[This is a draft chapter from Professor Schake’s forthcoming book on America and its role in the world in the 21st
century.]
Chapter 3: Sustainability
The conventional wisdom, certainly
among those critical of the strategic choices of the Bush Administration, is
that American power has crested. Having
reached the zenith of its incline, it will inevitably decline relative to other
states in the international order. The
proposition bears examining, for if it is true, there is little reason to
concern ourselves with managing American hegemony. There will be no American hegemony to
manage. Other powers will surpass the U.S.,
and we will be forced to accommodate ourselves to an order governed by a new
hegemon, a collective of states strong enough and cooperative enough internally
to impose their will, or market forces beyond the reach of governance. If, however, the argument proves true that
American predominance of the international order is more durable, the U.S.
and other states will need to develop strategies for managing American
hegemony.
Will globalization
continue?
Perhaps the first order question is
whether globalization will continue. It
could falter on national chauvinism, recidivist trading barriers, natural
limits to transportation infrastructure, disruptive wars, or systemic
weaknesses. For example, computer
hackers making the reliability of internet transactions suspect or publics
boycotting foreign goods. These are
extreme and unlikely scenarios. The
marginal cost of extending infrastructure, willingness of publics to
indefinitely sustain boycotts, incentives for virtuoso hackers to work for
banks to repair networks all argue on the side of continued globalization.
There are moral arguments in favor
of globalization, as well: it prevents the tyranny of governments from going
unknown, reduces the cost of immigration, demonstrates best practices,
encourages the flow of capital to rural areas, makes possible the availability
of markets beyond local reach. Even if
the face of globalization is slick Wall Street traders making money from the
movement of money, the world’s poor are among globalization’s greatest
beneficiaries, because the localized impediments it removes weigh most heavily
on them.
It is possible that globalization
is being oversold: that it is not a stampeding force of market efficiency
spreading across the globe and into an ever wider array of economic sectors as
the human genius for enrichment sees opportunities develop. The ‘tyranny of distance’ that military
logisticians consider immutable may have its economic counterpart. Globalization may have natural limits beyond
which companies cannot make money and the possibility of communication does not
spark connection. Not every stone cutter
in remote location can compete with more centrally located alternatives, not
every business has internet applications, not every commodity is exportable,
not every colorful local custom will be of international interest. To put the argument more concretely, there
are reasons we eat cattle rather than xebra, and those reasons are unlikely
constrained to cost-effectiveness or availability. Globalization may bump up against such
boundaries.
Globalization may also be
constrained by cultural and subsequently political backlash. Popular reaction may choose the narrower
prosperity of localization rather than the expansiveness of “McWorld.” Robert Cooper has argued persuasively that
“the stubborn persistence of the local” will prevent a wholesale (quite
literally) globalization. The most ardent apostle of sensible
globalization, Jagdish Baghwati, worries that too little understanding of the
different strains of globalization will lead to sweeping restraints. It is likely, however, that the
unquestionable advantages of prosperity that opting into the globalized market
provides will continue to motivate individual choices in ways that reward
governments managing increasing openness, allowing companies to more
efficiently collect and distribute capital, making opportunities possible where
local constraints formerly restricted initiative, and empowering individuals.
Many opponents of globalization
characterize the future as one of economically rapacious lawlessness, in which
governments will be powerless to prevent the intrusion of inexpensive goods,
unharnessable capital, and unwelcome social influences. This is surely wrong,
because states retain the ability to prevent most incursions. Whether of short-term capital investment,
long-term structural investment, shipment of goods and services, immigration or
emigration of people, states still set the legal frameworks that make
mutability of their borders possible.
Some ravages cannot be halted at national borders -- the spread of
disease, for example -- but even in that case, responsible states can shield
their populations from much risk by investing in early detection and robust
public health networks. The dark
portends for globalization are unpersuasive.
States may not behave responsibly – they may choose the enrichment of
opting into the market without adequate strengthening of their legal systems,
economic advantages and cultural practices to preserve those elements of their
unique societies they most value – but the point is that states still do have
critically important abilities to bound the range of their exposure to globalization.
The Asian currency crisis of 1998
is illustrative: the cascading flight of capital would not have been possible
had the states previously enacted laws restraining the rate of capital
outflow. To limit the speed or magnitude
of outflows would have prevented companies from stampeding to the exits in a
panic; of course, it would also have likely produced less foreign
investment. States would have seen less
enrichment through investment, but they would have gained the ability to shield
themselves against the economic landslide experienced when spooked investors made
rational choices to sell currencies that appeared to be rapidly losing their
value. Globalization was not at fault in
the impoverishment of those economies through lost currency value: governments
were at fault for inadequately controlling their economy utilizing domestic
law. If states exercise responsible
governance over their societies, then globalization will not be a marauding
force.
The contrasting example of
supremely competent management in a globalized economy is the combined
public-private orchestration of global financial markets on September 11th, 2001. When the World
Trade Towers
were attacked, their symbolism was significant.
It is likely that Al Queda intended (or at least hoped) that in addition
to the first-order effect of killing thousands of people – American and foreign
– working in the commercial and financial headquarters of lower Manhattan, the
attacks would also have the second-order effect of collapsing the American
economy and its associated enterprises.
This effect also must have been prominent in the minds of U.S.
government officials, because in his comments to the nation on September 20,
President Bush encouraged Americans to refute this act of terrorism by “continued
participation and confidence in the American economy.” It seems a very strange comment, the appeal
to go shopping in a time of national trauma, except when seen in the light of
the country’s leader attempting to forestall a second shoe falling: that of
economic panic.
The U.S.
had three enormous advantages going into the crisis without which a
full-fledged melt-down of the American economy would have been not only possible
but very likely. The first advantage is structural,
in the form of regulation of currency and stock trading. The New York Stock Exchange has built-in
bands of value monitored so that if the market were to lose more than 5% of its
value in a single day trading would be suspended. This gave the government the ability to shut
down the market. The NYSE had on a few
prior occasions forced a cessation of trading without damaging market
confidence, so there was even precedent on lesser grounds. Also, companies had been recently incentivized
by government to introduce redundancy into their information technology systems
to avert a mammoth Y2K computer glitch, meaning few businesses operating in
Manhattan were solely reliant on the physical plant there – with the critical
exception of the people – and could resume operations when the market opened.
