Global interdependence shapes today’s world, with its effects influencing economies, politics, and international relations. While integrated economies offer benefits, they also create challenges. Despite economic interdependence between nations like the U.S. and China, rivalry persists. Managing these complex relationships carefully is vital to preventing conflicts and promoting long-term stability.
BY DR. BRAD MARTIN, SENIOR POLICY RESEARCHER AT RAND CORPORATION
FOR THE NEWS ANALYTICS JOURNAL
a 5 mins read.
There is little question that the world has grown to a level of economic interdependence where events in any part of the world are likely to have repercussions worldwide. Indeed, the two largest economies in the world – the United States (US) and the People’s Republic of China (PRC) – remain extensively connected, even as they also remain geopolitical rivals. The level of interdependence between the US and PRC has decreased slightly, as the linked article indicates. Still, the degree of dependence between the two countries remains at a level where “decoupling” is impractical.
For example, the PRC remains highly dependent on exports to the US and others for revenue; on the other side, it also essentially controls the processing and, in some cases, the production of critical minerals used in effectively every commodity that requires rare earth or copper or nickel or cobalt anywhere in the production process. The potential damage from a trade disruption might be extensive – indeed economically and socially catastrophic – for both sides. I use the US – PRC example as a well-documented relationship but the same kinds of relationships apply today to one degree or another. Nations worldwide are locked in tight and complex connections, and although the interactions may differ from nation to nation, region to region, the facts and challenges of interdependence remain.
HISTORY’S LESSON
Looking at the US and PRC, it’s tempting to think that interdependence has reached a level where armed conflict between these two rivals is beyond irrational and unthinkable. However, history gives us little reason to be confident that peace is inevitable because the degree of connection is strong. Trading partners in fact sometimes do go to war with one another; nations with obvious reasons to avoid war still do so. Indeed, by the logic of interdependence, World War I should never have occurred. This historical perspective, showing that interdependence did not always prevent war in the past and also probably does not assure a peaceful future, is crucial for understanding and preparing for the complexities of international relations.
When high stakes hinge on a single decision, not cooperating or avoiding an imminent collision becomes the rational short-term choice for each actor.
THEORIES OF CONFLICT
Why would nations with incentives to avoid war go to war anyway? Sometimes, wars occur due to misperception and irrationality. In other cases, actors viewed war as at least inevitable and possibly desirable. However, to a degree, the propensity to arrive at conflict, even when seemingly against interests, is inherent in an international system where nations are in conflict and bargain over outcomes. There are many metaphors to describe dispute behavior within the global system.
Sometimes, the metaphors have been more formalized as games and models. “Prisoner’s Dilemma” and “Chicken” are two examples. A common theme is that although there are reasons for nations to collaborate to avoid terrible outcomes, there are also reasons for each actor to try and force the other to back down.
In cases where much is at stake in a single decision, refusing to cooperate or swerve from an imminent collision becomes each actor’s rational short-term choice. Over many iterations, actors may conclude that attempting to cooperate will bring negative short-term returns, even at the risk of betrayal. But, when there might not be another turn to consider, actors accept the mutual danger, refusing the option of surrender and believing that the other actor may back down.
COLD WAR LESSONS
How might this logic apply to the highly interconnected relationship between the US and PRC or other nations? Prisoner’s Dilemma and Chicken were developed in the context of the Cold War. The US and USSR possessed opposing world views but possessed the ability to destroy one another physically. Both sides believed that long-term trends were in their favor – neither was willing to yield entirely at any given point – but neither wished to provoke catastrophe. Accordingly, both sides developed mechanisms for advancing interest, testing commitment, and finding ways of de-escalating before the responses reached the highest escalation levels.
To illustrate how approaches varied, the “massive retaliation” doctrine the US adopted in the early 1950s dictated that the US respond with overwhelming force – use of strategic nuclear weapons – to provocations, great and small.
However, the idea that the US would destroy itself and its enemies over provocation was both dangerous and not credible. National leaders needed options between capitulation and overwhelming force. As a result, theorists developed, and US policymakers implemented options for credible responses with lower nuclear and conventional force levels. This became part of US policy and force structure in the early 1960s. Managed escalation became part of the regular interaction between the two powers, even in cases where the risk of war was high. Mutual assured destruction was understood at the highest levels of escalation, but neither side was confined to only surrendering or responding to provocations with civilization-ending force.
Despite the incentives to avoid war, states sometimes go to war due to misperception, irrationality, or strategic advantage over others. Prisoner’s Dilemma and Chicken theories explain conflict behavior regarding managed escalation over catastrophic retaliation.
The analogy between the situation in the Cold War and today is not perfect. The PRC is not the Soviet Union, and the US position in the world differs from that of the mid-20th century. Other national rivalries may have even less in common with the Cold War. However, what is familiar with the earlier era is the existence of conflict over ideological and geopolitical goals coupled with the ability of each side to inflict terrible damage on the other.
Unlike the Cold War, the principal vulnerability in many cases is less physical destruction than economic damage. In the case of the US and PRC, some crisis response mechanisms might be military. Still, the national damage incurred will be mainly in commodities denied, revenues curtailed, and supply chains disrupted. However, the same incentives to cause leaders to contemplate accepting the risk of damage would still exist.
CONFLICT RESOLUTION
Accordingly, rather than assume interdependence has made conflict impossible, potential rivals would be well-advised to consider the kinds of off-ramps and escalation options that provide a means of responding to provocations between capitulation and catastrophe. In the case of supply chain vulnerability, the first impulse might be to reduce vulnerability by “reshoring” or finding alternative sources and markets. This is possible in a few cases, but interdependent relationships formed over decades and in many cases cannot be readily reversed. Another option may be to accept interdependence as a condition of the international system and work within it to develop conflict resolution methods. This proactive approach, much as the US and Soviet Union came to accept the facts of mutually assured destruction and the need for resolution mechanisms that allowed both sides the ability to find off-ramps, can provide hope for a more peaceful future.
(Dr. Brad Martin, Senior Policy Researcher at RAND Corporation, Manassas, Virginia, United States. The views expressed are of the author and do not necessarily reflect the views of The News Analytics Journal.)
