The Emergence of the Global Political Economy

William Thompson, Jeremy Black

• Publisher: Routledge
• Year: 2002
• Topic: Economics
• eBook ISBN:
  9781134610853
• Subtopic: Economic History
• Index: Economics

The Emergence of the Global Political Economy challenges the assumption that the international political economy is a recent phenomenon. Instead this volume asserts that the current global political economy began to take shape around 1500 and that some of today's key processes were already perceivable several hundred years ago.
The book explains the interdependence between long-term economic growth, global political leadership and global war and how this interdependence has evolved over the last 500 years, and includes discussion of:
*the ascendence of Western Europe and the significance of the 1490s
*the military superiority thesis
*sequences of leadership and of challenge to the global political economy
*the importance of commodities from sugar and cloth to slaves and bullion
*the Anglo-American rivalry until the First World War.

Part I

INTRODUCTION AND OVERVIEW

1
K-WAVES, LEADERSHIP CYCLES, AND GLOBAL WAR
An orientation

We tend to think of international political economy as a recent arrived phenomenon. Prior to the early 1970s, and especially the first oil shock in 1973–1974, academics had not shown a great deal of interest in the subject although, of course, people had been talking about political economy processes for some time. But as the study of international political economy (IPE) became increasingly fashionable, it also took on a marked preoccupation with current events. Since it was economic deterioration and recession on a world-wide scale that had galvanized concern with the subject perhaps that is not altogether surprising. The study of international relations, in general, is hardly immune to the same emphasis on “currentism”, but there are clear costs in treating these questions and processes ahistorically. The greatest cost is that it is quite difficult to make sense of processes that have been underway for centuries if we choose to look only at the most recent tail end. That is not to say that no one examines international political economy questions while paying sufficient attention to historical matters. There are a number of analysts who do pay attention to the origins of the processes they study. The point remains, however, that the central tendency is still one of assuming that history does not matter all that much.

One of the theses of this study is that history does matter a great deal to the study of international political economy. It does not matter for history’s sake alone. History matters in this case because current processes have been developing and evolving for a considerable period. To know how things work in the current world, we need to know their origins and how they have become structured with the passage of time. At the same time, these structures are not carved in stone. They change. We need to know what causes them to change. All these concerns advise against an exclusive preoccupation with the present.

The main thrust of this study is that the current global political economy began to take shape around 1500 and that some of the present’s key processes were already dimly perceivable several hundred years ago. The adjective “global” has a special meaning here. “Global” is not merely another synonym for “international” or “world”. The term “global” as used here refers to interregional transactions. Technically, interregional transactions have actually been going on for many thousands of years. It is possible, for instance, to study the evolution of a Eurasian or Afro-Eurasianpolitical economy since around 4000 BCE. The current global political economy thus was not born in or around 1500 CE. It had been shaped by more than 5000 years of history prior to that time.

This is not the time or place to take on a maximal history of political-economic transactions across regions. We are still only beginning to flesh out our understanding of how to do 6000-year histories. For the most part, a 500-year emphasis will be stressed here instead for several reasons. One is that the scale of global political economy began to encompass the entire planet about this time. A second reason is that western Europe began to become increasingly central to the operations of a global political economy some 500 years ago. Note that there is a difference between “began to become” and “became.” A third reason, not unrelated to the first two, is that some of the current system’s principal processes began to emerge between the end of the fifteenth and the early seventeenth centuries. Nevertheless, some processes require longer perspectives because they began to take shape long before 1500. Where necessary, a 1000-year vantage point will be assumed, especially in terms of the emergence of “modern” economic growth.

As long as we do not fall into the mental trap of thinking modern history began around 1500 and as long as there are specific reasons for looking at specific important changes, the questions that are adopted as central will tend to dictate the time period examined. Hence, the temporal focus of this study will emphasize historical processes of the late fifteenth through the early twentieth centuries, even though it will not be restricted to these same centuries in all instances. That is because three sets of questions will be examined. The first question set has to do with the ascent of western Europe or, more accurately, some parts of western Europe to a position of political-economic centrality. Why and how did this happen? These questions are explored in Chapters 3, 4, and 5.

A second set of questions pertains to the sequence of leadership and challenge that has become a hallmark of transitional changes in the global political economy. A singular leader emerges, is preeminent for a while, and then enters into a phase of relative decline. The leadership of the global political economy is then contested by a variable number of challengers who seek to supplant the incumbent system leader. We have gone through a number of iterations of this process and, therefore, it is possible to advance some generalizations about how the challenge process works. Who challenges whom, when, and to what effect? These questions are examined in Chapters 6, 7, and 8.