The second advantage was personnel,
in the form of Alan Greenspan; there is simply no substitute for good judgment
in crises, and even before taking any action, the wizened Federal Reserve
Chairman was a reassurance to markets. The
Secretary of the Treasury would have been the obvious candidate by bureaucratic
position, but Paul O’Neill was an uninfluential figure both within the
Administration and in the financial community.
By contrast, no less a Washington king-maker than Bob Woodward dubbed
Greenspan ‘the maestro,’ and his judgment was so widely acclaimed that Senator
McCain suggested in 1999 that when Greenspan died, he should be stuffed and
remain at the Fed’s helm (it passes for humor in the dismal science that
several commentators noted his Delphic statements about the economy would be no
more intelligible were he dead). Greenspan
was at a bankers conference in Geneva
when the attacks occurred, and his aircraft was the first permitted into U.S.
airspace to rush him back for crisis management.
The third advantage was the global
connectedness of the American economy.
Because the dollar is still the reserve currency of choice, governments
and businesses around the world had an enormous stake in preventing precipitous
collapse of its value. In slower motion,
governments and companies can game depreciation to their specific advantage,
but a sudden collapse of the value of the dollar would hurt all holders. For governments that hold dollars, a rapidly
falling dollar would wipe out government-sponsored pensions and other social
safety programs that depend on stable value for long-term investments. By virtue of the strength and connectedness
of the American economy, damage of this magnitude to the U.S.
could not be inflicted without severe damage to most states and creating chaos
for businesses. As a result, they all
had vested interests in cooperation.
On September 11th, Wall
Street was physically shut down by the collapse of the Twin
Towers. While Wall Street is the premier financial
market, it is not the only one, and trading could easily have been channeled to
London, Hong Kong
and alternative markets for frenzied selling of American shares and
currency. While canny traders might have
bet on rapid reconstitution of value, the turbulence alone could have
precipitated real loss. Greenspan
orchestrated closure of the entirety of global financial markets for four days,
a Herculean accomplishment never before attempted. No significant trading was done in the
immediate aftermath of the attacks, buying the precious commodity of time to
put in place other elements of a strategy to shield the economy from damage. When the market did reopen, it dropped 2,000
points, but quickly rebounded to pre-September 11th levels.
Greenspan also persuaded
governments and Wall Street firms to back up his assurance to markets that all
calls for U.S. dollars would be cleared – that is, promising sufficient
liquidity to pay any checks presented.
This reassured owners of dollars they would not be stuck holding them
when the market reopened, which shored up value in the short-term. He very quickly built a coalition of
governments and major financial actors with common interests in preserving the
value of U.S.
holdings, even arranging 30 day currency swap lines with other countries to
ensure sufficient liquidity in the U.S.
market. The strategy not only bridged the
vulnerability of near-term shock, the example of such virtuoso management of
financial crisis likely increased the attractiveness of the dollar and other
investments in the U.S.
over the longer term.
These contrasting examples
demonstrate the importance of leadership, perhaps increasingly, as the speed
and magnitude of effect grow with globalization’s advance. Globalization does erode the ability to
control some activity, but that loss of control can be managed and compensated
for. The American military makes a
distinction between command and control that gives a useful conceptual
framework for thinking about how governments can manage effectively in a
globalized economy. Command is a
leadership function; it is the crafting of a vision, motivating others to buy
into and work to advance that vision, shaping the understanding of a problem
and training people’s judgment about how to react. Control is the staff function of issuing
orders, the promulgation and enforcement of rules. Both are essential, but the balance shifts
with circumstances. With transformation,
which is the military equivalent of economic globalization, leaders need to
rely less on control and more on command.
Instead of preventing young sailors from sending emails with revealing
details about operations that compromise security or surprise (the number of communications
being now so large that effective supervision is impossible), commanders need
to train sailors’ judgment about what information they can share. Commanders cannot prevent soldiers making bad
choices on patrol in Baghdad, even
when those tactical choices have strategic significance. But they can train soldiers’ judgment so fewer
mistakes are made. The example of the
Asian currency crisis demonstrates the continuing value of control: governments
should have established a legal framework robust enough to prevent catastrophic
consequences. The example of America’s
prevention of economic harm after September 11th demonstrates the
enormous advantage of a commander who can use the available tools with
creativity and effectiveness in bringing many elements not under his control
into coordination.
Challenges to U.S. Hegemony
If globalization continues, will
the U.S.
continue to benefit from it? It could be
that the inherent advantages that have accrued to the U.S.
are transitional. Other countries that do not have the many difficulties and
drawbacks of the U.S.
could replicate the successful characteristics of America
to diminish our comparative advantages.
Rising powers could develop new models that succeed even more
dramatically than has the U.S. Anti-American sentiment could foreclose
markets to our businesses and talented immigrants to our nation. American society could calcify, losing its
adaptiveness and innovation. The
inability of political leaders to address long-term structural weaknesses in
the economy could cause it to founder. We
could commit international follies of great magnitude that degrade American
power, or take on responsibilities beyond our means. All of these scenarios of American decline
are possibilities. The challenges can be
grouped into three categories: those positing rising competitors the U.S.
proves unable to match, failure as the result of intrinsic domestic weaknesses,
and imperial overreach.
Rising Powers.
The contemporary rising powers
argument is usually primed for China, although previously in the 1950s the
Soviet Union and in the 1980s Japan figured prominently as the model education
system, disciplined society, innovative economy, and flawless government
coordination we were incapable of. These
analyses generally accord rising powers all of the advantages of our own
society with few of its messy drawbacks.
They assume Chinese mandarins can manage an economy without the
transparency necessary for signaling in other economies. They assume Chinese political system can
remain immune to demands for worker’s rights, rising wages, government spending
on health or pensions that freight down growth in other countries. They assume the Chinese can invest in the
so-called Third World without incurring the frictions
and resentments and political entanglements the U.S.
has. They assume the Chinese have no
economic or cultural cleavages that politicians will exploit. They assume that states with growing power
will impede rather than advance American power, when in fact, the U.S.
record is pretty good on working out mutually beneficial economic compromises
and creating political accommodations and cultural friendships with rising
powers, as the post-war examples of Germany
and Japan
attest.
