Is US Economic Power in Decline Since the 1970s?

Master's Thesis, 2007

72 Pages, Grade: 1,3



I. Introduction

II. 1. Elucidating the Elements of the Research Question
II. 1. 1. The US as an Actor on the International Stage
II. 1. 2. Power in International Political Economy
II. 2. The Development of US Economic Power
II. 2. 1. The First Decades After the End of World War II
II. 2. 2. The 1970s: The Demise of the Bretton-Woods System
II. 2. 3. The 1980s: Reaganomics and the Proclaimed US Decline
II. 2. 4. The 1990s: ‘The End of History’ and the Asian Financial Crisis
II. 3. Assessing US Economic Power at the Beginning of the 21st Century

III. Conclusion and Perspectives

IV. Bibliography

I. Introduction

Power – and especially economic power – is one of the least researched concepts in International Relations[1], yet it is arguably one of the most central phenomena for this academic discipline. The purpose of this study is twofold. First, the goal is to shed some light on the obscure concept of economic power and to illuminate its many facets and varieties. One of the most important aspects will certainly be the introduction of the concept of structural power as developed by Strange. Subsequently, the insights about economic power shall be applied to the international position of the United States as it has developed since the early 1970s. This point in time has been chosen because it marks a fundamental break in the international political economy since the end of World War II, according to Helleiner and other observers.[2] The government-led Bretton Woods system with its inherent fixed exchange rates and its intended confinement of finance to the domestic realm was effectively terminated by the US in the early 1970s. Instead, a market-led ‘non-system’[3] characterised by free floating exchange rates emerged in the field of international finance.

This study begins, however, with a chapter about the political and social nature of the United States. The concepts of the ‘Lockean heartland’ and the ‘Anglosphere’ are presented here. Both ideas come from intellectually very different backgrounds, yet they are strikingly related to each other. The inclusion of these two connected concepts is vital to this work because only they render the analysis of the full dimension of US economic power possible. Without their application the findings of this study would remain incomplete. This section is followed by a theoretical chapter about power in the international political economy. Together they form part one of this study.

Part two is an analysis of the historical development of US economic power. The situation as it has evolved from the end of World War II until the 1970s is presented only very briefly in chapter II 2.1. as it lies outside the focus of this work. Nonetheless, the understanding of this period is essential for the analysis of the post-Bretton Woods era. Chapter II 2.2. deals with the termination of the Bretton Woods system in the early 1970s, the underlying factors for its demise such as the emergence of the ‘Euromarkets’ and, last but not least, the role the United States played in that development. Chapter II 2.3. analyses the impact of the liberalisation and deregulation policies pursued in tandem by US President Reagan and UK Prime Minister Thatcher in the 1980s on the international financial and monetary system. A central point in that chapter is the argument that in finance it is possible to initiate policies of liberalisation and deregula-tion unilaterally, whereas in the field of trade that is only possible in a multilateral way. An additional topic analysed in this chapter is the discussion surrounding the (seeming-ly inevitable) decline of the US in the 1980s and Japan's predicted rise to power. The central tenets of this debate shall be critically assessed from our perspective more than 20 years later. Chapter II 2.4. deals with US economic power in the 1990s. Firstly, it will analyse how the proclaimed ‘end of history’[4] in reality covered the ongoing conflict of ‘capitalism against capitalism’[5]. Secondly, the role of US influence on the Asian financial crisis will be scrutinised. Part three, finally, analyses US economic power in the contemporary configuration of the global political economy. The international position of the US dollar and the US financial markets, along with the ‘sticky power’[6] of the United States, is the main subject in this chapter.

The academic and political relevance of this study lies in the fact that historically the demise of great powers – and the parallel rise of competitors – nearly[7] always caused intense and violent conflict in the system of international relations.[8] In addition, the pre-dominance (or hegemony) of states since the 17th century derived in a large part from their economic, and especially their financial power.[9] This, in turn, is why this study seeks to find whether or not US economic power has been in decline since the 1970s.

