Hegemonic Stability Theory and 19th Century Tariff Levels in Europe STOR Timothy J.McKeown International Organization,Vol.37,No.1.(Winter,1983),pp.73-91 Stable URL: http://links.jstor.org/sici?sici=0020-8183%28198324%2937%3A1%3C73%3AHSTAIC%3E2.0.CO%3B2-T International Organization is currently published by The MIT Press. Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use,available at http://www.istor.org/about/terms html.JSTOR's Terms and Conditions of Use provides,in part,that unless you have obtained prior permission,you may not download an entire issue of a journal or multiple copies of articles,and you may use content in the JSTOR archive only for your personal,non-commercial use. Please contact the publisher regarding any further use of this work.Publisher contact information may be obtained at http://www.jstor.org/journals/mitpress.html. Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed page of such transmission. The JSTOR Archive is a trusted digital repository providing for long-term preservation and access to leading academic journals and scholarly literature from around the world.The Archive is supported by libraries,scholarly societies,publishers, and foundations.It is an initiative of JSTOR,a not-for-profit organization with a mission to help the scholarly community take advantage of advances in technology.For more information regarding JSTOR,please contact support@jstor.org. http://www.jstor.org Wed Jan915:03:582008
Hegemonic Stability Theory and 19th Century Tariff Levels in Europe Timothy J. McKeown International Organization, Vol. 37, No. 1. (Winter, 1983), pp. 73-91. Stable URL: http://links.jstor.org/sici?sici=0020-8183%28198324%2937%3A1%3C73%3AHSTA1C%3E2.0.CO%3B2-T International Organization is currently published by The MIT Press. Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at http://www.jstor.org/about/terms.html. JSTOR's Terms and Conditions of Use provides, in part, that unless you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal, non-commercial use. Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at http://www.jstor.org/journals/mitpress.html. Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed page of such transmission. The JSTOR Archive is a trusted digital repository providing for long-term preservation and access to leading academic journals and scholarly literature from around the world. The Archive is supported by libraries, scholarly societies, publishers, and foundations. It is an initiative of JSTOR, a not-for-profit organization with a mission to help the scholarly community take advantage of advances in technology. For more information regarding JSTOR, please contact support@jstor.org. http://www.jstor.org Wed Jan 9 15:03:58 2008
Hegemonic stability theory and 19th century tariff levels in Europe Timothy J.McKeown Can the degree of"openness"of the international system,or at least of its capitalist state members,be explained by the existence of a single wealthy, powerful,and technologically advanced state that possesses both the capability and the motivation to create and maintain an open international system?In the past decade a number of students of international politics have essentially answered "yes"to this question.They have argued that the existence of a state possessing clear superiority over its nearest rivals-the United Kingdom in much of the 19th century and the United States in much of the 20th- is a necessary and sufficient condition for such an open system to emerge. They have explained the development of low-tariff trading systems and of the Bretton Woods monetary system in the 19th and 20th centuries in terms of the emergence of such"hegemonic"states.They have argued further that it is the power of these hegemonic states that leads to the emergence of open international economic systems. A hegemonic stability explanation of the existence of open regimes has obvious attractions.It is simple:openness is explained as a function of a certain distribution of capabilities among states.It is plausible:both the United Kingdom and the United States in their respective periods of preem- inence seem to fit the notion of a hegemonic state,both seem to have wanted an open system,both seem to have acted-at least at certain times-to create such a system,and a relatively open system did in fact emerge during the periods of their preeminence.It is also"political":it explains the configuration of the international economic system in terms of "power"rather than in terms of rational exchange. Perhaps for these reasons hegemonic stability theory has attracted an im- pressive assemblage of adherents.Mainstream economists and political sci- This article is based on the author's dissertation,"The Rise and Decline of the Open Trading Regime of the Nineteenth Century,"Stanford University,1982.I would like to thank Robert Keohane,David Sylvan,and two anonymous referees for their comments. International Organization 37,1,Winter 1983 0020-8183/83/010073-18 $1.50 C 1983 by the Massachusetts Institute of Technology and the World Peace Foundation