While the Chinese economic rise is
indeed remarkable, there are quite a large number of problems that could stymie
its continued success. Economically, the
Chinese will have the challenge of transition from a derivative to a leading
economy – from being a cheap production facility for commodities designed
elsewhere to dominating the intellectual capital of consumer economies. There are early signs the Chinese government
and businesses understand this, since contracts typically include technology
sharing or joint management that serves to transfer knowledge from foreign
investors to Chinese participants.
However, it is an enormous shift that most developing economies have not
succeeded at.
The economy of scale that has
fueled China’s
current economic development could easily become a disadvantage as other
developing economies mimic China’s
strategy and provide cheaper labor and better infrastructure over less distance. The average age in China
is rising, an actuarial time bomb resulting from the population control
measures of the one-child policy since 1979.
A nascent green movement may prove an impediment to continued production
or use of fossil fuels by firms in China,
as could any number of social developments. China’s
fuel dependence will grow stratospherically as poverty gives way to middle
class comfort, driving up their (as well as our) cost of continued
development. It is by no means clear the
Chinese political system will prove responsive to the concerns of a burgeoning
middle class, the social frictions of widening income disparity, and growing
demands for transparency as they bring the top-down development model under
pressure.
As proved with the Soviets in the
1950s and the Japanese in the 1980s, the Chinese may not prove so perfect a
model competitor when forced to address the problems American society is
already managing reasonably well. Will
the world adopt the Chinese language, whose slippery elegance is ill-suited to
computer keyboards? Will the size of the
Chinese population and foreign investment compensate for the xenophobia that
prevents immigration of talent? Will the
Chinese model of making political repression more palatable with economic
prosperity hold? Will domestic
repression be tolerated by China’s
economic and intellectual elites? While there
are many reasons to admire China’s
burgeoning economic success, there are also reasons to caution against
projecting the present giddy prosperity in Shanghai
and other coastal cities into a Chinese colossus. Western firms may marvel at doing business in
China, but few
would move their headquarters there or be willing to live under Chinese law
without recourse to a foreign passport. China’s
advantages may prove less enduring than America’s,
especially as ours have been better tested.
Even if China
were to climb to the top rung of the global economic ladder, would it
necessarily challenge the U.S.? International relations models are predicated
on a dynamic in which a rising power begins to assert its interests, and those
interests are of necessity different than those of the established powers, which
leads to war. It is a useful narrative
for explaining war; however, it is a poor model for explaining peace. One can trace wars backward in time by this
means, but it is very difficult to explain the absence of wars by this route
without early recourse to tautology. U.S.
and British interests have often been different in the 20th century,
but never have they precipitated war between the two, and similarly on down the
line for most countries in the international order most of the time. In fact, U.S.
wars in the 20th century are mostly wars of policing and
consolidating the international order.
The great exception is the Asian theater of World War II, in which
Japanese conquest of territory for economic advantage can sustain the story
line of the U.S.
attempting to hold down a rising power.
The hallmark of American dominance
has been voluntary accession. Countries
choose to belong to our alliances, make their currencies convertible by agreed
rules, adopt laws that permit foreign investment, make trade deals, send their
children to our universities, speak our language. Countries opt in because the rules of that
order benefit them, not because we force their accession. True that the Axis powers were forced into
compliance, but that compliance has been overwhelmingly to their advantage and
the best deal on offer. Germany
and Japan may have been subjugated in
1945, but on terms far more generous from the U.S.
than other victors, and have been voluntary allies of an intensely close and
affectionate kind for decades. Countries
the U.S. has fought and not
subjugated, such as Vietnam,
often long for mended relations in order to have the advantages of fuller
participation in the prosperity of the American order.
The Chinese mostly appear to be
opting into the American order rather than attempting to change the order. They Chinese government does not appear to be
seeking to restructure the rules, but to compete fiercely within the rules, and
as more of those rules protect Chinese businesses in areas like enforcement of
trade deals and preservation of intellectual property rights, their compliance
expands. The $573 billion in American
Treasuries held by the Chinese government and quasi-government companies – 70%
of their total currency holdings – are often touted as a spectre of our
vulnerability to Chinese blackmail; however, as the September 11th
example highlighted, that influential stake in the American economy likewise
gives China
exposure should it fail. One would have
to go pretty far down the paranoid path to believe Chinese holdings were
intended for damage rather than the quotidian explanation of needing economic
safe harbor and where better than in the world’s most productive economy that
is also your largest trading partner? Withholding their currency from open
exchange does, as Congress has begun loudly braying, give it an unfair trade
advantage, but undervaluing currency is a practice not unknown to the American
government, either, and they appear on the path to a convertible yuan. And many
of the advisors to the Chinese on these issues are American economists and
bankers, further increasing the odds that the Chinese economy will move into
the American order and compete by mutually accepted rules that have in the past
spurred greater U.S.
innovation and productivity.
Another way to gauge whether a
rising China is likely to become a
challenger for U.S. hegemony is to ask
which country has the deepest economic and cultural intertwining with China? The U.S.
is its largest market, its largest investor, and our debt is providing the safe
harbor for their money. There are 3.4
Chinese-Americans, the largest group of Asian-Americans. U.S.
colleges are also educating 73,000 Chinese students every year – plus an
additional 28,000 Taiwanese. Those students that return to China
probably do not hope their teen age children dress like ours or listen to
American music, but they likely do want a society that provides such expanse of
opportunity their children will live better lives than they have, and a government
they can hold accountable the way Americans can.
Even in the security arena, the
Chinese may bridle at American pledges to defend Taiwan,
but the U.S. is
also the main constraint on Taiwanese behavior.
China could even be considered
the main beneficiary of American security commitments in the Pacific, as those
constrain Japan
in ways acceptable to other Asian states and ensure a peaceful status quo in
which the Chinese can build their own capabilities before having to defend
their interests. There exist numerous
issues on which U.S.
and Chinese security interests coincide, and in which the U.S.
will seek to address Chinese concerns and encourage a prominent Chinese role:
handling the North Korean nuclear threat, freedom of navigation in the South
China Sea, assisting moderate Islam in Indonesia
and other Asian muslim countries, and ensuring energy distribution. Their strength does not necessarily become
our weakness; the handling of it to mutual advantage has been the pattern of
American relations with rising powers.
