Category Investments

History repeats itself...

14 October 2004 Angelo Coppola

Adrian Clayton of PSG Fund Managers says that he has for a while been plagued by the concept of American Imperialism and Colonialism.

This due to watching extensive television coverage of the wars in Iraq and Afghanistan, as well as huge amounts of press dealing with the so-called influence of the 'global watchdog'.

Here is a summary the thoughts of one of Britain's wonder kids, historian, Professor Niall Ferguson who has written the book: 'Empire: The rise and Demise of the British World Order and Lessons for Global Power'.

Ferguson compares the British Empire of the 18th and 19th century to modern America, finding major similarities between the two world powers and some important differences.

His thesis is clear, however, America is an Empire, notwithstanding the vehement denial thereof by Americans. So what are the similarities?

1. 'Anglobalization':
From 1830 the British began to commit themselves to economic liberalisation aimed at promoting global trade, thus fostering the integration of international capital markets and the freedom of labour movement.

This was however not based on altruism, but was instead focused on territories fostering the British spirit and embracing colonialism. This is currently no different to the American principle of promoting free market principles in external markets, possibly to promote capital flows, especially when one appreciates the essential requirement of capital needed by the US economy.

Furthermore, American companies have outgrown their home market and US multinationals demand friendly foreign territories embracing American culture. American economic dominance manifests itself in the US's share of global output, which is about 30%, this compares to Britain at its height being only 10%.

2. 'Soft power' or cultural appeal:
As did the British, Americans have dominated the globe in terms of a cultural appeal.

The last culture with such dominance was in fact that which emanated from Britain. American culture as we know enjoys major media dominance as the largest channels of distribution are controlled within the US.

It has only been in the past few years that tiny cracks are emerging with an anti-America psyche emerging.

3. Military dominance:
The British Empire has been heralded as possibly the most dominant military influence known to man. Ferguson argues, however, that the US has now superseded Britain with respect to global military occupation.

Military commentators argue that the US is currently involved or is militarily present in at least 60 countries around the world at the moment and is involved in major military engagements in at least three countries.

Furthermore, the level of military dominance in terms of might and fire power relative to competitors has never been so skewed.

Thus with military, cultural and economic influence, Ferguson argues that the US is the archetypal empire, exhibiting a similar constitution to the 67 empires preceding it.

However, empires are not all alike and there are differences between the US and the British Empire, the most prominent being:

Manpower deficit:
Americans have fewer armed forces enlisting; this has been in steady decline since the mid 1980's. Of even more importance is that Americans according to Ferguson have not been able to find a way of enticing others to fight its wars, as did the English with the Indians for example.

Americans also are not colonising the world as was the case with other empires. Only four million Americans live outside the US today and virtually no Americans live in Sub-Saharan Africa and the Middle East.

A fiscal deficit:
The British were a massive exporter of capital, especially to poor countries.

Its annual net export of capital averaged between 5% and 9% for the decade prior to the Second World War. This compares to the US, which Ferguson describes as an empire of consumption and not development.

An attention deficit:
The final difference between the US as an empire and previous empires is that Americans are incredibly impatient in terms of external military activities.

Previous empires would spend decades and often centuries occupying, controlling and altering their colonies. The US public on the other hand demand rapid action and withdrawal.

The focus of this article was on constructing proof that we live in an era where one of the most dominant empires of all times exists and operates.

We will explore the implications of American influence and look at history in establishing what factors have historically led to the fall of great empires.

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