The third set of questions focuses on puzzles about structural change. The approach adopted here is highly structural. Chapter 9 reexamines the wisdom of this emphasis by looking at (and rebutting) the criticisms of historians who rebel at the notion that Britain was the leader of a global political economy in the nineteenth century. Chapter 10 looks more closely at one of the more curious elements of the challenge process. Why is it that the most successful challenger ends up defending the declining system leader against other challengers and then ascends almost by default? Chapter 10 examines the British-US transition up to the point at which their nineteenth-century rivalry ended. It might be thought this topic belongs to thesecond set of questions but its placement in the third set should become more clear in the context of Chapter 11’s scrutiny of long-term changes in the way system leaders are interrelated over time. The pattern is highly suggestive of fundamental changes in the organization of the global political economy’s management principles. Just because a process began to take shape 500 years ago does not imply that the shape assumed will remain unaltered into the future. The global political economy is evolving constantly. The trick is to decipher in what direction it is evolving.

There are certainly other questions to ask about the historical functioning of the global political economy but these three sets will have to suffice for one book. Prior to tackling them, though, some preliminary material needs first to be considered. Chapters 1 and 2 provide an overview of the main features of the global political economy as they have unfolded over the past few centuries. These two preliminary chapters also discuss many of the assumptions that will reappear in attempting to answer the three sets of questions described above.

AN ORIENTATION ON THE DEVELOPMENT OF THE
GLOBAL POLITICAL ECONOMY

Some of the most central questions in the study of the global political economy include:

• Why do preeminent states, and their associated political orders, rise and fall?
• Why are some types of economic activity more critical at some times than at others?
• Why do some parts of the world economy seem more central to economic operations at some times than at others?
• Why is economic growth intermittent rather than continuous, and what difference does it make?
• What relationships link intermittent processes of economic growth to such ostensibly political phenomena as war, domestic stability, and state-making?

These are all important questions. They address the basic rhythms of political-economic life; they are very much about how the world works. These questions are also closely related because of the rise and fall dynamics, the shifting centrality of the world economy, and the discontinuities of growth share roots in a thousand-year old, evolutionary process of long-run economic growth and structural change.

Among the core dynamics of these processes are long, Kondratieff waves (K-waves) of innovation and even longer cycles of politico-military preeminence and order (leadership long cycles). The shape of these processes are not perfectly uniform throughout time. Their periodicities are less than precise. They have a specific historical genealogy in the sense that their operations and transitions can be traced back roughly over the last millennium in a continuous fashion and seemingly no further, at least in a continuous fashion. Nor did they emerge abruptly with all of thecharacteristics that K-waves and leadership long cycles possess currently. On the contrary, almost 500 years went by before these processes began to assume the attributes associated with their contemporary manifestations. Similarly, we should not assume that these core dynamics must continue forever. They may but it is most unlikely that they will do so without undergoing substantial modification, just as they already have done in the past.

The remainder of this chapter will focus on providing an overview of the interdependence between long-term economic growth, global political leadership, and global war and how that interdependence has evolved over the past millennium. The arguments that are advanced constitute a type of world-systems analysis that does not embrace the central tenets of Wallersteinian “world-systems” analysis. While this interpretation shares an interest in macrostructures and their impact on micro-processes, the concern of the present focus is not oriented primarily toward the processes of capital accumulation, capitalism, and core-periphery divisions of labor. Rather, and perhaps betraying a disciplinary origin in political science, the focus is on waves of political leadership, order, and large-scale violence closely linked to processes of long-term economic growth. Thus, in the end, we arrive at a classical world-systems position: “economic” and “political” processes are tightly intertwined and reciprocally interdependent. However, our initial assumptions are not the same as those associated with world-systems analyses with a hyphen.

At the same time, these assumptions are hardly congruent with most historical and political science approaches to interstate conflict and international political economy. While there are certainly many different approaches to interpretation in the literature on international relations, mainstream approaches are reluctant to embrace the notions of systemic structures, high degrees of economic and military concentration, and historically patterned fluctuations in long-term economic growth and its variable impacts. Mainstream international relations prefers to stress the role of nation states as the principal actors in world politics. Many analysts argue that nation states are entirely free from structural constraints and opportunities. Movement to and from bipolarity and multipolarity are conceivable, even though the probable outcome is disputed, while unipolarity is deemed beyond the pale of likelihood. Short-term economic growth is the preferred province of economists and political economists alike. The operating attitude is that in the long term, we are all dead, so why worry about the ephemeral? The idea that some of those long-term patterns even exist and/or might influence behavior in the long- and short-term is more often ridiculed than examined empirically.

THE DOUBLE HELIX OF K-WAVES AND LONG CYCLES

K-waves represent surges of radical innovations that peak and decay over durations of approximately 50–60 years. Long cycles are periods of variable politico-military leadership reflecting the initially ascending and then eroding primacy of a singleworld power over durations of approximately 100 years. Each world powers order is tied to a specific pair of K-waves. The first wave in the set helps to propel a new systemic leader to preeminence. The second wave follows a period of intense conflict and is made more likely by the nature of the conflict. The period of intense conflict, in its own turn, is made more probable by the destabilizing, politico-economic outcomes of the first K-wave which catapults one or more states ahead of its competitors. The subsequent politico-military leadership is very much dependent on the nature of the struggle and the outcome of the intensive competition. Each set of four shocks (two innovation surges, one period of intense conflict, and the development of politico-military preeminence) thus define a distinctive era organized around the finite salience of a single state—the “world power” or the lead actor in the global politics and economy of its time.

