Economy

The incredible shrinking global sea powers

THE OBVIOUS place to look if you want to understand the future is cyberspace — the birthplace of virtual worlds, artificial intelligence and other digital wonders. But we shouldn’t forget the case for keeping a watchful eye on something more elemental — the relative fortunes of land powers versus sea powers. Sages from Homer onwards have argued that land and sea powers generate different societies and we forget their wisdom at our peril.

Everywhere you look, land powers are on the march. Russia is trying to reassemble its old imperium by gobbling up first Crimea and now Ukraine. China has ingested the great seaport of Hong Kong and may be planning to do the same to the island of Taiwan. Brexit means that the European Union is more than ever a land-power: dominated by Germany and France and looking eastward towards land-locked Mitteleuropa. The United States, which has long flipped between being a land power and a sea power, is turning inwards once again.

This is bad news for the future of both free trade and liberty. Sea powers, most notably Great Britain, created both the institutional and intellectual infrastructure of a distinctively liberal form of capitalism: limited government at home and free trade abroad supported by innovative stock markets and powerful navies. Land powers, by contrast, pursued a more authoritarian road to modernity: overbearing governments, standing armies necessitating efficient tax systems, dirigiste economies, and, above all, a hunger for yet more land (at its most monstrous manifestation, Adolf Hitler’s lebensraum).

The founders of modern economic liberalism saw numerous links between open seas and open societies. Adam Smith argued that “water carriage” opens a more extensive market than “land carriage.” David Hume noted that merchants who “possess the secret of importation and exportation” check the power of the ancient nobility and “tempt other adventurers to become their rivals in commerce.” In the 16th century, England and another smallish seafaring nation, the Dutch Republic, became the world’s first capitalist powers. They both created powerful navies, ambitious merchant classes, sprawling empires, far-flung alliances and vital political philosophies — Hugo Grotius, John Locke — of global import.

The relationship between sea power and land power, and between both and liberty, was more nuanced than these great thinkers supposed. Spain had a powerful enough navy to challenge the British to a fight (the Armada of 1588 was repulsed as much by the weather as Francis Drake) and founded a giant empire in the Americas. Japan was a hermit kingdom until the late 19th century when it launched on imperial expansion in Asia and the Pacific.

The Atlantic world’s commitment to freedom was also nuanced. The Netherlands and Britain created vast overseas empires. British trading companies, particularly the Royal Africa Company, dealt in slaves. The navy’s detractors described ships as floating prisons that relied on press gangs to provide them with men — and rum and the lash to keep those men in order.

Yet qualifications don’t discredit the thesis. Spain was a highly centralized state that treated its South American territories as a source of gold to finance its military exploits on the European mainland rather than as a trading partner. Slavery and colonialism have been ubiquitous in human history. In 1807, Britain was the first country to abolish the slave trade within its territories and to use the might of its navy to enforce the abolition. And, for all their abuses, sea powers developed principles of limited government and secure property rights whereas prominent land powers, notably Russia and China, remain despotisms.

Britain’s history and culture are saturated in sea salt: many of the country’s greatest heroes were admirals (Horatio Nelson who still looks over central London from his column) and many of its greatest artists, notably J.M.W. Turner, focused on maritime themes. The British navy was known as “the Senior Service” to the army’s junior. The unofficial national anthem, “Rule Britannia,” was fully conscious that the country’s source of power came from ruling the waves.

The US was never as committed to the sea as Britain. It began life as a maritime power with its population concentrated on the north-east seaboard and its political elite soaked in the writings of Smith and Locke. In the 19th century it turned inwards, colonizing the vast interior, protecting its infant industries and steering clear of foreign entanglements. But in the late 19th century it turned outwards once again as it built its own navy, extended its commerce around the world, and renewed its links with Britain.

The US and Britain together twice prevented Europe from becoming a German province. During World War II, Winston Churchill and Franklin Roosevelt bonded in part over their shared naval experience — the US president was Assistant Secretary of State for the Navy in 1897-98 and the British prime minister was First Lord of the Admiralty in 1911-15. Seadog to seadog. The Atlantic Charter, which provided a joint declaration of Britain and America’s war aims on Aug. 14, 1941, was celebrated in an extraordinary religious service on the HMS Prince of Wales. Thereafter, Britain and America co-operated in re-founding the world on the basis of the liberal principles of free trade and rule-bound global institutions.