It can even be argued that the U.S.
has a natural affinity for rising powers, or at least pays attention to getting
relationships right as potential challengers rise. Culturally, we understand their grasping
ambition and arriviste tastes because we share them. Philosophically, we admire the optimism and
pluck, and understand the nationalism, that accompanies new-found
achievement. Their behavior is
comprehensible to us, because it is how we would, and do, behave. Where the U.S.
tends to fail to understand is much more often then resentful
self-defeatingness of states that believe they deserve to be successful but are
not. It is difficult for us to
anticipate the behavior of states that will accept failure for themselves in
order that a despised other will also fail.
The point is illustrated by the Russian joke Americans seldom
understand: neighboring Russian farms in a time of famine, one doing much
better than the other because the farmer has a cow to milk. God offers the
starving farmer one wish, and he wishes his neighbor’s cow would die. Americans, being fortunate, are also
optimistic, so we culturally resonate with other successful cultures.
It is therefore not surprising that
the countries the U.S.
has had the most positive relationships with in the past few years are
successful countries: Britain,
Australia, Japan,
China and India. Japan is in the midst of the most interesting
strategic repositioning of any country in Asia, attempting to wrest its economy
from political party influence and government control, trying to build a
domestic dialogue about responsible defense measures and move beyond war guilt,
reinterpreting the restrictive defense clauses in its Constitution, expanding
its military capabilities to better defend itself against North Korea, moving
into partnership with Australia to manage Asian security. All of this is encouraged and in many cases
enabled because of the friendliest and closest relationship the U.S.
has ever had with Japan.
If a rising China
conforms to the pattern of increasing cooperation with the U.S.,
what other countries might prove contenders to diminish American hegemony? Two serious candidates on a 30 year timeline
would be the European Union and India,
and for nearly opposite reasons.
The European Union. EU
countries have mature and successful economies, a GDP larger than the U.S.,
defense spending of $229billion per year, military forces that could
unquestionably defeat any state other than the U.S. and any coalition we were
not participating in, a strong social consensus on political and economic and
values issues, and are often brandished by enthusiasts as a collective
counterweight to unchecked U.S. power in the world. In fact, the EU has actually performed as a
counterweight to U.S.
power in some instances, such as the Israeli-Palestinian problem. European states are often the loudest and
most angrily condescending critics of American foreign policies, as Iraq
has demonstrated, and therefore could represent an alternative model of engagement
unhindered by the unpopularity of U.S.
policies. They have common regional
interests, such as peaceful transition of “new” European states after the Cold
War, that they have managed with sophisticated strategies of integrated
political, economic, and military elements.
They have a diversity of economic models from which the collective could
draw best practices to remedy their sluggish growth rate. Solidarity funds have improved the
infrastructure of the EU’s poorer members, and Germany’s
30 billion Euro per year investment in its Eastern laender have brought the
former GDR up to the FRG’s sparkling standard.
With so much achievement, why,
then, has the EU not proved a rising power since the end of the Cold War? Why isn’t the EU diminishing U.S.
power? Euro-enthusiasts would argue the
consolidation of U.S.
federal power required a decade, and EU states are midstream in making the
political compromises and erecting the structures necessary to unified
action. While true, three other factors
seem more likely to account for the lack of a rising EU. First is that while EU states cooperate in
many areas, even pool sovereignty in some areas to give them the economies of
scale for acting together, they remain states with differing interests. Differing reactions to the war in Iraq
demonstrate the extent to which they viewed in different terms the threat,
their interests in participating, and the political value of cooperating with
the U.S. Differing reactions to the role of the
European Central Bank are a major reason the Euro has not supplanted the dollar
as a reserve currency. EU states are not
unified enough to make a run at U.S. power, and European publics last year sent
a warning shot to their leaderships that they do not consider Brussels
sufficiently accountable. Both the Dutch
and the French rejected the EU Constitution, and for reasons that suggest we
may have seen the high water mark of institutional collusion in the EU.
Second is that essential to being
the hegemon of the order is being the guarantor of security. EU states continue to have superb militaries,
but few EU states are willing to fight wars to make other states secure. They will send peacekeepers, but many balk at
sending conquerors or enforcers. Partly
this is the long shadow of agonizing experience with the falling dominos of
European alliances pulling the continent into conflagration. Helmut Kohl often
defended an ever closer European Union as preventing war among its members, and
he meant it. Europeans have worked very
hard to create norms and institutions that make war among European states
unthinkable, and so it is perhaps not surprising they consider that possible
everywhere. However, defending others’
independence is an essential part of a hegemon’s job description. Most states want a very high degree of
reliability that the enforcer of rules in the international order is actually willing
to enforce the rules, which at the end of the day means imposing your will by
force. As unpopular as the U.S. often is
for its choices about using force, its willingness to be the guarantor of
security for 25 NATO allies, South Korea, Japan, Australia, New Zealand
formally, with more conditional offers to scores of other states, is an
enormous contribution to its power in the international order.
Third is that Europeans continue to
struggle with distinctions between nationality, ethnicity, and religion. The European constitution drafting in 2003
included a serious proposal to define Europe as a
collective of Christian nations, despite having 13 million muslims living in EU
countries. The French refuse hyphenated identity – one
cannot be Algerian-French or Italian-French -- which leaves the majority
dictating to the minority the acceptable terms of self-reference, engendering
an unsurprising resentment. It is only
in the past 5 years that a person could “become” German unless they had an
ancestor of German extraction, which led to the absurd circumstance of 2.6
million ethnic Turks that had lived two generations in Germany were unable to
attain citizenship, but people that had lived generations in Ukraine
could. Even Britain,
Denmark and the
Netherlands,
the three countries with the most expansive approach to diversity, struggle
mightily with immigrants not integrating into their societies. Moreover, the ageing of European populations
means their social security systems need to be radically reduced without huge
infusions of immigrant labor, which will put further pressure on the problem of
nationality. It is not an unsolveable
problem, as the peace the U.S.
and other diverse states have made demonstrates, but it is one of the most
intractable issues because it cleaves collective and personal identity.
The lack of unity, unwillingness to
guarantee the order, and struggle with identity make the EU an unlikely
challenger to American hegemony. Even if
unity were achieved, it is unlikely to be attained on the basis of a more
broad-shouldered, assertive EU that will police the international order. The heady days of European triumphalism have given
way to a lack of confidence by Europeans in their ability to succeed in the
emerging order. It is evident in their
efforts to preserve an eroding status quo, both economically and politically.
