Empires and economic tools

Where you put your money matters

I came across this lovely blue gem on the balcony yesterday as I fought to extend the summer colours by watering one more time. The intensity of the colour captivates me as it apparently does the bees who find their way to these flowers over the summer.

I finally pulled out Piers Brendon’s The Decline and Fall of the British Empire, 1781-1997 yesterday, hoping to plow through its 662 pages. I wearied of it staring at me any longer. My husband read it at the cottage probably twelve years ago but I never quite got around to it.

I confess up front that I misremembered the subject as I thought it was merely about British experiences in the Subcontinent which accounts for why I delayed reading it until I had adequate time to think it through. I find the Subcontinent history fascinating but pretty dense so I like a relatively clear mind when I start reading on the topic. Brendon’s introduction cleared that up my erroneous assumption, making it an even more timely read in light of our challenges of empire of late.

We don’t like to acknowledge having an empire because we find it distasteful, non-democratic, and a raft of other self-satisfying phrases. In short, ‘Americans just would not do that’ seems to be our attitude but the Filipinos, our circum-Caribbean neighbours, and other parts of the world would heartily disagree. I welcome your reactions.

As President Biden shifts between the immediacy of U.S. commitments to Israel, Ukraine, Taiwan, and longer term (we hope) issues for our treaty allies (for whom we have solemn obligations if we are bound under a mutual defense treaty as we are with Australia, New Zealand, Japan, South Korea and the Philippines), it’s rather hard to deny we have an empire. Politicians who increasingly think that ‘demanding-respect- from-others-equates-to-ignoring-all-but-our-personally-preferred-commitments’ may not understand that the world take our words rather seriously. These obligations become ever more pressing as we continue identifying adversaries threatening our allies.

We almost always view our role in the world overwhelmingly one relying foremost on the military with other instruments in support of the military. This results from our history of ousting, through a combined ragtag American armed force supported by a more agile and larger French fleet, an occupying power by 1783. Even though we have rarely, if ever, confronted a true physical threat again, we still view most responses as subordinated initially to the blunt power of the armed forces.

Brendon reviews for the reader the importance of Adam Smith’s advocacy of the laizzez-faire economic approach set forth in 1776 in The Wealth of Nations. Smith’s oft-cited work stresses the importance of the ‘hidden hand of the marketplace’, setting the building blocks for the economic theory of free trade. That grander trade began as an interplay between regional states before it became a crucial tool for preventing global conflict after World War II. In the late Eighteenth Century, it was far from universally welcomed, however.

Britain’s economic advantages, fueled by this increasingly important trade driven by, with, and from India, was only building slowly as industrialisation in the British Isles accelerated. Better production meant more goods and more goods, according to Smith, were a mechanism for incentivising others to desire relations with London and its trading companies.

Brendon quotes the incredibly astute Foreign Secretary George Canning in a rather obvious statement (on page 61) setting Britain empire firmly apart from our own in 2023. In responding after the 1823 Monroe Doctrine, where America unilaterally declared the western hemisphere closed to European colonisation following Spain’s ignominious ouster, Canning said ‘Spanish America is free; and if we do not mismanage our matters sadly, she is English’. America can suck it up, in today’s parlance.

Brendon goes on to remind the reader ‘[T]he idea that commercial penetration could secure political influence without the trouble and expense of imperial occupation and administration increasingly attracted leaders of the first industrial nation [Britain].’

Britain, in other words, stressed the economic tool of statecraft over the military to achieve its desired role as the dominate desired international trading in support of protecting what mattered—the Indian Subcontinent—to advancing British security, prosperity, and values. London’s foreign policy decisions, especially in the post-American independence period, focused on security India through a vast trade network.

Washington simply never read that memo. The United States prioritises military power over economic prowest to that same end of precluding the development of another state becoming more powerful than we are. But ours is turning out to be an expensive choice, as Brendon alluded to above.

Why is this worth stressing besides that I am reading this volume? Because we are finding the military tool prohibitively expensive and are increasingly ambivalent about one of our most cherished economic tools as we struggle with our economic philosophy in the 2020s. The result of these two challenges, more than China, Russia, or any other competitor, is an unsustainable path.

