Is the Era of US Dominance Over?

Author: Sangay Linkins, The Australian National University

Introduction

The United States has been a global superpower since 1945 but has long faced challenges from less powerful states such as the Soviet Union, Japan, and the People’s Republic of China (PRC).  I contend the era of US dominance is not over as the country has significant power projection capabilities involving the unequalled tools of statecraft at its disposal. 

After having differentiated between ‘hegemony’ and ‘dominance’, I acknowledge briefly that the short period of unipolar US hegemony following the USSR’s dissolution has ended.  This can be witnessed by the narrowing power differential between the US and its strategic competitors, with continued American relative decline rendering it unable to unilaterally shape the international system without serious challenges from emerging powers in their region, predominantly the PRC within the Indo-Pacific.  I then explore American pre-eminence in military and economic capabilities to demonstrate continuing dominance.  Whilst examining a state’s capability to attract others, such as via soft power and diplomatic measures, I focus only on coercive capability – military and economic power – as the basis from which other means of power projection can develop.  Overall, despite the loss of hegemonic status and strategic competition with the PRC on a regional level, American global dominance continues. 

The End of Hegemony and the Ever-Narrowing Power Differential

I note the distinction between ‘hegemony’ and ‘dominance’, arguing whilst the US no longer is in possession of the former, due to regional-level resistance from emerging powers, it enjoys the latter on a global level.  Hegemony is defined as the ability of actors, predominantly states, to shape the international system, either coercively or non-coercively, due to their overwhelming military and economic capabilities.  On the other hand, dominance refers more simply to a state’s superiority over others in the above categories.  As I argue is the case of the US, state characteristics and capabilities can allow for states to enjoy dominance without also having hegemony. 

US global dominance in the military and economic spheres continues, although its period of unipolar global hegemony following the dissolution of the USSR in 1991 has ended.[1] Whilst talk of a dangerously narrow power differential between the US and a ‘newly assertive’ PRC has been a prominent meme—as Johnston refers to it—in International Relations scholarship since 2010 especially,[2]American relative decline is not new.  Relative economic decline was experienced from the 1970s onwards due to integration measures in the European Economic Area, a European attempt at a counterweight to US hegemony, and rapid Japanese growth in the 1980s.[3] In 1953, the US had a 69% share of the combined GNP of advanced economies, compared with 3.6% by Japan, and 27.2% by the nascent European trading area (West Germany, France, Italy, and the United Kingdom).  By 1977, the US held 48%, with Japan holding 17.7% and the Big Four collectively responsible for 34.2%.  Deng Xiaoping’s reforms in the PRC from 1978-92 encouraged foreign investment and competition, bringing about rapid growth and, subsequently, enormous defence investment that has further reduced the gap between the US and “the rest”.[4] Mirroring American relative decline, strong local powers have established regional initiatives and institutions to challenge US influence, such as the PRC’s Belt and Road Initiative (BRI) and ‘String of Pearls’ strategy, and the Sino-Russian SCO.  Indeed, the US has been unable to prevent long-time allies from entering the Asian Infrastructure Investment Bank, demonstrating the end of American hegemony through a clear shift away from unquestioned support for the US.  Nevertheless, the above challenges are regional rather than global, and the US maintains its unrivalled global military and economic reach despite its years of relative decline.

Continued US Military Dominance

Although hegemony has waned, we still live in the era of US dominance. The most obvious demonstration of continuing US dominance is within the military sphere. The US spent $649 billion on defence in 2018—the largest amount in the world and accounting for over one-third of global defence expenditure.[5]  Compared with the US’ strategic competitors, the PRC spends only $250 billion and the Russian Federation only $61.4 billion,[6]although it must be noted that higher labour costs in the US partly account for the high American expenditure and that figures are only an estimate for the PRC as the government regularly underreports its military expenditure.  

