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787
Hegemonic Power
Ponzi scheme of Bernard Madoff in 2008, have
brought the hedge fund industry under the scrutiny
of the investing public and regulators. The Financial
Reform Act that was approved by the U.S. Senate
and signed into law by President Barack Obama in
July 2010 requires that hedge fund managers with
assets under management of US$150 million or
more must register with the SEC and provide the
SEC with certain information related to their trading
and portfolios. The act also redefined the “accred-
ited investors” as those with at least US$1 million
net worth, excluding value of primary residence.
Two newly created federal agencies with broad man-
dates in the United States, the Consumer Financial
Protection Bureau and the Financial Stability Over-
sight Council, may also be given the authority to
regulate hedge funds. More than half of the hedge
funds doing business in the United States are off-
shore funds. Although the reform intends to reduce
the systematic risk created by the previously unregu-
lated and highly levered hedge fund industry, it is
expected that many hedge funds will move offshore
to escape registrations and regulations.
Xiaoqing Eleanor Xu
See also Currencies; Distribution of Wealth, Equitability
of; Economic Crises; Entrepreneurship; Globalization,
Measurement of; Governance Networks,
Transnational; Internet; Law, International; Markets;
Taxation; Trade
Further Readings
Bollen, N. P. B., & Pool, V. K. (2009). Do hedge fund
managers misreport returns? Evidence from the pooled
distribution. Journal of Finance, 64, 2257–2288.
Fung, H. G., Xu, X. E., & Yau, J. (2002). Global hedge
funds: Risk, return and market timing. Financial
Analysts Journal, 58, 19–30.
Fung, H. G., Xu, X. E., & Yau, J. (2004). Do hedge fund
managers display skill? Journal of Alternative
Investments, 6, 22–31.
Fung, W., & Hsieh, D. A. (2001). The risk in hedge fund
strategies: Theory and evidence from trend followers.
Review of Financial Studies, 14, 313–341.
Fung, W., & Hsieh, D. A. (2004). Hedge fund
benchmarks: A risk-based approach. Financial
Analysts Journal, 60(5), 65–80.
Ibbotson, R., Peng, C., & Zhu, K. (2010). The A,B,Cs of
hedge funds: Alphas, betas, and costs. SSRN Working
Paper. Retrieved from http://papers.ssrn.com/sol3/
papers.cfm?abstract_id=1581559
Lo, A. (2005). The dynamics of the hedge fund industry.
Charlottesville, VA: The Research Foundation of CFA
Institute.
Xu, X. E., Liu, J., & Loviscek, A. L. (2010). Hedge fund
attrition, survivorship bias and performance:
Perspectives from the global financial crisis. SSRN
Working Paper. Retrieved from http://papers.ssrn.com/
sol3/papers.cfm?abstract_id=1572116
HeGemonic Power
The notion of hegemonic power denotes a state
that, because of its preponderant capabilities
(material or material and ideational, hard or hard
and soft power), can lead an alliance of affiliated
nations and dominate the global political and
economic order. Based on its own preferences, a
hegemonic power can establish and maintain the
rules that regulate interactions within the interna-
tional system of states. The concept of hegemony
(hêgemonía), for ancient Greek thinkers, meant
guidance and leadership, as well as an authority to
exercise power, to govern, and to command among
states.
Various Views
As David Wilkinson explains, traditional usage
of “hegemony” emphasizes hard power and the
ability to coerce, if need be. For classical antiquity,
hegemony meant first and foremost political and
military supremacy, dominance, and the ability to
lead and control. Thus, a hegemonic power was a
state, or an empire, that presided over a military-
political hierarchy consisting of both allied and
subjugated states and commanded these states’
obedience by means of superior military power.
According to John Wickerman, a different aspect
of hegemonic power was emphasized by those
who saw it as based predominantly on ethical
leadership, the power of the reasonable, and the
willing consent of the governed. Aristotle distin-
guished between hegemony and domination: the
first as leadership directed to the interest of the
led, and the second as the raw exercise of power
over those who naturally deserve to be slaves. For
Copyright © 2012 SAGE Publications. Not for sale, reproduction, or distribution.