II. 1. Elucidating the Elements of the Research Question

Before it is possible to answer the question of whether economic power of the United States is in decline since the 1970s – in an intersubjectively understandable and veri-fiable manner – it is imperative to elucidate the major elements which constitute this research question. These two elements are ‘the US’ and ‘power’.

II. 1. 1. The US as an Actor on the International Stage

The first element of this study's research question is ‘the US’. The United States of America constitutes the centre of reference in all chapters of this work, but what exactly is meant by ‘the US’? In classical realism, for example, nation states were seen as the exclusive actors in international relations. According to this view, to speak of ‘the US’ then means the leadership of the country – the executive arm of government – which takes the crucial decisions related to foreign policy. In the case of the United States that would be the respective administration in office – and in theory that would ultimately be the President of the United States of America.

However, International Relations theory has progressed in the last decades. Many scholars now hold the view that states are no longer the exclusive actors in international affairs. Scholars believe that transnational actors such as Multinational Corporations (MNCs), International Non-Governmental Organizations (INGOs) or epistemic communities – ‘networks of individuals and organizations based on authoritative claims to consensual knowledge’[10] – have all become influential actors in international relations.[11] One observer even regards this development as a fundamental ‘power shift’ in international affairs to non-state actors.[12] This shift undermines the traditional terminology of our academic subject. The exclusive use of the term inter- national relations, which implies states as the predominant actors should be comple-mented with the use of the terms international political economy or global political economy. Therefore, when the author of this work deals with ‘the US’, not only does this term include the executive branch of the United States government, but it also comprises MNCs, INGOs and other private actors which are based in the USA, but exert influence beyond the physical borders of the United States. As this study primarily looks at international economic issues, Multinational Corporations will play a much more important role than Non-Governmental Organisations.

The divide between the public and the private (i.e. economic) sphere, which is apparent in many works regarding political science and International Relations, is not so distinct. Historically, the state has almost always been heavily permeated by private interests.[13] Market mechanisms play a vital role for these private, primarily economic, interests. Markets, however, are more than just mechanisms through which buyers and sellers pursue commercial exchange; ‘they are structural sets of social practices in which wealth and power are created, appropriated, and then used in particular ways: they are themselves structures of power.’[14] As Underhill points out: ‘The concept of states and markets as separate entities is an often-useful abstraction, but we need to remind ourselves that states and markets are not separate things as such. They are part of the same integrated ensemble of governance, a state–market condominium, and should be thought of as such.’[15] Thus, the state (possibly except for autocratic polities)[16] always exists in symbiosis with private interests. The degree of involvement and influ-ence of private interests in ‘state affairs’ may vary from state to state. Arguably, the influence of private actors is less pervasive in so-called ‘strong states’ such as Russia or China for example; however, it is still ever present even in these polities.[17]

In contrast, the United States of America is a very liberal polity. The public and the private realms are closely intertwined and private actors exert a major influence on the state. Van der Pijl calls this the ‘Lockean’ state configuration. The main charac-teristic of the Lockean state/society complex is that in general, the role of the state is subordinate to the interests of civil society; the important thing the state has to do is provide stability and the enforcement of property rights and contracts, which are essential to the free pursuit of economic activities. The Lockean state, led by a trans-national ruling class closely affiliated with capital, privileges the interests of Multi-national Corporations and other potent economic actors over the interests of society. ‘The Lockean state ... is the true bourgeois political formation; a state that ‘serves’ a largely self-regulating, ‘civil’ society by protecting private property at home and abroad.’[18]

Historically, the Lockean state/society configuration emerged with the Glorious Revolution of 1688 in England. The two main results were the constitutional limitation of state power and the protection of the genuinely ‘private’, thus implementing the influence of the civil society over the state.[19] Subsequently, this state/society complex spread from the British Isles to North America and parts of Oceania forming a ‘Lockean heartland’.[20] Domhoff gives a very plausible explanation for why the United States in particular is such a decided ‘Lockean’ political and social entity:

