Power_ Foreign Policy

Power_ Foreign Policy - A G THINK A IN By Niall Ferguson...

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Unformatted text preview: A G THINK A IN By Niall Ferguson POWER The United States may boast a massive economy and whopping defense budget, but wielding true global power takes more than just greenbacks and green berets. These days the tools for projecting power are more var- ied and dispersed than ever. And as the clout of terrorist networks, diplo— matic alliances, and international financiers seems to expand, lasting glob— al supremacy may hinge on the skillful deployment of an increasingly elusive resource: moral authority. "Military Dominance Makes the United States the World’s Greatest Power” Yes, but military dominance depends on other factors. The German thinker Max Weber once char- acterized the modern state as claiming a monopoly on the legitimate use of violence. Although such a monopoly is impossible in the global arena, interna- tional power sometimes seems to depend on monop— olizing the most sophisticated means of perpetrating violence. Today, the United States enj0ys a techno- logical edge enioyed (briefly) by a few West European powers in the 19th century, when their possession of ironclad steamboats and Maxim machine guns put the world at their mercy. just consider the sheer size of the US. defense budg- et. Yale University historian Paul Kennedy used to worry Niall Ferguson is Herzog professor offinancia! history at New York University's Stern School of Business. His rimsi recent book is The Cash Nexus: Money and Power in the Modern World, 1700—2000 (New York: Basic Books. 2001). 18 Fonncs Forum- about U.S. overstretch. No longer: “The Pentagon’s budget is equal to the combined military budgets of the next 12 or 15 nations," he wrote last September in the Financial Times. “In other words, the US accounts for 40—45 per cent of all the defence spending of the world’s 189 states.” The European Union‘s (EU) member states collectively spend around $170 billion annually on defense, but the United States spends more than $300 billion per year and could comfortably increase that Figure by 60 percent without exceeding 5 percent of gross domestic product {GDPl—once seen by Kennedy as the overstretch threshold. Indeed, dollars alone understate the extent of the United States’ military lead. The most compelling evi— dence was revealed to the world‘s television viewers in '[999 in Kosovo and in 200] in Afghanistan. in both conflicts, the technical superiority of U.S. forces allowed them to annihilate enemy troops, weaponry, and other military “assets” while sustaining minimal casualties. Yet there are two caveats. The first is that one can eas- ily underestimate the speed with which such technologi- cal gaps have closed in the past. The British launch of the Dreadnought in 1906 rendered all other battleships obso— lete. But within a few years. all the great powers had them. The United States~ monopoly on the atomic bomb was equally ephemeral. Today, a great deal of the accuracy of U.S. fighters and bombers depends on the software that assists pilots in their split—second decision making—soft- ware that could soon replace pilots altogether. Anyone familiar with the civilian software business will know that it is extremely hard to monopolize a software break- through for long. And technologies are transferred espe- cially quickly when national survival is at stake. Second, US. military superiority has been facil- itated by the United States” extraordinary economic growth of the 1990s, which made substantial defense expenditures suddenly seem insignificant in relative terms. And in turn, that economic growth could only be harnessed because the United States‘ politi- cal institutions have been remarkably successful, at least since World War 1, in convincing voters to pay taxes or approve government borr0wing to maintain and improve national defense. 50 power is not iust military power; or rather, military power depends on economic growth and political institutions. "Diplomacy Allows Weak Powers to Counter Strong Ones” Correct. This argument has special appeal to Europeans. They know the EU is a military pygmy, even though Europe‘s NATO members have, between them, more people under arms than the United States. But by acting collectively and through the institutions of the postwar internation- al order—such as the United Nations, the World Trade Organization, and NATO—Europeans may be able to restrain Washington. Harvard University political scientist Samuel P. Huntington once argued that European integration was the “single most important move" as the rest of the world respond- ed to U.S. power and that it would ultimately lead to a “truly multipolar“ let century. The energy and time the United States expended trying to per- suade European powers (France in particular) to approve of military action against Iraq suggests there is at least some truth to this view. Certainly, the ability to form alliances can more than compensate for a power’s relative weakness. No one wrote better about the way that system works than historian A.].P. Taylor, whose 1954 work The Struggle for Mastery in Europe remains the classic study of dipIOmatic power. For it was as much shrewd diplomacy as military superiority that led Piedmont and Prussia to triumph over their superficially stronger continental rivals, Austria and France. There is a