788 Hegemonic Power
thinkers in this tradition, says Benedetto Fontana,
a hegemonic alliance of states, although necessar-
ily cemented by its leading power, is impossible
without the mutual consent of the allies and there-
fore must differ from the imposition of coercive
and despotic rule on unwilling subjects.
In the 20th century, this second line of thought
received a new emphasis in the writings of Antonio
Gramsci, who argued that hegemonic leadership
required conscious efforts to construct a “histori-
cal bloc” that would command the emotional,
moral, and intellectual support of the governed.
Robert W. Cox as well as other neo-Gramscian
theorists have extended this insight to relations
between states. Rather than seeing hegemony
solely in terms of individual state dominance over
other states, these theorists represented it as a form
of class rule constituted internationally in dialecti-
cal interaction among the social relations of pro-
duction, the forms of state, and world order. For
Adam D. Morton, hegemony in this sense is the
articulation and justification of a particular set of
interests as general interests, the spread and accep-
tance of ideas and values, as well as rules and
institutions that the dominant class imposes
nationally and internationally, while expanding
and meshing with similar social forces across dif-
ferent countries to shape the world order in its
interests.
A separate but related view on the essence of
hegemonic power has been developed by Imman-
uel Wallerstein and the world-systems theory
strand of neo-Marxian analysis. According to
Wallerstein, hegemony exists when one power can
largely impose its rules and its wishes in several
areas—in economic, political, military, diplomatic,
and even cultural matters. The material base of
such a power lies in the ability of enterprises domi-
ciled in that power to operate more efficiently in
all three major economic areas—agro-industrial
production, commerce, and finance. The world-
systems theory’s analysis is similar to the neo-
Gramscian one, in that both see the world system
of states as more or less an expression of the
underlying logic of capital accumulation. The dif-
ferences lie in the accents of their respective views
of a hegemonic power: While neo-Gramscians
emphasize the intersubjective structures of a hege-
monic consensus, world-systems theorists stress
productivity and economic competitiveness.
Theoretical Distinctions
The listing of hegemonic powers varies. For Fer-
nand Braudel, hegemonic powers in the capitalist
world economy first appeared as “world cities”—
Venice, Antwerp, Genoa, and Amsterdam—and
then continued as hegemonic states—the Nether-
lands, Britain, and the United States. Others add
Spanish and Portuguese empires to the list. Still
others—such as Jeremy Black—argue that the very
idea of a sequence of hegemonic powers is not a
helpful concept if it neglects the coterminous nature
of great-power status. However, most scholars refer
to two archetypical hegemonies in the international
and global system—the Pax Britannica in the 19th
century and the Pax Americana in post–World
War II and post–Cold War 20th century (despite
a significant period of bipolar rivalry between the
United States and the Soviet Union from 1949 until
the end of the Cold War in the 1989–1991 period).
Important theoretical distinctions have emerged
among classical (and neoclassical) realists, neoreal-
ists, and international relations liberals, on the one
hand, and critical theorists, on the other. Although
the first see hegemony primarily as a result of a par-
ticular distribution of material capabilities and an
individual state’s powers to control the rules of the
interstate system, neo-Gramscians and other criti-
cal theorists, says Benno Teschke, claim that liberal
international hegemonies of Britain and the United
States were also based on the universalization of
particular state-society complexes maintained pri-
marily by consensus formation, with coercion only
used latently.
William C. Wohlforth explains that mainstream
realists developed the concept of hegemony in
terms of hegemonic stability theory (HST)—that
materially powerful states tend to seek dominance
over all parts of an international system, thus
establishing a significant degree of international
hierarchy within the overall anarchy of the inter-
national and global system. In contradistinction to
classical realists, who focus on the balance of
power in the international system, HST propo-
nents, such as Robert Gilpin, see historical devel-
opments as a succession of hegemonic cycles
during which one dominant power leads by being
a direct benefactor to its allies and the provider of
the internationally accepted “rules of the game”
for all. Charles P. Kindleberger contends that the
Copyright © 2012 SAGE Publications. Not for sale, reproduction, or distribution.