‘When the United States is viewed in historical-comparative perspec-tive as a fragment of the European system of capitalist nation-states, there is a prima facie case that leaders from the capitalist class are more powerful than in European nations and in comparison to any other group or federal government. First, America did not have a feudal past, so its capitalists were not hindered by a rival economic class that had to be battled, assimilated, or deferred to in attempting to dominate the state. ... The small size of the 19th-century American state meant there were powerful corporations before there was a large national government, another contrast of major importance with Europe. ... Finally, the lack of any dangerous rival states on American borders, along with the protection from European states provided by the British navy throughout most of the 19th century, meant that the capitalist class in the United States did not have to contend with a permanent military establishment until World War II.’[21]

One vital aspect of this intellectual approach to international relations (or rather global political economy) is the fact that civil society is transnational in character, spanning across those English-speaking countries integrating them on a very fundamen-tal level. This applies especially to economic actors, such as Multinational Corpo-rations. The ideological counterpart to the Lockean state/society complex is the ‘Hobbesian’ configuration, which features a strong state-class that regulates economic affairs and civil society in order to develop the national economic and military power base. Historical examples of ‘Hobbesian contender-states’, which challenged the Lockean heartland, include Napoleonic France, Nazi-Germany and the Soviet Union. The People's Republic of China is obviously the rising Hobbesian state at the beginning of the 21st century[22] – even though it is not yet clear that Beijing ultimately wants to contend with Washington.

Various analysts coming from quite different ideological positions share the view that the United States and Great Britain are connected and integrated very closely. For Bennett the two nations constitute the core of what he calls the ‘Anglosphere’, a distinctive branch of Western Civilisation, that includes the other English-speaking countries – such as Australia, New Zealand and in parts Canada. According to Bennett, a major feature which characterises the Anglosphere are certain shared customs and values: ‘These include individualism, rule of law, honoring contracts and covenants, and the elevation of freedom to the first rank of political and cultural values.’[23]

The presentation of these two intellectual paradigms – the Lockean heartland and the Anglosphere – is vital to the analysis of the research question that will take place in later chapters of this study. The two concepts highlight the central position that private economic actors have in the United States and the other English-speaking polities, which explains why these ‘Lockean’ countries propagate the idea of self-regulating markets. The shared language and common customs and values have fostered strong bonds and similar mindsets amongst the countries of this ‘Lockean Anglo-sphere’. Hence, when this study analyses ‘the US’ as an actor on the international stage, not only is the executive branch of government addressed, but US-based Multinational Corporations and other potent economic actors as well. The embeddedness of the United States of America in a larger ‘Lockean heartland’ or ‘Anglosphere’ of like-minded countries has to be borne in mind, too.

II. 1. 2. Power in International Political Economy

The second central element that constitutes the research question, on which this study is based, is power. As Russell observed already in 1938, power is one of the most pivotal and, at the same time, most manifold phenomena in International Relations:

‘The fundamental concept in social sciences is power in the sense in which energy is the fundamental concept in physics. Like energy, power has many forms, such as wealth, armaments, influence on opinion. No one of these can be regarded as subordinate to any other, and there is no form which the others are derivable.’[24]

Even more than half a century later, the concept remains opaque: ‘Power is an essentially contested concept. Its status owes not only to the desire by scholars to agree to disagree, but also to their awareness that power works in various forms and has various expressions that cannot be captured by a single formulation.’[25] Baldwin concurs: ‘The long history of discussions of the role of power in international relations ... has failed to generate much agreement. Scholars disagree not only with respect to the role of power but also with respect to the nature of power.’[26]

One of the well-known and most general definitions of power in social science stems from Weber. Weber defined power as the ‘probability that one actor within a social relation will be in a position to carry out his own will despite resistance, regard-less of the basis on which this probability exists.’[27] This definition of power is not yet focused on the field of international relations. However, it already highlights one crucial aspect of power: the social character of power. One necessary precondition for stating that an actor has power is the existence of at least one other actor that is involved with the first in a social relation. In the words of Dahl, ‘power is best understood as the ability of A to get B to do what B otherwise would not do.’[28]

