Hydrocarbons and Hegemony
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Tank driver, at Fort Knox, Kentucky, June 1942 (Library of Congress/Alfred T. Palmer) Hydrocarbons and Hegemony By Anand Toprani here is a widespread notion today of this system and its possible future ent of both British and U.S. power. that the United States inherited by integrating hydrocarbons—specifi- That said, subtle differences exist T from Great Britain and defended cally coal and oil—into our analysis. between the two nations’ experiences. a liberal world premised on the free The control of hydrocarbons—both Coal sustained and augmented British exchange of goods and capital (par- for satisfying domestic demand and for primacy, but British control over coal ticularly by sea).1 This article suggests controlling external flows to allies and was also less extensive than that of the we can better understand the origins adversaries—was an essential ingredi- United States over oil and afforded it far less influence over the internal affairs of other nations (either through coercion or by consent), which is one Dr. Anand Toprani is an Associate Professor of Strategy and Policy at the U.S. Naval War College, a prerequisite for a hegemonic power.2 To Term Member of the Council on Foreign Relations, and the author of Oil and Great Powers: Britain and Germany, 1914–1945 (Oxford University Press, 2019), which received the 2020 Richard W. Leopold simplify, coal contributed to Britain’s Prize from the Organization of American Historians. global power but did not create it, JFQ 102, 3rd Quarter 2021 Toprani 29 “Breaker Boys,” from Hughestown Borough Coal Company, Pittston, Pennsylvania, pose for photo, January 1911 (U.S. National Archives and Records Administration/Lewis Hine) unlike oil, which was a key element in how it came about (which necessitates a process was, with some arguing that the U.S. rise to genuine hegemony. critique of the relevant scholarly literature) Britain aided, even welcomed, the rise of At a time when there is a great hue and how it perseveres, and what systemic American power, whereas others argue and cry within Western capitals about changes are undermining it. that the United States had been pursuing saving the post-1945 liberal international Transitions between rising and declin- a competitive grand strategy to topple system, those who are planning U.S. ing Great Powers tend to be violent.3 British hegemony since the Civil War.4 operations and strategy—to include the Great Britain and the United States, how- Originally, the concept of Great readership of Joint Force Quarterly— ever, stood for complementary (though Britain passing the mantle of liberal ought to know exactly what it is they not identical) visions of the world order, hegemon to its American cousin was an are defending. But military professionals privileging the interests of trading as outgrowth of the work of the economic should also have a broader awareness of opposed to territorial states. Therefore, historian Charles Kindleberger concern- the other instruments of military power. unlike past transitions among so-called ing the origins of the Great Depression. When we in the national security com- hegemonic powers and their challengers He argued that Britain, specifically the munity study the economic instrument (Spain, Holland, France, and Germany), Bank of England, enjoyed a position of of U.S. power, it is tempting to limit our the proverbial passing of the torch from financial supremacy during the heyday perspective to economic warfare, most Britain to the United States did not re- of the 19th-century gold standard and notably sanctions. The U.S. economy quire them to come to blows, even if this operated as a de facto lender of last resort and financial system are not only instru- transition was accelerated by devastating that stabilized international financial ments of American hegemony but also Great Power conflicts in 1914–1918 markets, usually by coordinating interest constitutive elements of it. Preserving this and 1941–1945. There remain scholarly rate adjustments among central banks. hegemony requires understanding both differences over how consensual the The ebbing of British financial power 30 JPME Today / Hydrocarbons and Hegemony JFQ 102, 3rd Quarter 2021 during World War I, and the failure of the Barry Eichengreen put the final nail ex post facto construction that obscured United States (in this case, the Federal in the coffin of supposed British financial the extent of the massive power differen- Reserve) to undertake similar burdens, hegemony. He posited that the Bank of tial between the two nations. Compared despite its then considerable gold reserves England never served as the conductor with American hegemony, Britain’s and status as the world’s largest global of an “orchestra” of central banks. Great position was really one of primacy—first creditor, doomed the international econ- Britain’s economic power had already among equals—whose perpetuation omy—particularly after the 1931 financial begun to