Aside from larger budgets, US military dominance is underlined both by its unparalleled nuclear deterrent and the ease with which it maintains an active presence abroad.  The US has around 130,000 troops deployed abroad[7] and boasts unparalleled forward projection capabilities with 38 fully staffed military bases and over 600 ‘lily pads’ of approximately 200 people each stationed in every region.[8]  Comparatively, the United Kingdom comes second with 16 major bases[9] and the PRC has only one, located in Djibouti.[10]  Additionally, whilst increasingly vulnerable to new missiles, the US comes first in the world with 24 aircraft carriers in its military arsenal—traditionally instrumental in forward projection.[11] Comparatively, Italy comes second with five and the PRC comes eighth with one (although numbers are disputed).     

Furthermore, the US’ defence partnerships with allies provide a firm foundation for its global military dominance.  Its intelligence gathering relationships, such as the close working relationships with Israel, Singapore, and Japan, have allowed the US to monitor security developments around the world.  In particular, its Five Eyes alliance with the UK, Canada, Australia, and New Zealand provides enormous security intelligence benefits, with each country collecting intelligence on its surrounding region, and is a lynchpin of the firm relationship between the ‘Anglosphere Five’.[12]  The US’ unparalleled global alliance system is even more extensive; the NATO collective security alliance on both sides of the Atlantic and the hub-and-spokes system in North Africa, the Middle East, and the Indo-Pacific give the US dependable allies and act as a valuable force multiplier.

Comparatively, the PRC has no alliances of such great value; whilst the PRC- and Russia-dominated Shanghai Cooperation Organisation (SCO) comprising eight member-states has been portrayed as an anti-US response to NATO, it is riddled with mutual distrust, with few economic interlinkages and even less appetite for collective defence.[13]  In lieu of allies, the PRC has “close relationships”—such as with Pakistan and the Democratic People’s Republic of Korea (DPRK)—which in many ways resemble liabilities, and have in recent years become strained.  Whilst the PRC’s oil transportation needs are dependent on Pakistani infrastructure in Karachi, the growth of PRC-Pakistan ties has damaged relations with India and placed responsibility for the gargantuan task of combating unrest and terrorism in Pakistan on Beijing’s shoulders.[14] The DPRK’s utility as an ally is also questionable; whilst it provides a buffer against the US presence in the Republic of Korea, a substantial amount of Chinese money is spent in food and energy aid and Pyongyang’s unpredictable nuclear sabre-rattling provides poor optics for Chinese regional leadership.[15] The US’ strong alliances thus allow for force multiplication and the expansion of US power projection capabilities, whereas the PRC’s closest informal relations lack strategic benefit in comparison. 

On a related note, the US has a politico-geographic advantage in its security within North America, with two benign and close neighbours to the north and south.[16]  Comparatively, the PRC shares borders with 14 countries—more than any other state—which has brought significant problems.  It has major unresolved border issues with India over Aksai Chin and South Tibet,[17] and maritime border issues with Japan, the Republic of China, Vietnam, the Philippines, the Republic of Korea, Malaysia, Brunei Darussalam, and Indonesia over the East and South China Seas.[18] This is not to say the PRC is unable to resolve these border and sovereignty issues—the US experienced huge territorial flux in its first hundred years following independence as it annexed, purchased, and strong-armed its way into acquiring the territory making up the current US.  However, these seemingly intractable border disputes with unfriendly neighbours are reflective of the PRC’s lack of regional security and support, compared with the US’ secure regional position.  Overall, the factors discussed serve to underline US superiority over all other states in terms of military power projection capabilities.

