Power – and especially economic power – is one of the least researched concepts in International Relations, 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. 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’ characterised by free floating exchange rates emerged in the field of international finance.
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 always caused intense and violent conflict in the system of international relations. 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. This, in turn, is why this study seeks to find whether or not US economic power has been in decline since the 1970s.
Table of Contents
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
Research Objectives and Key Topics
This study investigates whether the economic power of the United States has been in decline since the 1970s, moving beyond traditional indicators of a nation's power base to analyze structural power within the global political economy. It aims to determine if the US maintains control over international economic outcomes despite relative shifts in GDP or trade dominance.
- Theoretical conceptualization of economic and structural power in international relations.
- Historical analysis of US economic hegemony from Bretton Woods to the post-Cold War era.
- The role of private economic actors, Multinational Corporations, and the 'Wall Street-Treasury complex' in shaping global finance.
- Critique of 'declinist' arguments that focus on relational power rather than structural control.
- Evaluation of the contemporary 'Dollar-Wall Street Regime' and US 'sticky power'.
Extract from the Book
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, regardless 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
Summary of Chapters
I. Introduction: Outlines the research purpose, focusing on the concepts of economic and structural power, and establishes the 1970s as the critical turning point for the international political economy.
II. 1. Elucidating the Elements of the Research Question: Defines 'the US' as a complex actor involving both the state and private institutions, and explores competing theoretical definitions of power, favoring the concept of structural power.
II. 2. The Development of US Economic Power: Provides a historical overview of US economic influence, detailing the collapse of the Bretton Woods system, the rise of neoliberal policies in the 1980s, and the dominance of the 'Wall Street-Treasury complex' in the 1990s.
II. 3. Assessing US Economic Power at the Beginning of the 21st Century: Argues that despite current account deficits, the US maintains supreme power through the global financial regime and its unique ability to issue the world's reserve currency.
III. Conclusion and Perspectives: Summarizes findings that challenge the thesis of US decline, emphasizing that the US continues to shape the structures of global finance, production, and knowledge.
Keywords
United States, Economic Power, Structural Power, Bretton Woods, International Political Economy, Wall Street, Financialization, Globalization, Anglosphere, Hegemony, Dollar-Wall Street Regime, Neoliberalism, Capital Mobility, Sticky Power.
Frequently Asked Questions
What is the primary focus of this academic work?
The work examines the evolution of US economic power since the 1970s, specifically questioning whether the US has entered a period of decline in the global political economy.
What are the core thematic fields covered?
Key themes include structural power in international relations, the transition from Bretton Woods to a market-led system, the role of financial markets, and the influence of Anglo-American neoliberal economic models.
What is the central research question?
The author explores whether the United States has truly lost control over global economic outcomes, or if perceived decline is merely a misunderstanding of how structural power operates.
What scientific methodology is utilized?
The study uses an analytical framework based on the concept of 'structural power' as developed by Susan Strange, contrasting this with classical realist perspectives that focus solely on relational power and material power bases.
What topics are discussed in the main body?
The chapters detail the historical development of US policy from the post-WWII era, the 1970s financial shifts, the 1980s Reaganomics, and the 1990s Asian financial crisis, concluding with a contemporary assessment of US financial dominance.
Which keywords best characterize the research?
The research is characterized by terms such as Structural Power, Dollar-Wall Street Regime, Anglosphere, Financialization, and Hegemony.
How does the concept of 'sticky power' relate to US economic dominance?
Mead's 'sticky power' is used to explain how foreign entities are trapped into maintaining the US-led system because they depend on the US as a market and a creditor, making a break with the US economically damaging for them.
How did the 1990s Asian financial crisis demonstrate US influence?
The crisis illustrated how US-led international organizations like the IMF promoted capital mobility, forcing affected countries to adopt neoliberal reforms that ultimately favored US-based financial actors.
- Quote paper
- MA Internationale Beziehungen Jan Fichtner (Author), 2007, Is US Economic Power in Decline Since the 1970s?, Munich, GRIN Verlag, https://www.grin.com/document/81028
