Neorealism is a theory of international relations, not a theory of foreign policy of states . However, a fundamental premise of the theory is that states maximize security. This is true of all modern theories of international security. In offensive realism, the prescription to obtain maximal security is for a state to become a regional hegemon . In the theory of regional security complexes, this notion is formalized as a centered regional security complex (RSC) . The North American centered RSC is a long-standing – and the only modern – example of this phenomena.
The United States has enjoyed unparalleled security since the advent of unipolarity. No combination of states in the international system is in a position of being a threat to the United States. Furthermore, despite the expectation of realists, unipolarity is stable and durable . How is it, then, that the US spends more on security than the rest of the actual and potential system-level powers combined? In fact, it spends more than the next 17 countries, and accounts for more than 40 per cent of the world total. Even as a share of GDP, at nearly 5 per cent, US security expenditures are higher than those of all other system-level players. Protected by two great oceans, and surrounded by marginal powers, the US is maximally secure. Surely, it is not buying security with these expenditures.
This anomaly is simply inexplicable in realist theories. For if states maximize security, and the United States is maximally secure, each extra taxpayer dollar spent on buying security is not being spent on competing priorities of the US state. Yet, one observes that the defense budget is treated as sacrosanct by policymakers. There is only marginal pressure from the democratic party to reign in defense spending in the interest of other priorities. No matter who occupies the White House, and whichever of the two mainstream parties controls Congress, non war-related spending on security has rarely declined since the advent of unipolarity.
Many explanations have been offered for this phenomena. Buzan and Wæver contend that since there are no real threats to the US, it has followed a strategy to maximize freedom of maneuver . Why that should be the case is left unsaid. Less sympathetic observers claim that the United States is pursuing an empire. There is certainly plenty of evidence for US unilateralism, but it falls short of proving that the US is pursuing the creation of a empire. For if that were the case, it would be fairly easy for the US to conquer large parts of the globe. Moreover, the timing couldn’t be better, the international system is unlikely to ever be as asymmetric as it is today. Yet, it does not seem interested in such an endeavor.
Another explanation offered is that much of US defense spending is actually geared towards the provision of a collective good. Most of the sea lanes through which the world’s commerce and energy flow are under US protection, so this seems a more promising avenue of investigation. Yet, the protection of the global sea lanes is unambiguously a collective good, so it is unclear why the tragedy of commons should not apply here. In particular, why doesn’t the US prod its allies to contribute? Although US policymakers have tried to get NATO members to sign up for specific tasks, they have not seriously pursued a multilateral arrangement for the provision of these collective goods. For instance, major strategic choke-points – the straits of Hormuz and Malacca, Bab el-Mandab, and the Panama canal – are all under exclusive US protection.
This can perhaps be accounted for by long-standing US grand-strategy of preventing the emergence of a regional hegemon in western Europe, east Asia, and the Persian Gulf. Yet, it is unclear why it is not compatible with allowing other powers from bearing the costs of protection of the world’s arteries and key regions. For instance, when Britain decided to withdraw protection of the Persian Gulf in 1968, the United States was enthusiastic. The US now spends a hundred billion dollars a year on doing the job itself . Clearly, British presence in the Gulf was not inconsistent with US grand-strategy.
In what follows, I will argue that one need to not resort to the specifics of US strategy to account for this anomaly. One can account for it via a modified realist theory which takes into account the role of the center country in the international system. What is required is an upgrade of theory to what I would call centered realism. Starting with the assumptions of neorealism, we amend the theory as follows.
A state is called a center country if it satisfies at least one of the following criteria:
It’s currency serves as the hard currency for a larger volume of international transactions than that of any other state.
It’s financial market is larger than that of any other state.
It’s share of overseas investment is larger than that of any other state.
Note that the only possible configurations are for there to be one, two, or three center countries. We call the system centered if there is exactly one state that satisfies all three criteria. When no such state exists in the international arena, we call the system decentered. The goal of the center countries is not just to maximize security for themselves, but rather to guarantee the stability of the international order and the security of the global trading system.
If the system is decentered, the tragedy of commons applies to the provision of the global commons: openness of global markets, protection of the sea-lanes, the stability of the global financial and monetary systems. Global markets disintegrate, and foreign investments becomes increasingly subject to greater and greater uncertainty. This forces the poles of the system to create spheres of influence and compete vigorously for access to markets and resources. This leads to more and more aggressive economic warfare – tariffs, market exclusion, denial of access to critical resources and so on – till the balance of power breaks down. Therefore, centered realism predicts repeated system-wide conflicts in a decentered international system. Indeed, the two periods when the system was decentered, 1775-1815 and 1914-45, are the sites of repeated system-wide conflicts.
In a centered system on the other hand, the center country bears the costs of the provision of these collective goods. It benefits disproportionately from the openness of global markets, security of the sea-lanes, and the stability of the global financial and monetary systems. Therefore, it lets the others free-ride. In a centered system, therefore, the balance of power would only breakdown infrequently. In particular, system-wide conflict would be extremely unlikely. Balances of power would still form, and great powers would jockey for influence and power. They would still compete for clients and balance each other and so on.