India. The strengths and problems India faces as a
rising power are in many ways the inverse of the EU: it is a young population
(mean age is only 22) with a cadre of relatively inexpensive, well-educated,
entrepreneurial, English speaking professionals that have become a magnet for
outsourcing back-office work from developed countries. It manages diversity well and has a buoyant
sense of confidence about its prospects in a globalized world. By contrast to China,
it is an established democracy with press freedom and nothing to fear from the
individual empowerment globalization is fostering.
India’s
problems are the challenges of squalor.
Poverty continues at shocking levels.
Many of its most talented scholars and entrepreneurs emigrate to the U.S.
or UK. While a
sliver of Indians are exceedingly well-educated, its literacy rate is only 60%,
which leaves 44 million Indians out of reach of reading. The government continues to vacillate on
throwing off the yoke of socialist or import-substitution policies that have
impeded its development. “Ground up” development can only take states so far
without an effective central government to provide transportation and
communications and energy infrastructure, which India
does not yet have. Its lead time for
developing into a genuine challenger to U.S.
power is much longer.
The U.S.
appears to be managing India’s
rise shrewdly, emphasizing the countries’ commonalities, providing status and
opportunity. India
appears to be moving out of “leadership of the non-aligned movement” and into
closer partnership with the U.S. Even before the nuclear deal, U.S.-Indian
relations had changed in important ways – in fact, the nuclear deal only
sanctified relations that had already dramatically improved. Interestingly, more opposition to the nuclear
deal came from India than from the U.S. Indian nuclear scientists feared scrutiny of
their expertise, but political leaders saw common interests in sustainable
power, economic compatibilities that made deeper linkages profitable, and an
Indian diaspora community in the U.S.
that was gaining political power and seeking to reduce barriers between the
countries. As India
has grown more successful, it has grown less prickly about its relationship
with the U.S.,
and that has permitted beneficial opportunities for both countries. As wild as it seems, in the run-up to the
Iraq War, the U.S.
very nearly had a commitment of Indian troops for the invasion. The confluence of forces that prompted the
BJP government to seriously consider fighting with the U.S. is unlikely to be
repeated any time soon, but it says volumes about how much India is changing
that the idea was even considered, given how far from traditional Indian
international policies such a move would have been.
The ‘rising powers as threats’
argument undervalues the extent to which the structure of the order benefits
rising powers buying into it in ways that benefit the U.S.
as well as themselves. In this period of
globalization, it is almost inconceivable to envision a state becoming
prosperous without adopting the American order.
That order has generated and survived the recovery of decimated World
War II economies, the rise of global competitors, the recklessness of the
American political system, economic shocks of considerable magnitude, and yet
it has produced the longest period of sustained growth we have known. A state could become influential by opting
out of the norms of the Pax Americana: North
Korea and Iran
threaten upheaval and gain worried attention by refusing to adopt the accepted
rules. But it has impoverished them both and made violent domestic upheaval
more likely. States that opt in to the
international order are overwhelmingly advantaged. While Francis Fukuyama’s end of history is
much maligned, he remains right that there is no philosophical competitor to
free-market democracies. Religious
zealotry may pose rewards of a different kind, but no system of political
economy can realistically promise to improve on the rewards to the individual.
Domestic Failure.
Even if potential challengers prove
to be partners that actually strengthen American power in the international
order, a second category of challenge to American hegemony is its internal
corrosion. International standing being
a relative ordering, by this argument, the U.S.
will decline not because other states will grow better, but because we will
decline.
Surveying the dramatic advantages
accruing to the U.S.
that made us predominant among states in the international order at this time,
it is reasonable to ask why we aren’t further ahead. It gives a different perspective on our
shortcomings to invert the question and ask why the U.S.
isn’t 50% of the global economy rather than 20%? Why, with a defense budget larger than the
next 16 states combined, do terrorists believe they can strike crippling blows and
insurgents believe they can prevent us achieving our objectives? Why, when most international agreements
cannot succeed without U.S.
support and participation, are they still undertaken?
An underlying element of answers to
all these questions is the supposition that U.S.
power is fragile rather than enduring.
The economic argument goes that the U.S. economy may be booming because
of profits on mergers and acquisitions or the dot com fad or soaring real
estate prices, but it is inherently vulnerable because of the greed of
corporate chieftains seeking short-term profitability, massive government debt
that will only worsen with the rising cost of medical and elderly care, the
corrosive weakness of primary and secondary school education producing workers incapable
of becoming empowered and creative individuals that will prosper. The social argument goes that American
culture is a race to the bottom, producing sexually explicit and violent
movies, lurid and vacuous celebrity culture, obese and lazy teenagers wandering
Walmart aisles and incapable of placing Canada on a map, puritanical religious
conservatives circumscribing scientific teaching and research, suburban SUV
drivers unconcerned with Americans ruining the planet.
There are elements of truth in all
of these caricatures. It seems unlikely
we could have ever attained such dominance along so many types of power were the
criticisms actually true, or that we could ossify so quickly from vibrance, but
the caricatures do illuminate important vulnerabilities of U.S. power and areas
for remedial attention if we are to sustain American power.
Debt. The U.S.
government currently owes its creditors $8.2 trillion. It is a figure so large as to be
incomprehensible. It is larger than the
annual GDP of every single country on earth except China
and the U.S. –
it is larger than the GDPs of more than 150 of the world’s countries
combined. It is more than 16 years of U.S.
defense spending at current levels. We are adding to that debt at a rate of $500
billion per year. In addition to the
sheer size of our indebtedness, most federal spending is directed to activities
that do not increase productivity or create the basis for future jobs. Debt is a neutral instrument, often advantageous
provided it is invested to create wealth or opportunity, as is the case with
mortgages or college loans. However,
debt that is spending for consumption, as much federal debt now is, does not
produce the means to repay the debt from an improved position.
The profligacy of American spending
in response to the September 11th attacks would seem to play into a
strategy of collapsing American power.
The few hundred thousand dollar investment in terrorist attacks
precipitated an increase in defense spending of over $661 billion dollars from
2002 through the end of 2005, an encouraging exchange ratio from an Al Queda
perspective. Such an avalanche of
spending only makes sense strategically if the President needed to prime a
fragile economy with government spending to sustain confidence after the
September 11th attacks. Otherwise, it appears a dramatic
overreaction, given that the U.S.
already had the most capable and well-equipped military in the world.
