Correspondence: The Profitability of Primacy

Abstract

Daniel Drezner deserves credit for addressing arguments that link military primacy to economic benefits, which are typically considered only indirectly in the security studies subfield.1 Any plan for future U.S. military spending would profit from a thorough understanding of (1) whether primacy provides economic benefits that offset its costs, and if not, (2) whether other benefits that it provides may be worth those costs. Drezner does not adequately establish the former argument, however, and he tries to dismiss the latter despite acknowledging the significant security benefits of primacy. Drezner advocates “deeper cuts” in U.S. military spending (p. 79), but ultimately provides little in his article to help readers determine whether making such cuts would be a good decision.My critique proceeds in three sections. The first lays out four core flaws that undermine Drezner's analysis: (1) stretching the concept of military primacy, (2) drifting across several distinct research questions, (3) selectively isolating economics from military matters, and (4) avoiding the key alternative logic he claims to undermine. The second section identifies the five ways primacy might pay that Drezner targets in his article—an open trading order, foreign investment, the global reserve currency, bargaining leverage, and direct contributions to the hegemon—and evaluates his counterarguments to each. The third section examines the security benefits of primacy (which are worth a net cost greater than zero), critiques their dismissal by Drezner, and observes how he overstates the definitiveness of his conclusions.Four core flaws in Drezner's approach persistently recur and undermine his analysis. First, despite accurately defining primacy as “a distribution of military capabilities in which one country faces no current or emergent peers on any significant battlefield” (p. 54), he regularly conflates that characteristic of the international system with expensive and reckless foreign policy behavior by the hegemon. For example, he argues that a forward military presence is costly because the United States pays for most of its military bases (pp. 65–66), that trade and capital flows before World War I did not conform to alliance patterns (p. 64), that foreign investment concerned with risk will flee a hegemon that pursues risky wars (p. 60), and that high defense spending does not raise employment (p. 58). Drezner asserts that “[i]n practice, primacy always seems to lead to … deep engagement” (p. 55). Yet “deep engagement” can mean many things, not all of which are reckless or expensive as Drezner implies (e.g., preserving freedom of the seas, providing international organization leadership, maintaining overseas bases subsidized by host countries, and “leading from behind”).Moreover, foreign policy may be strongly influenced by the distribution of power, but it remains a choice; unipolarity is not the cause of recklessness nor is multipolarity its cure. Napoleon's and Hitler's invasions of Russia were far bolder than any recent U.S. war, and international relations theory provides good reason for expecting riskier policies under multipolarity than unipolarity given that (1) similar levels of power encourage competition, and (2) in a system with many moving pieces, states look to convert temporary advantages into long–term gains (e.g., territorial conquests).2 Primacy, in contrast, gives a hegemon the option to be reckless or restrained with minimal fear for its survival. This may loosen “constraints on the state to refrain from military adventurism,” as Drezner claims (p. 62), but it does not necessitate adventurism. As Nuno Monteiro recently observed, “Unipolarity minimizes structural constraints on grand strategy”; it does not dictate grand strategy.3 Indeed, the debate over U.S. grand strategy since the end of the Cold War has focused explicitly on the numerous policy choices available to the United States as a result of its primacy.4The second core flaw in Drezner's article is that it drifts from his admirably clear initial research question—Does military primacy pay?—to a variety of distinct questions. Rather than comparing the costs of maintaining a predominant military versus the economic benefits of doing so, Drezner compares (1) the economic benefits of unipolarity versus bipolarity, (2) the economic benefits versus costs of deep engagement, and (3) the roles of economic primacy versus military primacy in producing the benefits of unipolarity. Even regarding these related but distinct questions, he does not provide the systematic evidence needed to persuasively answer them. Absent is a comprehensive comparison of the economic benefits drawn to a hegemon and those drawn to one of two superpowers, or a typology of behaviors falling under the term “deep engagement” and a comparison of their respective abilities to produce economic benefits that defray their own costs. He spends