The Kindleberger Trap

January 16, 2017

The Kindleberger Trap

by Joseph S.Nye

Image result for thucydides trap

CAMBRIDGE – As US President-elect Donald Trump prepares his administration’s policy toward China, he should be wary of two major traps that history has set for him. The “Thucydides Trap,” cited by Chinese President Xi Jinping, refers to the warning by the ancient Greek historian that cataclysmic war can erupt if an established power (like the United States) becomes too fearful of a rising power (like China). But Trump also has to worry about the “Kindleberger Trap”: a China that seems too weak rather than too strong.

Charles Kindleberger, an intellectual architect of the Marshall Plan who later taught at MIT, argued that the disastrous decade of the 1930s was caused when the US replaced Britain as the largest global power but failed to take on Britain’s role in providing global public goods. The result was the collapse of the global system into depression, genocide, and world war. Today, as China’s power grows, will it help provide global public goods?

In domestic politics, governments produce public goods such as policing or a clean environment, from which all citizens can benefit and none are excluded. At the global level, public goods – such as a stable climate, financial stability, or freedom of the seas – are provided by coalitions led by the largest powers.

Small countries have little incentive to pay for such global public goods. Because their small contributions make little difference to whether they benefit or not, it is rational for them to ride for free. But the largest powers can see the effect and feel the benefit of their contributions. So it is rational for the largest countries to lead. When they do not, global public goods are under-produced. When Britain became too weak to play that role after World War I, an isolationist US continued to be a free rider, with disastrous results.

Some observers worry that as China’s power grows, it will free ride rather than contribute to an international order that it did not create. So far, the record is mixed. China benefits from the United Nations system, where it has a veto in the Security Council. It is now the second-largest funder of UN peacekeeping forces, and it participated in UN programs related to Ebola and climate change.

China has also benefited greatly from multilateral economic institutions like the World Trade Organization, the World Bank, and the International Monetary Fund. In 2015, China launched the Asian Infrastructure Investment Bank, which some saw as an alternative to the World Bank; but the new institution adheres to international rules and cooperates with the World Bank.

Image result for thucydides trapSparta Vs Athens–America Vs China

On the other hand, China’s rejection of a Permanent Court of Arbitration judgment last year against its territorial claims in the South China Sea raises troublesome questions. Thus far, however, Chinese behavior has sought not to overthrow the liberal world order from which it benefits, but to increase its influence within it. If pressed and isolated by Trump’s policy, however, will China become a disruptive free rider that pushes the world into a Kindleberger Trap?

Trump must also worry about the better-known Thucydides Trap: a China that seems too strong rather than too weak. There is nothing inevitable about this trap, and its effects are often exaggerated. For example, the political scientist Graham Allison has argued that in 12 of 16 cases since 1500 when an established power has confronted a rising power, the result has been a major war.

But these numbers are not accurate, because it is not clear what constitutes a “case.” For example, Britain was the dominant world power in the mid-nineteenth century, but it let Prussia create a powerful new German empire in the heart of the European continent. Of course, Britain did fight Germany a half-century later, in 1914, but should that be counted as one case or two?

World War I was not simply a case of an established Britain responding to a rising Germany. In addition to the rise of Germany, WWI was caused by the fear in Germany of Russia’s growing power, the fear of rising Slavic nationalism in a declining Austria-Hungary, as well as myriad other factors that differed from ancient Greece.

As for current analogies, today’s power gap between the US and China is much greater than that between Germany and Britain in 1914. Metaphors can be useful as general precautions, but they become dangerous when they convey a sense of historical inexorableness.

Even the classical Greek case is not as straightforward as Thucydides made it seem. He claimed that the cause of the second Peloponnesian War was the growth of the power of Athens and the fear it caused in Sparta. But the Yale historian Donald Kagan has shown that Athenian power was in fact not growing. Before the war broke out in 431 BC, the balance of power had begun to stabilize. Athenian policy mistakes made the Spartans think that war might be worth the risk.

Athens’ growth caused the first Peloponnesian War earlier in the century, but then a Thirty-Year Truce doused the fire. Kagan argues that to start the second, disastrous war, a spark needed to land on one of the rare bits of kindling that had not been thoroughly drenched and then continually and vigorously fanned by poor policy choices. In other words, the war was caused not by impersonal forces, but by bad decisions in difficult circumstances.

That is the danger that Trump confronts with China today. He must worry about a China that is simultaneously too weak and too strong. To achieve his objectives, he must avoid the Kindleberger trap as well as the Thucydides trap. But, above all, he must avoid the miscalculations, misperceptions, and rash judgments that plague human history.–nye-2017-01

8 thoughts on “The Kindleberger Trap

  1. A very short but very meaningful article. A confrontation between China and the US that could endanger not only both the US and China but the rest of the world.

    The highlight of the article is in the last paragraph: “That is the danger that Trump confronts with China today. He must worry about a China that is simultaneously too weak and too strong. To achieve his objectives, he must avoid the Kindleberger trap as well as the Thucydides trap. But, above all, he must avoid the miscalculations, misperceptions, and rash judgments that plague human history.”

    The problem with Trump is that he lacks the intellect and political acumen. He is thin-skinned, erratic, impetuous, arrogant, egotistic, narcissistic, selfish, bombastic, pompous, obnoxious, racist, blow hard, opinionated, disgusting, idiotic, crazy, loud-mouthed buffoon bully. Perhaps Xi Jinping will show Trump what leadership is all about. In his speech in Seattle in September 2015, he tackled the threat of the two nations’ strategic rivalry head on: “There is no such thing as the so-called Thucydides trap in the world. But should major countries time and again make the mistakes of strategic miscalculation, they might create such traps for themselves.”

