"These facts are uncomfortable for libertarians. We would like to think of trade and military hegemony as substitutes. Instead, they appear to be complements."
The Benefits of Hegemony
By Arnold Kling*
Marco Polo, his father, and his uncle, were merchants. They were able to trade throughout Asia because of the protection of Kublai Khan, grandson of Genghis Kahn. These rulers created a Mongol hegemony in Asia.
Trade flourishes under hegemony. That is the lesson I took from Power and Plenty, a dense, arduous survey of economic history written by Ronald Findlay and Kevin H. O'Rourke. In addition to the Mongol empire, they describe the increased trade under the hegemonies of the Romans, the Muslim Caliphate, and various dynasties in China and Latin America during the first millenium. Of course, the most recent example of trade under hegemony has been what Walter Russell Mead in God and Gold calls the maritime powers of Great Britain and the United States.
It makes sense once you think about it. Disparate peoples can coexist in three ways: in isolation, under hegemony, or at war. In the absence of hegemony, peaceful intercourse is an elusive ideal.
Geographical isolation has been a factor for most of human history. For millenia, inhabitants of what we now call the "new world" were unaware of the existence of the "old world," and vice-versa. Geographical isolation was overcome by transportation technology, from ocean-going ships to railroads to automobiles and airplanes. Another important technological development was communications, from the telegraph to the telephone to the Internet.
Political and military factors also have produced isolation. In medieval times, when castles were the dominant military technology, this tended to promote isolation. More recently, during the Cold War, the capitalist countries were isolated from the Communist countries, by such means as the Berlin Wall and the refusal by the United States to have any relations with Communist China.
Today, many Americans long for isolation, especially from the Islamic world. Such a desire is reflected in the political popularity of "energy independence," in spite of the impracticality of this notion.
Historically, isolation correlates with economic backwardness. The most underdeveloped societies are those that have been cut off from trade–remote islands in the ocean or villages in Africa and Latin America located far from water transport.
Squalid isolation has also been observed in the West. The fall of the Roman Empire produced isolation and decline in Europe. The two decades following World War I saw trade curtailed and living standards reduced.
The Golden Passport
In the absence of hegemony, trade is impaired. If Marco Polo wants to buy goods in Afghanistan and sell them in China, he has to be able to avoid having his goods stolen, either by bandits along the route or by criminals or government rulers at his destination. Without protection from a hegemon, he is unlikely to be able to complete his trade mission.
Marco Polo carried with him a Golden Passport, which signified Kublai Khan's protection. Every trader needs the equivalent of such a Golden Passport.
The United States Constitution was in part a contract for hegemony. The separate states were given wide latitude for setting policies within their borders. However, the "commerce clause" stated that states could not introduce tariffs or other impediments to interstate commerce.
The "commerce clause" effectively gave American traders their Golden Passport within the United States. As Walter Russell Mead points out, the British and American navies helped give Anglo-American traders a Golden Passport throughout the world.
Discomfort with Hegemony
Many liberals, of both the classical and modern varieties, are uncomfortable with hegemony. Hegemony suggests militarism and the potential for dictatorship.
Some libertarians envision a government-free world, with people too dependent on trade with one another to engage in war. Some liberals envision a world government, something like the European Union or the United Nations. These model governments enjoy apparently unlimited scope to make rules but ultimately no power to enforce them.
Many historians view hegemony as unstable. Inevitably, challengers arise. When they become sufficiently powerful relative to the hegemon, war breaks out. War destroys the hegemon, leading to chaos and squalid isolation.
The unpopularity of the Iraq war shows that Americans are not eager practitioners of hegemony. That is probably a good thing. However, we also should not be eager to give up hegemony. In theory, there are better alternatives. In practice, there are alternatives that are much worse.
*Kling is an adjunct scholar with the Cato Institute.