November 28, 2006
Tear up the Bush doctrine and revisit America’s real values
US voters have now repudiated those who sought to impose democracy by force abroad. In spite of the gerrymandering of districts, the advantages of incumbency and renewed recourse to the politics of fear, common sense prevailed. George W. Bush is still president. But he is damaged political goods. That is good, because change is desperately needed. The signal feature of this administration has not been merely its incompetence, but its rejection of the principles on which US foreign policy was built after the second world war. The administration’s strategy has been based, instead, upon four ideas: the primacy of force; the preservation of a unipolar order; the unbridled exercise of US power; and the right to initiate preventive war in the absence of immediate threats. The response to the terrorist outrage of September 11 2001 reinforced the hold of all these principles. The notion of an indefinite and unlimited “war on terror” became the fulcrum of US foreign policy. It led to the idea of an “axis of evil” connecting Saddam Hussein’s Iraq to theocratic Iran and Kim Jong-il’s North Korea. It brought about the justified invasion of Afghanistan, but also the diversion into Iraq. Not least, the idea of the war on terror led to the indefinite imprisonment of alleged enemy combatants without judicial oversight, toleration of torture, “extraordinary rendition” of suspects, the extra-territorial prison at Guantánamo Bay and, by indirect means, the abuses at Abu Ghraib. The remainder of Martin Wolf’s column can be read here (FT.com subscribers only). Discussion from our guest economists is free - click ‘Comments’ below.
Stephen Cecchetti: I applaud virtually every word of Martin Wolf’s excellent column. We cannot afford to have American foreign policy in such a complete state of disrepair another moment. With that in mind, I have several comments.
Economists are libertarians at heart. Most of us favor democracy and civil liberties as well as free markets and economic liberties. The big question is which comes first? The Bush administration seems to think that it is easy to set up a democracy, and once we do capitalism will naturally follow. I doubt it. The problem is that without strong individual protections, elected majorities tend to tyrannize minorities. Democracy tends to be illiberal.
Capitalism has its own problems. As Raghram Rajan and Luigi Zingales argue persuasively in their book “Saving Capitalism from the Capitalists”, competitive market-based economies produce wealthy people who capture the political system and use it to place a break on any sort of competition that can hurt them. That is, left unchecked capitalism destroys itself.
Unfortunately, the Bush Administration provides a case study for both of these points. It has campaigned to restrict civil liberties and implemented policies that perpetuate the concentration of economic power. Its tactics in the so-called “war on terror” promote the first of these, while its changes to tax and regulatory codes work toward the second. Let’s hope that the new foreign policy focuses on lifting the poor out of the desperate circumstances that lead them to physically attack us, and that new domestic policy works to disperse economic power.
As Martin goes on to point out, Mr Bush’s move away from multilateralism is an unmitigated disaster that must be rectified soon. Globalization requires co-operation and requires world-wide co-operation. We need broad alliances not only for our physical security, but for economic security as well. (And then there is environmental security…) Financial and economic activities are both quickly becoming like air and water – they know no borders. Monitoring the world economy, and guarding against systemic financial crisis, requires multilateral co-operation. And getting that co-operation means being friendly in all aspects of international relations.
Like Martin, I am optimistic about the US. I would go even further, and say that I am optimistic about people. I have faith that they are good at their core, and that kind deeds and co-operation will be repaid in kind. Let’s hope that the newly elected Congressional Democratic leaders eschew the partisanship of their Republican predecessors and work toward creating cooperative alliances both inside the government and throughout the world.
Posted by: Stephen Cecchetti | November 30th, 2006 at 2:21 am | Report this commentMonty Graham: Martin Wolf is of course right - US foreign policy under the Presidency of George W. Bush, largely driven by the ideology of so-called “neo-conservatives”, has been one enormous fiasco, one whose repercussions are likely to reach quite a long time into the future. The urgent question of the moment is, how does one go about reversing this fiasco? The question is complicated by the fact that George W. Bush remains the US President until early 2009 and, moreover, it is the US President, and not the Congress that is now controlled by the opposition party, that largely determines US foreign policy.