wane in the late 19th century. rested largely on a favorable balance crisis, when the Federal Government Its share of global manufacturing output of power within Europe following the raised interest rates to protect U.S. gold shrank as rivals such as the United States Napoleonic Wars. Echoing the work of reserves and thereafter failed to coor- and Germany rose from behind tariff Halford Mackinder, O’Brien argued that dinate a global response to an incipient walls, while the peculiar nature of British British power flourished in the twilight financial crisis.5 political economy (specifically, the nexus of the Columbian era, when control Political scientists picked up between the City of London and financial over maritime trade allowed Britain to Kindleberger’s evaluation of how a col- policymaking at the Treasury and the Bank augment its meager natural resource en- lapse of transatlantic equity and financial of England, which P.J. Cain and Anthony dowments. Even at the zenith of British markets grew into a global economic Hopkins called “gentlemanly capitalism”) influence, however, the foundations of crisis that threatened the very viability of starved British industry of investment by this world were crumbling thanks to the liberal capitalism. Robert Gilpin, based diverting savings abroad to chase higher diffusion of railroads, automobiles, and on his reading of Thucydides’s claims returns within the formal or informal em- eventually aircraft; such proliferation regarding the underlying causes of the pire, as well as in the United States.9 allowed better resourced continental Peloponnesian War, articulated a theoret- Great Britain’s imposing financial powers to chip away at the position of the ical construct of the international system position before 1914 actually masked outlying maritime powers.12 in which hegemonic powers exercised a the true state of the nation’s diminished Although Great Britain relinquished stabilizing role, thus mitigating the innate economic, industrial, and geopolitical its role as “workshop of the world” to tendency of the system toward anarchy. standing. The stability of the global the United States and Germany in the The waning of a power’s hegemonic financial system rested, therefore, less late 19th century, it certainly remained status, and the waxing of a rival’s, created on objective criteria concerning Britain’s the world’s dominant financial power the possibility of a hegemonic war either relative power than on a series of implicit until World War I. Nevertheless, O’Brien to defend the existing system or to create assumptions concerning political econ- echoed Eichengreen by noting that a new one.6 omy—namely, that national governments British officials had neither the intention Kindleberger’s thesis was an attrac- would not run persistent budget or trade nor the means to play the role of a global tive explanation of the Great Depression deficits (the two are closely linked) and financial backstop or to use access to since it complemented the Wilsonian would, if necessary, induce involuntary British markets as an instrument to co- perspective of U.S. officials during the unemployment through higher interest erce potential adversaries, like the United 1930s and 1940s that the economic rates to forestall a balance of payments States does with financial sanctions today. crisis and the war that followed it were crisis that undermined the peg to gold. It is hard to imagine the United States the result of Americans’ failure to accept These commitments were credible to allowing one of its major banks to finance global leadership after World War I.7 This international financiers and bankers a key foreign policy objective of one might be good strategy, but it is poor because of the limited extent of the of its rivals, as Britain did when Baring history. Many elements of Kindleberger’s franchise, which privileged the interest Brothers assisted the fledging United narrative collapse under close scrutiny, of the merchant creditor class in national States with the Louisiana Purchase. especially his argument that Britain’s legislatures rather than those of debtors British fiscal policy, meanwhile, was a position in the world before 1914 was such as farmers in the United States (fol- far cry from that of the vaunted “fiscal- analogous to that of the United States lowing William McKinley’s triumph over military” state of Georgian England, with after 1918. Paul Kennedy, for instance, the forces of free silver led by William its high taxes, intrusive regulation, and demonstrated that the Bank of England Jennings Bryan in 1896) or organized military Keynesianism avant la lettre.13 was hardly a ruthless instrument of labor in Europe, which lacked a broad Victorian and Edwardian governments British statecraft. Because of prevailing national political foundation (in Britain) were all in thrall of the liberal credo of re- liberal orthodoxies, the bank maintained or was actively repressed (in Germany).10 trenchment and sought to curb taxes and relatively small gold reserves.