Infrastructure. If places to
spend public money were the need after September 11th, improving
ports, roads, bridges, border enforcement, and other crumbling infrastructure
should have been prime candidates. The
Bush Administration did establish a Department of Homeland Security to
consolidate the elements of immigration, law enforcement, coastal patrol that
were scattered across the government, and fund it to the tune of $50 billion
per year, little of the spending has gone to physical improvement to
infrastructure, and most of that has been focused on airport security. As important an issue as illegal immigration
is in American politics, with all its economic, social, and security
ramifications, it is alarming that in the five years since September 11th
we have not seen a dramatic improvement in border and port security. The federal government has not directed
spending, technology, and talent on the problem in the way that would be
speedily expected if it were seriously viewed as a defense vulnerability.
Infrastructure improvements are not
only important in playing better defense against attacks, they are a
competitive disadvantage for the U.S.
economically. Developing means to screen
cargo before it arrives in U.S. ports, employing technology to surveil the
vastness of the U.S.-Mexican border and direct other resources to investigate
suspicious activity, designing data bases and visa programs that provide
information on arriving foreigners and enforce departures are all critically
important security measures that have economic advantages for speeding flow of
transport and encouraging new applications of emerging technologies.
Education. American primary
and secondary schools have been derided throughout most of our history; the
introduction of public schools often meant little more than basic education
from a spinster with little education herself, and quality has varied widely
because funding has varied widely, coming as it does predominantly from local
and state property taxes. It may even be
mythical that American schools ever had a golden age, since much of the
learning was basic and many of the great minds that spurred innovation and
prosperity have always come to us as refugees.
If there were a golden age of American primary and secondary education,
however, its death knell came in 1978 when California’s
Proposition 13 capped property taxes, setting the stage for impoverishing
schools around the country. Funding is
not, of course, the only problem, but the Prop 13 tax revolt marks the turning
point. Our schools produce graduates
with an ignorance of the world that does not bode well for our continued
prosperity, national and international responsibilities. They don’t speak
foreign languages, they are poorly trained in math, science and engineering –
many of the basic building blocks for success as globalization advances. As no less a source than Edmund Burke has
said, “a great empire and little minds go ill together.”
The compensating factor is
collegiate education. Since 35% of
Americans attend college, the weaknesses of primary and secondary education are
made up at the cost of more time out of productive labor in the economy. Educational weaknesses are, as they have
always been, also made up for through immigration. While the wretched refuse from the teeming
shores of other countries continues to become the strength of America,
we also get some of the most highly educated and accomplished immigrants. American colleges continue to bring our
country many of the world’s most talented students, professors, and
researchers. The great drawback of weak
primary and secondary education in the U.S.
is that it leaves those students that do not attend college at a larger
disadvantage than in other countries.
They are the segment of the economy facing greatest competition from
foreign labor, and they are least well prepared to compete or pivot to other
professions. The ceiling may be higher
in the U.S.,
but educational weakness suggests the floor could be lower, too.
Political Incapacity. Many
of the “declinists” argue that the U.S.
is bumping up against inevitable constraints that will stall its
competitiveness. The most prominent of
these critics, Paul Kennedy, argues that problems are becoming of a magnitude
so monumental that the American political system cannot provide solutions. Congress is too irresponsible to rein in the
debt or provide adequate job training or ensure a common language that will
keep our society intact.
It seems an odd line of argument
that the U.S.
will precipitously become unable to prosper for the very reasons it has until
now prospered. Moreover, the argument could easily be applied to the U.S.
in virtually any time frame: Congress has always been irresponsible, the
government has never provided adequate job training. Kennedy is unpersuasive in explaining why
government solutions instead of individual initiative should suddenly become
the American ethos. It is unclear why an
America that
found its way through the Great Depression would be unable to produce leaders
of mettle and creativity to solve the problems they confront.
Which is not to deny there are
certainly causes for concern: federal and consumer debt, education, a growing
entitlement mentality. But why should we believe that present future
generations will be less innovative and adaptable than former? Nobel Prize winning economist Thomas Schelling
has taken this counter-argument to its extreme, suggesting that we can entrust
the problems of the future, such as global warming, to the ingenuity and
self-interest of future generations, and should instead focus resources on
current injustices, such as poverty.
The final rebuttal to the
declinists is that success is relative not an absolute activity: we don’t need
to be perfect, just need to be better than the competition. For all its problems and frictions and
shameful failures, the U.S.
is well-postured to retain its dominance of the global order for the
foreseeable future. If globalization is
eroding state control and forcing responsibility downward to the individual,
Americans will hold a significant advantage over most other political cultures
because of our reverence for individual rights and openness to individual
reward. If globalization places a
premium on cross-cultural acceptability, American diversity allows our domestic
market to be an incubator for products that will be successful
internationally. If state power becomes
a competition for creative and motivated individuals, the American dream will
continue to be a magnet for immigrants that perpetuate American hegemony.
Imperial Overstretch
The last of the critiques of
sustained American hegemony also comes from the political theorists of
international relations (as had the earlier argument that countries naturally
cooperate to diminish a hegemon). It
explains the faltering of great empires as a function of their responsibilities
outstripping their strength. Athens
cannot hold its allies but by murdering entire defecting populations, and sinks
to be no better than the Spartan despotism it fights a decade defending itself
against; Rome conquers more territory than its Legions can defend and is
consumed in subduing constant rebellions; Britain establishes an empire on
which the sun never sets and goes bankrupt preserving freedom of navigation and
suppressing nationalist uprisings in its colonies. The argument basically treats empires as
though they cannot prevent themselves taking on more responsibilities, like a
person who cannot stop eating and dies of digestive failure. Despite the simile, imperial overstretch is
an alluring theory because all empires eventually decline, and all for the same
reason, which is their power diminishes.
It is, however, not an explanation.