Let me make one modest and specific proposal for a reversal of US policy that affects one of the countries designated by Bush as part of the “Axis of Evil”; this country is North Korea. In the on-going negotiations between the US and South Korea to create a free trade agreement between the two countries, a demand by the South Korea government has been that products made in the Kaesong Industrial Complex, an “economic zone” located in North Korea but largely managed by South Korean firms, be included in any preferences created under the free trade agreement. To date, the US has indicated that this demand is unacceptable and indeed that, if the South Koreans were to continue to press the demand, it could be a “deal-breaker”, one that could cause the whole negotiation to fail.
But, in the long run, the demand is not unreasonable. Indeed, the process of economic reform and movement towards a market system in China about which Martin Wolf writes began with Chinese experimentation with “special economic zones” during the 1980s, where these zones were not wholly unlike the Kaesong Industrial Complex. The success of the special economic zones in China emboldened a sometimes reluctant Chinese leadership to undertake widespread economic reforms in the early 1990s, reforms that directly led to the very rapid growth and development of the Chinese economy that has occurred during the past 15 years or so. There is no guarantee, of course, that the Chinese experience would be repeated in North Korea, but there is also no strong reason to believe that success at Kaesong might not embolden further economic reform in North Korea, reform that could over time greatly change the way in which this nation conducts its relations with other countries, where the change would almost surely be for the better. Indeed, there is evidence that there is a rising generation of North Koreans (including importantly younger military officers) who seek market-driven reform as a means of improving North Korea’s economic performance. But current US policy, which is pretty much to do as much as possible to prevent North Korea from conducting any sort of commerce with the rest of the world, creates major disincentives for North Korea to undertake serious economic reform. Moreover, consistent with Martin Wolf, US policy simply has not worked: It was, after all, only after a US policy of aggressive sanctions against the North Korean regime was initiated under the Bush administration that North Korea, in 2004, restarted its plutonium production program, a program that had been suspended following the “Agreed Upon Framework” negotiated under the Clinton administration in 1994.
Thus, a change of attitude on the part of the US towards the status of the Kaesong Industrial Complex could prove to be a constructive first step towards a new and more fruitful policy towards North Korea. Moreover, such a step can be taken in the context of a negotiation being undertaken with South Korea and hence this step need not involve any direct interaction with North Korea itself. Rather, indication of a new US position to South Korea would send a signal to the North that the US is now willing to consider a more flexible policy towards North Korea.
Indeed, such a signal might not even require that the US accede fully to the South Korean demand that products from Kaesong be covered under a Korea-US free trade agreement. Rather, the United States, rather than rejecting the South Korean demand outright (where outright rejection is the current US position), could indicate that, while it was unwilling to accept that products from Kaesong be covered under the free trade agreement under present circumstances, it would be willing to reconsider this issue at some time in the future subject to certain conditions being met. Such conditions might include quite reasonable ones such that North Korea must stop its current practices of counterfeiting and circulating US currency and manufacturing for export narcotic drugs such as methamphetamine. Indeed, for the US to express even this little bit of flexibility in the free trade negotiations might send a signal to the North Koreans that there might be a better path for that nation to take than the one it is currently taking.
As noted, my proposal as outlined above is but a modest one, and a lot more than just this proposal will be needed to undo the damage that a misguided US foreign policy has created. However, as goes the Chinese proverb, the longest journey starts with a single step, and the step that I propose would be, I submit, in the right direction.
Posted by: FT Forums | November 30th, 2006 at 9:29 am | Report this commentAllan Meltzer: Martin Wolf is right to criticize the implementation of the Bush foreign policy in Iraq and the rest of the Middle East. Like many before them, Bush and his team will die of hubris.
But Martin Wolf does not offer a viable alternative. The Europeans are free-riders. They want no part in the defense of the West. Leave that to the US and the UK. Criticize them for doing too much or doing too little, but keep you troops out of harm’s way. Talk about international institutions leading the way. Has he heard of Darfur? Rwanda? When was the last World Bank success?
Posted by: FT Forum - Allan Meltzer | December 1st, 2006 at 10:14 am | Report this commentMartin Wolf: I thank Stephen, Monty and Allan for their interesting comments.