the greatest effort asserting that the benefits of unipolarity “rely on the hegemon's economic might as much as its military might” (p. 78), but this too is problematic given Drezner's selective separation of economics from military matters.The third core flaw in Drezner's article is that he attributes independent causal influence to economic primacy despite repeatedly noting that a strong economy is the foundation of a strong military (pp. 59, 79). Drezner is unable to reject the alternative argument that the reason why economic power matters is often because of its implications for military power. Separating the two is unjustified theoretically, but he does so in order to claim that deeper cuts in military spending will save money while preserving the economic benefits the United States currently enjoys. Whereas Drezner does not provide compelling evidence that those benefits endure for leading economies lacking military primacy, international relations theory provides numerous warnings about the security dangers of power transitions and non-unipolar distributions of power.5Drezner repeatedly emphasizes that China's economic rise “has reintroduced uncertainty into assessments about the global distribution of power” (p. 74; cf. p. 77). This statement is correct precisely because of the military potential that China obtains through its economic growth: waning U.S. economic strength portends the end of U.S. military primacy.6 As Drezner himself notes, “Without a sufficient amount of economic power, the pacifying effects of military supremacy will eventually erode” (p. 77; cf. p. 78). This is so, not because economic power produces those pacifying effects directly, as Drezner implies, but because a sufficient amount of economic power is required to maintain the military primacy that produces those effects.The fourth core flaw in Drezner's analysis is that he avoids the key alternative causal logic that he claims to undermine. In quoting Robert Kagan, Drezner clearly lays out that logic, which follows three steps: (1) a decline in U.S. military primacy would increase global instability, (2) that instability would result in a less prosperous global economy and hence U.S. economy, and (3) restoring stability would be far costlier than sustaining it (p. 57). The clarity of this logic provides an opportunity for skeptics to attack any of its three causal steps, but Drezner surprisingly sidesteps this opportunity. As his introduction summarizes, “Ostensibly, by acting as a guarantor of the peace in hotspots such as the Middle East and Pacific Rim, the United States keeps the international system humming along—which in turn yields significant benefits to the United States itself” (pp. 52–53), and Drezner does not directly critique what is ostensibly correct.Throughout his analysis, Drezner questions five hypothesized economic benefits of primacy. The most important of these benefits is facilitating an open global economic order by providing “the ultimate means of enforcing the rules of the game” (p. 68). Drezner acknowledges that primacy is associated with free trade and that free seas—ensured by primacy—boost trade, but he attempts to minimize the role of primacy through several tangential and unconvincing arguments. Drezner claims that high trade, central bank cooperation, and interdependence under early-twentieth-century multipolarity show primacy to be unnecessary for an open trading system. Yet he also observes that “economic interdependence was so strong … that it triggered security concerns among the great powers” (p. 64), which ultimately produced World War I. Drezner refrains from connecting the dots: the combination of interdependence and multipolarity created dangerous vulnerabilities that fueled a devastating war. In contrast, the current unipolarity largely mitigates those vulnerabilities under modern globalization, enabling a more stable and profitable international economy.He also asks why China would become the largest foreign market for “stalwart U.S. allies” such as Japan, South Korea, and Taiwan if primacy mattered (p. 64). Yet China is (1) the most populous country in the world and hence the biggest potential market, and (2) right next door to all three of those countries and hence offers very low transportation costs for their exports. This is a false test: no theory of primacy predicts that states should abandon rational pursuit of their own economic growth by rejecting such an opportunity. Drezner observes that China is expanding its commerce around the world and accuses U.S. primacy of failing to “deter” it (pp. 64–65), yet expanding global commerce is participation in the open trading system that the United States champions. His critique of the economic favoritism argument implies that the United States is benefiting less than other countries from this system, but his article does not provide the economic analysis required to make such a claim persuasive.Drezner attempts to write off the U.S. role in