July 15, 2014
We are in the season of discontent concerning the position of the United States in the world. Following the financial crisis, it was the declinist narrative, and now it appears to be verging on a competency, or weariness, narrative. We recognize our fundamental strengths and lean away from global responsibilities. Pundits from both sides of the aisle wonder about the direction of our nation and the unease this has caused in the rest of the world. Signs of retrenchment and floundering abound, and the concern over the future leadership role of the United States is not just a partisan endeavor. The National Intelligence Council’sGlobal Trends 2030 listed as one of its potential game-changers the uncertain “role of the United States.” Whereas the United States was previously perceived as a global stabilizer, in the future, the United States is increasingly perceived as a variable.1 Highlighting the perception of growing unease over the role of the United States was the recent cover story in the Economist entitled, “What Would America Fight For? The Question Haunting its Allies.”2 Crises in Syria, Ukraine, the South China Sea, and now Iraq—all cry out for U.S. engagement in support of the liberal world order we have assiduously supported for decades.
Fortunately, this season of discontent corresponds with a season of momentous commemorations that offer valuable lessons that could help us get back on track toward demonstrating global leadership and responsibility. August marks the 100th anniversary of the outbreak of World War I, viewed by many as the greatest catastrophe of the 20th century, “the first calamity of the 20th century, the calamity from which all other calamities sprang.”3 We have also recently witnessed the moving commemorations of the 70th anniversary of the D-Day invasion. Arguably, however, a more important anniversary is the convening of the Bretton Woods conference, just 1 month later in July 1944 that resulted in correcting the failed legacy of World War I by creating international institutions for governing the global economy. Finally, in June, despite Chinese government efforts to erase memories of the 25th anniversary of the Tiananmen crisis, it remains an important reminder that China continues on an evolutionary and very uncertain path. These three events speak volumes about important lessons the United States should be applying now as it struggles to define its role in the world following its debilitating decade of war. As Robert Kagan recently noted, “These days it is hard to watch both the conduct and discussion of American foreign policy and not sense a certain unlearning, a forgetting of old lessons. . . .”4 Relearning just a few lessons from these commemorative occasions should help our leaders and people understand the importance of U.S. global leadership as we shape the future, and avoid the perils of the past.
Excellent scholarship abounds on the run up to World War I, and two recent books worthy of consideration are: Sleepwalkers by Christopher Clark; and, The War that Ended Peace by Margaret MacMillan. Among the many reasons for the outbreak of World War I, two stand out as of particular importance for what they say about current circumstances: the perils of nationalism and complacency.
Lack of trust between the pre-World War I great powers was exacerbated by the failure to abate the rise of nationalism. The advent of mass media led to the growth of a nationalist public opinion, fanned by politicians appealing to popular fears and prejudices and their populism. “Governments were finding,” MacMillan concludes, “that their ability to maneuver was increasingly circumscribed by their publics’ emotions and expectations.”5 Today, U.S. political leaders seem to be most interested in winning the next election, as opposed to leading the nation, let alone the global community. Appeals to populist platforms on both the left and right, along with an over emphasis on nation building at home, all stoke fears and nationalist responses. Sure, all politicians want to win reelection, but occasionally the good ones rise above personal aspirations to make the hard choices for the good of the nation. Newt Gingrich recalled that one of the most courageous decisions President Clinton made was to eventually come out in favor of the North American Free Trade Agreement (NAFTA). It was a tough choice, and he had to make the case to the American people. President Obama recently argued that leadership requires leveling with the American people about required sacrifices, yet an election focus feeds populist responses and trumpets government payouts, not sacrifice nor national responsibility.