-- - - Hegemonic stability theory and 19th century tariff levels in Europe Timothy J. McKeown Can the degree of "openness" of the international system, or at least of its capitalist state members, be explained by the existence of a single wealthy, powerful, and technologically advanced state that possesses both the capability and the motivation to create and maintain an open international system? In the past decade a number of students of international politics have essentially answered "yes" to this question. They have argued that the existence of a state possessing clear superiority over its nearest rivals- the United Kingdom in much of the 19th century and the United States in much of the 20this a necessary and sufficient condition for such an open system to emerge. They have explained the development of low-tariff trading systems and of the Bretton Woods monetary system in the 19th and 20th centuries in terms of the emergence of such "hegemonic" states. They have argued further that it is the power of these hegemonic states that leads to the emergence of open international economic systems. A hegemonic stability explanation of the existence of open regimes has obvious attractions. It is simple: openness is explained as a function of a certain distribution of capabilities among states. It is plausible: both the United Kingdom and the United States in their respective periods of preeminence seem to fit the notion of a hegemonic state, both seem to have wanted an open system, both seem to have acted-at least at certain times-to create such a system, and a relatively open system did in fact emerge during the periods of their preeminence. It is also "political": it explains the configuration of the international economic system in terms of "power" rather than in terms of rational exchange. Perhaps for these reasons hegemonic stability theory has attracted an impressive assemblage of adherents. Mainstream economists and political sciThis article is based on the author's dissertation, "The Rise and Decline of the Open Trading Regime of the Nineteenth Century," Stanford University, 1982. I would like to thank Robert Keohane, David Sylvan, and two anonymous referees for their comments. International Organization 37, 1, Winter 1983 0020-8 183/83/0 10073- 18 $1 .SO O 1983 by the Massachusetts Institute of Technology and the World Peace Foundation
74 International Organization entists,and less orthodox scholars,have all embraced some form of the theory.'Given the diversity of intellectual and political commitments among these people,such a degree of consensus is quite remarkable.Unfortunately, it is also quite premature.Important conceptual and empirical difficulties have not been addressed,and alternative explanations for open regimes have received scant attention. 1.Hegemonic stability theory and 19th century tariff levels Hegemonic stability theorists agree that the hegemonic state has both the motivation and the capability to create and maintain open regimes.(Indeed, since theorists do not posit any other method by which these regimes can be created and maintained,the existence of the hegemonic state is both sufficient and necessary for open regimes to exist.)The hegemonic state is able to offer both bribes and threats.Those who emphasize bribery tend to treat open regimes as collective goods.They discuss the hegemonic state in terms reminiscent of Frohlich,Oppenheimer,and Young's discussion of the role of entrepreneurship in the creation of such goods,and worry about the cost to the hegemonic state of all those side-payments.2 Those who emphasize coercion worry less about benefits to other members of the system and more about the benefits flowing to the hegemonic state.3 In either case,it is argued, the hegemonic state has the resources to invest in creating and maintaining compliance with the regime in the face of member states'constant temptations to defect and take a“free ride.” In addition to the capability to create an open regime,the hegemonic state must possess a motivation for doing so.The motivation generally implied (if not actually cited)is that the decision makers of the hegemonic state expect that the open regime,while perhaps conferring benefits on all states, will confer special benefits on the hegemonic power.Its superior capabilities- in producing commodities efficiently,in financing and transporting these commodities,and in protecting these activities with military force,if nec- 1.C.P.Kindleberger,The World in Depression (Boston:Little,Brown,1973);R.Gilpin, U.S.Power and the Multinational Corporation:The Political Economy of Foreign Direct In- vestment (New York:Basic Books,1975);S.D.Krasner,"State Power and the Structure of International Trade,"World Politics 28 (1976),pp.317-47;R.O.Keohane and J.S.Nye, Power and Interdependence:World Politics in Transition (Boston:Little,Brown,1977);H. Magdoff,The Age of Imperialism (New York:Monthly Review Press,1969);A.MacEwan, "The Development of the Crisis in the World Economy,"in B.Steinberg et al.,eds.,U.S. Capitalism in Crisis (New York:Union for Radical Political Economics,1978);I.Wallerstein, The Modern World System,vol.2:Mercantilism and the Consolidation of the European World- Economy,1600-1750 (New York:Academic Press,1980). 2.Kindleberger,World in Depression;M.v.N.Whitman,"Leadership without Hegemony," Foreign Policy no.20 (1975),pp.138-64;N.Frohlich,J.A.Oppenheimer,and O.Young, Political Leadership and Collective Goods(Princeton:Princeton University Press,1971). 3.See the works by Krasner,Magdoff,and MacEwan cited in note I above
