ABSTRACT. Geopolitics and economics are interdependent. In the long run, economic growth upsets power balances among great powers and thereby sets the agenda for great power rivalry. As the rise of the West and the decline of China in the early modern age demonstrate, geopolitical factors also affect economic development. Political fragmentation or interstate rivalry in the West provided a more favorable environment for the establishment of limited government and private property rights, economic freedom or capitalism than imperial unity in China or elsewhere in Asia. That is why the West could overtake the great Asian civilizations and became prosperous. Although European integration reduced the risk of war in Europe, the mitigation of interstate competition in Europe provides Europe with the luxury of making self-defeating economic policies seemingly viable. The European Union has turned from a promoter of economic freedom and prosperity into a threat to prosperity and, possibly, even to the viability of European capitalism. Moreover, low fertility rates and mass immigration may undermine the institutional basis of prosperity as well as political stability in the long run. Given the decline of Europe and Japan, and the economic head-start of China over India, future struggles for hegemony will put China against the United States. A core issue of the future hegemonic rivalry concerns whether the Russian resource treasure chest will become more easily accessible to Europe and the West or to China. By not conceding a sphere of influence to Russia now, in Ukraine and elsewhere in Russia’s near-abroad, the West might push Russia into a nascent Chinese sphere. Whereas China rises, Europe declines. Whereas yesterday’s geopolitical threats came from strong and rising neighbors, currently weak and failing states in the neighborhood might become a greater evil than strong and prosperous rivals. pp. 177–220

Keywords: capitalist peace; economic freedom; geopolitics; institutions; mass migration; sanctions

How to cite: Weede, Erich (2016), “Geopolitics, Institutions, and Economics: On the Rise and Decline of Civilizations,” Geopolitics, History, and International Relations 8(1): 177–220.

Received 11 August 2015 • Received in revised form 2 October 2015
Accepted 5 October 2015 • Available online 15 October 2015


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