Imperial overstretch works better
as a retrospective description than a predictive theory. One can discern with hindsight that Rome
had extended itself too thinly to preserve its periphery, that Athens
was surrendering its moral authority in ways that corroded its leadership of
the essential alliance against Sparta,
that the British had not adequately created a means of conveying colonies into
constituent parts of Britain. The trick in making imperial overstretch into
more than a cautionary by-word is being able to see that pattern in real time. The difficulty is rather like the Federal
Reserve intervening to deflate stock or housing bubbles: responsible regulators
want to allow the creation of value to reach its xenith before reining it in,
and acting too early robs wealth from the potential transactions, but you can’t
tell a bubble is going to burst until it bursts. Their performance can only be graded once you
know the bubble has burst.
America
is an unlikely candidate for demise by this means, because we are in many ways
an accidental empire. To be pedantic
about it, an empire is only constituted when peoples are forcibly subjected;
voluntary collusion is alliance, not the relationship between an Imperial power
and a tributary. So Germany
would be an element of American empire in 1945, but with the return of German
sovereignty in 1954 it ceases to be part of the American empire by
definition.
Politically, we abjure the label –
others talk of the American empire, but Americans neither aspire to the title
(as Greece, Rome,
and Britain did
in their time) nor feel comfortable accepting the mantle. Who we are domestically has made us into a
colossus, but at least until September 11th, we still think of
ourselves as likeable and unexceptional.
The American empire is largely voluntary, with others choosing to opt
into it. So when the fury of Somalis
dragging dead American soldiers through the streets of Mogadushu or Iraqis
burning bodies of American civilian contractors occurs, it still surprises
us. Romans might have been frightened by
reports of those occurrences from the edges of Empire, but they wouldn’t have
been surprised. They held their sway by
force, whereas we mostly do not think of ourselves in that way. Germany
and Japan are
the subliminal models in American consciousness of power: impose your will, but
on terms that will make your former enemies want to become what you want them
to become, and enjoy their partnership in their subsequent peace and
prosperity. We expect to be a force for
good in the world, and cannot long sustain domestic support for wars without
that narrative as justification.
September 11th changes American
consciousness of power comparable to Adam and Eve noticing their nakedness
after the apple – we are suddenly aware of how dominant we are in the
international order. Before September 11th,
the reverse seems almost to be true: far from believing we have the ability to
accomplish anything, we more often – as a society, not individual Presidential
administrations – believe we are no different than other states, no better
suited to power, unexceptional as states go.
There are the occasional triumphalist outbursts (Madeleine Albright
crowing about the U.S.
being “the indispensable nation” comes embarrassingly to mind), but for the
most part American perceptions of American power undervalue it to a much
greater degree than non-Americans do. We
don’t believe we have the ability to force a settlement between Israel
and Palestine, even if European and
Middle Eastern states believe we do.
Americans are also cost conscious,
as empires go. We hesitate to become
embroiled in many problems, knowing the American people are skeptical of such
obligations. More often than not we have
to be cajoled into participation, whether by Britain
in World War II or America’s
NATO allies in the Balkan wars of the 1990s.
Ironic, then, that we end up the guarantor of the international order,
but examining each sequential commitment, the Congress and public in every
instance require considerable persuasion and time. Committing to the European theater in World
War II would have been a hard sell had Hitler not foolishly declared war on us.
Dean Acheson publicly ruminates on South Korea
being outside the perimeter of American commitments before North
Korea’s attack moves the line for the Truman
Administration. Securing Congressional
support for NATO commitments was a very hard sell in 1949, and the troop stationing
necessary for the integrated military command would have been impossible before
the Korean war spooked us all about the potential speed of a Soviet conquest of
Western Europe.
However blatantly transparent the fiction, President Clinton had to
promise Congress that U.S.
forces would not remain in the Balkans longer than 365 days in order to gain
their approval for participation, and considerable effort was exerted by NATO
allies to prevent the Bush Administration withdrawing U.S.
forces.
National Security Advisor
Condoleezza Rice’s judgment that “troops from the 82nd Airborne
should not be walking kids to school in the Balkans,” captures the hesitance of
American imperial ambition. We basically
think it’s other societies’ responsibility to solve their society’s
problems. This Jacksonian tradition is
distrustful of grand ideas and institutions and of our own government. As Walter Russell Mead (who identified the
strand in American foreign policy) argues, the Jacksonians are the critical
constituency to persuade on issues of war and international commitment. But the U.S.
is often the ally of choice precisely because of our hesitance. It makes us more trustworthy than if we were
enthusiastic about the undertaking, which would signal gains for us. Empires look for opportunities to extend
their dominion; at least in the 20th century, that has been a
difficult case to make against America.
September 11th
dramatically changes this aspect of our American political psyche, at least
temporarily. The vulnerability Americans
feel after the September 11th attacks may be difficult for
non-Americans to appreciate except in light of an understanding that the
magnitude of American power wasn’t something many Americans actually
experienced. As Americans struggled to
understand “why they hate us”
the breadth of American power in the international order came to the forefront
of explanations. Americans stopped to
think what it might be like to feel the stampeding pressure of American
political, cultural, economic, and military power from outside our national
perspective, to be unable to protect a society from influences that disrupt
traditional mores and relationships or that accelerate changes beyond
societies’ ability to successfully adapt to them. Americans also wanted to regain the lost Eden
of invulnerability.
The Bush Administration believed
that America
could not “win the war on terror on the defensive,” but must fix problems where
they were developing. To pick up Mead’s
superb iconography, President Bush shifts gears from the Jacksonian tradition
of wary engagement with the international order to a Wilsonian vision of making
the world safe for democracy. The first
stage of the Bush Administration’s transformation, immediately after the
attacks and culminating in the 2002 National Security Strategy, is intolerance
for terrorism and insistence that states be accountable for activity occurring
in their territory, only mildly tinctured by advancing human rights,
development, and democracy. The second
stage, evident by the President’s 2003 State of the Union address, is ennobling
the work of enforcing our own security in the vision of advancing democracy
throughout the world in order to make states more accountable to their own
publics and thereby forestall the seething resentments that foster terrorist
violence.
Which brings this discussion to Iraq. It is difficult to deny that the theory of imperial
overstretch does have some resonance in explaining the choice of the war in Iraq. Even if Iraq
was a danger and international sanctions were quickly fraying, imperial hubris
rings through the Bush Administration’s unwillingness to make compromises that
would expand international support, shaving back the margin of error in
military planning, and lack of attention to the gritty realities of Iraqi
politics and society that would affect the success of the undertaking. That the war could drag on this long, be so
costly to America, its allies, and Iraqis, encourage other challenges to
American power, and have the potential to fail must quite literally have been
inconceivable to the architects of the war.
