Foreign Policy after 9/11: Overview
Walter, welcome back to Berkeley.
It's good to be back here.
Good. How has 9/11 changed our country, do you think?
I think it will go down in history as a profound watershed, certainly in our foreign policy, comparable to Pearl Harbor, or comparable to people's realization that in the Soviet Union we faced a serious enemy, and that for a very long time in the future we'll be looking at the war on terror as the central organizing feature of American foreign policy, for better or for worse.
How, in particular, has it changed the foreign policy, putting us in both a defensive and preemptive mode to deal with that?
For people who remember Special Providence, I talked there about how you have periods like the twenties and the thirties, or like the nineties, when America seems a little bit adrift, when there isn't a consensus on what our threats are or what our goals are. I argued in Special Providence that we might drift for some time, until some external event forced a new focus. It seems to me this is what's happened.
We're going to have a long national debate over how to meet the challenge. The Bush set of ideas on where we go is not the only possible response, and you can see already people have come up with very articulate and intellectually serious alternative views, and there's going to be a national political debate over where we head. So it's a little early to say where we're going to come down in all of this.
And you would say that's a good thing, wouldn't you? Because it's in those kind of debates that the various themes and ideas that have shaped foreign policy emerge anew and are rejuvenated.
Exactly. Also, that we're a very complicated country, and it's not that easy to read the national interest. The way that you find out what the national interest is in this instance is through a political process of debate and engagement. The political system gradually points in a given direction, and ultimately, what we've found historically is that that process has in the long-term given us a lot of success in what we do.
Millennial Capitalism
Your new book is called Power, Terror, Peace, and War: America's Grand Strategy in a World at Risk. It's a very impressive survey, history, and analysis of where we are right now. I want to begin with one dimension that you raise, which is the changes America was undergoing before 9/11, before the terrorist attack, and how profound they were. Let's talk a little about the way that the economy was changing in the nineties, and maybe even a little before.
If you go back to the 1960s, the 1970s, we had what some people called the New Deal system, the New Deal economy. I use a word that comes out of European political discourse, the "Fordist" economy.
After Henry Ford.
After Henry Ford, [who had] the idea that you pay the workers $5 a day (a lot of money at the time) so that they can buy your cars. It's a mass consumption - mass production economy, but it's in a very regulated context, so that the government is doing macro economic policy to keep the economy growing.
If you can go back to the sixties and seventies, those of our viewers who are old enough to remember (and maybe the younger ones that have read about it), there was one phone company, there were three [television] networks, there was no cable; there were two bus companies, the airlines were regulated, banks couldn't offer really competitive products. The only way banks could compete is give you a toaster if you made a deposit!
In that much smoother economy there was more lifetime employment; things were stable. That system was an administered form of capitalism. The "experts," the guys in the suits, the "apolitical experts" (we would now call them bureaucrats, but in those days we tended to call them experts) administer society and they make the right choices for what goes on. For most people, certainly when I was a kid, and probably in your memory too, when the doctor said this is what to do, you didn't question it. The expert has spoken!
The American economy has been changing for a generation, along with other changes in American society -- much more deregulated, much more of a sense that we have to move quickly to capture new opportunities. Regulation, which business once welcomed as providing stability and protecting business from another Depression, is seen as more of a straightjacket. This is not just a reversion to the nineteenth-century Victorian capitalism of dog-eat-dog, no-regulation; it's a real change from the system that we had, the New Deal system or Fordist system.
I call it "millennial capitalism" in the book, because its flowering, if that's the word (some people would say, "Well, it's a pretty black blossom if it's flowering") is coming to fruition around the millennium. And also, the people who like it have millennial hopes -- deregulation is going to create a borderless paradise, going to make everybody rich, and so on. The people who oppose it see it as an apocalyptic horror, dog-eat-dog neoliberalism, the race to the bottom, destruction of the middle class. The economy has moved in this direction now.
And it has not only domestic implications, but also implications for the world economy, and it's knocking a lot of countries off-balance, both in the developed world and the developing world.
That's exactly right. One thing that we're not as aware of in the U.S., when we talk about globalization we tend to think it's something that other people are doing to us. You know, the Chinese and the Indians stealing our jobs, or whatever it may be. But in most of the world when people think about globalization, they think, "This is what America is doing to me." When Europeans read in their newspapers that they're going to have to make higher copayments on their government-funded healthcare, or they can't retire as young, or whatever else it may be, they say, "This is that Anglo-Saxon capitalism. It's American neoliberal globalization." And it's true that in an Argentina and a Brazil -- in much of the developing world as well as in the developed world -- the consequences, the sometimes very unwelcome human consequences of this new form of capitalism are seen as something that America is doing to the rest of the world.
In some of the underdeveloped world we see this capitalism creating a group of people who perceive us as the enemy.
That's right. And it's not, as some people might have you think, the marginalized and the very poor. The very poor are actually not that much affected by globalization in some ways. Peasants living subsistence agriculture: you can't get much poorer than they are already. It's other groups.
Interestingly, this new form of capitalism is a problem for elites in a lot of the world, and especially the elites that are close to governments, because the old system of capitalism, the Fordist model, was a kind of a national capitalism. The French government could control the French economy, the Malaysian government controlled the Malaysian economy, and states were able to direct investment into industries or into regions where it was in the state's interest to do that. So this form of capitalism was very popular with governments and with elites around the world.