Victory, however, had its costs. While defeating the Axis, Britain lost about 280 major warships and 1,000 smaller ones like minesweepers. It was an astonishing demonstration of its continued naval prowess amid the decline of its empire but also a loss from which an exhausted power could never recover. Today, the UK scarcely has a fishing fleet, a shipbuilding industry, a merchant marine, or sailors. The Senior Service has suffered from merciless cuts. It is hard to see Britain sending a fleet to the South Seas to thwart an Argentinian invasion of the Falklands Islands as it did in 1982. The coastguard is locked in the endless job of rescuing refugees from the sea.

The US still has by far the world’s biggest navy. But it is nevertheless reverting to its old land-based habits. Joseph Biden has entrenched Donald Trump’s America First policies by reinforcing barriers to the export of strategic industries to China, focusing on promoting domestic manufacturing and national industrial strategies rather than global trade. Having played a leading part in creating the World Trade Organization, America is now sidelining or even undermining it. US culture is increasingly inward looking, focused on addressing domestic decay, which is understandable, or fighting toxic culture wars, which is less so. (Europe is now mimicking the US in subsidizing and protecting domestic manufacturers and turning its attention away from global trade.)

The critical shift in the balance of power is gathering pace elsewhere. China has the capacity to define the 21st century in the way that the US did the 20th. History and geography have conspired to make the Middle Kingdom a quintessential land power. The Emperor disbanded the country’s formidable navy in the 15th century and banned trading with the outside world. The government is based in the inland city of Beijing and has long been preoccupied by threats from marauders from the vast northern steppe, hence the Great Wall. The West once hoped that coastal provinces and cities — most notably Hong Kong — would pull the country towards freedom. Instead, the former British colony’s liberty has been crushed and the metropolis has gone from entrepot to garrison. The next great global clash may well be ignited should China try to conquer Taiwan.

China is allied to another great land power that stretches from Asia to Europe. In the 17th century, Peter the Great tried to reorient Russia to the West — and modernity — by building a navy and creating the port city of St. Petersburg. But, over the ensuing centuries, the enterprise failed spectacularly. Today Russia displays all the defects that have long been associated with land powers at their worst: an omnipotent state, a lack of private property rights, and an addiction to seeking power and prestige by acquiring land. Russia’s basic instinct is to extend its influence by marching into neighbors’ territories, but it is also extending its tentacles around the world, dispatching Wagner group mercenaries to Africa and using the proceeds of its mineral wealth to twist, subvert, or otherwise corrupt foreign institutions.

There have been dire consequences in the past when sea powers have been supplanted by land powers. Athens, the birthplace of democracy, declined rapidly after Sparta destroyed its navy at Aegospotami in 405 BCE. Venice pioneered limited government at home — the Doge was elected for life but required to take advice from a rotating council — while trading with all the known world. But it eventually sank into beautiful irrelevance. Its fate holds poignance for Britain. J.R. Seeley, one of the most influential 19th century historians, once dubbed Britain “a world Venice, with the sea for streets.”

One of the great 18th century politicians, Thomas Pelham-Holles, the first Duke of Newcastle, noted that Britain had no choice but to “consider the whole globe” because “every part of the world affects us.” Now, Britain can barely manage to look across the channel. It skitters from one geopolitical strategy to another — first joining Europe, then leaving it, and now feverishly searching for a place in a regionalizing world. The country’s departure from the EU has handed power to a Franco-German alliance — something that centuries of British foreign policy had tried to avoid — and reduced the size and sophistication of the free trade caucus in Brussels.

Many Brexiteers hoped to use the departure to construct an Anglosphere of culturally similar powers linked by similar maritime traditions — the United States, Canada, Australia, New Zealand — to function as a counterbalance to a land power future. But this has not happened. The AUKUS agreement, whereby Britain and the United States are helping to provide Australia with nuclear submarines, hardly compensates for the failure to create an Anglo-American trading deal.

A striking number of Britain’s seaside towns are moldering places like Clacton-on-Sea. They provided the Brexit-mongering UK Independence Party with its first footholds in British politics. British naval heroes have been moved from the center of school curriculums to the margins, mentioned, if they are mentioned at all, with a lecture on colonialism. University history departments have almost abandoned naval history.

The spirit that defined the buccaneering world of England’s Francis Drake is now finding new homes in cyberspace and outer space. Today’s pirates spend their time surfing the web rather than skimming the waves. Our contemporary adventurers finance flights to the moon and Mars rather than the East Indies. But will these they create a liberal culture in the way that the English and Dutch once did? China has broken the link between the web and liberty by building a Great Fire Wall and using the internet to spy on its people. Russia exerts its cyber prowess interfering in foreign elections and stirring up discord across the West.

The decline of sea power is clearly a tragedy for Britain. Over the coming decades, it is likely to prove just as tragic for the rest of the world.

BLOOMBERG OPINION

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