Dahl's original concept of power has three defining features: Firstly, intentio-nality on the part of actor A; secondly, a conflict of interests between both actors; and finally, the utilization of material and/or ideational resources by actor A, which leads actor B to alter its actions.[29] According to Barnett and Duvall, ‘the underlying claim [of Dahl's original concept of power] is that identifiable resources that are controlled and intentionally deployed by actors are what counts for thinking about power.’[30] This definition of (relational) power in social science is useful as a starting point. Several elements of its constituting elements should be criticised however. First of all, power need not necessarily be exercised consciously or with a specific intent to be effective; ‘power still exists even when those who dominate are not conscious of how their actions are producing unintended effects.’[31] A second element of Dahl's interpretation of power (shared by many other scholars) which warrants critique is the focus on resources under the disposal of an actor. This was especially prominent in one of the first theories of International Relations – Realism.

Power is the main focus of scholarly attention for classical Realism. According to Realism, all states in the international system strive to increase their power in order to enforce their particular interests vis-à-vis the power of other states. For Realism, power is primarily of a material nature and based on certain resources of the state: population, military forces, size of the economy, territory and resources, to name the most important ones.[32] Associated with this tendency, there is a widely accepted conceptualisation that is viewed as the only way to understand power: ‘how one state uses its material resour-ces to compel another state to do something it does not want to do.’[33]

One should be careful, however, not to confuse the capabilities (or resources) that a state has at its disposal with the actual control of a state over outcomes in inter-national affairs. Scholars adhering to classical Realism often ‘shared the assumption that is was possible to add up the various elements of national power, sometimes called ‘power resources’ or ‘capabilities’, in order to calculate the power distribution among the Great Powers.’[34] States, however, are more than just ‘capability containers’.[35]

As Russett has reminded us, a clear distinction has to be made between a state's power base (size of the economy, number of military forces etc.) and its control over outcomes – its ‘ability to prevail in conflict and overcome obstacles.’[36] Several scholars, while studying the development of the United States since World War II, have made the mistake of translating declining power base indicators directly into a loss of US power – the control over outcomes – in international political economy.[37] A prominent example is Keohane, who relied heavily on quantitative indicators when he declared in the mid-1980s that the international system was in a state ‘ After [US] Hegemony ’.[38] The power base of a state certainly plays a role in regards to how effectively it is able to wield certain kinds of power in the international political economy. However, the specific relation between a state's power base and its effective control over outcomes is not yet established, and it is clearly beyond the scope of this study to do this.

Thus far, only aspects of relational power have been touched upon. Even though the concept of relational power can be applied usefully in certain situations, many phenomena in international relations – and especially in international political economy – cannot be properly analysed or understood relying exclusively on this approach. A much more fruitful approach in many respects is the concept of ‘structural power’ as developed by Strange. Strange defines structural power as ‘the power to shape and determine the structures of the global political economy within which other states, their political institutions, their economic enterprises and (not least) their scientists and other professional people have to operate.’[39] Strange argues that there are four primary structures in international political economy in which power manifests itself: Security, production, finance and knowledge.[40] Of course, there exist other important structures in international political economy, such as trade, energy or transport systems. However, these merely constitute secondary structures, as they are to a very large extent shaped by the four basic sources of structural power.[41]

According to Strange, it is these four separate distinguishable yet related and intertwined structures of power that essentially decide which actor(s) wield control over outcomes in the modern global political economy. Security – the offer of protection against external threats and the control over the international use of violence – will not be dealt with explicitly in this study, due to space constraints. However, security is a key element of power in the contemporary system of international relations and has always to be borne in mind when analysing the other fundamental structures of power. A strong position in the security structure can enable a state to exert influence in one of the other three basic power structures. Military power is the basis for a dominant position in the international security structure. Even though military power is not the specific focus of this work, one fundamental difference between power in military terms and power in the economic realm shall be highlighted here. War as the ultimate test of military power is a zero-sum game. All belligerents stand to lose from violent conflict in absolute terms.[42] The decisive question is then which actor will lose more – and in particular, how much more – than the other(s). There is no parallel in regards to economic power since economic competition is not a zero-sum game, but instead offers mutual gain to the participating actors. The critical question in the field of economic interactions is which actor will gain more – in relative terms – than the other(s).[43] Consequently, there exists a fundamental difference between competition that relies on military power and competition that is based on economic power, which renders the exercise of economic power much more favourable.

