Pax Britannica demonstrates that the existence of a hegemonic power is a necessary foundation for progress in the global economy. Discuss.
Introduction
What is hegemony?
Firstly, it is necessary to understand the definition of the word hegemony, which has its origins from the Greek word that translates simply as ‘dominance over’ and that was used to describe relations between the city-states. Nowadays, it is known as the ‘dominance of one group over another, often support by legitimating norms and ideas’ (Britannica, 2016). The concept of hegemony was revolutionised by Antonio Gramsci. During his life, he effectively transfigured hegemony from a rather one-dimensional feature of international relations to ‘an organising principle, or world-view (or combination of such world views), that is diffused by agencies of ideological control and socialisation into every area of daily life’ (….). Moreover, Gramsci managed to separate the concept of hegemony from the impervious theoretical dispute on the human nature, which realists incorporate into their theories. Thus the absence of an incorporation of human nature into Gramsci’s theory of hegemony is one of the most salient differences to the realist understanding.
https://www.linkedin.com/pulse/hegemony-how-works-politics-society-media-vianney-joy
Theory of hegemonic stability
Theory of hegemonic stability (THS) became widely accepted tool to explain the dynamics of the world economy. By linking the evolution of the economy with the international distribution of forces, THS combines economic and political factors. The theory’s main assumption states that cooperation and a properly working global economy depends on the specific type of political structure characterised by dominance of one state. Hegemonic dominance of power creates optimal situation for functioning of an open and stable world economy. However, the position of a particular hegemon grows weak with time and the process of hegemonic fall causing disturbances in the system (Keohane, 1984). Duncan Snidal – at the essence of this theory sets similarly – the existence of one, strongly dominating state in the international politics leads to collectively desired results for all countries in the global system. The opposite is the lack of hegemony resulting disturbances in the global system and adverse results for individual countries. Theory formulates two significant conclusions. First, that the existence of dominating state leads to the stability regime of free trade. Hegemon exercises leadership on emerging in various international spheres regimes. Second, that although the leading state is benefitting from this situation, smaller countries can also gain a lot (Snidal, 1985).
Pax Britannica
Pax Britannica is a ‘peace imposed by Great Britain upon hostile nations especially in the 19th century’ (Dictionary, 2016). In period since 19th century to the outbreak of the First World War Great Britain had its dominance both in the global trade and finance. Its participation in the world exchange since 1870 accounted about 24%, and before 1914 only lower than 15% (Lake, 1995). S.D. Krasner showed the dominance of the Great Britain in the international trade based on its leading in the global profits in relative to the second biggest participant of trade. In 1880 the dominance in this regard over France was more than twice (2.22) and in the 1913 in relative to United States only 1.2 (Krasner, 1995). During Pax Britannica far outweighs was liberal policy with the exception of a small increase in tariffs in 1879-1900. Great Britain seeking to implement the principles of free trade already in the 20s of the 19th century, liberalized their trade policies, lowering tariffs and eliminating other trade barriers. Important and spectacular decision was repealing the Corn Law in 1846, which was a symbol of agriculture protectionism. France began to pursue liberal policy trade in the 30s 19th century, lowering in first duty on certain semi-finished products and next on coal, iron ore and steel. Liberalistic tendencies in international trade strengthened as a result of abolition of trade restrictions by other European countries, such as Belgium, Spain, Norway, Portugal, Sweden and Switzerland. A turning point in the process of liberalization of international trade in the nineteenth century had the Cobden-Chevalier Treaty, signed in 1860 between France and Great Britain (Mucha-Leszko, 2006).
In period of Pax Britannica Great Britain in 1844 created basis of the Gold Standard which is a
‘monetary standard under which the basic unit of currency is defined by a stated quantity of gold and which is usually characterized by the coinage and circulation of gold, unrestricted convertibility of other money into gold, and the free export and import of gold for settling of international obligations’ (Merriam-Webster, 2016).
In that year Bank of England was obligated to redemption of their notes for gold and repealed the restrictions in the smelting of coins and transmission of gold. An introduction to the gold standard in England was the adoption of gold specie standard in 1821, when on demand was possible to exchange paper money for gold sovereign emitted by the Royal Mint at Tower Hill since 1816 years. Later, between 1870 and 1880, gold standard was adopted by a large number of countries and it was used until the First World War (Narodowy Bank Polski, 2015).
What was before?