nice irony here. Devotees of balance-of— power diplomacy, such as Henry Kissinger, have tend- ed to dismiss institutions such as the United Nations and its predecessor the League of Nations, which were established at the instigation of archidealists Franklin D. Roosevelt and Woodrow Wilson, respectively. But now, European powers are using such supranational institutions—erected in the name of collective secu rity— in the most realpoli'rz'sda way imaginable. "A Strong Economy Makes a Nation Powerful” N01: necessarily. It's tempting to assume that power is synonymous with a large economy— that big GDP equals big power. Hence many ana- lysts point to China‘s huge economy and rapid growth as evidence that the country will soon gain superpower rank, if it hasn’t already. Just project forward the average annual growth rates of the past 30 years, and Chinese GDP will equal that of the United States and exceed that of the EU within just two decades. But GDP doesn’t stand for great diplomatic power. If institutions aren’t in place to translate IANLZ\H!'| Iii-uniiauv ZIIIH 19 E[ Think Again ] — _ economic output into military hardware—and if the economy grows faster than public interest in foreign affairs—then product is nothing more than potential power. The United States over- took Great Britain in terms of GDP in the 18703. But it was not until World War 1 that the United States finally overtook the British Empire as a global power. In any case, national growth rates in the next 20 years are unlikely to match those of the last three decades. Depressed Japan’s will almost cer- tainly be lower, while growth in the United States might conceivably be higher, if there is any truth to the claim that investments in information tech- nology during the 19905 permanently boosted U.S. productivity. And China will have trouble sus— taining average annual growth rates of more than 5 percent in the coming decades. Already the Asian behemoth is suffering serious social growing pains as market forces rend asunder what was once a command economy. Before 1914, Russia had the fastest growing economy in Europe. But the ensu— ing social polarization and war caused Russia’s collap5e in 1917. "Access to Oil Is the Key to Power” N0. Sustained economic growth is only possi- ble with access to plentiful, cheap oil. So if petroleum reserves are the key, wouldn’t true power lie with the oil-producing nations of the Arab world? The realities here are stark. The Middle East accounts for 31 percent of world oil production but just 6 percent of consumption. North America accounts for about 18 percent of world oil production but consumes 30 percent. Even more sobering, how- ever, are the figures for world oil reserves: The Unit- ed States has just 6 percent of them; the Middle East 65 percent. Right now, the U.S. economy depends on the Persian Gulf mainly Saudi Arabia—for about 14 percent of its oil consumption, but that figure is bound to rise. Some experts predict that starting in 2008 supplies of non-OPEC oil will fall steeply and that, bar- ring maior technological breakthroughs, there will be an effective world shortage from 2010. Nevertheless, oil doesn’t necessarily make one powerful, though it certainly can make one rich. The strategic importance of Middle Eastern oil makes it a safe bet that the United States will seek to increase rather than diminish its influence in that region. Not Only Iraq but even Saudi Arabia itself——already an unstable ally and a breeding ground of the al Qaeda terrorist network—may have to become de facto U.S. protectorates in the foreseeable future, iust as Germany and japan did after World War 11. "True Power Resides With Global Financiers” Not at Sub-Marxist teenage demonstra- tors from Seattle to Florence like to claim that power lies with international financial institutions, particu- larly the World Bank. and the International Monetary Fund (IMF). This notion is as silly as it gets. The two agencies like to criticize one another, but they share one thing in common—they are try- ing to help less developed or transitional economies. Their medicine may not always be palatable or effec- tive, but that’s another matter. If anything, these institutions are not powerful enough. Much of the 20 FOHI‘ICN Puriuv time, all they can do is lend money to flaky govern- ments and exhort them to be less flaky. Some power. Their resources are also far more limited than the antiglobalization rent-a—mob seems to realize. What the IMF calls its “total resources“ amount to approximately $290 billion, but its net lending capacity is just $69 billion. That’s less than a sixth of the annual U.S. social security budget. Of course, others argue that IMF 6: Co. are just public-sector fronts for the real powerhouses: multi— national corporations (MNCs). This line of argu- ment is more serious. Between them, the three largest companies in the world (according to Fortune mag— azine) have as‘sets worth $550 billion and revenues of a similar order. They employ more than 1.8 mil- lion people. Yer it would be a bold claim to say that Wal-Mart Stores—the biggest of the three—has power. And even if it seems more plausible to attrib- ute power to the next largest corporation—Exxon- Mobil—the case shouldn’t be overstated. History has witnessed companies exercising power so directly and successfully that they them— selves became states. The East India Company is the most famous case. No MNC