years finally destroyed the political reign of free trade in Britain. But the experience of neomercantilism during the 1 930s, and of the world war that seemed to result from it, stimulated a powerful revival of the free-trade and peace connection in the United States. Whatever the historical merits of this interpretation, Cordell Hull and others in the Roosevelt administration were strongly committed to the liberal case, believing that "If goods can't cross borders, soldiers will."4 With America finally acting as heir to Britain's role, Hull and his colleagues had both the will and the means to create an international order in which the hope for peace was strongly tied to the rebuilding of an open trading system among countries that were either democratic by tradition or else made so as a result of occupation and reform. This orthodoxy has dominated and legitimized American hegemony for the past four decades. Commitment to it underlies the current sense of crisis created by America's inability to maintain the liberal order. Protectionism, and the demand for it, is everywhere on the rise, creating the fear that another neomercantilist revival will once again set the world on the path to war. The arguments used to support the liberal case have not remained constant 2. The extreme liberal position has already been adequately dismissed, for example, in Lord Robbins, Money, Trade and International Relations (London: Macmillan, 1971), chaps. 9 and 11. 3. On the intellectual history of liberal thinking, and its connection to free trade, see F. H. Hinsley, Power and the Pursuit ofPeace (Cambridge: Cambridge University Press, 1963), chaps. 5 and 6. On the history of free trade up to the 1930s, see Norman McCord, ed., Free Trade: Theory and Practice from Adam Smith to Keynes (Newton Abbot: David & Charles, 1970). 4. Richard N. Gardner, Sterling-Dollar Diplomacy: The Origins and Prospects of Our International Economic Order (New York: Columbia University Press, 1980), pp. 7-9. See also pp. 101-12, 382-84
600 International Organization over the two centuries of its existence.Central to the economic side of the theory is the assumption that we have only two choices about the form of economic structure:liberal,based on free trade,and mercantilist,based on protection.Because the relationship between the two is mutually exclusive, only limited possibilities exist for policies that combine elements of both. Within this very restricted framework of choice,arguments connecting eco- nomic structure to the use of force have been made on two levels:domestic and international. In the period leading up to the triumph of free trade,arguments on the domestic level dominated the liberal case.Mercantilism was seen to arise from the nature of aristocratic states,and therefore the political priority of liberals was to topple the interventionist,power-seeking state structures that were the legacy of the eighteenth century.Liberals envisaged states that, because the bourgeoisie dominated national politics,would be both inherently disinclined to seek power and anxious to avoid war. The classical liberal view was,therefore,that the character of international relations was determined principally by the character of states.Liberal states would produce a harmonious system,mercantilist states a discordant one. Free trade straddled the domestic-and international-level arguments.It served on the one hand as a device for attacking the domestic bastions of the mercantilist state and on the other,as both the natural expression of the liberal state and the mechanism by which international harmony could be realized. Unfortunately,neither the minimal states nor the perfectly competitive markets envisaged by the classical liberals developed,and consequently nei- ther did the international harmony that they were supposed to generate. Instead,states moved toward nationalism and mass politics,and interven- tionist governments and highly distorted markets became everywhere the rule.s Because history did not unfold in line with liberal assumptions,the ar- guments about the relationship between domestic structure and the use of force have become confused and controversial.The image of the liberal state has been subtly usurped by mass democracies whose domestic structures are far removed from those envisaged by the early 19th-century liberals. Such states still derive some of their legitimacy from the carry-over of the classical liberal image,the principal connection between the two being the ideological primacy of individualism and democracy. But the rise of socialist and Marxist ideologies-a phenomenon associated with the absorption of the lower classes into the political life of the state- has raised all sorts of new perspectives on,and new controversies about, the impact of domestic structure on the use of force.Collectivists have 5.For a summary of this development,see E.H.Carr,Nationalism and after (1945;rpt. London:Macmillan,1968),pp.1-33
600 International Organization over the two centuries of its existence. Central to the economic side of the theory is the assumption that we have only two choices about the form of economic structure: liberal, based on free trade, and mercantilist, based on protection. Because the relationship between the two is mutually exclusive, only limited possibilities exist for policies that combine elements of both. Within this very restricted framework of choice, arguments connecting economic structure to the use of force have been made on two levels: domestic and international. In the period leading up to the triumph of free trade, arguments on the domestic level dominated the liberal case. Mercantilism was seen to arise from the nature of aristocratic states, and therefore the political priority of liberals was to topple the interventionist, power-seeking state structures that were the legacy of the eighteenth century. Liberals envisaged states that, because the bourgeoisie dominated national politics, would be both inherently disinclined to seek power and anxious to avoid war. The classical liberal view was, therefore, that the character of international relations was determined principally by the character of states. Liberal states would produce a harmonious system, mercantilist states a discordant one. Free trade straddled the domestic- and international-level arguments. It served on the one hand as a device for attacking the domestic bastions of the mercantilist state and on the other, as both the natural expression of the liberal state and the mechanism by which international harmony could be realized. Unfortunately, neither the minimal states nor the perfectly competitive markets envisaged by the classical liberals developed, and consequently neither did the international harmony that they were supposed to generate. Instead, states moved toward nationalism and mass politics, and interventionist governments and highly distorted markets became everywhere the rule.5 Because history did not unfold in line with liberal assumptions, the arguments about the relationship between domestic structure and the use of force have become confused and controversial. The image of the liberal state has been subtly usurped by mass democracies whose domestic structures are far removed from those envisaged by the early 19th-century liberals. Such states still derive some of their legitimacy from the carry-over of the classical liberal image, the principal connection between the two being the ideological primacy of individualism and democracy. But the rise of socialist and Marxist ideologies-a phenomenon associated with the absorption of the lower classes into the political life of the statehas raised all sorts of new perspectives on, and new controversies about, the impact of domestic structure on the use of force. Collectivists have 5. For a summary of this development, see E. H. Carr, Nationalism and after (1945; rpt. London: Macmillan, 1968), pp. 1-33
Economics and security 601 devised extensive critiques of capitalist democracies based on the charge that their domestic structures generate international conflict through the mech- anisms of imperialism and neocolonialism.In return,the advocates of cap- italist democracy have made collectivist states,whether fascist or communist, the heirs to the villainies of mercantilism.Despite their totally different class base,the neomercantilist states are seen to be as power-seeking and expan- sionist as their aristocratic forebears.This dispute muddies the whole con- temporary question about the relationship between domestic structure and the use of force,and it denies the capitalist democracies any clear claim to the classical liberal arguments linking domestic structure to international harmony. Historical realities have also done violence to classical liberal assumptions about free trade and international harmony of interest.The original liberal assumptions were formulated in the context ofa strikingly simple international economic system.Britain was the sole industrial power.Trade was therefore conducted primarily in functionally different items and reflected the high harmony of real interdependence implicit in Ricardian assumptions about comparative advantage.But despite the triumph of free trade in the middle of the century,or perhaps because of it,the international economic system rapidly became much more complex,and serious flaws disturbed the harmony of the long 19th-century peace. Free trade was accompanied by a massive expansion of imperialism despite vigorous opposition to such developments from the advocates of free trade.? Indeed,Lenin's interpretation sees the 19th-century harmony as resulting from the availability of colonial territory,thereby discounting the whole liberal case.8 More recent versions of this line of thinking implicate free trade as a cause of the chronic weakness of states in the periphery.Because of the rather confused balance between free trade and protectionism leading up to 1914,however,the First World War is not normally interpreted by those arguing within the liberal tradition as providing clear evidence either for or against the liberal case. 6.Kenneth Waltz,"The Myth of Interdependence,"in Charles Kindleberger,ed.,The Inter- national Corporation (Cambridge:MIT Press,1970),pp.205-6. 