    Personally, I do not see China’s national ambitions as much of the problem. History has shown the Chinese never had global ambitions. Even with the mighty naval fleet of Admiral Cheng Ho who sailed all the way to Africa never colonized a piece of land along the way. America’s projection of world hegemony through military power is a much greater threat. Like any Western global empires in history, America is seemingly all centered on the notion of a “something” intrinsically superior that justifies domination, e.g. race, culture, but where China is about adaptability and flexibility a la leaf of grass and the Taoist empty center of a wheel.

    In reaction to the erratic manner of Donald Trump, I know China is quietly preparing for war with the US. But I honestly do not see a war between America and China, for any war between the two can go nuclear. The US has more than 2000 nuclear weapons (think of the great amount of money we can save from maintaining these many nuclear weapons safe and operational) and the Chinese an estimated 400. If even only 10% reached their targets inside the mainland USA, the country would be reduced to no more than a bunch of rednecks trying to farm mushrooms under the ash clouds of burnt cities. China would probably end up being wiped out.

    Rather than focusing on “global public goods,” I think the US should focus on what is likely to benefit the US in the long term. America should seek a cooperative, multi-polar global power structure, which is the only just future we can build, and consequently the only path to world peace.

    Who knows what Trump is thinking. We shall find out more in his first 100 days of administration. Stay tuned.

  2. An interesting and excellent write-up, Pak Din.

    But i think it’s a bit narrow in focus, cuz the world is getting much more complicated since the advent of the information Age.

    Instead of Kindleberger’s bipartite Supremacist takeover, we have a Quadripartite Foci – i.e USA, PRC, Russia and Europe – each with it’s own agenda. The rest of the world tags along as a relic of the Globalization FUBAR. Remember the fake phenomenon of BRICs? Failed prediction, as i’ve anticipated.

    The Thucydides Trap otoh, seems plausible – but i think the Americans are more careful than the Athenians. PRC otoh is no Sparta, culturally, politically, militarily nor economically – i.e not as stoic to the point of death. Xi may impose his will only in as much as the Central Committee CCCP acquiesces. For a quick reference to the Thucydides Peloponnesian War:

    and Prof Graham Allison’s take:

  3. Hahahahaha……..Americans are more careful than the Athenians……hahahahaha

    Oh doggie doggie doggie…….oh doggie doggie doggie

    How the hell USA embroil in Vietnam mess? I love this scene. You see what goes up must come down?

    China played a very big part in it

  4. It is hard to imagine a suicidal WW3 coming because it can reduce the entire world into dust. The US and China are at top of the world economically and militarily and they will not and should not do something silly like waging a war against each other to self-destruct themselves. Why should they when the going is good for them? But the danger can come from Russia because it possesses equally awesome nuclear power to spoil the party if it is denied a good slice of the pie in the hands of US and China. It is going to be like the case of the three musketeers – one for all and all for one.

    What we may be seeing is a tri-polar world headed by these three powers with the rest of the world living under their shadows. Any postulations from economists and political thinkers should take this likely reality into account.

    • on the same track on orwell. it is strange that both huxley and orwell talked about became true.


      Amusing Ourselves to Death: Public Discourse in the Age of Show Business
      // What Orwell feared were those who would ban books. What Huxley feared was that there would be no reason to ban a book, for there would be no one who wanted to read one. Orwell feared those who would deprive us of information. Huxley feared those who would give us so much that we would be reduced to passivity and egotism. Orwell feared that the truth would be concealed from us. Huxley feared the truth would be drowned in a sea of irrelevance. Orwell feared we would become a captive culture. Huxley feared we would become a trivial culture, preoccupied with some equivalent of the feelies, the orgy porgy, and the centrifugal bumblepuppy.
      China adopting an Orwellian 1984, while a Trump world adopted an Huxley un-truth.

      On Xi-core, I am seeing similarity in how tactic used by Qin during the warring states with what he has done so far.'s_wars_of_unification

      Alas, weaker states in SEAS would be likely to be like Han during the Warring State period, the first to be succumbed.
      I am not worried about a nuclear war. Most likely scenario is the perpetual small battles in various dispensable states.

      Be afraid, my Layu-sians.

  5. Katasayang,
    History, to me, seldom repeats itself. It informs and warns, but seldom intrudes into the present – unless we lack forgiveness (not forgetfulness) and other ‘enlightened’ virtues. That is why it is called HIS-story and not OUR-story. That being said, the world is made of blind rats drowning in their own ignorance and excrement, like that loose-brain – who see history as unvarnished Truth and Predication without understanding it’s import – i.e, not as an allegorical ‘warning’ device but as a cyclical phenomenon which belies their ‘causality’ belief system. Such thinking is what we call dyadic – with Truth being binary. HIS-story is way beyond that.

    So i’m not a fan of ‘hard’ predestination nor karmic cycles. Otherwise we won’t be where we are today. That is why i seldom delve into similitude or conflating the past with the present. You have done well to quote the history of Qin, but only as a warning – not as a fact.

    Stop humping or shagging the knots on the Ipoh Tree. It’s sap is toxic and tree-humping might make you lose other ‘essential’ bits as well. At least, i fertilize trees by pissing on them and am doing my bit by defraying from the Carbon tax..

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