Will hegemonic war end the American crisis?

Interplay between Turchin's secular cycle and Modelski's Leadership Cycle

As I argued in my previous post, most of the common secular cycle crisis resolutions are unlikely today. The typical resolution is generated from causes internal to the society, typically as the result of rising political conflict between elite factions. For example, Figure 1 compares the size of the elite factions in the years before the Civil War and today. Shown is the ratio of the size of the South:North and Red:Blue factions over time (see chapter 2 of America in Crisis for details). The figure suggests that by 2040, the “Red” faction will be about as outnumbered as Southern elites were in 1850, suggesting some sort of dramatic move by the Red faction would need to happen by then to prevent their political defeat. So this sort of analysis could given insight into when a Civil War II might happen.

But, there is a big difference between the two periods. The vary existence of plantation owners as elites was under threat, as three-fifths of their wealth was the value of their slaves which they feared Republicans planned to emancipate. No such threat is faced by red elites, whose property and elite status are secure regardless of who is in power, so there nothing to fight about. Hence the conflict is likely to remain purely political, operating on the symbolic level. For example, recent release of texts from prominent Fox news commenters show that they make false statements they do not believe to promote symbols of a beleaguered Red champion fighting against electoral fraud in order stoke political paranoia and keep the rubes watching.

Figure 1. Balance of power shifts over two period in American history

As I concluded last time, as long as profits (or QE) flow into the stock market, the sort of financial catastrophe that triggered resolution last cycle can be avoided. Any diversion of this flow threatens the status of current elites, Red and Blue alike. Preserving it may be the only thing on which they agree.

There is one thing that could put a fly in the ointment, however. Large-scale war would require profits be invested into war production rather than stock buybacks, threatening the financial economy that underlies SP culture and elite status. That is, large scale war is incompatible with continuation the neoliberal order. The last secular cycle ended with WW II mobilization, which led directly to a more equal economy (see section 2.8 of America in Crisis).

Another outcome of WW II was the emergence of United States as the global hegemon. Hegemonic theories of international governance propose that one strong power, the hegemon, brings a form of order to international relations, allowing for the continued development of civilization. A variety of theories of the self-organization of the international states system have been proposed. The theory best supported by evidence, in my opinion, is Modelski and Thompson’s Leadership cycle, which is described in Appendix A of America in Crisis. It proposes a cycle in which hegemonic powers arise, have their day in the sun, decline, and then are replaced over a century-long cycle. The current hegemon is the United States, the one before them was Britain and before them, the Netherlands.

The Global War phase of the Leadership Cycle determines the next hegemon. The last Global War was WW I. After the war the nation that should have become the new hegemonic power and begin a new cycle failed to do so. America chose not to join the League of Nations and take on a leadership role in international affairs, turning inward and retreating behind her flanking oceans. Because of the lack of US leadership, when Hitler invaded the Rhineland, there was no “coalition of the willing” to drive him out and WWII followed. Hence the previous Global War period did not end with WW I, but continued on with WW II, which was essentially a repeat of the earlier war.

As a result of this anomalous outcome, Modelski and Thompson projected the next Global War phase to occur in the second quarter of the 21st Century. The outbreak of the Russo-Ukraine war in 2022 might reasonably be seen as the beginning of the forecasted Global War Phase. There appears to be a real possibility for a period of conflict pitting a rising Chinese challenger against a divided American hegemon. American hawks have made a case for war in the event of a Chinese attempt to take Taiwan by force, which has been a stated objective of the Chinese state since 1949. Indeed, President Biden has already stated the US would intervene militarily in the event of a Chinese invasion of Taiwan.

The Ukraine war has revealed deficiencies in America’s ability to supply munitions in a protracted war. If Modelski and Thompson’s model is still valid, a conflict with China would involve great power coalition warfare, which as Paul Kennedy noted 35 years ago, are long drawn out (and expensive) slugfests:

What does seem incontestable, however, is that in a long-drawn out Great Power (and usually coalition) war, victory has repeatedly gone to the side with the more flourishing productive base—or, as the Spanish captains used to say, to him who has the last escudo.

This means that in the event of a war with a Russo-Chinese “axis” against a US-led coalition, America will have to scale up industrial production, not only of munitions, but of all the things the US current imports from China. The trillions of dollars of “wealth” represented by the stock market capitalization isn’t the sort of “escudo” that wins Global Wars; it needs to be converted into munitions and manpower. In short, it needs an economy that builds stuff. Doing so will necessarily mean the diversion of profits from stock buybacks to real investment to build the necessary productive capacity, which would mean a falling stock market and the end of inflation control via financial flows, requiring imposition of high taxes on wealthy Americans.

This would erode the SP culture underlying the current neoliberal order, which is precisely what happened last cycle. Choosing to pursue hegemony puts us in the same position as then in terms of cultural evolution. This suggests that the Global War phase forces a choice between hegemony or neoliberalism. To the extent that neoliberalism is dependent on the globalization hegemony makes possible, it is possible that a resolution to the secular cycle crisis might eventually be forced on American elites regardless of what they choose to do.

At present, the correlation of forces seems stacked against the US and the West. If China truly intends to invade Taiwan, it seems sensible to do so when the US is still enmeshed in Ukraine. Despite the size of the EU economy, Europe has played a much smaller role in the Russo-Ukraine war than has the US. Preventing a defeat in Europe requires that the US continue to provide the bulk of the Western support for the war. Should war break out over Taiwan while the Ukraine war is ongoing, the US may be forced to choose to focus on one or lose both.