The second primary power structure in the global political economy is produc-tion, which is the sum of all arrangements determining ‘what shall be produced, by whom, by what means and with what combination of land, labour, capital and techno-logy and how each shall be rewarded.’[44] The production structure is the primary creator of wealth in the international political economy and is more important than the structure of international trade. Lawton and Michaels have summarised this point very concisely: ‘The location of productive capacity ... is far less important than the location of the people who make the key decisions on what is produced, where and how, and who designs, directs and manages to sell successfully on the world market.’[45] A major development since World War II, in this respect, is the erosion of barriers between national production structures and the formation of a world market, which enables the dominant actor(s) in the production structure to gain increasing transnational cultural, linguistic and ideological influence.[46]

The third fundamental structure of power in the global political economy is finance, which is ‘the sum of all the arrangements governing the availability of credit plus all the factors determining the terms on which currencies are exchanged for one another.’[47] Whereas the other three basic power structures have existed in virtually every system of economic and social interactions between human beings in history, the influence of finance only became paramount with the ascendancy of advanced capitalist industrialized economies:[48] ‘finance ... is the facet which has perhaps risen in impor-tance in the last quarter of century more rapidly than any other and has come to be of decisive importance in international economic relations and in the competition of corporate enterprises.’[49] Finance has to be attributed a very special prominence in the contemporary global political economy, because – as Strange has stated cogently – ‘the integration of the world economy has been achieved through the bringing together of national financial systems into one global system. ... And this global financial system, instead of being a minor appendage to the various national financial systems, is now both larger than any of them and more influential.’[50]

The fourth and final source of structural power in international political economy is knowledge. This facet of structural power is arguably the most subtle and most elusive of the four kinds presented by Strange. She describes power over the knowledge structure of the global political economy as follows: ‘whoever is able to develop or acquire and to deny the access of others to a kind of knowledge respected and sought by others; and whoever can control the channels by which it is communi-cated to those given access to it, will exercise a very special kind of structural power.’[51] In the contemporary global political economy the knowledge most sought after is technology. It enables actors (states and Multinational Corporations) to gain relational power in comparison to other actors; technology also allows actors to strengthen their structural power in the fields of security, production and finance.[52]

What Strange does not stress enough in her seminal study ‘States and Markets’ is the role of knowledge power in relation to the maintenance and the shaping of (international) belief-systems. She only does this in a later and less known article.[53] The actors that dominate the knowledge structure are able to impose elements of their belief-systems onto other actors. To quote Strange: ‘At this level, [the realm of knowledge and ideology,] the strong implant their ideas, even their self-serving ideology, in the minds of the weak, so that the weak come to sincerely believe that the value-judgments of the strong really are the universally right and true ones.’[54] The most important development in the realm of belief-systems since World War II was – in the mind of the author – the demise of communism and the expansion of free-market capitalism to nearly every country on the planet. Other key developments in the knowledge structure include the revolution in communication and information technologies and the international adoption of English as the lingua franca of international business, commerce, science and politics.[55]

In a number of respects, the concept of power through the knowledge structure, as developed by Strange, is similar to the concept of ‘soft power’ as presented by Nye. Nye defines soft power in opposition to ‘hard power’, which is the use of tangible power resources (e.g. military forces) to enforce its own will vis-à-vis other actors. Soft power, in contrast, enables states to get others to do what they want through intangible resources of power such as ‘cultural attraction, ideologies or international organisa-tions’.[56] According to Nye, ‘a country's soft power can come from three resources: its culture (in places where it is attractive to others), its political values (when it lives up to them at home and abroad), and its foreign policies (when they are seen as legitimate and having moral authority).’[57]

