Donald Trump: A Symptom of Imperial Decline

                                         

 Thirty-six years ago the political scientist Robert Gilpin wrote Hegemonic War and International Change, a seminal piece that is still required reading for many undergraduates (including my own). He identifies discernable patterns throughout the history of global politics, namely, power transitions from the established but declining great power to the rising one. The characteristics of the declining state’s politics include anger about the loss of status, disputes about the reasons for its occurrence, increased political polarization, insularity, and pessimism—a mix of conditions that are ripe for the rise of a strong man who promises to make things right. In this blog post I will suggest that this pattern fits the current global order characterized with America’s relative decline and Chinese ascendency, and that Donald Trump’s triumph is not unrelated to this historical power transition.

The main contenders

Gilpin shows that as the leading state declines, more and more believe that its international commitments are too costly to sustain, mainly because of the needs of domestic constituents.  There are several ways of responding to this challenge: scale back the commitments, demand that the recipients pay more for the costs of protection, or increase domestic productivity so that more resources are available for funding international obligations. Generally, the last is hardest because the established power’s population is aging and lacks the dynamism for the necessary increase in growth, or it has lost the desire to bear the burden of leadership. The first two, therefore, are typically pursued.

Another aspect of power transitions is a “closing of space”: the established and rising powers repeatedly “bump” into each other, leading to minor skirmishes. Alliance formations are a major reason for these disputes, as a distinguishing feature of the established power is defense and economic ties to countries that feel threatened by the rising one (sometimes called “encirclement”). These ties help balance the rising power, but only up to a point. When allies begin to feel that the hegemon’s commitments to their security are not secure, they either beef up their own defense capabilities, consider developing new security arrangements or defect to the rising power.

Lastly, Gilpin shows that the society of the declining power is characterized with an increased rights-based mentality that emphasizes individual (and hence domestic) needs and wants over international ones. There are also major domestic disputes about which rights should be satisfied, leading to fierce political conflict that becomes difficult to bridge. As polarization increases, a blame game ensues as each side of the political divide blames the other for the general decline in economic well-being. Conversely, in the rising state a sense of duty to contribute to the nation’s destiny prevails. There is a relatively accepted consensus that it will soon assume leadership of the international system and that citizens, in both public and private sectors, should contribute to the attainment of that goal. Confidence is high in this society because it is growing fast and rapidly increasing investments in the military, while the established power is divided, insular and increasingly prioritizing domestic needs over international ones.

This picture more or less characterizes the relationship between the US and China over the last fifteen years, and Trump’s victory needs to be placed in that context. Not coincidently, his rise coincides with some significant inflection points: China’s economy is now roughly equal in size to America’s, it is the world’s largest manufacturer, and its military expenditure is growing at double-digit rates. Current trends suggest that China will soon overtake America as the world’s leading state, and Americans are fiercely divided about how to manage the domestic and international challenges posed by this power transition.

Thus it is no coincidence that Trump’s major target is China or that his main campaign slogan, “Make America Great Again” is an implicit recognition of a sense of American decline. Other patterns fit the mold; as Gilpin might have predicted, China and the US are increasingly “bumping into each other”, as China makes territorial claims against America’s allies in the region. The domestic and psychological changes identified by Gilpin can also be observed. While the US is polarized, pessimistic, and prioritizing domestic needs, China is increasingly confident and becoming bolder in challenging the US-led order. Philippino President Rodrigo Duterte’s surprising defection to China despite his country’s long alliance with the US may be a sign of more to come.

Gilpin’s analysis of power transitions over 2500 years show that more often than not they result in war. In all the international power transitions he analyzes (Peloponnesian War, Punic wars, the Crusades, 30 years’ war, Napoleonic wars, World War 1), war was preceded by structural shifts in the distribution of power, an unwillingness of the established power to accept decline, the rising power’s increasing assertiveness and claim to rightful leadership, leading to disequilibrium, tensions, skirmishes, and conflict. This does not bode well for the Trump administration. Soon enough Trump may face a crisis in South East Asia that will test his resolve to defend a status quo characterized by waning American leadership. The alternative is to accept the structural shifts taking place and accede to China’s effective control of the region. If he refuses to bow to China’s claim of regional leadership, a high-stakes war is very likely. Gilpin shows that, during these types of “hegemonic” wars, at stake is not only or mainly military dominance, but also whose societal model gains prestige, radiates outwards and becomes the norm. A victory for China in any standoff with the US would also mean a triumph of China’s model of authoritarian state-capitalism, giving liberal democracy another major blow.