maintaining freedom of the seas by describing how private security on commercial tankers has recently thwarted Somali pirates (p. 71), when what is more notable is that states do not prey on each other's shipping. Privateers cannot thrive under unipolarity because their government sponsors would face retribution from the hegemon; that private pirates still raid shipping from a failed state—and that private security has gotten better at combating them—is no indictment of primacy. In the same way, the fact that private terrorist groups continue to pose security threats does not negate the substantial benefits of unipolarity in mitigating interstate violence. Drezner's conclusion that “military primacy is hardly a prerequisite for attracting trade and investment” (p. 78) is too simplistic. U.S. trade has more than quadrupled in the two decades since the end of the Cold War, growing from less than $1.2 trillion in 1991 to nearly $5 trillion in 2012 (exports plus imports).7 The burden is on Drezner to argue that this dramatic growth has not in any significant part been a result of U.S. military primacy despite the impressive correlation.Second, Drezner argues that primacy does not encourage foreign investment, which abhors risk. Foreign capital is scared away by risk-raising behaviors such as failing to protect domestic property rights, failing to honor public debts, creating private goods for the selectorate, pursuing overseas adventurism, and frequent warfighting (pp. 59–62). Primacy guarantees security from foreign invasion, which attracts foreign capital (p. 60), and affords the hegemon latitude to choose among risky or restrained behaviors.8 Drezner is too bold in concluding that “[a]t a minimum, this set of capital market preferences implies that hegemons receive negligible geoeconomic benefits from military primacy” (p. 61). At a minimum, the abhorrence of risk implies that total mobile capital should be greater under (stable) unipolarity than other (less stable) distributions of power, and that the hegemon should have a great opportunity to benefit from foreign investment if it prioritizes doing so. Foreign direct investment (FDI) in the United States rose gradually during the Cold War to $68 billion in 1989, but skyrocketed after the onset of unipolarity, growing to more than $321 billion in 2000. From 2001 to 2003, it plummeted back to 1989 levels before rebounding to more than $340 billion in 2007.9 Not only do these data show an explosion of FDI in the hegemon under unipolarity, but they also show FDI dropping after a homeland attack destabilized the domestic economy (September 11) but rebounding beyond previous levels during an episode of overseas adventurism (the Iraq War). The burden is on Drezner to invalidate this correlation between primacy and FDI.Third, Drezner questions the link between primacy and the global reserve currency. He points to the interwar period when Britain had superior power projection capabilities yet actors began treating the U.S. dollar as a reserve currency (p. 61). It is unclear, however, why power projection capabilities should be more important than factors that more directly reduce risk; in geopolitical security, for example, the United States far surpassed Britain given its power and isolation from Europe. Moreover, Britain did not enjoy military primacy during the interwar period, so this case does not test its significance. Drezner expresses surprise that China supports the dollar as the primary reserve, writing, “If the United States’ biggest potential rival was engaged in the same kind of dollar-supporting role as close allies, then it suggests that U.S. bilateral security relationships did not play a causal role in preserving the dollar's standing as the world reserve currency” (p. 67). Here he confuses primacy with alliances and presents another false test, given that China employs the dollar as reserve in pursuit of its own growth. If even the “rising challenger” has an interest in reinforcing a U.S. economic benefit, this implies that primacy actually does pay. Thus, Drezner's analysis belies his conclusion that “[e]conomic and financial factors, not the military balance of power, primarily determine the location of the reserve currency” (p. 61).Fourth, Drezner rejects the notion that primacy grants bargaining leverage on the grounds that Europe and the United States achieved similar deals when negotiating free trade agreements with South Korea. Although that case should prompt skepticism that a hegemon can routinely compel asymmetrical deals, it is a poor candidate for a test: the United States has an interest in a healthy South Korea and would not want to eviscerate it in a trade agreement. International negotiations are always complex and military power does not necessarily translate into bargaining leverage, as witnessed in recent U.S. failures to influence Israel's behavior in Palestine. That said, military primacy has allowed the United States to weight the