Note that this state of affairs is not new. When Britain was the center country, it bore the costs of protecting the global commons alone. Naval primacy certainly allowed Britain to compete with other Great powers, but that was not its primary function. What really counts in the balance of power is actually land-based military power, which is barely enhanced by naval primacy . Great Britain pursued naval primacy and protected the global commons because it was the “organizing center” of Capitalism . Pax Britannica wasn’t just a period of peace between Great powers, it was also a ‘long century’, a regime of accumulation centered at London. Neither was Britain the first. Before London became the center of the international financial system and the entrepôt of the world, Amsterdam had played that role for nearly two centuries. Holland accounted for half the European fleet on her own and maintained her naval primacy until the collapse of the global system with the advent of revolutionary upheaval and system-wide conflict in the late eighteenth century.
The notion of the center country is often used in the context of the international monetary system. The role of the US dollar and the stability of the international financial system depend critically on US naval primacy. The security underpinnings of the global financial system are well understood by market participants. What is also clear is the enormous advantages the center country enjoys from this privilege. The holders of capital are the primary beneficiaries of the security and stability of the global trading system. Moreover, the center country enjoys a share of financial assets out of proportion to its share of global output. This creates a strong tendency in the polity of the center country to pursue policies that ensure the stability of the international order and the security of the global trading system.
In a centered system, the center country is bound to be strong enough to be secure without outspending all other powers on defense. Rather, it pursues a functional role in the global system, seeking to maintain the security and stability of the global order. This requires, first and foremost, the protection of major sea lanes. Whence, the center country always seeks naval primacy.
There was two reasons why the center country bears the costs of the protection of the global commons alone. First, a multilateral arrangement for such provision would suffer from the tragedy of commons, with each power trying to free ride on the others. This would make the security of the commons unpredictable and uncertain. Consequently, international investments and trade would be drastically lower. Second, the benefit of the provision of these collective goods to the center country far outweigh the costs. Capital is far more concentrated than economic output and the primary beneficiaries of such provision are the investors who dominate the polity of the center country. Indeed, in each of the three historical cases, we observe that the center country accounts for half the capital deployed overseas.
Centered realism also provides the right framework of analysis for a unipolar world. The reason why the ‘world is not balancing back’ is not just because the United States is so dominant that no one sees any point in trying. It is also because US protection of the global commons directly benefits not just US investors and corporations but investors and corporations in the entire international system. For instance, if the US tried to exclude Japanese or German corporations from participating in the global system, we would surely see Japan and Germany balancing and creating their own spheres of influence. Japan attacked the United States at Pearl Harbor precisely because it was excluded from access to markets and resources controlled by the allied powers. Similarly, if the US were to exclude any Great power from the global system under US protection, we would see it balancing the US in short order. Other Great powers are not balancing the United States because they do not have the incentive to do so.
This theory also provides an interesting implication about what to expect at the end of unipolarity. Since the US would remain the center country even if the system becomes bipolar or tripolar, we will not see system-wide conflict. The US would continue to protect the global commons, using that leverage to temper the behaviour of emergent challengers. A balance of power would emerge between the poles, and system-wide conflict would be unlikely. On the other hand, if the US loses its status as a center country and there is a significant decline in US primacy, we would be in for a fourth round of system-wide conflict.
Note that isolationism is quite consistent with neorealism. For if all states maximize security, a maximally secure state could stay in ‘splendid isolation’, to emerge on the international arena only if a Great power threatened to become hegemonic. But this is completely at odds with centered realism wherein isolationism would be equivalent to a center country voluntarily giving up its status. Centered realism predicts that no center country will ever give up its status voluntarily. Rather, it would fight tooth and nail to protect it.
It is also clear that the center country need not be the strongest power in the international system. Holland was perhaps the weakest of the Great powers in the early European balance of power system. Even Great Britain was not the strongest power in the late nineteenth century. What is required militarily for the center country to maintain its status is naval primacy, for it is this which allows it to impose order on the high seas.
The implications for US grand-strategy are therefore clear. It should not bend over backward to maintain the military gap with rising Great powers. Aside from preventing a hegemonic power to dominate the industrial resources of Eurasia, it should focus on maintaining its naval primacy. Even if another power becomes strong enough to alter the structure of the international system from a unipolar to a bipolar one, the US would be able to maintain itself as the center country if it maintains its naval primacy.
Centered realism also explains US soft power: power that it enjoys above and beyond what would accrue to it solely on balance of power considerations. Soft power is almost inexplicable in neorealism, it does not arise endogenously from the theory and has to be put in by hand with further arguments. In centered realism on the other hand, soft power arises endogenously. The center country creates and presides over multilateral institutions and the financial architecture of the global system, and protects the global commons. It is the functional role of the center country that accounts for its ability to lead and the willingness of others to follow.
Accepting this theoretical framework opens up fresh new lines of investigation. For instance, if the EU acquires actor quality, it would be perfectly positioned to replace the US as the center ‘country’. Even if US policymakers expect the EU to be a permanent ally, should the US be then pushing for European integration?
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