7.See John Gallagher and Ronald Robinson,"The Imperialism of Free Trade,"and Oliver MacDonagh,"The Anti-Imperialism of Free Trade,"both in A.G.L.Shaw,ed.,Great Britain and the Colonies 1815-1865 (London:Methuen,1970),chaps.7 and 8;and D.C.M.Platt, "The Imperialism of Free Trade:Some Reservations,"Economic History Review 21,2 (1968), pp.296-306. 8.V.I.Lenin,Imperialism:The Highest Stage of Capitalism (1916).For a less ideological discussion of the role of"environmental supply"in international relations,see Richard Rosecrance, International Relations:Peace or War?(New York:McGraw-Hill,1973),chap.6. 9.See Robert Skidelsky,"Retreat from Leadership:The Evolution of British Economic Foreign Policy,1870-1939,"in Benjamin Rowland,ed.,Balance of Power or Hegemony:The Interwar Monetary System (New York:New York University Press,1976),pp.147-92,and Stephen D. Krasner,"State Power and the Structure of International Trade,"World Politics 28,3(1976), pp.31747
Economics and security 601 devised extensive critiques of capitalist democracies based on the charge that their domestic structures generate international conflict through the mechanisms of imperialism and neocolonialism. In return, the advocates of capitalist democracy have made collectivist states, whether fascist or communist, the heirs to the villainies of mercantilism. Despite their totally different class base, the neomercantilist states are seen to be as power-seeking and expansionist as their aristocratic forebears. This dispute muddies the whole contemporary question about the relationship between domestic structure and the use of force, and it denies the capitalist democracies any clear claim to the classical liberal arguments linking domestic structure to international harmony. Historical realities have also done violence to classical liberal assumptions about free trade and international harmony of interest. The original liberal assumptions were formulated in the context of a strikingly simple international economic system. Britain was the sole industrial power. Trade was therefore conducted primarily in functionally different items and reflected the high harmony of real interdependence implicit in Ricardian assumptions about comparative advantage.6 But despite the triumph of free trade in the middle of the century, or perhaps because of it, the international economic system rapidly became much more complex, and serious flaws disturbed the harmony of the long 19th-century peace. Free trade was accompanied by a massive expansion of imperialism despite vigorous opposition to such developments from the advocates of free trade.7 Indeed, Lenin's interpretation sees the 19th-century harmony as resulting from the availability of colonial territory, thereby discounting the whole liberal case.8 More recent versions of this line of thinking implicate free trade as a cause of the chronic weakness of states in the periphery. Because of the rather confused balance between free trade and protectionism leading up to 1914, however, the First World War is not normally interpreted by those arguing within the liberal tradition as providing clear evidence either for or against the liberal case.9 6. Kenneth Waltz, "The Myth of Interdependence," in Charles Kindleberger, ed., The International Corporation (Cambridge: MIT Press, 1970), pp. 205-6. 7. See John Gallagher and Ronald Robinson, "The Imperialism of Free Trade," and Oliver MacDonagh, "The Anti-Imperialism of Free Trade," both in A. G. L. Shaw, ed., Great Britain and the Colonies 1815-1865 (London: Methuen, 1970), chaps. 7 and 8; and D. C. M. Platt, "The Imperialism of Free Trade: Some Reservations," Economic History Review 21,2 (1968), pp. 296-306. 8. V. I. Lenin, Imperialism: The Highest Stage of Capitalism (1916). For a less ideological discussion of the role of "environmental supply" in international relations, see Richard Rosecrance, International Relations: Peace or War? (New York: McGraw-Hill, 1973), chap. 6. 9. See Robert Skidelsky, "Retreat from Leadership: The Evolution of British Economic Foreign Policy, 1870-1939," in Benjamin Rowland, ed., Balance of Power or Hegemony: The Interwar Monetary System (New York: New York University Press, 1976), pp. 147-92, and Stephen D. Krasner, "State Power and the Structure of International Trade," World Politics 28,3 (1976), pp. 317-47