Continued US Economic Dominance

Global American dominance is similarly reflected through its economic pre-eminence.  The US has been a major economic player since 1900 and has had the largest economy since 1945.[19] The US economy, in nominal gross domestic product (GDP), was estimated in 2017 at $19,485,394 million,[20]making up 24.32% of the global economy and underlining US economic power.[21] This is compared to the PRC, which holds 14.84% of the global economy at $12,234,781 million.[22] Furthermore, much has been made of the PRC eclipsing the US economy in purchasing power parity (GDP PPP) terms from 2014 onwards; in 2017, the PRC’s GDP (PPP, US Dollars) was at $19,854 billion, compared to the US’ $17,213.82 billion.[23] However, scholars have argued that far from demonstrating the end of US economic dominance, these numbers obscure the reality that PRC economic power is smaller than assumed.  The purchasing power parity exchange rate is a measure of how large the PRC’s GDP would be if costs of living were the same as those in in the US—an interesting measure for tourism and living standards but not indicative of the PRC’s global coercive economic capability.  A more illustrative measure relevant to power projection involves converting the PRC’s GDP, measured in the renminbi, to US Dollars, using market exchange rates.  The PRC’s GDP in this instance is only $9 trillion, compared to the US’ $16.87 trillion.[24] This measure indicates the PRC is capable of influencing global supply and demand only around half as much as the US can. 

The strength of the US’ capacity for coercive economic measures is not just a result of an enormous economy but also of its dominance within international economic institutions—

the World Trade Organisation (WTO, formerly the General Agreement on Tariffs and Trade [GATT]), the International Monetary Fund (IMF) and the World Bank (WB) in particular.  The US has enormous influence within these organisations as a result of favourable formal mechanisms, such as voting power pegged to the size of financial contributions, and informal conventions, such as the subjection of proposals for US approval.  The US provides around 17% of capital subscriptions to the IMF, resulting in the US gaining 17.3 per cent of votes—enough to veto policy changes requiring an 85% majority which threaten US interests.[25] Foot, MacFarlane, and Mastanduno have discussed the informal porousness of the IMF and WTO to ‘civil society’ and non-governmental organisations with lobby groups within the US Congress, reflective of significant US involvement in the institutions’ activities both officially and in private.[26]

Additionally, US economic power can be seen in its extraordinary international monetary and financial reach, which has earned it the title of a “sticky economic superpower, whose capacity to influence the world economy will linger,” although its relative economic weight may be in decline.[27] The US has enjoyed increased global monetary dominance, especially subsequent to policies enacted by the Federal Reserve in response to the 2007-2008 financial crisis.[28] As the world’s primary reserve currency, there is high foreign demand for US dollars, widely perceived as the safest option in light of uncertainty following the 1997 Asian financial crisis, the 2007 financial crisis, and the 2009 European debt crisis.  The US dollar is also widely used as both official and de facto currency, particularly in Central America, the Caribbean, and the Arabian Peninsula.  This wide use permits the US Government to borrow more cheaply than otherwise would be possible, earn seigniorage from the issuance of its currency internationally, and protect its own economy to an extent from any negative economic impacts of coercive economic action against its rivals.[29] 

Furthermore, the US leads the global financial sector, with the global market share of Wall Street investment banks rising to 50% in 2015, as European and Asian banks have floundered.[30] Volatility in American stock markets have direct repercussions on global capital flows. Finally, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network of financial transactions, whilst formally politically neutral, has bowed to US influence in the past, having blocked transactions to Cuba and Iran.[31] Seeing as SWIFT connects over 11,000 financial institutions in over 200 countries, its historic support of US foreign policy directives is a major boon to US coercive economic capabilities.  Such profound financial and monetary embeddedness in the world economy has manifested despite Chinese economic growth, rapid Indo-Pacific development, and, most recently, political opposition to the liberal economic order, demonstrating the strength and durability of US dominance within these sectors.  In addition to military dominance, therefore, the US is pre-eminent in its capability to use economic might to exert the greatest amount of international influence.

Conclusion

Having examined American coercive capabilities in the military and economic spheres, I conclude, in reference to the stated definitions, that the period of US global dominance continues, although US hegemony is over.  The only viable challenger is considerably weaker and presents only a regional challenge.  

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[1] Christopher Layne, “This Time it’s Real: The End of Unipolarity and the “Pax Americana”,” International Studies Quarterly 56, no. 1 (March 2012): 203-205. 

[2] Alastair Iain Johnston, “How New and Assertive is China’s New Assertiveness?” International Security 37, no. 4 (Spring 2013): 7-8.

[3] “The Sticky Superpower,” Economist, October 3, 2015, 2, http://media.economist.com/sites/default/files/sponsorships/BMC154/20151003_world_econ.pdf.