today comes close to wielding the power that company did when it ruled most of the Indian subcontinent, paying for one of the largest armies in the world {and one of the largest corporate debts) by relentlessly annexing new terri— tories and taxing their inhabitants. But today's multinationals exercise power indi— rectly. Other than in regions of the world where state power has crumbled away or become hopelessly contested, they prefer to coexist with governments rather than replace them. And with good reason— from Russia in .1917 to Iran in 1979, the 20th cen- tury repeatedly demonstrated that even powerful oil companies can be summarily expropriated in the wake of revolutions. That is not to say that multi— national companies have not been known to topple or buy governments. But, in general, the large and immobile assets of most MNCs make them as vul- nerable as their vast resources make them strong. Nor should it be forgotten that MNCs are owned by mul- titudes of shareholders. Powerful though 0205; may be, their power can swiftly be removed if they fail to deliver positive returns to investors. So is it the global investors who are powerful? New York Times columnist Thomas Friedman has argued that real power in the age of globalization is vested in the “electronic herd" of international investors. When they dumped the Thai baht, the whole Asian economy promptly faltered. It’s cer- tainly convenient for finance ministers to blame their travails on such anonymous forces: the “gnomes of Zurich,” as British Prime Minister Harold Wilson called them after sterling had taken yet another post- war dive. But it’s only in fairy tales that gnomes have power. Saying that global investors rule the world is like saying plankton rule the sea. There may be an awful lot of them, but without a unifying intelligence they can quite easily get gobbled up by passing whales. It was international investors, after all, who poured money into countries like Argenti- na, Brazil, Mexico, Turkey, and Russia in the decades before 1914. However, when those countries decid- ed to default on their foreign loans, it turned out that investors had no power at all. "The United States Exerts Influence Through Soft Power” Not really. Harvard political scientist joseph S. Nye jr. coined the concept of “soft power”—the notion that nontraditional forces such as cultural and commercial goods can exert influence in world affairs. And since so many of the world‘s largest multinationals are of U.S. ori- gin, some argue that the products they sell make American culture attractive and are the key to the real power the United States wields. But the trouble with soft power is that it’s, well, soft. All over the Islamic world kids enjoy (or would like to enjoy) bottles of Coke, Big Macs, CDs by Britney Spears and DVDs starring Tom Cruise. Do any of these things make them love the United States more? Strangely not. Well, perhaps it is not so strange. In the 19th century, Great Britain pioneered the use of soft power, though it projected its culture through the sermons of missionaries and the commentaries in Anglophone newspapers. Yet it was precisely from the most Anglicized parts of the indigenous pop- ulations of the British Empire that nationalist movements sprang. The archetype was the Bengali babu—better able to quote William Shakespeare than the average expatriate Brit—who worked for the British by day but plotted their overthrew by night. Antiglobalization protesters smashing McDonald’s windows while clad in Gap khakis and Nike trainers are today’s version of the same janus- faced phenomenon. IANuAiu‘ l l‘lEJHlUAR} lllilj E[ Think Again ‘ "Consumers, Activists, and Terrorists Wield True Global Power” N0. U.S. consumers may be the motor of the world economy, but they have a qualified kind of power—the power of the herd, capable of being either an immovable mass or, like those global investors, a stampeding horde. Indeed, the numer- ical strength of consumer power tends to be in inverse proportion to the degree to which it is organized and led. It has become a cliche that nongovernmental organizations (NGOs) are now powerful interna- tional actors in their own right, the pillars of a nas- cent global civil society. The figures are doubtless impressive: Membership of the Worldwide Fund for Nature (WWF), for example, has increased IO-fold since the mid-19803 to around 5 million, and Green- peace has 2.8 million supporters. These NGOs have considerably more resources than most internation— al governmental organizations: The World Trade Organization‘s annual budget is roughly $100 mil— lion, less than a third of the WWF‘s budget. But the WWF’s current campaign to stop overfishing of the world’s oceans is likely to be frustrated by the count less millions of—you guessed it—individual con- sumers who just like eating fish more than they like thinking about the future of the planet. The biggest check on the power of those who actively organize may be the indifference of those who passively shop. Others worry that, rather than consumers or activists, the individuals who wield the greatest power are now lone lunatics with access to large-scale weapons. The historic cheapness, smallness, and destructivcness of modern weaponry no doubt great— ly enhance the power of terrorists. In the face of this kind of power, even the biggest state and the rich- est economy seem impotent. That, for many com— mentators, was