602 International Organization Equally as disturbing as imperialism was the effect of increasing numbers of industrial countries.Not only did this increase result in the growth of intense trade competition,which fed into the imperialist drive,but it also undermined the real interdependence of trade in functionally dissimilar items.10 Rising competition also led to problems of surplus capacity and therefore,ironically,to rising demands for protectionism,as characterized most clearly by the situation in the 1980s. But despite these assaults on free trade,two important lines of argument survive that link it firmly to declining incentives for states to use force in their relations with each other.These arguments are first,that free trade substantially reduces the number of targets to which force might appropriately be applied in the pursuit of state interests;and second,that it increases the vulnerability of actors,therefore making them disinclined to entertain the risks of resorting to force. These arguments rest on direct structural consequences of free trade.Their logic therefore stands independent of all the controversies that surround the other aspects of the liberal case.Furthermore,these arguments are on the international rather than on the national level.Their impact requires only that states be willing to implement free-trade policy.The arguments thus allow a considerable degree of flexibility in the domestic structure of states, a feature that fits well with the actual composition of the liberal economy since 1945 and no doubt accounts for some of the wide influence of the liberal case in the postwar era. Given the controversy attending the other aspects of the liberal case,es- pecially the highly ideological debate surrounding the character of capitalist democracies,these two arguments have provided the case's backbone in the period since 1945.The balance of the liberal case has thus changed dra- matically.In the classical period the absence of democracy caused the weight of argument to be focused on the domestic structure of states.But in the modern period both the predominance of democracy in the core states and the disputes about its political effects have largely shifted the burden of the case onto arguments at the international level. It is important to note that these arguments do not require perfect free trade.The modern liberal case requires only that the level of restriction on trade be sufficiently low to allow the principle of comparative advantage to operate effectively.When that condition is met,both the separation of wealth from territory and the increase in vulnerability can come into play.The logic does not require free movement of labor or capital,but the relatively free movement of money is an important factor in maintaining trade.Thus a highly imperfect free-trade system will still count as liberal. Several writers have commented on the first argument-the connection between a liberal economy and the declining attractiveness of traditional 10.Waltz,"Myth of Interdependence,"pp.205-20
602 International Organization Equally as disturbing as imperialism was the effect of increasing numbers of industrial countries. Not only did this increase result in the growth of intense trade competition, which fed into the imperialist drive, but it also undermined the real interdependence of trade in functionally dissimilar items.10 Rising competition also led to problems of surplus capacity and therefore, ironically, to rising demands for protectionism, as characterized most clearly by the situation in the 1980s. But despite these assaults on free trade, two important lines of argument survive that link it firmly to declining incentives for states to use force in their relations with each other. These arguments are first, that free trade substantially reduces the number of targets to which force might appropriately be applied in the pursuit of state interests; and second, that it increases the vulnerability of actors, therefore making them disinclined to entertain the risks of resorting to force. These arguments rest on direct structural consequences of free trade. Their logic therefore stands independent of all the controversies that surround the other aspects of the liberal case. Furthermore, these arguments are on the international rather than on the national level. Their impact requires only that states be willing to implement free-trade policy. The arguments thus allow a considerable degree of flexibility in the domestic structure of states, a feature that fits well with the actual composition of the liberal economy since 1945 and no doubt accounts for some of the wide influence of the liberal case in the postwar era. Given the controversy attending the other aspects of the liberal case, especially the highly ideological debate surrounding the character of capitalist democracies, these two arguments have provided the case's backbone in the period since 1945. The balance of the liberal case has thus changed dramatically. In the classical period the absence of democracy caused the weight of argument to be focused on the domestic structure of states. But in the modern period both the predominance of democracy in the core states and the disputes about its political effects have largely shifted the burden of the case onto arguments at the international level. It is important to note that these arguments do not require perfect free trade. The modem liberal case requires only that the level of restriction on trade be sufficiently low to allow the principle of comparative advantage to operate effectively. When that condition is met, both the separation of wealth from territory and the increase in vulnerability can come into play. The logic does not require free movement of labor or capital, but the relatively free movement of money is an important factor in maintaining trade. Thus a highly imperfect free-trade system will still count as liberal. Several writers have commented on the first argument-the connection between a liberal economy and the declining attractiveness of traditional 10. Waltz, "Myth of Interdependence," pp. 205-20
