Two assumptions dominate current foreign policy debates in the United States and China. First, the United States is in decline relative to China. Second, much of this decline is the result of globalization and the hegemonic burdens the United States bears to sustain globalization. Both of these assumptions are wrong. The United States is not in decline; in fact, it is now wealthier, more innovative, and more militarily powerful compared to China than it was in 1991. Moreover, globalization and hegemony do not erode U.S. power; they reinforce it. The United States derives competitive advantages from its hegemonic position, and globalization allows it to exploit these advantages, attracting economic activity and manipulating the international system to its benefit. The United States should therefore continue to prop up the global economy and maintain a robust diplomatic and military presence abroad.
Power is the most important variable in world politics, but scholars and policy analysts systematically mismeasure it. Most studies evaluate countries’ power using broad indicators of economic and military resources, such as gross domestic product and military spending, that tally their wealth and military assets without deducting the costs they pay to police, protect, and serve their people. As a result, standard indicators exaggerate the wealth and military power of poor, populous countries, such as China and India. A sounder approach accounts for these costs by measuring power in net rather than gross terms. This approach predicts war and dispute outcomes involving great powers over the past 200 years more accurately than those that use gross indicators of power. In addition, it improves the in-sample goodness-of-fit in the majority of studies published in leading journals over the past five years. Applying this improved framework to the current balance of power suggests that the United States’ economic and military lead over other countries is much larger than typically assumed, and that the trends are mostly in America's favor.
A large literature assumes that alliances entangle the United States in military conflicts that it might otherwise avoid. Since 1945, however, there have been only five cases of what might be characterized as U.S. entanglement—the 1954 and 1995–96 Taiwan Strait crises, the Vietnam War, and the interventions in Bosnia and Kosovo in the 1990s—and even these cases are far from clear-cut. U.S. entanglement is rare because the United States, as a superpower with many allies, is capable of exploiting loopholes in alliance agreements, sidestepping commitments that seriously imperil U.S. interests, playing the demands of various allies off of each other, and using alliances to deter adversaries and allies from initiating or escalating conflicts.
Many analysts argue that China will soon dominate East Asia militarily. In reality, China is far from achieving this goal and will remain so for the foreseeable future. China's maritime neighbors have developed antiaccess/area-denial (A2/AD) capabilities that can deny China sea and air control throughout most of its near seas, and China cannot afford the power-projection capabilities it would need to overcome these A2/AD forces. This regional balance of power enables the United States to preserve the territorial status quo in East Asia at moderate cost and risk to U.S. military forces.
What makes some states more militarily powerful than others? A growing body of research suggests that certain 'non-material' factors significantly affect a country's ability to translate resources into fighting power. In particular, recent studies claim that democracy, Western culture, high levels of human capital, and amicable civil-military relations enhance military effectiveness. If these studies are correct, then military power is not solely or even primarily determined by material resources, and a large chunk of international relations scholarship has been based on a flawed metric. The major finding of this article, however, suggests that this is not the case. In hundreds of battles between 1898 and 1987, the more economically developed side consistently outfought the poorer side on a soldier-for-soldier basis. This is not surprising. What is surprising is that many of the non-material factors posited to affect military capability seem to be irrelevant: when economic development is taken into account, culture and human capital become insignificant and democracy actually seems to degrade warfighting capability. In short, the conventional military dominance of Western democracies stems from superior economic development, not societal pathologies or political institutions. Therefore, a conception of military power that takes into account both the quantity of a state's resources and its level of economic development provides a sound basis for defense planning and international relations scholarship.
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