Especially critical to this interpretation is the distinction between global and nonglobal activity. The global adjective is not used as a synonym for world or international political and economic activities. Global activities refer to interregional, long-distance transactions which, of course, have become increasingly salient. A principal question is when did a global system specializing in the political management of interregional transactions begin to emerge? To answer this question, it is not simply a matter of finding the first recorded instance of interregional transactions and commencing our history of the global system from that point on. Interregional transactions have been around for quite a long time but they were also characterized by a great deal of intermittence in ancient times. The question, then, is if we work back from our own time, how far back can the perceived continuity of the contemporary system be traced?

Modelski and Thompson (1996) find nine sequentially related sets of innovationbased leadership between 930 and 1973: two Chinese (Northern and Southern Sung), two Italian (Genoese and Venetian), one Portuguese, one Dutch, two British (Britain I and II) and, so far, one American.¹ The scope of these instances of leadership have become increasingly “global” and, therefore, focused on the management of interregional transactions. For a variety of reasons, conditions (population scale, urbanization, marketization, and maritime commerce) came together propitiously in tenth-century China to begin a continuous sequence of innovation-driven, longterm, surges of economic growth. The expansion of maritime trade (in the South China Sea and Indian Ocean) and the revived use of the Silk Roads on land facilitated the emergence of competing trading empires in the eastern Mediterranean that helped to transplant-transmit the growth surges and the innovation-based sequence of paired K-waves to the other end of Eurasia. At the end of the twentieth century and after several more geographical shifts in location, we appear to be in the process of entering a tenth K-wave set that may or may not assume a US leadership identity. It is too soon to tell for sure. Too many degrees of freedom remain open to human agency.

Table 1.1 lists the leaders and the chronological pattern of political and economic leadership. Each long cycle is characterized by four phases that can be interpreted in two different ways. If we wish to emphasize the rise of a new leader, the appropriate sequence of phases is agenda-setting, coalition-building, macrodecision, and execution. To emphasize the decline of an incumbent leader, the phase sequence is global war, world power, delegitimation, and deconcentration. Each phase delineates different types of behavior. The macrodecision/global war phase determines the identity of the next system leader or world power. The post-war execution/world power phase is the period of peak economic and politico-military leadership. Agenda-setting delegitimation is a period in which leadership declines and challenges to the existing world order become increasingly noticeable. New problems emerge that demand innovative responses. Finally, coalition-building/deconcentration is a period marked by competitive preparations for developing new versions of world order and succession to systemic leadership.

Table 1.1 Long cycles in global politics: learning and leadership patterns

The political processes of the leadership long cycle, it is argued, have coevolved with the economic processes of the K-wave. There are at least three reasons why this might be so:

1. Political leadership and waging global wars are expensive propositions that depend on adequate economic resources. Economic fluctuations, therefore, are likely to influence the exercise of political leadership.
2. The world economy’s activities are dependent on a minimal level of stability and security. Intensive conflicts within the political system are likely to influence the functioning of the world economy.
3. To emerge as the world’s politico-military leader requires technological leadership. Technological leadership, in turn, is predicated on the development of innovation in commerce and industry. Once some level of technological leadership is attained, politico-military leadership, or its pursuit in global war, can be quite useful in expanding the edge associated with technological leadership and protecting the consequent accumulation of wealth.

The economic carriers of these interdependent processes are the rise and decline of leading sectors or clusters of basic innovations that periodically restructure economic activities. The innovations are Schumpeterian in the sense that they encompass new ways of production, the opening of new markets and sources of raw materials, as well as new forms of business organization. They are also Schumpeterian in the sense that many of the old ways of doing things tend to be destroyed by the ascendance of new leading sectors. The innovations that fuel these long waves of economic growth may be limited to one or more of the various types of change but their implications for economic restructuring must be substantially more than merely routine increments to existing practices and activities. They revolutionize commerce and/or industrial production. They are not the only source of long-term growth (for example, population growth is another important source) but new technology does constitute one of the more significant sources.

Why should this pattern characterize long-term economic growth? Innovations are responses to problems encountered by economic (and political) agents. As commercial routes or industrial profits become increasingly unpredictable or unattainable, the search for new routes and production possibilities is quite likely. For instance, Europeans began searching for a way around the Mosl...

Table of contents

• COVER PAGE
• TITLE PAGE
• COPYRIGHT PAGE
• FIGURES
• TABLES
• PREFACE
• PART I: INTRODUCTION AND OVERVIEW
• PART II: THE ASCENDANCE OF WESTERN EUROPE
• PART III: THE LEADERSHIP CHALLENGE SEQUENCE
• PART IV: STRUCTURAL CHANGE AND EVOLUTION
• NOTES
• REFERENCES