Economics and security 603 targets for the use of force-noting particularly the lowered interest in territory and wealth as objects of force in the post-1945 context.11 In a liberal economic system the costs of using force in pursuit of economic interests are likely to outweigh any gain,because markets and resources are already available on competitive terms. The liberal claim to separate the pursuit of wealth from the control of territory marks a major distinction between liberal and mercantilist systems, and it is the basis for much of the connection between free trade and peace. When wealth and welfare are directly associated with territorial control,force has a high utility within the economic sphere.That this high utility is likely to lead to actual use of force is compellingly evinced by the history of both the 1930s and the long period of classical mercantilism that preceded the 19th-century Pax Britannica.It is this contrast with the mercantilist system that makes the role of free trade so important.Liberal economics can be offered not only as being positively conducive to peace in its own right but also as being a specific cure for the problems of mercantilism. The second argument-that free trade increases the vulnerability of states and therefore reduces their incentives to resort to force-is most frequently found in the literature on interdependence.'2 The complex network of de- pendencies that results from free trade requires individual actors to depend increasingly on the availability of both key imports and export markets for indigenous products.This dependence on the larger pattern of exchange relations means that states become vulnerable.Participation in a liberal economy automatically erodes the pursuit of economic self-reliance. Because states in a liberal economy are more vulnerable,the use of force declines for two reasons.First,instruments other than military ones become a more effective,appropriate,reliable,and economical means of conducting international relations.Second,because states are dependent across a range of relationships,their fear of self-damage will incline them to refrain from using force even when the issues are not economic ones. These effects are amplified when the liberal system has been in operation for many years and its higher levels of welfare have become institutionalized in domestic political life.When high levels of domestic welfare are dependent on the maintenance of liberal economic relations,governments become es- pecially vulnerable to economic pressure,as Britain discovered during the 11.Klaus Knorr,Power and Wealth (London:Macmillan,1973),p.196,and"On the Inter- national Uses of Military Force in the Contemporary World,"Orbis 21,1(1977),pp.7-9,16; Robert Keohane and Joseph Nye,Power and Interdependence (Boston:Little,Brown,1977), p.28;Robert W.Tucker,The Inequality of Nations (London:Robertson,1977),pp.174-75; Robert J.Art,"To What Ends Military Power?"International Security 4,4(1980),pp.31-35; and Wolfram Hanrieder,"Dissolving International Politics:Reflections on the Nation-State," American Political Science Review 72,4 (1978),pp.1279-80. 12.See,for example,Keohane and Nye,Power and Interdependence,pp.28-29;Tucker, Inequality of Nations,pp.174-75;and Robert Gilpin,U.S.Power and the Multinational Cor- poration (London:Macmillan,1976),p.227
Economics and security 603 targets for the use of force-noting particularly the lowered interest in territory and wealth as objects of force in the post- 1945 context. " I In a liberal economic system the costs of using force in pursuit of economic interests are likely to outweigh any gain, because markets and resources are already available on competitive terms. The liberal claim to separate the pursuit of wealth from the control of territory marks a major distinction between liberal and mercantilist systems, and it is the basis for much of the connection between free trade and peace. When wealth and welfare are directly associated with territorial control, force has a high utility within the economic sphere. That this high utility is likely to lead to actual use of force is compellingly evinced by the history of both the 1930s and the long period of classical mercantilism that preceded the 19th-century Pax Britannica. It is this contrast with the mercantilist system that makes the role of free trade so important. Liberal economics can be offered not only as being positively conducive to peace in its own right but also as being a specific cure for the problems of mercantilism. The second argument-that free trade increases the vulnerability of states and