We have to raise taxes to have sufficient funding for the robust military we require to keep our commitments unless we drop some of those commitments. Period. The fantasy, as we have discussed over the past few months, of cutting discretionary spending is not a budget solution but a policy preference. The numbers are simply clear.

Taxes are kryptonite for politicians in the United States after George H. W. Bush but establishing worldwide military commitments without paying for adequate forces to carry out the missions required to sustain them is beyond folly. It’s gross national security malpractice. Chiefs of Naval Operations for years, most recently firmly and dispassionately in the person of recently retired Admiral Michael Gilday, have explained to Congress why we need a far bigger fleet. It will be a most expensive fleet but it is the one we—Executive and Legislative Branches—are deeming vital to meet our commitments. The Air Force Chief of Staff, the Marine Commandant, and the Army Chief of Staff all echo the CNO. So does the Commandant of the Coast Guard.

The leaders of the Congress, the branch responsible for mandating revenue through taxation, must choose between their personal, individual perpetuation in office and the interests of the country. Easy for a retired person to say but unavoidably true. If the Congress wants to continue advancing fanciful nonsense about how we can repay for the already borrowed money we are living on (at increased interest rates of late) as debt repayment begins impinging on other programs in the budget, we are giving each citizen a bag of pixie dust. I am quite confident pixie dust won’t solve the problem.

We could, alternatively, diminish our commitments overseas. That, however, would still require a national debate about how to choose between the priorities. We can’t decide on a Speaker of the House in less than 21 days right now. I am decidely pessimistic that the adversaries our our allies would await our decision-making processes. The options for far too many states would be to develop their own nuclear weapons, I fear. Expensive for them but volatile for the world. Doesn’t seem a good approach but certainly a possibility if we don’t want to pay for the necessary force and want to pull back from some of those guarantees to others.

Additionally, we must determine whether we care about other instruments, such as trade as we approach the world. That would lessen the burden on the armed forces over time (not immediately and woefully insufficiently to address the immediate challenges around the globe) but it would also help address our now completely discombobulated messaging. The United States was long the most deeply committed nation in supporting free trade to lift all standards of living around the world. We saw trade as building trust and trust breaking down barriers and helping ease tensions. After we struggle over this issue, China increasingly upsets us with their Belt and Road engagements around the world. Do we understand that?

Instead, we today reject trade as conveying ‘unfair’ advantages to other economies. We no longer have the confidence in our own industries and job creation to retain the framework we set into motion in 1945 which has been in place as no world war erupted. Certainly the framework created winners and losers at home; that has been painful for lower technology industries. That has been a transformational pain for several domestic industries but the job losses result as much form the widely-lauded automatisation as it does free trade. It’s easier to tolerate a machine, apparently, than people who speak a different language and seeking to advance their own standards of living just as we do.

If we seek to maintain the empire we have created over the past century and a quarter, fundamental choices are necessary immediately.

At the same time, no country has ever sustained an empire indefinitely. Britain is only the last to relinquish theirs. We all believe in American exceptionalism but is it a viable analytical perspective?

Empires are expensive in so many ways. We are not currently capable of maintaining one under our current approach even if we prefer to blame others for our irrational decisions. The circus ended this week with the selection of a Speaker but that process showed how profoundly inadequate our current political reality is for reconciling the fractures in our society—financial, cultural, fiscal, demographic, political, and everything else. And the new Speaker, entitled to his own views as is anyone, appears unable to appreciate these fractures matter which is even worse.

Time is wastin’ away. Tick tock tick tock.

Give me your reactions, your preferences, your rebuttals. We need debate as no one, repeat no one, has a sure answer today.

Thank you to each and every one of you who read this column, even if it’s several days after I wrote it. It means a great deal to know it’s worth your time. I know it’s available in a couple of locations but the act of putting your name on this list matters to me. Please feel free to circulate to others.

Thank you especially for paid subscriptions to ActionsCreateConsequences. I write daily because I take your commitment seriously. I deeply appreciate the subscriptions.

Let me leave you with this morning’s sunrise. Life is so short, even if you to be 105. Take advantage of what each sunrise offers. You have no guarantee you will see another.

Be safe and be well. FIN

Piers Brendon, the Decline and Fall of the British Empire, 1781-1997. New York: Knopf, 2008.

Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. London: W. Strahan and T. Cadell, 1776.