POLSCI 1G06 Lecture Notes - Lecture 11: United States Dollar, Great Power, Future Us

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Hegemony
What accounts for the fact that the late 19th and late 20th/early 21st century
international systems appear to be similar on so many levels?
Is there some common cause that can explain why trade, investment, migration- all
the features that we normally take to be globalization- expanded at both points in
time?
AND why the earlier period of late 19th/ early 20th century "globalization" collapsed?
One possible explanation: Hegemonic Stability Theory
1 common feature of both periods of time: international system was dominated by 1
state that had an overwhelming advantage in power over all other states
Both eras have states that are hegemonic
Thus: high levels of international openness during the period of British Dominance in
the 19th century
Britain was the undisputed economic and political power of the 10th century
international system
Once Britain was world's most powerful state it began to push forward a project of
free trade
Once its preponderance began to decline the international economy seized up and the
international system descended into war
Like today, high levels of international openness appear to correspond with the
American international dominance that began in the mid-20th century
With the rise of a new hegemon, the international order seems to stabilize and a
process like "globalization" can begin again
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What is the status of US hegemony
Its GDP is more than 2 times bigger than its next competitor
The extent of US power along 4 different axis (Mann):
1. Economic power
There are several aspects of the American economy that appear to give it an
unparalleled supremacy in the international system
A) American economy is largest in the world
B) American dollar is the world's de facto currency (used to be fixed relationship with
currencies around the world to American dollar- used to be gold- now it has centrality
in international trade- it inflates demand for US dollars externally rather than
domestically, keeps its value high) – the US can print dollars at will without losing
international purchasing power
C) the US has a dominant position in the construction of international economic
regulations
2. Military Power
By most measures, military is unparalleled in terms of its strength
Budget close to 50% of world's total
Nuclear shield
Global reach- "military facilities in 132 countries, bases in 40"
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