Anyone reading about the coming of World War I cannot fail to recognize the apparently unending series of great power crises that occurred from the beginning of the 20th century. Controlled brinkmanship was demonstrated in North Africa, the Far East, Persia, and, of course, the Balkans. French socialist Jean Jaures commented on the impact of muddling through, “Europe has been afflicted by so many crises for so many years, it has been put dangerously to the test so many times without war breaking out that it has almost ceased to believe in the threat and is watching the further development of the interminable Balkan conflict with decreased attention and reduced disquiet.”6
Leader complacency, caused by repeatedly running to the edge of crises prior to reaching a resolution, leads to a false sense of security. Our political establishment has mastered the art of kicking the can down the road and muddling through, and has become complacent about the need to address pressing problems, most readily demonstrated in our fiscal mismanagement. How many times have we dangerously approached the fiscal cliff? The need for a grand bargain to balance revenues, entitlements, and government services has been recognized, studied, and “commissioned” for years without effective action. Bruce Jones, author of the recent and appropriately titled book, Still Ours to Lead, offers this thought, “. . . if the United States does not rectify a perception that it is becoming incapable of managing its global financial role, the willingness to participate in a system still overwhelmingly managed by the United States will be undermined.”7
Perhaps we have become complacent in another matter. In a recent Brookings Essay, Margaret MacMillan argues that:
Like our predecessors a century ago, we assume that large-scale, all-out war is something we no longer do. In short, we have grown accustomed to peace as the normal state of affairs. We expect that the international community will deal with conflicts when they arise, and that they will be short-lived and easily containable. But this is not necessarily true.8
Decreased attention may already have contributed to worsening situations in the Middle East, Ukraine, and the Western Pacific.
World War I was botched on the front end and the back end.9 The failure to achieve a just and lasting peace in 1919 led to the outbreak of World War II. Economic distress during the interwar years resulted in the rise of fascist states and easily rekindled the embers of nationalist revanchism. President Woodrow Wilson’s 14 points were not adhered to, including the all-important point 3: “the removal, as far as possible, of all economic barriers and the establishment of an equality of trade conditions among all nations consenting to the peace and associating themselves for its maintenance.” In terms of post-war economic relations, the opposite occurred as nations scrambled to respond to the 1929 crash. Nations participated in a series of competitive devaluations and enacted crippling tariffs, sending the global economy into a death spiral.
Our second major commemoration of this summer is the Bretton Woods conference, convened shortly after the D-Day landings and well before the end of World War II. It was focused on creating a post-war international regime based on rules designed to govern the global economy. Following the collapse of the Soviet empire, these rules now govern the vast majority of the globally interconnected economy. The results of this conference point to the importance of institutional arrangements to monitor and support the global economy, including the International Monetary Fund (IMF) and the European Bank of Reconstruction and Development, better known today as it has evolved into the World Bank (WB); and the commitment to free trade. Conference attendees initially debated the creation of the International Trade Organization, which at the time proved to be a bridge too far, and thus they settled on the General Agreement on Tariffs and Trade (GATT). Through a series of multinational negotiating rounds and agreements, culminating in the creation of the World Trade Organization (WTO) in 1995, GATT, and now the WTO, have succeeded in broad tariff reductions and a dramatic increase in global trade. The liberal world economy, based on open markets and free trade, and managed by rules-based, international monetary and trade regimes, has furthered both individual and collective interests and promoted international cooperation. When it comes to the support for international institutions, the President is correct in highlighting their importance. But some of that support should also be expressed in action, particularly as it relates to the global economy. Once again the President is right to focus on the “key source of American strength: a growing economy,” and there is nothing wrong with domestic nation building, but only if it does not replace an equal emphasis on the management and continued engagement in geoeconomic affairs.
International regimes, particularly those related to the global economy, require the willingness to fight for proven common benefits. Globalization has provided proven benefits, but it has always been a hard sell with the American people and thus our politicians need to continue to make the case. The United States is currently engaged in two potential game changing trade negotiations: the Trans-Pacific Partnership (TPP), and the Trans-Atlantic Trade and Investment Partnership (TTIP). These are both characterized as comprehensive and high-standard 21st century trade agreements and could knit together most of the major trading nations, generating increased economic benefits for all. Of the two, the TPP holds the most promise because of the possibility that China may join, further integrating their economy into the international rules-based trading regime. Encouraging our negotiating partners to take the necessary political risks to finalize these agreements would be facilitated if the United States showed leadership and passed Trade Promotion Authority. The President called for this action in his State of the Union address, and was immediately rejected by Senator Harry Reid. Congress also needs to make progress on IMF reforms. Economics represents a positive-sum game and leads to international cooperation. The United States needs to level with the American people and show leadership in this area.