international organizations that underpin the current international system in its favor, a benefit absent from Drezner's analysis but which inherently grants the United States substantial leverage in many negotiations.Fifth, primacy can pay if other countries pay for it by making direct contributions to the hegemon. As Drezner notes, numerous countries made financial contributions to the United States in support of the Gulf War (offsetting some $54 billion of the war's $61 billion overall price tag), and several allies currently subsidize U.S. military bases (including Japan, South Korea, and Kuwait).10 Despite these cases, he argues that direct contributions are not a major economic benefit of primacy, because the United States pays for most of its current military bases. Rather than being a test of primacy's ability to foster rent-paying allies, however, this simply reflects supply and demand. Primacy increases demand for U.S. military bases among some vulnerable states that want U.S. troops on their soil to deter prospective attackers, and the United States pays for other bases where it desires them in the absence of local demand. Drezner also asserts that “[g]eopolitical favoritism matters more during periods of bipolarity than it does under unipolarity” (p. 67). This is understandable given the tense security environment of bipolarity, but it implies neither that allies will cease to value the hegemon's security umbrella under unipolarity, nor that the loss in direct payments when moving from bipolarity to unipolarity is greater than the corresponding gain in security.The primary purpose of a national military is not to generate economic profit. Drezner claims that his results “point strongly toward deeper cuts in defense expenditures,” because “the argument that an overseas military presence pays for itself … does not hold up” (p. 79). Whether primacy (or deep engagement) pays is an interesting and relevant question, but there is more to consider when debating military spending: namely, that primacy may be worth a net economic cost if it provides valued noneconomic benefits. Drezner is interested in what international relations scholarship says about the economic benefits of primacy, but when translating his analysis into policy recommendations, he overlooks what it says about the security benefits of primacy.Unipolarity makes the international system more stable for two main reasons. First, it deters other states from attacking the hegemon, because no other country can reasonably expect to defeat it, thus eliminating hegemonic rivalry. Second, it decreases the occurrence of war between other states, because none of them want to risk the hegemon intervening. Overall, unipolarity eases local security competition, prevents resources from being wasted on arms races (providing more for investment), and reduces the occurrence of war worldwide. Drezner acknowledges that “the peace dividend from the shift to unipolarity has been significant” (p. 72), noting marked declines in interstate war, civil war, extrajudicial killing, and global military expenditures. Despite these unambiguous developments, however, he seeks to minimize the value of military primacy through four flawed counterarguments.First, Drezner asserts that “eventually the cost of maintaining global public goods catches up to the sole superpower,” as other countries free ride, technologies diffuse from the hegemon to rising powers, and the cost of a forward military presence adds up (p. 72). This argument is unpersuasive: the fact that something eventually ends is not a reason why it cannot have significant effects while it lasts (is life itself any different?).Second, Drezner claims that the post-Cold War decline in violence is “merely the continuation of a long-term secular trend” rather than a result of unipolarity, citing four authors (p. 72). The first, John Mueller, observes a consistently low rate of international wars since World War II, the gradual fading of colonial wars as decolonization concluded by 1980, and (most notably) a gradual increase in ongoing civil wars from four to twenty-six between 1946 and 1991 followed by a subsequent drop from twenty-six back to four between 1991 and 2007.11 At minimum, this defies Drezner's characterization of a long–term trend, and at maximum, it suggests a powerful causal role for unipolarity in reducing civil war (and for bipolarity in promoting it). A second article, by Bruno Tertrais, contains similar data and hypothesizes that the data represent the start of a long-term trend (not the continuation of a past trend as Drezner implies).12 The third author, Joshua Goldstein, observes that “the annual average deaths was about 75,000 annually in 1990–2009 compared with about 215,000 annually in 1970–89.