74 International Organization entists, and less orthodox scholars, have all embraced some form of the theory.' Given the diversity of intellectual and political commitments among these people, such a degree of consensus is quite remarkable. Unfortunately, it is also quite premature. Important conceptual and empirical difficulties have not been addressed, and alternative explanations for open regimes have received scant attention. 1. Hegemonic stability theory and 19th century tariff levels Hegemonic stability theorists agree that the hegemonic state has both the motivation and the capability to create and maintain open regimes. (Indeed, since theorists do not posit any other method by which these regimes can be created and maintained, the existence of the hegemonic state is both sufficient and necessary for open regimes to exist.) The hegemonic state is able to offer both bribes and threats. Those who emphasize bribery tend to treat open regimes as collective goods. They discuss the hegemonic state in terms reminiscent of Frohlich, Oppenheimer, and Young's discussion of the role of entrepreneurship in the creation of such goods, and worry about the cost to the hegemonic state of all those side- payment^.^ Those who emphasize coercion worry less about benefits to other members of the system and more about the benefits flowing to the hegemonic state.3 In either case, it is argued, the hegemonic state has the resources to invest in creating and maintaining compliance with the regime in the face of member states' constant temptations to defect and take a "free ride." In addition to the capability to create an open regime, the hegemonic state must possess a motivation for doing so. The motivation generally implied (if not actually cited) is that the decision makers of the hegemonic state expect that the open regime, while perhaps conferring benefits on all states, will confer special benefits on the hegemonic power. Its superior capabilitiesin producing commodities efficiently, in financing and transporting these commodities, and in protecting these activities with military force, if nec- 1. C. P. Kindleberger, The World in Depression (Boston: Little, Brown, 1973); R. Gilpin, U.S. Power and the Multinational Corporation: The Political Economy of Foreign Direct Investment (New York: Basic Books, 1975); S. D. Krasner, "State Power and the Structure of International Trade," World Politics 28 (1976), pp. 31747; R. 0. Keohane and J. S. Nye, Power and Interdependence: World Politics in Transition (Boston: Little, Brown, 1977); H. Magdoff, The Age of Imperialism (New York: Monthly Review Press, 1969); A. MacEwan, "The Development of the Crisis in the World Economy," in B. Steinberg et al., eds., U.S. Capitalism in Crisis (New York: Union for Radical Political Economics, 1978); I. Wallerstein, The Modern World System, vol. 2: Mercantilism and the Consolidation of the European WorldEconomy, 1600-1 750 (New York: Academic Press, 1980). 2. Kindleberger, World in Depression; M. v. N. Whitman, "Leadership without Hegemony," Foreign Policy no. 20 (1975), pp. 138-64; N. Frohlich, J. A. Oppenheimer, and 0.Young, Political Leadership and Collective Goods (Princeton: Princeton University Press, 197 1). 3. See the works by Krasner, Magdoff, and MacEwan cited in note 1 above
Hegemony theory and tariff levels 75 essary-will enable it to prevail over other states in the worldwide competition to extract the most gains from an open system.We may borrow from his- torians'arguments concerning the imperialism of free trade to argue that open systems are favored by the strong.4 Both Robert Gilpin and Stephen Krasner have explained the period of free trade in the mid 19th century as a product of British hegemony.The defeat of France in 1815 had removed the last serious challenger to British dominance outside Europe.The territorial redistribution that followed the end of the Napoleonic Wars checked French and Russian expansion on the European continent;British naval superiority checked extracontinental ex- pansion.3 Thereafter,British economic superiority asserted itself:the com- bination of efficient and technologically advanced British industry,rapid improvements in transportation,and the pax Britannica led to British dom- ination of the international economy by the mid 19th century.5 An increasingly open international trading system accompanied these de- velopments in the period 1820-1879.Britain was the "instigator and sup- porter"of the new structure of international trade.She used military force in Latin America and Africa;her military strength was important in Napoleon III's calculations regarding the desirability of a commercial treaty with Britain in 1860.7 Economically,her well-developed banking and finance system worked in conjunction with the emerging gold standard to create an inter- national payments system