Hegemonic Instability and East Asia: Contradictions, Crises and US Power

Abstract

One of the most influential theories in international political economy is that hegemonic power generally and the actions of the US in particular have been essential forces for stability in the international system. Yet even before the current financial crisis that has its origins in the US there were grounds for questioning this claim. Now the argument looks increasingly implausible. The essence of our argument in this article is that the US's historical record suggests that it has often been a force for global instability, as it has opportunistically sought to shift the burden of economic adjustment onto others. We develop this argument by looking at US foreign policy toward East Asia in particular, which has been deeply affected by the actions of successive America administrations, and also examine the implications of recent efforts by states to manage hegemonic instability through an expanded role for the Group of Twenty (G-20).

Una de las teorías de mayor influencia en la economía política internacional es que generalmente el poder hegemónico y las intervenciones de Estados Unidos en particular, han sido fuerzas esenciales para la estabilidad del sistema internacional. Sin embargo, incluso antes de la crisis financiera actual que se originó en los Estados Unidos, existen razones para cuestionar esta afirmación. Actualmente dicho argumento parece cada vez menos probable. El argumento fundamental de este artículo, consiste en que el registro histórico de los Estados Unidos nos sugiere que más bien con frecuencia ha sido causal de inestabilidad global, porque ha buscado de manera oportunista trasladar la carga del ajuste económico a otros. Desarrollamos este argumento observando la política exterior de los Estados Unidos particularmente hacia Asia oriental, la cual se ha visto muy afectada por las continuas intervenciones de las diferentes administraciones de los Estados Unidos. También se estudiaron las implicaciones de los esfuerzos recientes de los estados para manejar la inestabilidad hegemónica a través de un mayor papel del Grupo de los Veinte (G-20).

Keywords:

• crisis
• hegemony
• United States
• East Asia
• foreign policy
• G-20

Notes

Significantly, Keynes was keen to ensure that the financial sector remained highly regulated as he viewed it as potentially dangerous and destabilising if given too much autonomy. Despite such views seeming remarkably prescient, the initiative was blocked by opposition from the New York-based financial sector. See Helleiner (1993).

But for a good overview, see Haggard (2000).

One of the more bizarre aspects of this period and the region's relationship with the rest of the world is that, given East Asia's famously high rates of saving, it should not have needed major inflows of additional capital in the first place.

See, for example, Wade and Veneroso (1998), Stiglitz (2002).

It is estimated that the cost of bailing-out of the banking sector will push the US budget deficit above US$9 trillion, reaching 77% of GDP by 2019. See The Economist (2009).

Former Treasury Secretary under Bill Clinton and newly appointed Chairman of Barack Obama's National Economic Council.