… Cold War conflicts were simply much more lethal than the more recent wars,” and that “world violence was lower in the nineteenth than the twentieth [century] overall, perhaps half as violent relative to the world's population.”13The lone author actually observing a long-term decline in violence is Steven Pinker, who describes a centuries-long process of gradually declining violence among humanity. Yet Pinker's logic reaffirms the importance of military primacy.14 The first cause Pinker offers to explain declining violence is the emergence of strong governments, concluding that “a state that uses a monopoly on force to protect its citizens from one another may be the most consistent violence-reducer that we have encountered.”15 The emergence of strong governments transformed global anarchy into international politics, constraining violence domestically while making the distribution of power among states the paramount factor constraining it internationally. Unipolarity performs a similar function, providing a de facto international leviathan strong enough to deter others from fighting.Drezner's third counterargument claims that “[t]he pacifying effects of unipolarity appear to have dissipated,” because recent years have witnessed a more assertive China that has not been tranquilized by the U.S. pivot to Asia (pp. 76–77). Assertive Chinese rhetoric, however, does not represent evidence against unipolarity's pacifying effects. The central pacifying effect of unipolarity is the deterrence of great power war, a consequence that remains intact. The notion that military primacy should enable the United States to dictate the settlement of all international disputes with minimal resistance from other interested states is (1) unrealistic, and (2) not a prediction of theories that attribute stabilizing effects to unipolarity. Moreover, one should not expect U.S. military power to be a credible deterrent regarding issues over which the United States clearly has no interest in fighting. Just as Russia was able to occupy one-third of Georgian territory in 2008 and annex Crimea in 2014 without fear of U.S. intervention, so too is China able to wield aggressive rhetoric in its various territorial disputes with minimal fear of U.S. retaliation.Drezner's final counterargument is that full-spectrum primacy (including economic power), rather than military primacy alone, drives the security benefits of unipolarity. He justifies this claim by noting that scholars typically include both economic and military measures of power, but neglects to mention the reason behind this inclusion: economic power is the basis of military power, and an emerging economic competitor is a potential military competitor. He cites at length William Wohlforth describing how full-spectrum primacy rather than military primacy produces stabilizing benefits, yet Wohlforth explicitly delineates the relevant dimensions of power as those that contribute to enduring military power: “naval, military, economic, and technological” (pp. 73–74).16 The difference between military primacy alone and full-spectrum primacy lies in our confidence that current military primacy will endure into the future. Thus, Drezner's claim that “hegemony relies on multiple channels of power” (p. 73) is correct precisely because enduring military power relies on multiple channels of power.Drezner himself elegantly advocated the profound causal role of military primacy in a May 2005 blog post, responding to an article by Gregg Easterbrook titled “The End of War?” The article noted the declining frequency and destructiveness of war since the end of the Cold War, but failed to recognize the role U.S. military primacy played in achieving that outcome.17 As Drezner wrote,Although his 2005 logic is fundamentally sound, Drezner insists on rejecting it in 2013, choosing instead to reduce primacy to “a force multiplier for other forms of statecraft, including the use of economic sanctions” (p. 78). This dramatically sells short the crucial security benefits of U.S. military primacy for the United States and the world.19Does military primacy pay? The answer implied by Drezner's analysis, though not the one he offers, is that it can, depending on the foreign policy choices of the hegemon. Policies that carry high price tags (e.g., renting military bases) or decrease the perceived stability of the hegemon's economy (e.g., reckless wars) can sap the hegemon's resources and discourage foreigners from trading and investing in it. Policies that promote stability, both internationally (e.g., securing the seas, founding international institutions, and offering military bases to allies willing to pay) and domestically (e.g., refraining from wasteful or reckless policies), can pay for themselves and attract unprecedented levels of trade and investment. Military primacy offers a unique freedom of choice in foreign policy, and wise choices can make primacy pay.In failing to persuasively establish either (1) that primacy cannot pay for itself, or (2) that primacy's economic costs outweigh its security benefits, Drezner overstates the definitiveness of his conclusions regarding “deeper cuts” in U.S. military spending (p. 79). What