I agree strongly with Stephen. In particular, he makes the point that freedom is the basis of democracy rather more than the other way around. But freedom can destroy itself if inequalities allow a plutocracy to manipulate democracy in its own interests. Both dangers are evident in the world today.
I liked Monty’s specific example. It also illustrates a bigger point. It makes sense to talk to one’s enemies. I think one of the biggest mistakes made by the Bush administration is its failure to do so. We even talked to the Soviet Union, for good reasons, even though it was a truly evil regime. In retrospect, probably the most important western contribution to the collapse of the Soviet Union was the power of example and our opening up to the east. Obviously, the relative economic failure of the Soviet system was also crucial.
In the case of North Korea, opening up the economy is the only imaginable way to bring about political change peacefully. Since North Korea cannot be overthrown by force without destroying large parts of South Korea and destroying relations with China, the only sane policy is to pull it into the world economy and for the US to guarantee the country against an attack, in face-to-face talks, provided it gives up the nuclear weapons programme. A similar approach should be taken towards Iran. The more hostile the US is to Iran, the more it will bring the intensely nationalistic Iranian people behind a government that the majority probably despises. That will give us a nuclear-armed Iran that is united in opposition to the west.
I agree with Allan that I did not offer a viable alternative. I would have to write many more columns to do so, because in foreign policy detail matters.
I agree with his criticism of the free-riders, which is why I hope we will continue to enjoy wise American leadership. But, after 9/11 we would have done well to have sorted out Afghanistan fully and left Iraq to a later day: there was no great urgency in dealling with Saddam. Also face-to-face talks were needed with Iran, as I have indicated. When Khatami was president that might even have made a big difference.
Allan’s last few sentences caricature my position. International institutions cannot do anything much on their own, at least in the area of security. They lack the resources to do so, because powerful governments will not give them to them. If major powers had wanted to deal with Darfur or Rwanda, they could have done so. But it is true that usually nobody wants to do very much if the US is not also involved. Again, its leadership is essential.
When was the last World Bank success, asks Allan? How do you define a success? I suppose the question would have to be answered by assessing what would have happened in its absence. Unfortunately, we cannot know the answer to that question. Since every successful developing country has had World Bank involvement, the Bank could claim them all as successes (China, for example). But then it would also have to be blamed for all the countries that have failed.
Honestly, I don’t think this is a question we can answer. That allows us to retain our prejudices about the usefulness or uselessness of the World Bank. But I certainly don’t think the national aid programmes are any better. At least the World Bank’s distribution of money is moderately rational. That cannot be said of most bilateral programmes. That is a gain produced by the discipline of multilateralism.
Posted by: FT Forum - Martin Wolf | December 3rd, 2006 at 7:00 pm | Report this commentRobert Wade: A comment on Martin’s ‘Tear up the Bush doctrine’ (Nov 28), written after several days in Moscow. Martin says, ‘The right way ahead…should go via the power of US example rather than its military power and via its ability to give a lead rather than unilateral dictation. The great US policy makers of the twentieth century understood that well’. I too hope that the US will lead by example and by consent rather than dictation. But hopes should be calibrated to past trends and causes.
From the British media and from discussions with several Russian intellectuals, I sense a real danger of return to the Cold War ’syndrome of mistrust’, in which the behavior of one side merely confirms the negative expectations of the other. On the one hand the US has a long history of what Richard Hofstadter famously called ‘the paranoid style’ of politics, meaning a tendency to respond to the chronic difficulties of achieving national cohesion in a society characterized by intense individualism, class division and ethnic diversity by invoking the threat of some ‘other’, including socialism, communism, anarchism, protectionism, or terrorism. On the other hand, Russia has a long history of its own brand of the paranoid style. The Cold War fitted their mutual propensities well. Deploying the oldest sociological generalization in the book-an external threat generates internal cooperation, each side cast the other as its chief enemy and villain as part of a strategy of internal control.
For a time after 1990 these dynamics were muted as Russia became or seemed to become a ‘normal’ democratic capitalist country. The ‘war on terror’ helped to keep them in check, with Russia signing on to the US side.
