(This is Part 2 of a series. Go back to Part 1.)
We see a similar rhythm in the rise and fall of nations and empires from 1500 AD to the present, as documented by Paul Kennedy in The Rise and Fall of the Great Powers.
Kennedy demonstrates that each empire in turn develops a strong economic base, and because of its increasing strength in trade, industry and finance, it is able to assert greater and greater military power abroad.
During this period of great success, however, internal strains build up. These strains have many causes, but perhaps the major one is that the Great Power eventually takes on military commitments beyond its means and enters a period of "imperial overstretch."
Eventually this over-reaching of military commitments exhausts the empire economically and it suffers a more or less precipitous decline in its influence on world affairs. This debilitating decline then provides for the rise of the next Great Power.
An example is Imperial Spain in 1519 AD. By that date the Spanish monarch, Charles V, had become Holy Roman Emperor and had an empire which stretched from Austria to Aragon and from The Netherlands to Naples.
This near-hegemony over Europe persisted, to varying degrees, over the next 140 years or so. But internal financial stresses kept increasing. The Hapsburg monarchs consistently spent more on military afffairs than they took in, even though they were receiving wealth from their colonies in the New World.
Consequently, Charles V and his successors Philip II and Philip IV were obliged to tax and then borrow greater and greater sums from all areas of the empire to finance the large and increasing military expenditures resulting from the over-extension of the empire.
Over time this exhausted Spain's economy and finances, and from the 1640's on this inner economic decline began to show up externally in military affairs. After 1859 and the Treaty of the Pyrenees, Spain began a rapid collapse to second-rate status.
Next came Great Britain. From 1760 onward it had parlayed a dominance in naval commerce into being the world's number one economy by 1815.
From there the Industrial Revolution, which occured in Britain decades ahead of other countries, increased its dominance to an astonishing degree. From 1760 to 1860 the United Kingdom's share of world manufacturing production soared from 1.9% to 19.9%.
By 1860 the United Kingdom made 53% of the world's iron, 50% of its coal and consumed half its cotton. It was responsible for one-fifth of the world's commerce and two-fifths of its trade in manufactured goods. Moreover, its empire was the first truly global one, stretching from India to Canada, from Southern Africa to Australia.
Moreover, the United Kingdom had absorbed Adam Smith's warning in The Wealth of Nations (1776) that armed forces were "unproductive" and did not add value to the national economy the way that a farm or factory did. So all through the empire's "growing" period it kept its military expenditures low, less than 2-3% of GNP.
But from 1880 on, with increasing commitments around the globe, the British empire enormously increased its imperial expenditures. As it did so, it began a relative economic decline. In Joseph Chamberlain's memorable phrase, Britain had become "the weary Titan, staggering under the too vast orb of its fate."
From 1880 to 1913 the United Kingdom's share of world manufacturing output fell from 22.9% to 13.6%; its share of world trade shrank from 23.2% to 14.1%. Within a few more years the British empire had effectively collapsed.
A final example is the United States. For a century after 1850, aided by rapid industrialization, advances in mass production and sophisticated management techniques, the U.S. economy expanded continually as a percentage of world output.
By 1960, aided anew by its entrepreneurial innovations in information technology, the U.S. accounted for no less than one-quarter of total world GNP and about 45% of world manufacturing production.
The U.S. bestrode the world now as a colossus. Interestingly, it was about this year when the U.S. stock market's advance-decline line—a broad measure of the market's strength—reached its all-time peak.
But other forces were at work. Because of its efforts in World War II and then its increasing commitments during the Cold War, the United States had built up an increasing military presence in the world, so much so that it reached "imperial overstretch" militarily and economically.
By 2004 the U.S. was maintining 725 overseas military bases around the world amid a vast array of strategic commitments. Indeed, it was spending more on the military than all other large industrialized nations combined, just as Spain in 1600 had by far the largest army and Britain in 1900 had by far the largest navy.
Experts estimate that in 2004 the U.S. was spending, in open and hidden areas of the budget, about 8% of its GNP on the military, a far larger percentage than any other country. And it was doing so at a time when its share of world GNP and manufacturing production was about half what it was a half-century earlier.
Significantly too, a vastly larger percentage of U.S. R&D money was going to the military than in other countries. While China, Japan, the Asian Tigers, the European Union and others were primarily focusing on creating goods for world markets, the U.S. was spending larger and larger sums on unproductive military expenditures.
If history is a guide, at some point this "weary Titan," like Imperial Spain and Victorian Britain and the Roman and Ottoman empires before it, will suffer, as a result of increasing financial strains, a rapid implosion of its economy. It's worth noting that U.S. markets reached their peak in 2000, some four years ago. Time will tell.
But what deeper implications can be drawn from this pattern—in both empires and scientific paradigms—of external success, increasing internal strain and then ultimate collapse?
(This is the end of Part 2. Go to Part 3.)
—jim sloman, 2.16.04 for Sep 30
|