In addition to these four basic structures of power (and concepts related to them) there exist several other useful perspectives on this paramount phenomenon. One of these relevant perspectives on power is the distinction between ‘internal’ and ‘external power’. According to Cohen, ‘the internal dimension corresponds to the dictionary definition of power as a capacity for action. A state is powerful to the extent that it is insulated from outside influence or coercion in the formulation and implementation of policy. A common synonym for the internal dimension of power is autonomy ’.[58] This concept of internal power implicitly assumes the notion of interdependence as it refers to the influence of outside actors. In order to understand the dynamics of power in an interdependent relationship, Keohane and Nye distinguish two useful concepts: sensiti-vity and vulnerability. Sensitivity interdependence, ‘involves degrees of responsiveness within a policy framework – how quickly do changes in one country bring costly changes in another, and how great are the costly effects? It is measured not merely by the volume of flows across borders but also by the costly effects of changes in trans-actions on societies or governments.’[59] On the other hand, vulnerability interdependence takes into account the costs to, and the capabilities of, a country to offset or change any unwanted impacts caused by the actions of other states.[60] Two countries may be equally sensitive to change in an economic variable, for example, but one might be less vul-nerable than the other because it has a wider variety of alternatives available to it.
The second element of Cohen's power dichotomy is external power. External power ‘corresponds to the dictionary definition of power as a capacity to control the behavior of others; to enforce compliance. ... A common synonym for the external dimension of power is authority.’[61] Hence, external power is the ability of an actor to actively create and shape developments in the international political economy. How-ever, there is one crucial element of external power, which Cohen does not mention. This kind of power is the opposite of the ability to create and shape: it is the power to veto. If a dominant actor possesses the ability to effectively exert veto power in inter-national political economy, this actor is able to block any initiatives by other actors that could eventually undermine its authority or its position of power. Thus, veto power is a very potent instrument to wield in the global political economy. This kind of power can take the shape of de jure veto power, e.g. the command over a blocking minority in an important international organisation, or it can just be de facto veto power, when some or many other actors acting in concert are not able to implement certain policies against the will of a veto power wielding actor.

This chapter has given an overview about the concept and the nature of power. Power is of paramount importance in the global political economy, yet much remains to be researched about this complex and manifold phenomenon. Our understanding of the role that the power base of a state plays in regards to its effective power, for example, is far from being complete. It is not possible to describe the social phenomenon of power in one grand theory or definition. Instead, it seems more appropriate to elucidate the term by resorting to various intellectual concepts of power. The most important diffe-rentiation or dichotomy in this respect is between relational power – ‘the ability of A to get B to do what B otherwise would not do’[62] – and structural power. The introduction of the concept of structural power by Strange was a milestone for the discipline of international political economy. A focus on relational power alone – as was the case in classical Realism – is unable to account for many phenomena and specific outcomes in international affairs. There are four discrete yet related and intertwined primary struc-tures of power: Production, finance, knowledge and security. The actor that controls one or more of these structures is able to limit the range of choices open to other actors in the global political economy without the need to exert direct and obvious pressure on them.

Power in international political economy may be defined at its very simplest – regardless of the distinction between relational and structural power – as ‘the ability to control, or at least influence, the outcomes of events.’[63] Therefore, it is warranted to ask cui bono – who benefits – regarding every process and development in global political economy.[64] Consequently, the most fundamental definition of economic power – the focus of this work – is the capability to control or influence the outcomes of events related to the economic realm. There is no single grand theory of economic power. Rather, it is composed of different kinds and perspectives on the phenomenon. Pivotal elements of economic power include the control over the international structures of finance, production and knowledge. One of the most important factors on which economic power is based – but far from being the only one – is the size of the GDP.


[1] When International Relations is spelled with capital letters in this study, the academic discipline is addressed; when written in lower case letters, the reference is to the system of international relations.