matters is not simply that cuts in U.S. military spending be “deeper,” but that they locate the proper balance between maintaining current military primacy and promoting the economic strength to maintain that primacy into the future. A predominant U.S. military is not an unsustainable venture; between 1998 and 2001, the United States maintained its primacy at a cost of roughly 3 percent of its gross domestic product per year.20 Drezner's suggestion that “[t]he United States would profit more from investing in nonmilitary power resources than in military assets” (p. 79) is worth considering, but profit should not be the goal of U.S. military spending.In the aftermath of the Great Recession, U.S. leaders have increasingly demonstrated awareness that enduring military primacy depends on economic strength. As Drezner recounts, Adm. Michael Mullen declared the debt to be the single greatest threat to national security, and Defense Secretary Robert Gates recognized that the September 11, 2001 attacks, “opened a gusher of defense spending” that needed to be turned off (p. 56). The precise military capabilities the United States should maintain will continue to be the subject of intense debate (rightfully so), but preventing the rise of a peer competitor should continue to be the sine qua non of the U.S. military budget. The central question is: Would an emergent bipolarity be preferable to the current unipolarity? Drezner seems to favor emergent bipolarity for his perception of its economic benefits, though few would join him given the existential threat required to foster those benefits. Drezner is right that “an overreliance on military preponderance” should be avoided (p. 79), but that phrase should be explicitly conceptualized. The United States should not undermine primacy in the future by spending more than is necessary to maintain primacy in the present. Primacy itself should be an enduring priority.—Richard W. MaassIthaca, New YorkIn “Military Primacy Doesn't Pay (Nearly As Much As You Think),” Daniel Drezner evaluates whether military dominance is economically beneficial to the United States.1 He identifies and raises objections to three principal arguments in support of the view that U.S. military power leads to economic gain: a geoeconomic favoritism argument, a geopolitical favoritism argument, and a public goods argument. Because I advance variants of all three of these arguments in earlier work, I would like to respond to some of his objections.2 Drezner's article makes a number of valuable and important points, but for reasons of space I focus on our disagreements.The geoeconomic favoritism argument has two components. The first is that the United States’ extraordinary ability to secure investments and property rights has allowed it to enjoy unusually high financial flows from private investors. Second, America's military primacy enables it to maintain the dollar as the world's reserve currency and thus to enjoy better borrowing terms (seignorage).Drezner states that for the geoeconomic argument to be valid, “military power must generate concomitant economic gains rather than vice versa” (p. 60). Here, Drezner is arguing against a straw man. Many scholars (including me) who think that military dominance can generate economic benefits also think that economic power is a prerequisite to military power. Drezner cites evidence from scholars such as Paul Kennedy and Barry Posen about the military advantages of a strong economy.3 This evidence does not undermine the geoeconomic favoritism argument if that argument is properly understood.In challenging the first component of the geoeconomic favoritism argument, Drezner cites my discussion of the correlation between U.S. military successes and failures on the one hand and financial flows on the other.4 He does not dispute the correlation, but argues that my analysis fails to consider other possible explanations for the correlation such as economic growth and monetary and fiscal policy. Drezner is certainly right that it is desirable to consider other variables such as these, and in future research I will do so. Nevertheless, it is better to have an analysis supported by the existing, if imperfect, evidence than one contradicted by the available evidence. Drezner does not claim that there is any evidence contrary to my argument, only that the conclusion is not yet firmly established.This first difference between us is not the most important one. The key question for the geoeconomic favoritism argument is not whether investments flow in tandem with U.S. military successes and failures, but whether the United States gains a security premium because of its status as the dominant military power. Drezner expresses skepticism about this. He cites Jonathan Kirshner's finding that bankers tend to oppose wars because they want to minimize risk, and Kirshner's suggestion that international financial markets may punish a military hegemon with “capital flight, pressure on th