But it is not hard to imagine scenarios in which the two sides get locked into mutual distrust and hostility in a way that would pull the next US administration right away from ‘leading by example’ or ‘leading by consent’. For one thing, the recent foreign policy behavior of the Russian state easily lends itself to Cold War interpretation. The billion-dollar arms deal with Venezuela; delivery of sophisticated weapons to Iran; building a nuclear reactor in Iran; opposing US-proposed sanctions on Iran and North Korea (having itself put sanctions on Georgia); plans to sell nuclear storage facilities to North Korea; possible state security service involvement in murdering critics of the current regime. Internally, Russia is witnessing a ferocious outbreak of ethnic Russian ‘nationalism’, directed especially against people from the Caucusus. I am informed that recent polls of ethnic Russians find that over 50% agree with the proposition that ‘Russia should be only for ethnic Russians’. Just a few days ago the opening of a new exhibition by a celebrated Georgian artist in Moscow, attended by big names in the art world, was broken up by a gang of eight men who tore the paintings from the walls and destroyed them, and walked out undisturbed. They warned the gallery owner not to show work by non ethnic Russians.
On the US side, it is likely that the US is set to lose even more influence in the Middle East. If Iraq splits into three parts, Turkey will be drawn in to oppose a Kurdish state; Iran will be drawn in to advance geopolitical interests through Iraqi Shiites; Saudia Arabia will attempt to block Iran’s advance. Turbulence will spread to Central Asia and to relations between Azerbaijan and Armenia (a Russian ally). With the US out and the EU paralysed, Russia may be tempted to reconstitute its empire–but this time, ‘empire lite’. Such developments would intensify the dynamics of mutual distrust between the US and Russia, playing upon their histories of paranoia. The Murdoch-owned and -inspired media can be relied upon to play a big part in banging the drum.
If America is to lead by example and consent, the Iraq experience — and a lot of other experience — suggests that it is unwise to make ‘promoting democracy’ a cornerstone of its foreign policy. Democracy may be a desirable end, but by itself it is not a powerful means to either law and order or economic growth. There is a threshold. In countries where ‘law and order’ is weak, more democracy is unlikely to work as more than a façade, and may well worsen law and order and lower economic growth. Above a law and order threshold, more democracy (where representatives chosen by a wide stratum make the main decisions and control the main officials) tends to improve law and order and increase economic growth. In the many developing countries below the threshold, the top priority for foreign policy help should be to build state capacity to enforce legal rules and to shrink the scope for personalistic state action. Judicial reform, police reform, civil service reform are higher priorities than elections. Saying this runs the risk of being branded a proponent of authoritarian rule-and there are real dangers that sanctioning law and order over democracy supports brutal regimes; but there is reasonably good evidence for the threshold effect.
Posted by: FT Forums | December 4th, 2006 at 9:14 am | Report this commentMartin Wolf: I agree with an important part of Robert’s post, namely, the last paragraph. We should support democracy, other things being equal. But, as Robert rightly notes, often they are not. Elections certainly do not create a working democracy.
I am much less worried than he is about a return to a cold war relationship with Russia. This is partly because I consider the cold war to have been a success: it had the right outcome, while we also avoided head-on conflict. Furthermore, I think there was good reason to be paranoid about Soviet Russia. So I have no great problem with that attitude.
Contemporary Russia is, however, a very different matter. It has no ideology, just a desire to be great again. It is poor and weak. It merely has natural resources and pretensions to a role in the world that is outmoded and in many ways detestable. I don’t think we can regard Putin’s Russia as an ally. I think we have to regard it, instead, as potentially a significant nuisance. But it is not a serious threat either.
The right policy is one of guarded friendship. But we must also set try to set clear limits on what we are prepared to tolerate in its policies towards its so-called “near abroad”. Russia’s government needs to be persuaded to devote itself, for the first time in its history, to giving a decent life to its people. If we can resist Russia’s tendency to gnaw at the bone of its lost grandeur, we may at least help this highly desirable transformation along.
The relationship between the US and Russia is no longer the fulcrum of geopolitics. The relationship between the US and China is far more important. What we want to avoid is pushing Russia into China’s arms. That is why we should offer Russia friendship, albeit a guarded one.
Posted by: FT Forum - Martin Wolf | December 4th, 2006 at 11:43 am | Report this comment