therefore reduces their incentives to resort to force-is most frequently found in the literature on interdependence.'2 The complex network of dependencies that results from free trade requires individual actors to depend increasingly on the availability of both key imports and export markets for indigenous products. This dependence on the larger pattern of exchange relations means that states become vulnerable. Participation in a liberal economy automatically erodes the pursuit of economic self-reliance. Because states in a liberal economy are more vulnerable, the use of force declines for two reasons. First, instruments other than military ones become a more effective, appropriate, reliable, and economical means of conducting international relations. Second, because states are dependent across a range of relationships, their fear of self-damage will incline them to refrain from using force even when the issues are not economic ones. These effects are amplified when the liberal system has been in operation for many years and its higher levels of welfare have become institutionalized in domestic political life. When high levels of domestic welfare are dependent on the maintenance of liberal economic relations, governments become especially vulnerable to economic pressure, as Britain discovered during the 11. Klaus Knorr, Power and Wealth (London: Macmillan, 1973), p. 196, and "On the International Uses of Military Force in the Contemporary World," Orbis 21,1 (1977), pp. 7-9, 16; Robert Keohane and Joseph Nye, Power and Interdependence (Boston: Little, Brown, 1977), p. 28; Robert W. Tucker, The Inequality of Nations (London: Robertson, 1977), pp. 174-75; Robert J. Art, "To What Ends Military Power?" International Security 4,4 (1980), pp. 31-35; and Wolfram Hanrieder, "Dissolving International Politics: Reflections on the Nation-State," American Political Science Review 72,4 (1978), pp. 1279-80. 12. See, for example, Keohane and Nye, Power and Interdependence, pp. 28-29; Tucker, Inequality of Nations, pp. 174-75; and Robert Gilpin, U.S. Power and the Multinational Corporation (London: Macmillan, 1976), p. 227
604 International Organization Suez crisis.In effect,interdependence becomes addictive.The preservation of accumulated joint gains necessarily becomes a core government objective. Both economic activity and political expectation structure themselves around its continuance,and withdrawal becomes increasingly costly and painful.3 Knowledge of this situation constrains governments from using military in- struments for any except the most basic objectives. But if we take these two strong international-level arguments and try to use them to explain the long peace since 1945,a large anomaly emerges, namely,that the liberal system is not universal in extent.If the liberal eco- nomic system is only partially applicable to the international system as a whole,its ability to explain a period of relative harmony must be corre- spondingly limited. The most obvious consequence of nonuniversality is the inevitable rela- tionship of force between the liberal subgroup and any other large international power.Since actors outside the liberal sphere cannot be assumed to be subject to its logic,the liberal subgroup must play the balance-of-power game in order to ensure its own security.The character of that larger game will clearly determine the overall pattern of peace and war to a much greater extent than will the internal dynamic of the liberal subsystem. Nonuniversality also has serious consequences for the liberal case on the domestic level.Two domestic lines of argument relate to those stemming from interdependence.First,it can be argued that the pressure of economic competition causes states within a liberal system to favor resource allocations to investment rather than to defense.4 Second,it can be argued that liberal economics sustains individualist,materialist,and humanist values,which erode the will of the state to use force.(A more cynical version of this second argument holds that the democratic mass politics that arises from these values forces governments to favor resource allocations to civil consumption over defense.)To the extent that these arguments are true,states within a liberal system will consistently tend to underprovide themselves with military capability. This domestic liberal dynamic traps governments within a liberal subgroup in a permanent policy dilemma.They must resolve on a continuing basis the contradiction between the internal pressure to minimize their relationship with force and the external pressure to play the balance of power.If domestic liberalism leads to underprovision or underuse of force,governments risk the external destruction of their values.But if they overreact to external threat,they risk the internal destruction of liberal values,and possibly of 13.Edward L.Morse,"Interdependence in World Affairs,"in J.N.Rosenau,K.W.Thompson, and G.Boyd,eds.,World Politics (New York:Free Press,1976),p.676;Knorr,Power and Wealth,p.9;C.A.Murdock,"Economic Factors as Objects of Security,"in Klaus Knorr and Frank Trager,eds.,Economic Issues and National Security (Lawrence:Regents Press of Kansas, 1977),pp.70-72;and Hanrieder,"Dissolving International Politics,"pp.1279-80. 14.For discussion,see Gilpin,War and Change,chap.4
604 International Organization Suez crisis. In effect, interdependence becomes addictive. The preservation of accumulated joint gains necessarily becomes a core government objective. Both economic activity and political expectation structure themselves around its continuance, and withdrawal becomes increasingly costly and painful.'3 Knowledge of this situation constrains governments from using military instruments for any except the most basic objectives. But if we take these two strong international-level arguments and try to use them to explain the long peace since 1945, a large anomaly emerges, namely, that the liberal system is not universal in extent. If the liberal economic system is only partially applicable to the international system as a whole, its ability to explain a period of relative harmony must be correspondingly limited. The most obvious consequence of nonuniversality is the inevitable relationship of force between the liberal subgroup and any other large international power. Since actors outside the liberal sphere cannot be assumed to be subject to its logic, the liberal subgroup must play the balance-of-power game in order to ensure its own security. The character of that larger game will clearly determine the overall pattern of peace and war to a much greater extent than will the internal dynamic of the liberal subsystem. Nonuniversality also has serious consequences for the liberal case on the domestic level. Two domestic lines of argument relate to those stemming from interdependence. First, it can be argued that the pressure of economic competition causes states within a liberal system to favor resource allocations to investment rather than to defense. 14 Second, it can be argued that liberal economics sustains individualist, materialist, and humanist values, which erode the will of the state to use force. (A more cynical version of this second argument holds that the democratic mass politics that arises from these values forces governments to favor resource allocations to civil consumption over defense.) To the extent that these arguments are true, states within a liberal system will consistently tend to underprovide themselves with military capability. This domestic liberal dynamic traps governments within a liberal subgroup in a permanent policy dilemma. They must resolve on a continuing basis the contradiction between the internal pressure to minimize their relationship with force and the external pressure to play the balance of power. If domestic liberalism leads to underprovision or underuse of force, governments risk the external destruction of their values. But if they overreact to external threat, they risk the internal destruction of liberal values, and possibly of 13. Edward L. Morse, "Interdependence in World Affairs," in J. N. Rosenau, K W. Thompson, and G. Boyd, eds., World Politics (New York: Free Press, 1976), p. 676; Knorr, Power and Wealth, p. 9; C. A. Murdock, "Economic Factors as Objects of Security," in Klaus Knorr and Frank Trager, eds., Economic Issues and National Security (Lawrence: Regents Press of Kansas, 1977), pp. 70-72; and Hanrieder, "Dissolving International Politics," pp. 1279-80. 14. For discussion, see Gilpin, War and Change, chap. 4
Economics and security 605 the liberal economic system,by militarism.In this sense the political dynamic of liberalism,like that of any other revolutionary political ideology,is seriously constrained in realization by not being universally applied. 2.Noneconomic explanations for the decline in the use of force since 1945 The fact that the post-1945 liberal system is not universal requires us to ask how well it corresponds to the decline in the use of force during the same period.If major discrepancies exist,the decline in the use of force must also be explained in noneconomic terms.If other explanations appear plausible, the liberal case is diminished to the extent that the alternatives are powerful. The principal area of decline in the use of force since 1945 has been the absence of war among the major powers.More arguably,there are grounds for thinking that decolonization has reduced the use of force in relations between North and South. These two categories of decline have been in what Robert Art calls the "physical"use of force:war or direct violence between states.But in what he calls the"peaceful"use of force,the picture is quite different.s Deterrence has offset the decline in war among the major powers,by substituting a “peaceful'use for a“physical'”one.Almost everywhere else the use of military power short of fighting flourishes in the traditional fashion.Con- sidering just"peaceful"uses of force,it is only among relations within the Western group of states that one can identify a major decline.Hardly any of these states deploy their forces against each other,and hardly any of them view others in the group as a significant source of military threat.16 Thus,while there has been no uniform decline in the use of force,there have been some significant sectional declines.7 By far the largest decline is centered on the Western states,particularly in relations among them but 15.Art,"To What Ends,"p.5.Thomas Schelling and Robert Osgood have also made extensive use of a very similar distinction.See Schelling,Arms and Influence (New Haven:Yale University Press,1966),chap.1,and Osgood and Robert W.Tucker,Force,Order and Justice (Baltimore:Johns Hopkins Press,1967),pt.I,chaps.1 and 3. 