The Myth of Interdependence

August 20, 2003

The Myth of Interdependence

 It is undeniable that the era of globalization that exists today has led to a more economically interconnected world.



It is undeniable that the era of globalization that exists today has led to a more economically interconnected world. Global markets are increasingly intertwined and the massive exchange of capital across borders occurs on a daily basis. Production, once designed to promote national champions, is becoming increasingly international in scope. According to the World Bank, "global production sharing-sharing different stages of manufacturing of a product between countries-involves more than $800 billion in manufactures trade annually, or at least 30 percent of world trade in manufactured products…highlighting the growing interdependence of countries in international trade and production operations."[1]


As realization of this phenomenon increases, it is disturbingly common for analysts to develop false conclusions based upon a superficial understanding of globalization. Perhaps the most prevalent and beguiling mirage of all is the notion of a universal "interdependence."   Implicit in the arguments of interdependence proponents is the premise that interdependence affects all nations to roughly the same extent --that it acts as a blanket phenomenon, restraining all that are involved to the same degree. Clearly this is not true.

Consider this hypothetical. Would Australian foreign policy have been affected if it had strenuously opposed America's efforts in Iraq? Would Canberra have been likely to abrogate the ANZUS treaty because of its people's opposition to the Iraq war? Hardly, as Australia undoubtedly benefits from the American military alliance serving as life insurance in the volatile Asian region. Would it be likely to impose an embargo on the U.S.? Nonsense, as it greatly benefits from trade with America. In fact the opposite is true: it has long been a goal of Australian foreign policy to secure a free trade agreement (FTA) with Washington --Iraq war or no. Would Australia refuse to continue closely sharing intelligence with America? Impossible, as the Bali bombing illustrated that Canberra is a major target of Al-Qaeda, along with the United States. Or would certain Australian diplomats simply snub Americans at cocktail parties? For in the end, that is what "disapproval" with America often amounts to.

While interdependence does mean that there is always mutual vulnerability, in the case of the U.S. and Australia (and indeed in every case), this is not the salient feature of the relationship. Rather, Australia's far greater dependence on the U.S. conditions foreign policy decision-making at the highest levels --but not necessarily the other way around. 

The Wilsonian habit of misunderstanding the nature of interdependence is far from an esoteric error. For despite what many foreign policy practitioners believe, policy outputs flow naturally from first principle intellectual assumptions. By overrating the universal impact of interdependence theory, Wilsonians naturally see the present order as fundamentally multipolar, and devise policies to fit this ‘reality.' Unfortunately, the real world does not correspond to their assessment, thus dooming their policy initiatives to failure.

In the turbulence of a changing world order, one particular paradigm has been almost totally neglected. Ironically, we have abandoned realism-the one doctrine that can best navigate our role in the uni-multipolar world we find ourselves in. For, if we hold that the attempt to remake our global history of conflict and chaos into a hopeful future of peaceful order is but an illusion, then we must accept the anarchic nature of our world and attempt to live in it as best we can. Specifically, we must create policies that recognize and place our national interest above all other priorities.

This reality is largely reinforced by the current nature of interdependence. The Wilsonian view suggests it binds all states with equivalent strength, while the realist outlook allows that interdependence in the economic arena is very much part and parcel of the modern world, but does not in fact affect all states equally. As illustrated by the U.S.-Australia hypothetical, a power hierarchy characterizes interdependence. Countries that possess the preponderance of power are able to significantly influence the policy outcomes of weaker states (assuming such states do not perceive overriding security/geopolitical concerns). Such will it ever be.


The authors are all affiliated with The Heritage Foundation ( Dr. Hulsman is a Research Fellow In European Affairs at Heritage's Davis Institute.


[1]Alexander J. Yeats, "Just How Big Is Global Production Sharing?"  World Bank, 1998: