Offshore Balancing in Theory and Practice

The period immediately following the end of the Cold War was a transformational one. With the collapse of its bipolar rival the Soviet Union, the United States inherited an enviable yet precarious position as the world’s sole superpower. This period also marked the ascendency of globalisation as the dominant framework for a neoliberal transnational system governed by social, economic and political norms. As the new unipolar superpower, the U.S. was tasked with maintaining order and stability across this new world order. However, the promise of globalisation reducing global insecurity and inequity began to come into question. This heightened level of general insecurity, paired with a growing concern by strategists of the unprecedented imbalance of power in the international system left many in search of an alternative grand strategy which could aid the U.S. in transitioning away from preponderance, but would still be adaptable enough to suit an emerging multipolar world. Enter Offshore Balancing. Its main objectives are minimising U.S. military engagements overseas in order refocus its resources closer to home by capitalising on its existing strengths and geographical attributes in order to reinforce and maximise its relative power in the international system. Whether this strategy is practical, or even possible for the United States is matter of serious debate. This dissertation will attempt to evaluate the strategy of Offshore Balancing from both a theoretical and practical perspective, and to understanding its purpose and objectives in order to better determine its viability as an alternative grand strategy. This inquiry will attempt to expand the scope of that conversation into other theoretical considerations. This multi-level analysis will explore and ascertain structural attributes and capabilities of U.S. economic power which exists in the international system, including ‘monetary hegemony’ and economic statecraft. The review of financial preponderance will also include a critique of neoliberal globalisation in practice and consider whether or not it is responsible for global inequities and instability in the international system, and whether it will help or hinder Offshore Balancing. Against this backdrop of globalisation, I will also include critical discourse on the relationship between interdependence and security. By incorporating this area of U.S. capability more deeply into a strategic analysis, it can shed valuable light on new practical strategic considerations as well its global implications, further testing the viability of the theory. These implications include financial tulmults and system-level perturbations resulting unsustainable financial structures caused by aspects U.S. monetary policy, and also from an over-aggressive use of economic statecraft as a deterrent. Such disturbances can lead to economic crises and a further imbalance of power in the international system, which can draw the U.S. back into an extended deterrence position, all of which threatens to undermine the initial premise for pursuing a strategy of Offshore Balancing. Offshore Balancing offers an alternative grand strategy to an increasingly contested status quo of preponderance with the U.S. as a unipolar hegemon. For the U.S. and for the world, the potential benefits a plentiful, but there are also many potential problems, some of which are systematic, and which may be insurmountable in the near term. Any evaluation of a new grand strategy will benefit from a more thorough understanding of the full spectrum of U.S. capabilities and power in the international system. This inquiry hopes to shed additional light in this important area