Bandwagoning, Network Benefits and the Stability of U.S. Unipolarity

There is a debate going on between neoconservatives and others on the right versus traditional international relations theorists and liberals about the stability of the international system of U.S. unipolarity. International Security recently devoted an entire issue to the debate (vol. 30, no. 1, Summer 2005). Obviously it has significant implications for future foreign policy. The argument of the neoconservative has to date been all too easy: if hegemony always provokes a balance, where is it? It has been nearly twenty years since the dissolution of the bipolarity of the Cold War and nothing. And by the way, soft balancing doesn’t count.

The obvious answer to this criticism is that such politically costly, wrenching determinations are very difficult for states to make. Foreign policy establishments are extremely conservative — and rightly so since the survival of the state is at stake — and so only make such a drastic choices as to alter a decades-long foreign policy precedent after the long accumulation of failures — or after the indisputable occurrence of one catastrophic failure.

The choice between bandwagoning versus counterbalancing is essentially an economic calculation. Bandwagoning entails certain costs, mostly those of subordination, but so long as the benefits outweigh the costs, bandwagoning will remain a profitable national security choice. But the cost-benefit analysis is not carried out in a vacuum. Like all such analyses, it is one made in a competitive environment. Bandwagoning might be preferable, even when the costs are extremely high, if the field of choice consists of a security monopoly (unipolarity) — in other words, if the alternative is to go it alone. However, in a system where states have the option of bandwagoning with one of an array of powers, a state will badwagon with the state or alliance in which it perceives the most profitable arrangement of costs and benefits.

A significant advantage to bandwagoing with the United States to date has consisted in the benefit column of the array of international public goods supplied by the U.S. and by the network effects of the U.S.-centric system. On the cost side, historically the U.S. has made the price paid by allied states comparatively very low — think of the subordination costs of allying with the Soviet Union. But two things are happening under right-wing domination of U.S. foreign policy.

First, the U.S. is altering the calculation of costs and benefits. As the U.S. becomes more tight-fisted and capricious in the provision of international public goods, the benefit side starts to look pretty skimpy. And as the majority of the cost side comes from subordination costs, the more the U.S. demands a unidirectional loyalty, the greater the costs to a potential ally become. An act of loyalty is an exchange. When one nation makes a compromise with another, its aim is to make a purchase on some future reverse compromise. A nation compromising keeps a balance sheet of its sacrifices and when it sees that it is garnering nothing comparable in return, it will conclude that it is being ripped off.

A related problem, and much more significant over the long-tem, is that network effects are zero sum. The benefits to using Microsoft products are only partly the quality of the products themselves. The rest of the benefit comes from the fact that everyone else uses Microsoft products too. To e-mail a document is easy because you can rest assured that the recipient uses Word too. If everyone was using Linux instead, the benefits would accrue there and it wouldn’t matter so much how slick Microsoft products were.

One alliance is advantageous in so far as the states comprising the alliance are many, powerful, tightly bound together and offer a broad and deep array of public international goods. These advantages aren’t absolute, but comparative.

States allying with the U.S. are all different, with differing perceived interests and security problems, owing to differing geography, ethnic populations, levels of development, economic makeup, trading partners, and so on. As a result, each makes a different calculation of the profitability of its alliance with the United States. As the United States toughens the terms of its relations with the rest of the world, different nations will drop out at different assessed levels of cost and benefit. But here is where the zero-sum of network benefits becomes so pernicious. For each nation pursuing a security option other than bandwagoning with the United States, the net benefit of allying with the U.S. is reduced and that that of other options, namely that of joining a counterbalancing coalition, is increased.

And there is a feedback loop where this alters the analysis of cost and benefit of bandwagoning with the U.S. The more states that are in a counterbalancing coalition, the more attractive becomes that coalition — all other things being equal. Since the advantages of one coalition is comparative with other coalitions in the system, the strength of one is the weakness of another. And since membership in one alliance typically entails some consequence among states part of a competing alliance, each defection simultaneously decreases the value of membership in the spurned alliance and increases that of the alliance embraced. As more states join the counterbalancing coalition, the deeper the pool of international public goods on offer becomes.

At some point along the spectrum of the United States toughening the terms of its relations with the rest of the world and the trading off of network benefits, a tipping point is reached. The opposing alliance becomes competitive with and then overcomes that that of the United States. They are then in a position to use negative inducements to wrench the plum alliance partners from the U.S. coalition. The contenders find themselves in a position similar to the U.S. during, say, the lead up to the Iraq war, where nations that opposed opted to lay low or feign support, lest they engender the wrath of the U.S.

The two outstanding benefits of bandwagoning with the United States are coverage under the U.S. security umbrella — including that of extended nuclear deterrence — and access to U.S. markets. But both of these will be in declining absolute and comparative value in the next few decades.

U.S. relative military power — and relative military power is all there is — has been on the decline since its apex in 1945. Most pernicious is that though while relative U.S. military spending has been rising throughout most of this period, relative U.S. military strength on the ground has been declining. As the Iraq war shows, at the present price level the U.S. cannot subdue a nation with ten percent of our population and six-tenths of a percent of our gross national product. In al Qaeda we have a small distributed network funded to the tune of a few million dollars a year, whose military capital is even smaller a proportion of our own than their manpower, that now apparently represents an existential threat to the U.S. and is a dogged, nearly unconquerable menace.

Nuclear proliferation will complicate extended deterrence to the point where it can no longer be maintained. The U.S. could nearly convince the Europeans that we were willing to trade Paris for New York when a potential Soviet takeover of Europe was at stake, but could we convince Saudi Arabia that we would trade Los Angeles for Riyadh in a contest with Iran? Hence another reason for missile defense: to preserve the credibility of extended deterrence and thus the benefit to states of subordinating themselves to U.S. designs for a little longer.

The economic story of the latter half of the Twentieth Century is similarly that of the relative economic decline of the United States. This is a trend that will only accelerate in the Twenty-First Century as China and India continue to develop. The Economist Intelligence Unit predicts that the GDP of China may surpass that of the United States in purchasing power parity as early as 2017. Dean Baker similarly predicts about a decade, with China’s economy growing to three times that of the United States by the end of the Twenty-First Century (“The World in 2026“, The World in 2006, Special Edition; Baker, Dean, “The Social Security Shortfall and the National Defense Shortfall,” CEPR, April 2005; though Sun Bin predicts that China will never surpass more than 80 percent of U.S. GDP, “When will China’s GDP overtake the US?,” 29 December 2005). With a billion people each, neither country has to match the U.S. in GDP per capita or standard of living for total economy, aggregate purchasing power, tax receipts and military spending to outstrip that of the United States. And while they’re at it, why not outbid the United States at the IMF, hence gaining a controlling vote at that institution.

It’s like global climate change: U.S. military exhaustion is the thawing northern permafrost and the rise of the Chinese economy is the melting Greenland Ice Sheet of the international system. Both are cataclysms that threaten to push the international system over the hump where the trends become accelerating and self-sustaining.

To the too easy neoconservative argument of “show me a balance,” should be a similarly easy retort that the future is long. Things obviously won’t stay the same: they are already well down the path to changing. When material circumstances change, the relation of nations will follow. They always do; it’s just that sometimes ideology is a lagging indicator.

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