ABSTRACT
Paul Kennedy, in common with the rest of the decline school, starts from the age-old premise that ‘to be a great power demands a flourishing economic base’. 1 Following Adam Smith the liberal, and Friedrich List the mercantilist, this is then interpreted to mean an economic base of manufacturing industry located within the territorial boundaries of the state. It is this interpretation of ‘a flourishing economic base’ that is obsolete and therefore open to doubt. Smith and List are both long dead. More recent changes, noted by Peter Drucker 2 among others, in the character of the world economy throw doubt on whether it is manufacturing that is now most important in developing the sinews of war; and, whether it is location within the boundaries of the territory that matters most.