789
Hegemonic Power
Great Depression, 1929–1939, was primarily the
result of the old 19th-century hegemon, Great Brit-
ain, losing the capacity, will, and legitimacy to
order international economic relations (primarily
and indirectly) through the Bank of England in the
1920s. Robert O. Keohane, however, argues that
economic stability can persist “after hegemony,”
after U.S. economic predominance in the current
case. Regimes—collections of norms, rules, prin-
ciples, and beliefs stabilizing expectations of eco-
nomic actors—will continue to operate for some
time (albeit suboptimally), although the power of
the United States that initiated the current eco-
nomic regimes continues to decline.
Wohlforth explains that power transition the-
ory, as a subset of hegemonic stability theory, pre-
dicts that any international order is stable only as
long as the relations of international power and
authority within the overall global system conform
to the underlying distribution of economic and
military power in the system. U.S. power, although
declining after its post–Cold War resurgence, has
been sustaining current globalization and political
and military stability (as the leader or hegemon in
the first Gulf War and the War in Afghanistan,
despite disagreements about the U.S. initiation of
the Iraq War [2003–2011]). Lesser states tend to
challenge the global hegemon as they become
stronger, and thus, this hegemonic globalized sta-
bility is likely to become undone if China emerges
as the challenger to U.S. hegemony. As the mate-
rial capabilities of the United States and China
approach parity, hegemonic stability-power transi-
tion theory would predict war or at least a cold-
war rivalry between the United States and China,
as the United States tries to maintain its global
leadership role and China becomes dissatisfied by
the U.S.-led global order. On the other hand, such
conflictual relations between the old hegemon and
the new challenger may be prevented if China’s
economic-technological growth slows or the
United States discovers ways to accommodate Bei-
jing’s preferences for a new future global order.
The most important changes in our international
and global system, according to Howard H. Lent-
ner, are changes that can be viewed as transforma-
tional, as in the challenge of U.S. predominance by
China. Should China become dominant and assume
the role of the hegemon, it would insist on (some-
what or radically) different principles of economic
and political governance in the international and
global system than those currently supported by
the United States. However, if China slows its rise
to predominant power and the United States con-
tinues to lose predominance, there could emerge a
new multipolar system that lacks the coordinative
arrangements of the U.S.-led post–World War II
and post–Cold War coalitions and result in differ-
ent ways in which international and global politics
are conducted.
Further Thoughts
Joseph S. Nye Jr. provides us with an overview
for further thought on hegemonic power. He cat-
egorizes historical periods, leading or hegemonic
states, and major power resources (hard and soft
power). In the 16th century, Spain was the lead-
ing/hegemonic state based on the power of gold
bullion, colonial trade, mercenary armies, and
dynastic ties. In the 17th century, the Netherlands
became the hegemon, based on the power of trade,
capital markets, and its navy. In the 18th century,
France predominated based on the power of a large
population, rural industry, public administration,
its superior army (all elements of hard power),
and the widespread acceptance of its culture (soft
power). In the 19th century, however, Britain sur-
passed France in hegemonic power, based on its
advanced factory industry, superiority in finance
and credit as well as navy, its island location that
made the island easy to defend, and political cohe-
sion (all elements of hard power), as well as on the
attractiveness of its liberal norms to other states
(soft power). In the post–World War II and post–
Cold War 20th century, the United States was the
hegemon, based on its economic scale, scientific
and technical leadership, location, military forces,
and alliances (all elements of hard power), as well
as on its American universalistic culture and liberal
international regimes (soft power). Who will be the
hegemon of the 21st century? The United States
might prevail in reasserting its hegemonic power
based on its technological leadership, military and
economic scale, status as the hub of transnational
communications, and cultural and ideational soft
power. Or China might become the new hegemon
based on its growing hard economic and tech-
nological power and alliances with developing
countries. Moreover, as Daniel A. Bell suggests,
Copyright © 2012 SAGE Publications. Not for sale, reproduction, or distribution.