characterized by high levels of confidence and liquidity.8 When British hegemony began to decline,the open trading system began to decline as well.The pax Britannica was at its height in the period 1849-1880;thereafter,other states began to challenge British naval supe- riority,colonization became widespread,and states began to defect from the open trading system.British economic superiority began to fall off after 1880 as well.As Krasner notes,"Britain did not have the military or economic power to forestall these policies."However,the practical effects of this"mod- est"'closure were not as great as one might suppose,since the decline in trade as a proportion of national incomes was modest and since the United States had never been part of the open world system in the first place.0 2.Some conceptual difficulties Although hegemonic stability theory does have attractive properties,and although the preceding account is plausible and presents some empirical 4.J.Gallagher and R.Robinson,"The Imperialism of Free Trade,"Economic History Review, 2 d series,6(1953),pp.1-l5. 5.Gilpin,U.S.Power,pp.80-82. 6.Ibid,pp.83-85. 7.Krasner,"State Power,"pp.335-36. 8.Ibid,p.336. 9.Gilpin,U.S.Power,p.81. 10.Krasner,"State Power,"p.337
Hegemony theory and tariff levels 75 essary-will enable it to prevail over other states in the worldwide competition to extract the most gains from an open system. We may borrow from historians' arguments concerning the imperialism of free trade to argue that open systems are favored by the strong4 Both Robert Gilpin and Stephen Krasner have explained the period of free trade in the mid 19th century as a product of British hegemony. The defeat of France in 18 15 had removed the last serious challenger to British dominance outside Europe. The territorial redistribution that followed the end of the Napoleonic Wars checked French and Russian expansion on the European continent; British naval superiority checked extracontinental expan~ion.~Thereafter, British economic superiority asserted itselE the combination of efficient and technologically advanced British industry, rapid improvements in transportation, and the pax Britannica led to British domination of the international economy by the mid 19th ~entury.~ An increasingly open international trading system accompanied these developments in the period 1820-1879. Britain was the "instigator and supporter" of the new structure of international trade. She used military force in Latin America and Africa; her military strength was important in Napoleon 111's calculations regarding the desirability of a commercial treaty with Britain in 1860.' Economically, her well-developed banking and finance system worked in conjunction with the emerging gold standard to create an international payments system characterized by high levels of confidence and liq~idity.~ When British hegemony began to decline, the open trading system began to decline as well. The pax Britannica was at its height in the period 1849-1880; thereafter, other states began to challenge British naval superiority, colonization became widespread, and states began to defect from the open trading ~ystem.~ British economic superiority began to fall off after 1880 as well. As Krasner notes, "Britain did not have the military or economic power to forestall these policies." However, the practical effects of this "modest" closure were not as great as one might suppose, since the decline in trade as a proportion of national incomes was modest and since the United States had never been part of the open world system in the first place.I0 2. Some conceptual difficulties Although hegemonic stability theory does have attractive properties, and although the preceding account is plausible and presents some empirical 4. J. Gallagher and R. Robinson, "The Imperialism of Free Trade," Economic History Review, 2d series, 6 (1953), pp. 1-15. 5. Gilpin, U.S. Power, pp. 80-82. 6. Ibid., pp. 83-85. 7. Krasner, "State Power," pp. 335-36. 8. Ibid., p. 336. 9. Gilpin, U.S. Power, p. 81. 10. Krasner, "State Power," p. 337
76 International Organization evidence consistent with its argument,the conceptual difficulties are formidable. First,when is a state hegemonic?While it may not be necessary to posit possession of some precise share of world capabilities as a threshold for qualification as a hegemonic state,at least one ought to be as explicit as possible about the distributions of capability associated with hegemony,near- hegemony,and nonhegemony.For instance,what are we to make of the periods 1815-1849 and 1880-1914 in the light of Krasner's and Gilpin's comments?If the defeat of France,the settlement of Vienna,and undisputed British naval superiority really were the key ingredients in the establishment of British hegemony,why does Gilpin date the peak of that hegemony as beginning only in 1849?Similarly,if-as Krasner argues-Britain was not yet at the peak of her hegemony when she allegedly secured the opening of the trading system in the early 1860s,are we then to conclude that near- hegemonic states can achieve the same sorts of successes as truly hegemonic states?If so,how can we reconcile British success in