16.Greece and Turkey are notable exceptions to this generalization. 17.For the disutility view,see Walter Millis,"The Uselessness of Military Power,"in William Coplin and Charles Kegley Jr.,eds.,A Multi-Method Introduction to International Politics (Chicago:Markham,1971),pp.114-27.Public doubts about the utility of force arose both from the paralysis of deterrence and from America's debacle in Vietnam.They stimulated a host of rebuttals,most of which focused on the continued utility of"peaceful"uses of force despite increased restraints on its"physical"use.See Art,"To What Ends,"pp.27-29;Michael Howard,"Military Power and International Order,"International Affairs 40,3(1964),p.405; Osgood and Tucker,Force,Order and Justice,p.179;Edward A.Kolodziej and Robert Harkavy, "Developing States and the International Security System,"Journal of International Afairs 34,1 (1980),p.59;Laurence Martin,"The Changed Role of Military Power,"International Afairs special issue (November 1970),p.107.For a useful overview of the debate,see Knorr, “On the International Uses,”pp.5-27
Economics and security 605 the liberal economic system, by militarism. In this sense the political dynamic of liberalism, like that of any other revolutionary political ideology, is seriously constrained in realization by not being universally applied. 2. Noneconomic explanations for the decline in the use of force since 1945 The fact that the post- 1945 liberal system is not universal requires us to ask how well it corresponds to the decline in the use of force during the same period. If major discrepancies exist, the decline in the use of force must also be explained in noneconomic terms. If other explanations appear plausible, the liberal case is diminished to the extent that the alternatives are powerful. The principal area of decline in the use of force since 1945 has been the absence of war among the major powers. More arguably, there are grounds for thinking that decolonization has reduced the use of force in relations between North and South. These two categories of decline have been in what Robert Art calls the "physical" use of force: war or direct violence between states. But in what he calls the "peaceful" use of force, the picture is quite different.'5 Deterrence has offset the decline in war among the major powers, by substituting a "peaceful" use for a "physical" one. Almost everywhere else the use of military power short of fighting flourishes in the traditional fashion. Considering just "peaceful" uses of force, it is only among relations within the Western group of states that one can identify a major decline. Hardly any of these states deploy their forces against each other, and hardly any of them view others in the group as a significant source of military threat.'6 Thus, while there has been no uniform decline in the use of force, there have been some significant sectional declines.'7 By far the largest decline is centered on the Western states, particularly in relations among them but 15. Art, "To What Ends," p. 5. Thomas Schelling and Robert Osgood have also made extensive use of a very similar distinction. See Schelling, Arms and Influence (New Haven: Yale University Press, 1966), chap. 1, and Osgood and Robert W. Tucker, Force, Order and Justice (Baltimore: Johns Hopkins Press, 1967), pt. I, chaps. 1 and 3. 16. Greece and Turkey are notable exceptions to this generalization. 17. For the disutility view, see Walter Millis, "The Uselessness of Military Power," in William Coplin and Charles Kegley Jr., eds., A Multi-Method Introduction to International Politics (Chicago: Markham, 1971), pp. 114-27. Public doubts about the utility of force arose both from the paralysis of deterrence and from America's debacle in Vietnam. They stimulated a host of rebuttals, most of which focused on the continued utility of "peaceful" uses of force despite increased restraints on its "physical" use. See Art, "To What Ends," pp. 27-29; Michael Howard, "Military Power and International Order," International Affairs 40,3 (1964), p. 405; Osgood and Tucker, Force, Order and Justice, p. 179; Edward A. Kolodziej and Robert Harkavy, "Developing States and the International Security System," Journal of International Affairs 34,1 (1980), p. 59; Laurence Martin, "The Changed Role of Military Power," International Affairs special issue (November 1970), p. 107. For a useful overview of the debate, see Knorr, "On the International Uses," pp. 5-27