Bretton Woods points to the essential role of the United States in supporting these global economic arrangements. The Bretton Woods conference represented “a made in America” approach to the global economy,10 and the United States was willing to fulfill that essential leadership role. Political economist Robert Gilpin argues that:
there can be no liberal international economy unless there is a leader that uses its resources and influence to establish and manage an international economy based on free trade, monetary stability, and freedom of capital movement. The leader must also encourage other states to obey the rules and regimes governing international economic activities.11
Global economic leadership requires the United States to lead by example and demonstrate competent policy outcomes.
This brings us to the commemoration of Tiananmen, which serves to focus our attention on the rise of China and both the possibility of replaying the events of 1914 between transitioning powers, and the prospect that the existing rules for the global economy no longer apply. Tiananmen represents a critical example of the ongoing transformation of China.
Prior to 1989, China, under the leadership of Deng Xiaoping, made rapid progress concerning the four modernizations: agriculture, industry, science and technology, and defense. However, Tiananmen pointed out the government’s lack of attention to the fifth modernization, political transformation. China is now embarked on an even more ambitious reform agenda targeted at overcoming the middle-income trap. The middle-income trap postulates that after developing nations have harvested the low-hanging fruit of cheap labor and light manufacturing, they begin to lose their low-cost labor advantage and must transition to a knowledge based economy to move into a higher income status. China’s new leaders, Xi Jinping and Li Keqiang, recognize the need for dramatic economic reform and have presented plans for a new growth model relying on the decisive role of the market and rebalancing the economy to focus more on domestic consumption. The extensive reform agenda includes reform of the household registration system (hukou), new arrangements to fund local governments, ongoing measures to address corruption, inequality, and pollution. China’s success implies an increased urban voice and a more individualistic consumer-based economy. All of this presages the need to address the fifth modernization of political reform and transformation.
Under these circumstances, there is much that the United States can do to build a relationship of trust with China, to avoid the pitfalls of a 1914-style power transition, and to further integrate China as a stakeholder in the global economy. At the same time we should not overestimate the challenge posed by China and recognize the difficulties (and possibilities) inherent in its current reform agenda. A thoughtful array of transparent security and inclusive economic policies should point to cooperation, not conflict. We have always maintained a strong presence in the Pacific, and for the past decade have been engaged in intensive dialogue with China. The unneeded pivot seems to have heightened a sense of mistrust as China perceives containment, while at the same time creating a perception elsewhere of a U.S. loss of interest.
Today, U.S. leadership does not demonstrate much appreciation for any of these lessons of history. Official statements claiming a continuing objective of global leadership are insufficient.12 Leadership needs to be demonstrated through concrete actions. Failure to learn important lessons from the events we commemorate this season will only serve to disadvantage our nation and condemn future generations to unnecessary hardship.
ENDNOTES
1. Global Trends 2030, Washington, DC: National Intelligence Council, December 2012, pp. 98-106.
2. The Economist, May 3-9, 2014.
3. American historian Fritz Stern, cited in Christopher Clark, The Sleepwalkers: How Europe Went to War in 1914, New York: Harper, 2012, p. xxiii.
4. Robert Kagan, “Superpowers Don’t Get to Retire: What our Tired Country Still Owes the World,” New Republic, May 26, 2014. available fromwww.newrepublic.com/article/117859/allure-normalcy-what-america-still-owes-world.
5. Ibid., pp. 266, 451.
6. Ibid., p. 543.
7. Bruce Jones, Still Ours to Lead: America, Rising Powers, and the Tension Between Rivalry and Restraint, Washington, DC: Brookings, 2014, p. 187.
9. An additional essay on the importance of ending wars correctly is obviously necessary, reference the current chaos in Iraq.
10. Robert Kagan, The World America Made, New York: Alfred A. Knopf, 2012.
11. Robert Gilpin, Global Political Economy: Understanding the International Economic Order, Princeton, NJ: Princeton University Press, 2001, pp. 99-100.
12. President Obama’s West Point speech, May 28, 2014; and The Defense Strategic Guidance, Washington, DC: The Department of Defense, January 2012.
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