the near-hegemonic period of the 1860s with British failure to maintain an open system in the near-hegemonic period of the 1880s? Related to this difficulty is the silence of hegemonic stability theory on the motivations and capabilities of the nonhegemonic states that are most likely to rival the hegemonic power.It might be the case that states that are nearly as efficient and technologically advanced as the hegemonic state exhibit nearly as strong a preference for an open trading system as the hegemonic leader.If that were true,then conflict over a desired trading system would be slight and little inducement would be required to achieve these states' assent to an open trading system.However,if potential rivals to the hegemonic state are less optimistic about their abilities to catch up to the hegemonic state,they may conclude that their interests are not served by an open trading system.In such a case the states that oppose an open system might well coalesce against the hegemonic state and its favored policy.If this were to occur,the capabilities required to maintain an open system would be much greater than under the first contingency;a level of capability sufficient to maintain hegemony in the first instance could well prove insufficient in the second. A third conceptual difficulty is even more serious.In what sense is heg- emonic stability theory about "power"?Gilpin's consideration of the im- portance of power rests on his general observation about the superiority of the Royal Navy,but he conveys no sense of how this military advantage translated into Britain's desired policy outcome.Krasner does provide some concrete examples of the role of military power in changing the tariff policies of states in Latin America and in securing regions of Africa for the British (He could have added the imposition of low tariffs on Turkey and China, an effort that engaged Britain and other Western states as well.)However, if hegemonic stability theory's only prediction were that a dominant European
76 International Organization evidence consistent with its argument, the conceptual difficulties are formidable. First, when is a state hegemonic? While it may not be necessary to posit possession of some precise share of world capabilities as a threshold for qualification as a hegemonic state, at least one ought to be as explicit as possible about the distributions of capability associated with hegemony, nearhegemony, and nonhegemony. For instance, what are we to make of the periods 18 15-1 849 and 1880-19 14 in the light of Krasner's and Gilpin's comments? If the defeat of France, the settlement of Vienna, and undisputed British naval superiority really were the key ingredients in the establishment of British hegemony, why does Gilpin date the peak of that hegemony as beginning only in 1849? Similarly, if-as Krasner argues-Britain was not yet at the peak of her hegemony when she allegedly secured the opening of the trading system in the early 1860s, are we then to conclude that nearhegemonic states can achieve the same sorts of successes as truly hegemonic states? If so, how can we reconcile British success in the near-hegemonic period of the 1860s with British failure to maintain an open system in the near-hegemonic period of the 1880s? Related to this difficulty is the silence of hegemonic stability theory on the motivations and capabilities of the nonhegemonic states that are most likely to rival the hegemonic power. It might be the case that states that are nearly as efficient and technologically advanced as the hegemonic state exhibit nearly as strong a preference for an open trading system as the hegemonic leader. If that were true, then conflict over a desired trading system would be slight and little inducement would be required to achieve these states' assent to an open trading system. However, if potential rivals to the hegemonic state are less optimistic about their abilities to catch up to the hegemonic state, they may conclude that their interests are not served by an open trading system. In such a case the states that oppose an open system might well coalesce against the hegemonic state and its favored policy. If this were to occur, the capabilities required to maintain an open system would be much greater than under the first contingency; a level of capability sufficient to maintain hegemony in the first instance could well prove insufficient in the second. A third conceptual difficulty is even more serious. In what sense is hegemonic stability theory about "power''? Gilpin's consideration of the importance of power rests on his general observation about the superiority of the Royal Navy, but he conveys no sense of how this military advantage translated into Britain's desired policy outcome. Krasner does provide some concrete examples of the role of military power in changing the tariff policies of states in Latin America and in securing regions of Africa for the British. (He could have added the imposition of low tariffs on Turkey and China, an effort that engaged Britain and other Western states as well.) However, if hegemonic stability theory's only prediction were that a dominant European