Beneath the Commerce of Nations: A Theory of International Economic Structures

Abstract

Drawing upon the theory of hegemonic stability, this paper advances a theory of international economic structures. It places particular emphasis on analyzing the whole structure of the international economy, and not simply the absence or presence of hegemony. It finds that there is no axiomatic relationship between hegemony and free trade or declining hegemony and protection. By differentiating between non-hegemonic structures, moreover, the theory of international economic structures also calls into question the appropriateness of the 'British' or '1930' analogy for the future of the present international economy. Finally, the theory is briefly examined through the cases of American trade policy in the inter-war period and the 1970s and early 1980s. The conclusion argues against simplistic analogies between the two periods and maintains that a considerable potential does exist for collective leadership of the international economy in the 1980s. Drawing upon the decline of the Pax Britannica in the late 19th century and the inter-war period, current variants of the theory of hegemonic stability predict that America's declining hegemony will lead to increased economic instability, international conflict and national protectionism. Gilpin, in particular, has argued that there are three possible scenarios for the present and future international economy.