Fordism.
Fordism, exactly right.
Now, millennial capitalism is stripping all that power away, and is saying to France, "You shouldn't have national champion industries anymore. You should make all your state companies go public; put them on stock exchanges where foreigners are buying and selling them based on short-term criteria." You're saying to the Malaysians, "You can't anymore operate your corporations in ways to transfer wealth from the Chinese to the Malays, and so handle your internal political problems in this way. You have to just let the economy rip where it wants to rip."
What often happens in a lot of the world, this would be true in a lot of the Arab world, it's true in Latin America, is that the groups that are around the state, and the government, and the, quote, "formal sector," and around the handful of monopoly industries or powerful, well-connected industries, their living standards are higher than others. In some Latin American countries it's almost a racial thing, that the more your skin is dark and you're descended from the Indians, the more you're excluded from the formal sector. But this formal sector, which is a kind of a Fordism for the few, rather than in America and Europe where Fordism created affluence for the majority, still it has its constituency, and its constituency is the powerful.
So now, [through] the American government's foreign policy, which to some degree is about extending this global system of millennial capitalism, the United States is becoming the enemy of the states and the state elites around the world.
And their progeny too, right?
That's right, their progeny, and their pension funds, so that people say, "Things were great until Bush came in." It's not that simple. A lot of the alienation from America in, say, the Far East goes back to the '97-'98 Asian financial crisis, where the U.S. was seen as supporting IMF programs that many people blame for a lot of the poverty that overtook them then, in the name of this millennial capitalism.
I want to quote something from you, because you are the Henry A. Kissinger Senior Fellow. You write, "The progress of capital is destroying the Fordist economy, and the political and international systems that rose with it." In other words, it's the revolution in the economy, and how capital is transforming that economy and transforming itself that's really shaking things up.
I should say, first of all, Dr. Kissinger and I have an agreement, which is that he's not responsible for anything I say, and I'm not responsible for anything he says. So I'm not speaking for him, or the Council [on Foreign Relations], or anybody else. This is, obviously, my personal view.
But you're best known for your book Special Providence, and you are the man who has defined the importance of ideas that motivate our foreign policy. You still think ideas are important, right?
Absolutely. But in Special Providence I talk about how these ideas change in response to real forces. I'm not a Platonist [who believes] that there's a perfect ideology that's unrelated to events on the ground. So I talk about, for example, the Hamiltonians in America, who are the capitalist bloc in our foreign policy discussion. In the nineteenth century, they were protectionists. In the middle of the twentieth century, they were pretty free-trade and pro-regulation. Today, they're pretty much anti-regulation, at least the conventional forms, and they are also still even more free-trade. So ideas do change as events and as other forces change the world of ideas.
So again, the interesting thing for me about American foreign policy in all this, and something I write about in the book, is that that America is a contradictory force in the world. On the one hand, we want stability. We're a hegemonic, status-quo power. We want everything in the world to stay more or less the way it is. But at the same time, our economy is a transformative revolutionary force, and our democratic ideology is a transformative revolutionary force. So we are changing everything with the one hand, and with the other we're trying to keep everything the same.
The American Project
You write, "The American project is a distinguished moral imperative." Tell us what the American project is.
Well, it's ... you know, you could call it "La Cosa Nostra," in a way, if you wanted. It's ...
Or at least the mission statement... !
Right. It's something that we inherited, in a sense, from the English, and then remolded in our own way. It's the idea that what you try to do in the world is create a balance of power that prevents great power challenges to you from arising, particularly in Europe and Asia. And then you try to knit the world together in a system of trade, and a system of political relations and other kinds of relations which, on the one hand, make the world more peaceful and make war less likely, and on the other hand, make you rich enough and powerful enough that if threats to the system arise, you are in a position to do something to stop them.
You can debate, is this an empire or is it an order? I argue in the book that's it a bit of both. It seems to me that this is a reasonably moral way for a great power to behave. If this system of trade and finance and so on were to come crashing down, many of the people who would suffer the most in the ensuing military and political chaos, economic dislocation, and so on, would be the poor. When the Titanic sinks, it's the ones low down in the ship who suffer first. Many of the people who hate us and hate our system would be victims if the system, in fact, did crash.
I made a note after reading that section of your book: "leadership's ongoing management of the impact of American society and economy on the world." In other words, we're so big, we're so important, we're so influential in the world that whatever we do in our economy and our society impacts the world with ripple effects, and part of the challenge of our leaders is to manage that. Is that fair?
Certainly to understand it, and take thought of it, absolutely. When we deregulate our capital markets, or regulate them in ways that make them more efficient so that the return on capital rises here in the United States, this puts pressure on everybody else in the world to introduce similar reforms no matter what the social consequences might be, and sometimes those are very large.
Ultimately, our economy's development is going to be shaped by the needs of the economy, but people in power, in policy positions, need to be sensitive to the impact that's going to have. As I spend a lot of time talking about at the end of Power, Terror, Peace, and War, we need to be thinking a lot more than we do about the potential of the new powers that this economic system offers: the higher productivity, the greater ability to spread the growth and the good of capital around the world. We need to find ways to use that to support social objectives, and make this new form of capitalism also a resource for stability and peace in much of the world.