Interdependence has historically led to friction and war.
In the nineteenth and early twentieth centuries, France and Germany feared each other’s power, so each tried to shape the other’s behavior. The result was that the two countries went to war with each other three times in seventy years. Prior to World War I, the English journalist (later a member of Parliament) Norman Angell wrote a widely read book called The Great Illusion, in which he demonstrated the high degree of economic interdependence in Europe and asserted that this made war impossible. Obviously, the two World Wars proved that that wasn’t the case. Advocates for free trade continue to use this argument. Yet, as we will see, a high degree of global interdependence, with the United States at the center, actually increases—rather than diminishes—the danger of war.
Since the world does not have relatively equal powers willing to go on adventures, this danger is somewhat mitigated. The American military dominance is such that no country can use force to shape its relationship with America. But there is substantial resistance to U.S. hegemony, and there have been many wars since 1991.
Short of a devastating war, international influence can only be realigned based on economics, a process that will span generations if it ever happens. China is the emerging power, but “the U.S. economy is 3.3 times larger than China’s. China must sustain an extraordinarily high growth rate for a long time in order to close its gap with the United States. In 2009, the United States accounted for 22.5 percent of all foreign direct investment in the world, which, according to the United Nations Council on Trade and Development, makes it the world’s single largest source of investment. China, by comparison, accounted for 4.4 percent.”
The U.S. is also the largest borrower in the world, but that indebtedness does not hinder its influence on the international system.
Whether it stops borrowing, increases borrowing, or decreases it, the American economy constantly shapes global markets. It is the power to shape that is important. Of course, it should also be remembered that every dollar the United States borrows, others lend. If the market is to be trusted, it is saying that lending to the United States, even at currently low interest rates, is a good move.
Many countries impact other countries, but the U.S. is an empire because of the sheer number of countries it affects, and the intensity of this impact.
The fact that the U.S. has faced failures in the Middle East does not undermine the argument that it is an empire. Failure and empire are not incompatible.
In the course of imperial growth and expansion, disasters are not infrequent. Britain lost most of its North American colonies to rebellion a century before the empire reached its apex. The Romans faced civil wars in recurring cycles.
The last decade saw a passionate American war on terrorism, but in the next decade, there will be a need for less passion and more pragmatism in relations with countries like Israel, Iran, Poland, and Turkey.