Otherwise, the thorough examination of what might go wrong – the sensitivity analysis, as economists
would term it – would have been given more weight. The imperial overstretch narrative of Iraq
would see an America grown arrogant in its power, believing itself unquestionably
a force for good, unconcerned with others’ interests or counsel, incapable of
failing to impose its will, launching on a disastrous war that causes the
diminution of its international standing and power, and ushering in an new
contest for influence among states as the international order realigns to the
new reality of the end of American hegemony.
It is a compelling story line, especially if one disapproves of the Bush
Administration’s choice of war.
The problem with Iraq
as proof of the imperial overstretch theory is that the Iraq
war seems to have only minor effects on American power. Storms rage in European commentary (to be
fair, more often in sorrow than in anger) about the loss of moral standing,
smug satisfaction evinced by those who would not use force that military force
is irrelevant to contemporary security problems, schadenfreude that the U.S.
has finally had a comeuppance that will make us less messianic in our attitudes
and more multilateral in our behavior. There
are even occasional fears expressed about how dangerous the international order
will be without American power dominating it.
But American power clearly still
does dominate it. U.S. GDP rose by 4.6%
per year and sustained its position as the most agile and productive economy in
the world. Deficit spending continues,
but at slowing rates and with agreement from the democratic Congress and the
President that it must stop by 2012. Although
they are diversifying their currency portfolios, countries, most notably China,
continue to buy American treasury issues, keeping interest rates in the U.S.
low and making deficit spending affordable. Every death of an American soldier,
sailor, airman, or Marine is a tragedy, but the country has not been paralyzed
from continuing to prosecute the war because of its losses (as many had
predicted). Military recruiting is under
strain, not surprising given that operating tempo in the Army and Marine Corps
is higher than at any time in the 20th century, but is achieving
nearly all its goals and producing the best-trained military we have ever
fielded. The military remains the most
respected institution in American society.
The Chinese do not likely believe they could conquer Taiwan
over the efforts of the American military to prevent it, nor any country or
organization believe they could attack the U.S.
with impunity. Countries may descry
American folly in Iraq,
but they continue to want our help defending their own territories and
populations. American movies are
bursting profitability records, as are visits to Disney and, even with the
inconveniences mounting, travel to the U.S. By comparison with 2000, all these signs are
positive.
In every area except likeability, U.S.
power has increased rather than decreased.
And the likeability index is notoriously volatile in the
short-term. Those who claim American
moral authority can never recover the degradation of Guantanamo detentions and the
Abu Ghraib prison scandal ought only to review the record on these same claims
at the time of the McCarthy hearings or the National Guard enforcing school
desegregation, Eisenhower denying U-2
overflights of the Soviet Union in 1958 as Khruscchev paraded captured CIA
pilot Gary Powers for tv cameras, Watergate, the Watts riots, or the fall of
Saigon. American moral authority has
never been as unalloyed as those who bemoan its loss purport. It has always been a struggle, and an
unsuccessful one at times, to live up to our aspirations and claims.
Moreover, it is very likely that
now, after four difficult years attempting to change the world, the Bush
Administration is tacking back from grand Wilsonian visions to the smaller
aperture of Jacksonian skepticism. Elections
in Palestine and Lebanon that brought political parties with direct terrorist
links to power, the near-term objective of gaining more regional help for
stabilizing Iraq, slow progress in Afghanistan and Iraq despite enormous
international aid have ratcheted back enthusiasm for democracy as the solution
to terrorism.
What Iraq has done is make the
maintenance of American hegemony marginally more costly: there will likely be
more challenges the U.S. must handle, there will be a higher standard of proof
required by governments and publics – including our own – to gain support for
the use of force, we will need to commit more effort to achieve the outcomes we
want. The mistakes of Iraq
will require us to improve our game, work harder, argue longer and with more
effort to understand partners’ concerns rather than simply asserting our own,
build more effective strategies with constituent elements that reinforce each
other. American hegemony may require more
work for awhile until confidence in our use of power is re-established. But the power equation remains largely
unaffected.
The imperial hubris argument runs
aground because of the self-correcting nature of American political
culture. The checks and balances
inherent in the political culture and reflected in the political structures of
government are returning to form: government is divided, Congress is
threatening careful scrutiny of Executive action, restraint on spending is
returning to prominence in Federal Reserve and Treasury counsel to Congress,
cases are wending their way through the Courts to provide platforms for
limiting Executive power. September 11th
administered a terrible trauma to American political culture, but we appear to
be righting ourselves and returning to form.
The most important effect of hubris in Iraq
may be domestically for the U.S.,
a lesser public willingness to defer to grand designs of our own leadership.
Does It Matter?
Globalization requires a spine to
be effective; not in the sense of standing up for doing the right thing,
(although that is often economized on, as Mark Twain said, and would be
refreshing), but in the sense of a common backbone for communications, movement
of money, enforcement of rules. Someone,
some country, has to ensure the backbone of globalization. If we do not ensure that continuity, we will
be subject to others’ choices. It should
be no solution to outsource such decisions to international institutions rather
than states. International institutions
are not neutral benefactors, but collectives of advocates making choices that
advantage their nations. It makes no
sense to blame the United Nations for failing in Darfur, for we have failed in Darfur
and so has every other nation that has not intervened to prevent genocide. The United Nations is merely the place they
failed to take action, not the repository of responsibility.
Americans should not deceive
ourselves that we can allow other states or international institutions to
regulate the international order. Being
such a powerful state and one with a tradition of international activism, if
other states fail to act or are incapable of cajoling or imposing solutions, we
will eventually be called on to fix problems.
Being the hegemon means being the court of last resort. And if we are unwilling to fix problems, they
will slow and distort the functioning of the order much as sand in the gears
slows and eventually harms the workings of machinery. As we benefit more from a globalized
international order, we correspondingly will be disproportionately hindered by
the power of globalization becoming impaired.
Our economy would become less able to support the aspirations of our
people, our influence and the preferential relationships that result from the
exercise of our power would diminish as other states realize we are unwilling
to help solve their problems. If, as has
been argued here, American hegemony is likely to continue, we have a
responsibility to develop a strategy that makes maintenance of a beneficial
international order in our interests at a cost we are willing to sustain.