[2] Helleiner, Eric: States and the Reemergence of Global Finance: From Bretton Woods to the 1990s, Ithaca: Cornell University Press, 1994, p.1.

[3] Gilpin, Robert: Global Political Economy: Understanding the International Economic Order, Princeton 2001, p.235.

[4] Fukuyama, Francis: The End of History?, in: The National Interest, Summer 1989.

[5] Albert, Michel: Capitalism against Capitalism, London: Whurr, 1993.

[6] Mead, Walter Russell: America’s Sticky Power, in: Foreign Policy, 141 (March/April 2004).

[7] An intriguing exception was the peaceful 'hand-over' of power between Great Britain and the United States which arguably took place during World War I and became manifest in 1921 when London conceded naval parity to Washington (Cf. Dobson, Alan P.: Anglo-American Relations in the 20th Century, London 1995, p.5). I would argue that the key reason was the shared Lockean nature.

[8] Huntington, Samuel P.: The Clash of Civilizations, London 1998, p.231.

[9] Cerny, Philip: American Decline and the Emergence of Embedded Financial Othodoxy, in: Cerny, Philip (ed.): Finance and World Politics: Markets, Regimes and States in the Post-hegemonic Era, Aldershot 1993, p.167.

[10] Risse, Thomas: Transnational Actors and World Politics, in: Carlsnaes, Walter (ed.) et al.: Handbook of International Relations, London: Sage, 2002, p.256.

[11] Ibidem, p.257.

[12] Mathews, Jessica: Power Shift, in: Foreign Affairs, Vol. 76 No. 1 (January/February 1997), p 50.

[13] Underhill, Geoffrey R.D.: Global Money and the Decline of State Power, in: Lawton, Thomas C. (ed.) et al.: Strange Power: Shaping the Parameters of International Relations and International Political Economy, Aldershot: Ashgate, 2001, p.118.

[14] Cohen, Benjamin J.: The Geography of Money, Ithaca: Cornell University Press, 1998, p.24.

[15] Ibidem, p.129.

[16] However, in very autocratic states, such as North Korea, it is nearly impossible to even draw the line between 'the state' and private interests, as the state equals the private interests of only very few leading people - possibly only one person, Kim Jong Il.

[17] Ibidem, p.130.

[18] van der Pijl, Kees: Global Rivalries: From the Cold war to Iraq, London: Pluto Press, 2006, p.8.

[19] van der Pijl, Kees: ‘Private Weltpolitik’: Zur Geschichte der liberalen Weltordnung, in: Brühl, Tanja (ed.) Die Privatisierung der Weltpolitik – Entstaatlichung und Kommerzialisierung im Globalisierungsprozess, Bonn 2001, p.83.

[20] van der Pijl: Global Rivalries, p.xi.

[21] Domhoff, William G.: The Four Networks Theory of Power: A Theoretical Home for Power Structure Research, April 2005, (last access on 13 March 2007).

[22] van der Pijl: Global Rivalries, p.297.

[23] Bennett, James: The Emerging Anglosphere, in: Orbis, Vol 46 No 1, Winter 2002, p.111.

[24] Russell, Bertrand: Power: A new Social Analysis, London: Allen and Unwin, 1938, p.10.

[25] Barnett, Michael and Duvall, Raymond: Power in International Politics, in: International Organization, Vol. 59, No. 1, Winter 2005, p.41.

[26] Baldwin, David A.: Power and International Relations, in: Carlsnaes, Walter (ed.) et al.: Handbook of International Relations, p.178.

[27] Weber, Max: The Theory of Social and Economic Organization, Translated by A.M. Henderson and Talcott Parsons, New York: Free Press, 1947, p.52.

[28] Dahl, Robert: The Concept of Power, in: Behavioral Science 2 (3) 1957, p.202.

[29] Barnett and Duvall: Power in International Politics, p.49.

[30] Ibidem, p.49.

[31] Ibidem, p.50.

