Equilibrium and Decline

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Abstract
Assumption 4. Once an equilibrium between the costs and benefits of further change and expansion is reached, the tendency is for the economic costs of maintaining the status quo to rise faster than the economic capacity to support the status quo. The governance of international systems has been provided by empires, hegemonies, and great powers that have risen and fallen over the millennia. These successive dominant states have changed the system, expanding until an equilibrium is reached between the costs and benefits of further change and expansion. Once this equilibrium position is reached, developments both internal to the dominant power and in its external environment begin to undermine it. In consequence, there is a tendency for the economic costs of maintaining the international status quo to rise faster than the financial capacity of the dominant power to support its position and the status quo. The purpose of this chapter is to account for this tendency. The governance of an international system involves a fundamental economic problem. Although control over an international system provides economic benefits (revenues) to the dominant power or powers, domination also involves costs in manpower and material resources. In order to maintain its dominant position, a state must expend its resources on military forces, the financing of allies, foreign aid, and the costs associated with maintaining the international economy. These protection and related costs are not productive investments; they constitute an economic drain on the economy of the dominant state. Domination, therefore, requires the existence of a continuing economic surplus.

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