It may be possible for the US to obtain a Ukraine settlement favorable to both Russia and Ukraine. Western apologists for Putin argue that NATO expansion pushed Putin’s hand to invade Ukraine before he faced the presence of NATO troops just 300 miles from the Russian capital. I think there is something to this, and if correct, Putin might prefer a weak NATO in Ukraine than the powerful NATO currently subsidizing a war that is bleeding his country dry. He might prefer this so much that he would consider a five year armistice and complete withdrawal back the pre-2014 borders in exchange for US withdrawal from NATO and five year pullout of US troops from Europe. America might even sweeten the pot with an American withdrawal from the Middle East. A European alliance without the US is no threat to Russia and adding Ukraine doesn’t change that. A standoff between defensively strong, but offensively weak European and Russian blocs could result in a stable frontier, giving Putin more degrees of freedom in his dealings with other Eurasian powers. A secure border makes Euro-Russian economic cooperation again possible, providing Putin more independence with respect to China, which seems to me to be in the American interest.

Pursuing such a policy would allow the US to actually achieve the “pivot to the East” proclaimed by President Obama. It would signal the end of the original Cold War and the War on Terror as well.  They are no longer needed to justify the military-industrial complex, given the Chinese challenge. Furthermore, doing this would put the US in the best position to credibly deter a Chinese attempt on Taiwan, preventing the sort of conflict that could preserve the status quo.

By separating Europe and America, the two great bastions of the West, and the American pivot to the East, a tacit Western Alliance, would exist that could put serious pressure on any Russo-Chinese “axis” in the event of a coalitional conflict. Here I am using Samuel Huntington’s Clash of Civilizations conceptualization to populate the Modelski cycle with civilizational actors rather than national ones. Huntington saw the multipolar world arising out of the Cold War as being organized along cultural lines rather than ideologies. Here Russia leads Orthodox civilization and China the Chinese civilization, while Western civilization is represented by European and North American blocs. This leaves several other potentially neutral civilization players: Islamic, South Asian and Latin America.

But what does civilization even mean? An important property of a civilization is a characteristic cultural evolved psychology, with the prototype example being WEIRD (Western Educated Individualist Rich Democratic) psychology. WEIRD psychologies underlie Western civilization/culture. As Huntington noted, the Cold War saw a struggle between different WEIRD ideologies (capitalist democracy and authoritarian socialism), which defined the “First World” (those aligned with the US), the “Second World” (countries aligned with the Socialist Great Powers) and the “Third World” (the rest).  Using an estimate of the average “psychological distance” between citizens of the US (the WEIRDest country and so the standard against which WEIRDness is measured) and citizens of other countries, I constructed a WEIRDness measure with Egypt (the most distant country from the US) having a value of 0 and the US at 100.  I then calculated the average value of this scale for first, second, and third world countries to obtain average values of 70±14 (n=18), 53±13 (n=17) and 40±16 (n=35). Here we see the First World countries aligned with the US were twice as close to the US in their culturally-evolved psychology as the Third World, with the Second World in between. What Huntington saw was that after triumph of Capitalist Democracy over Socialist Autocracy, rather than the whole world joining the winning team as Francis Fukuyama suggested, countries would continue to pursue international politics on the basis of cultural/psychological affinity rather than ideology.

As we have seen the three worlds during the Cold War were already divided in terms of their cultural affinity with the US. Since the end of Cold War a number of former Soviet bloc countries, with an average score of 57±7 have joined the West to produce a bloc with average value 67±14. It now looks as though a Russia-China axis is forming to oppose world domination by the West. We can look at the cohesiveness of their alliance by looking at their “Chineseness” measure, measured in the same way as the WEIRDness measure. This group is small, consisting of Russia, China, Belarus, Iran and Pakistan and has an average score of 58±33. The large standard deviation shows this second grouping is going to be less cohesive than the first.

Were the US to pursue the Ukraine strategy I suggest above, there might be less close cooperation between Russia (WEIRD score 64) and China (36 score) than with a Western Europe (score 68), independent of the US. On the other hand, with Russia and China sandwiched between a European and a Pacific alliance might feel encircled, driving closer Sino-Russian relations. The combination of Chinese manufacturing prowess and Russian resources has the makings of a powerful bloc.

This discussion so far has assumed the US will choose to continue to maintain hegemony by, for example, defeating Russia in Ukraine or defending Taiwan. Isolationists might argue that America should cede the eastern hemisphere to Eurasian powers to haggle over. A nonhegemonic America lacks the authority to protect American property rights overseas, and would have to encourage domestic investment.

Retreat from hegemony might affect the dollar’s status as the global exchange currency and the value of its currency. Carla Norrlof identifies three faces of power affecting dollar hegemony. The first is the power to persuade and influence decisions, such as offering U.S. military protection in exchange for that country’s support of the dollar. The second is the power to change rules governing global trade such US support for the WTO by leaving GATT, rendering it obsolete. The third face of power is expectations and belief in the American continuity of power that promotes a bandwagon effect maintaining continuing its usage of the dollar. Only one of these would be directly affected by a US withdrawal from military hegemony so it is unclear what effect, an end to American hegemony would have on the dollar or trade flows. If it did result in a decline in the value of the dollar, it would likely result in inflation, unless accompanied by large tax increases and fiscal constraint to replace the anti-inflation effects of trade deficits.

In conclusion, continued pursuit of hegemony could provide a mechanism for a secular cycle crisis resolution during the current Global War period should the US be dragged into a military confrontation, or even an expensive series of proxy wars. A future post will explore how these processes may impact political evolution.