[4] Ibid.

[5] Nan Tian et al., “Trends in World Military Expenditure, 2018,” Stockholm International Peace Research Institute, April 2019, 2, https://www.sipri.org/sites/default/files/2019-04/fs_1904_milex_2018.pdf.

[6] Ibid.

[7] United States, Department of Defence, Defence Manpower Data Centre, Number of Military and DoD Appropriated Fund (APF) Civilian Personnel Permanently Assigned (Washington, DC: US GPO, June 30, 2019).

[8] United States, Department of Defence, “Base Structure Report – Fiscal Year 2015 Baseline,” 188-203, retrieved October 20, 2019, https://www.acq.osd.mil/eie/Downloads/BSI/Base%20Structure%20Report%20FY15.pdf.

[9] Army Technology, “British military bases abroad: what does the future hold?” December 20, 2018, https://www.army-technology.com/features/british-military-bases/.

[10] Ankit Panda, “The Chinese navy’s Djibouti Base: A ‘Support Facility’ or Something More?” Diplomat, February 27, 2017, https://thediplomat.com/2017/02/the-chinese-navys-djibouti-base-a-support-facility-or-something-more/.

[11] “Total Aircraft Carrier Strength by Country,” Global Firepower, accessed October 15, 2019, https://www.globalfirepower.com/navy-aircraft-carriers.asp.

[12] Andrew O’Neill, “Australia and the Five Eyes Intelligence Network: The Perils of an Asymmetric Alliance,” Australian Journal of International Affairs 71 (July 2017): 529, 530.

[13] Flemming Splidsboel Hansen, “Integration in the Post-Soviet Space,” International Area Studies Review 16, no. 2 (2013): 151-152.

[14] Derek Grossman, Keren Zhu, “What next for China-Pakistan Relations?” RAND Corporation, February 26, 2018, https://www.rand.org/blog/2018/02/what-next-for-china-pakistan-relations.html.

[15] Eleanor Albert, “The China-North Korea Relationship,” Council on Foreign Relations, June 25, 2019, https://www.cfr.org/backgrounder/china-north-korea-relationship.

[16] Aaron David Miller, “How Geography Explains the United States,” Foreign Policy, April 16, 2013, https://foreignpolicy.com/2013/04/16/how-geography-explains-the-united-states/.

[17] Selina Ho et al., “The Role of Ideas in the China-India Water Dispute,” Chinese Journal of International Politics 12, no. 2 (Summer 2019): 265.

[18] Johnston, “How New,” 17-30.

[19] Donald D. White, “The Nature of World Power in American History: An Evaluation at the end of World War Two,” Diplomatic History 11, no. 3 (July 1987): 182.

[20] “GDP (current US$) – United States,” World Bank, accessed October 19, 2019, https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=US&name_desc=true.

[21] Robbie Gramer, “Infographic: Here’s How the Global GDP is Divvied Up,” Foreign Policy, February 24, 2017, https://foreignpolicy.com/2017/02/24/infographic-heres-how-the-global-gdp-is-divvied-up/.

[22] “GDP (current US$) – China,” World Bank, accessed October 19, 2019, https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=CN&name_desc=true.

[23] Peter Robertson, “China’s economic power is actually a lot smaller than you think,” Conversation, December 29, 2017, https://theconversation.com/chinas-economic-power-is-actually-a-lot-smaller-than-you-think-88307.

[24] Ibid.

[25] Rosemary Foot et al., US Hegemony and International Organisations: The United States and Multilateral Institutions (Oxford: Oxford University Press, 2003), 99-100.

[26] Ibid., 112-113.

[27] “The Sticky Superpower”, 1.

[28] Ibid., 2.

[29] Ibid., 3.

[30] Ibid.

[31] Jo Harper, “Germany urges SWIFT end to US payments dominance,” Deutsche Welle, August 27, 2018, https://www.dw.com/en/germany-urges-swift-end-to-us-payments-dominance/a-45242528.