790 Heritage
China’s renaissance in Confucian thought—social
discipline, a nonindividualistic vision tied to the
priority of communal ethics—may provide it with a
model successfully competing with U.S. individual-
istic liberal democracy. Or will there be a new cold
war between the competing would-be hegemons—
the United States and China? Or, lastly, will there
emerge a new robust multipolar, nonhegemonic
world order, affirming the multidimensional power
and strong global participation of the European
Union, Russia, India, Brazil, Japan, Nigeria, Indo-
nesia, and other emerging powerful states, in addi-
tion to the global power and decision making of
China and the United States?
Joseph Masciulli and Mikhail A. Molchanov
See also Global Conflict and Security; Global Governance
and World Order; Global Order; Globalization,
Phenomenon of; Governance Networks, Transnational;
Power, Global Contexts of
Further Readings
Aristotle. (1995). Politics (E. Barker, Trans.). Oxford:
Oxford U.P./World’s Classics. (Original work
published 350 BCE)
Bell, D. A. (2006). Beyond liberal democracy: Political
thinking for an East Asian context. Princeton, NJ:
Princeton University Press.
Black, J. (2008). Great powers and the quest for
hegemony: The world order since 1500. New York:
Routledge.
Braudel, F. (1992). Civilization and capitalism, 15th–18th
century: The perspective of the world. Berkeley:
University of California Press.
Fontana, B. (2000). Logos and kratos: Gramsci and the
ancients on hegemony. Journal of the History of Ideas,
61(2), 305–326.
Gilpin, R. (1981). War and change in world politics.
Cambridge, UK: Cambridge University Press.
Gramsci, A. (1971). Selections from the prison
notebooks. New York: International.
Keohane, R. O. (2005). After hegemony: Cooperation
and discord in the world political economy. Princeton,
NJ: Princeton University Press.
Kindleberger, C. P. (1986). The world depression, 1929–
1939 (Rev. ed.). Berkeley: University of California
Press.
Lentner, H. H. (1997). International politics: Theory and
practice. New York: West.
Morton, A. D. (2007). Unravelling Gramsci: Hegemony
and passive revolution in the global political economy.
London: Pluto Press.
Nye, J. S., Jr. (2005). Understanding international
conflicts. New York: Pearson/Longman.
Teschke, B. (2008). Marxism. In The Oxford handbook
of international relations. New York: Oxford
University Press.
Wallerstein, I. (1983). The three instances of hegemony in
the history of the capitalist world economy.
International Journal of Comparative Sociology,
24(1–2), 100–108.
Wickersham, J. (1994). Hegemony and Greek historians.
Lanham, MD: Rowman & Littlefield.
Wilkinson, D. (2008). Hêgemonía: Hegemony, classical
and modern. Journal of World-Systems Research,
14(2), 119–141.
Wohlforth, W. C. (2008). Realism. In The Oxford
handbook of international relations. New York:
Oxford University Press.
HeritaGe
Like many other cultural ideas, including the
word culture itself, heritage has become a global
term. Coined by specialists in the West, the notion
eventually escaped their control and entered the
everyday vocabulary of people everywhere. Ety-
mologically, heritage is anything that has been or
may be inherited, or a condition or state transmit-
ted by ancestors (e.g., personal property). The glo-
balized term, however, refers to the preservation
of cultural monuments, sites, artifacts, and prac-
tices, all of which are deemed to be the patrimony
both of individual peoples or nation-states, and
of humanity at large. Hence the notion of “World
Heritage,” defined internationally under the aegis
of the United Nations Educational, Scientific and
Cultural Organization (UNESCO) and broadened
by it to encompass “natural heritage.”
An Expansionary Notion
The word heritage most commonly denotes cul-
tural heritage; it is also shorthand for the practices
of conserving and transmitting traces from the past
that are thought to represent the cultural identities
of human groups and enshrine their “collective
memories.” Such practices have not always been
Copyright © 2012 SAGE Publications. Not for sale, reproduction, or distribution.