[32] Morgenthau, Hans: Politics Among Nations: The Struggle for Power and Peace, New York, 1948.

[33] Barnett and Duvall: Power in International Politics, p.40.

[34] Baldwin: Power and International Relations, p.178.

[35] Treverton, Gregory and Jones, Seth G.: Measuring Power: How to Predict Future Balances, in: Harvard International Review, Vol. 27 (2), Summer 2005.

[36] Deutsch, Karl W.: The Analysis of International Relations, Englewood Cliffs: Prentice-Hall, 1978. Quoted in: Russett, Bruce: The Mysterious Case of Vanishing Hegemony; Or, is Mark Twain Really Dead?, in: International Organization, 39 (2), 1985, p.213.

[37] Nau, Henry R.: The Myth of America's Decline: Leading the World Economy into the 1990s, Oxford: Oxford University Press, 1990, p.4.

[38] Keohane, Robert O.: After Hegemony: Cooperation and Discord in the World Political Economy, Princeton, NJ: Princeton University Press, 1984, p.181.

[39] Strange: States and Markets, p.24.

[40] Ibidem, p.26.

[41] Ibidem, p.28.

[42] Exceptions might be very rare cases in which one actor is so much more powerful in military terms than its opponent actor that it will suffer nearly no damage in a violent conflict between both.

[43] Julius, DeAnne: US Economic Power: Waxing or Waning?, in: Harvard International Review, Vol. 26 (4), Winter 2005, p.2.

[44] Strange: States and Markets, p.29.

[45] Lawton, Thomas C. and Michaels, Kevin P.: The Evolving Global Production Structure: Implications for International Political Economy, in: Lawton, Thomas C. (ed.) et al.: Strange Power, p.57.

[46] Strange: States and Markets, p.30.

[47] Ibidem, p.90.

[48] Of course (international) finance has already existed long before the advent of advanced capitalist countries – however, on a much smaller scale and scope. In the Renaissance there were already about 150 Italian banking corporations operating multinationally (Cf. Dunning, John: The Globalization of Business : the Challenge of the 1990s, London: Routledge, 1993, p.97.)

[49] Ibidem, p.30.

[50] Strange, Susan: Finance, Information and Power, in: Review of International Studies 16, 1990, p.260.

[51] Strange: States and Markets, p.30.

[52] Ibidem, p.31.

[53] Strange, Susan: Who Governs? Networks of Power in World Society, in: Tooze, Roger and May, Christopher (eds.): Authority and Markets: Susan Strange's Writings on International Political Economy, Basingstoke: Palgrave Macmillan, 2002; first published in: Hitotsubashi Journal of Law and Politics, Special Issue, 1994.

[54] Ibidem, p.176.

[55] Strange: Finance, Information and Power, p.263.

[56] Story, Jonathan: Setting the Parameters: A Strange World System, in: Lawton, Thomas C. (ed.) et al.: Strange Power, p.33.

[57] Nye, Joseph: Think Again: Soft Power, in: Foreign Policy, 1 March 2006, (accessed on 7 March 2007).

[58] Cohen, Benjamin J.: Money and Power in World Politics, in: Lawton, Thomas C. (ed.) et al.: Strange Power, p.96.

[59] Keohane, Robert O. and Nye, Joseph S.: Power and Interdependence, New York: Addison-Wesley Publishing, 2000, p.12.

[60] Ibidem, p.13.

[61] Cohen: Money and Power in World Politics, p.96.

[62] Dahl: The Concept of Power, p.202.

[63] Verdun, Amy C.: Money Power: Shaping the Global Financial System, in: Lawton, Thomas C. (ed.) et al.: Strange Power, p.95.

[64] Ibidem, p.84.

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Is US Economic Power in Decline Since the 1970s?
Humboldt-University of Berlin  (Institut für Sozialwissenschaften)
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Economic, Power, Decline, Since
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MA Internationale Beziehungen Jan Fichtner (Author), 2007, Is US Economic Power in Decline Since the 1970s?, Munich, GRIN Verlag,


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