On Democratic Accountability

The populist insurgencies taking place in many Western countries have been broadly explained as being caused either by the rise of economic inequality or the old fashioned racism of whites who detest the changes occurring to the ethnic make-up of their countries. Undoubtedly these motives play a role, but ignored in this account is the pervasive sense that, to take a much abused phrase, “the system is rigged”. Although Donald Trump sundered the meaning of that term to mean the system is rigged only when he loses, at the level of the common person the expression has a simpler—and more accurate—meaning: the pervasive sense that political elites do not pay for their mistakes or for breaking their promises.

Western democracies operate under a basic assumption: elections keep leaders accountable. When we unpack what accountability actually is, it becomes evident that contemporary democracies do not meet the standard. Accountability is a specific kind of relationship between policy makers and policy takers. The former refers to those with political decision making power, and the latter are the citizens who are on the receiving end of policymakers’ decisions. Nobel Prize winning economist Joseph Stiglitz has helpfully shown that for democratic accountability to occur, three conditions are required: 1) policy makers have clear objectives, 2) policy takers have a reliable way of assessing whether objectives are met, and 3) policymakers face consequences, or punishments, if the objectives are not met.

Actions need consequences

It would be a stretch to say that Western politicians have been accountable in this sense. When objectives are not met, politicians blame failure on either poor implementation or unforeseeable consequences. The incentive structure of contemporary politics helps to explain this enduring pattern: decision makers are personally unmoored from the consequences of their decisions. They may lose elections, but such an outcome can hardly be described as a “punishment” since, after leaving office, they continue to live a life of privilege via the wealth and social networks accrued during, or as a consequence of, their time in power.

Voters perceive the inherent injustice of this system, and it is this that explains why many are willing to vote for populists. Thus policymakers need to start thinking about ways of restoring legitimacy to the system by making politics more accountable.

The most urgent need is to change the incentive structure of politics so that it accords with the third criterion on Stiglitz’s framework, i.e., decision makers are punished in some form if their stated objectives are not met. This can begin with the establishment of a personal financial stake in their enacted policies. When they introduce a significant new policy, promises would be followed by a clause that stipulates what they are personally willing to lose if they are wrong. For example, Prime Minister Justin Trudeau is proposing a carbon tax, promising, among other things, that it will help create jobs in the green energy sector. In the current system, if Trudeau is wrong, and his energy policies seriously undermine living standards, the worst that can happen is that he angers enough people to lose the next election. Meanwhile, he will continue to enjoy all the perks and privileges of being a wealthy insider; even worse is that his socioeconomic class insulates him from the damage his policy might cause.

Now imagine that Trudeau announced that he would be willing to have a personal stake in the policy by announcing that, if he is wrong, a portion of his assets would be donated to charity. There would be multiple benefits: he would signal genuine confidence in his promises, his personal stake in the outcome might make him more cautious and more willing to listen to those who disagree with him, and, most importantly, there would actually be a real punishment, however small, if his promises do not occur. This would be a small step towards introducing a dose of accountability into the political process.

           

 If others followed Trudeau’s virtuous example, a beneficial selection process could ensue. Politicians who did not really believe that their proposals would produce the stated outcomes would be reluctant to make promises. Others who did make promises might be more diligent. For voters, it would be a signal of good and honest leadership. Candidates who made promises, but were unwilling to have a personal and financial stake in them, would rightly be deemed not credible and would be more likely to lose elections. Crucially, it would help restore a sense that even the powerful face consequences when their decisions harm others.

A reform of this nature would introduce a number of procedural difficulties, such as how it will be enacted and who will be the arbiter of whether a policy succeeds or fails.

           

Initially at least, it would be completely voluntary. Principled and courageous candidates and political leaders would include a personal financial stake in their significant policy proposals, such as a percentage of their total assets. The stake would be proportional to wealth, ensuring that the rich pay more for their mistakes.  As more leaders voluntarily make this kind of commitment, others will follow and it could become a customary practise, similar to the way releasing tax returns is in the US.

 

Another complexity would be the definition of whether a policy succeeds or fails. An independent body would have to be established for the evaluation of each policy and whether expected outcomes were achieved. Western democracies already have experience with these kinds of agencies as watchdogs of public finances, which help to introduce an element of transparency in the budgetary process by providing independent and objective accounts of the spending and tax policies of the executive.

Such a reform would not cure the ills that afflict many Western countries. But it would go in the direction of correcting the flawed notion that the threat of losing an election imposes accountability. By establishing a personal stake in their policies, leaders would signal to voters that they have thought deeply and carefully about the potential consequences of their legislative proposals. If their policies fail to achieve declared outcomes, decision-makers would be punished with a personal financial loss. Political elites might think twice about making exorbitant promises or exaggerating the benefits of their proposals. Voters’ faith in the system could potentially be restored. This could take much of the fuel out of the populist insurgencies that threaten to burn down the entire edifice.