the lesson of September 11: The sui- cide bomber will always get through. But the question remains whether blowing one- self and others up is an effective way of deploying power to achieve a political objective. Killing British civilians has not (yet) secured a united Ireland for the Irish Republican Army. And somehow it is hard to imagine the United States meekly withdrawing its military personnel from the Middle East in response to a sustained campaign of terror—if that is indeed what Osama bin Laden wants to achieve. "Moral Appeals Have Little Power in International Politics” Wrong. Didn‘t joseph Stalin once ask how many divisions the Pope had? None, it’s true. But we should never underestimate the power of ideol- ogy and religion—which certainly has proved more enduring than the power of the Red Army. Indeed, some would say that, after Mikhail Gorbachev and Ronald Reagan, no one did more to bring down communism in Eastern Europe than Pope John Paul 11. Faith, then, is perhaps as impor- tant a component of power as material resources. Moreover, a final dimension of power cannot be left out: the psychological. Two things can great- ly magnify or diminish the ability of any entity to project power: first, its own legitimacy in the eyes of its individual members and second, its credibility in 22 l'l‘RI‘HIN l‘uLimr the eyes of other powers. These are the unquantifiable—but perhaps most important—elements of power. And the world would do well to remember them. For in the war against global terrorism declared by President George W. Bush in September 200], they may prove to be the deciding elements. As things stand, the United States and the terrorist diaspora have both firmly established their credibility, the latter by destroying the World Trade Center towers, the former by overthrowing the Taliban regime. At the same time, both appear to have legitimacy in the eyes of their respective constituencies. Certainly, the US. public mood was dramatically changed by September 11. And cer- tainly, support for al Qaeda among young Muslims Think Again — — ' seems to remain strong from Karachi to Riyadh. Some deem American patriotism a civil religion as formidable in its way as Islamic fundamentalism. But is it? Stamina—the ability of any human organization to sustain a collective effort—~depends as much on moral as on material factors; that is one of the old« est lessons of military history. The Russian army collapsed in 1917 under far less severe conditions than the Russian army endured in 1942, when Stal- in’s totalitarian combination of propaganda and coercion preserved his regime‘s legitimacy. In theory, democracies should prove equally resilient, even though they rely on consent through representa- tion more than on coercion. But no one knows for sure. No democracy has ever suffered privations as colossal as those the Nazis inflicted on the Soviets; the United States in particular has got off amazingly lightly in all the wars it has fought against external enemies. Power, then, is partly about monopolizing as far as possible the means of proiection (of power), which mainly include material things: guns, butter, people, money, oil. Today, many of these elements are becoming more evenly distributed because of dif— ferences in growth rates and the speed with which knowledge—including knowledge with military applications can be distributed. In that sense, power per se is becoming dispersed. One nation with a nuclear missile is quite powerful. Twelve nations with nuclear missiles are each much less powerful. The more proliferation, the less power. But power is also about morale. In a world characterized by the diffusion of most of the mate- rial elements of power, real power may therefore come to depend on having credibility and legiti- macy. Faith cannot move mountains. But it can move people. El: Want to Know More? ]: For works on military power emphasizing technology and logistics, see The Pursuit ofPowar: Tech- nology, Armed Force and Society SinceAD. 1000 (Chicago: University of Chicago Press, 1982) by William H. McNeil! and Supplying War: Logistics From Wallenstez'n to Patton (New York: Cam— bridge University Press, 1977). by Martin .van Creveld. For insights into leveraging military assets through diplomacy, read A.].P. Taylor’s The Struggle for Mastery in Europe, 1848—1918 (Oxford: Clarendon Press, 1954) and F. H. Hinsley:’s Power and the, Pursuit of Peace: Theory and Practice in the History ofthe Relations Between States (Cambridge: Cambridge University Press, 1963). The classic work on the relationship between economics and politics is Paul M. Kennedy’s The Rise and Fall of the Great Powers: Economic Change-and Military Conflict From 15 00 to 2000 {New York: Random House, 1987.). On oil, consult Daniel Yergin’s Pulitzer Prize—winning. work The Prize: The Epic Quest for Oil, Money, and Power (New York: Simon Sc Schuster, 1991). Niall Ferguson's The Cash Nexus: Money and Power in the Modem World, 1 700—2000 (New York: Basic Books, 2001) offers historical perspectives on the limits and extent of financial power. In his classic On War, Carl von Clausewitz saw moral factors as crucial on the battlefield. See in particular the version edited and translated by MichaelHoward and Peter Pater (Princeton: Prince- ton University Press, 1984). See also Timothy Carton Ash’s History of the Present.- Essays, Sketch- es, and Dispatches From Europe in the 19905 (New. York: Vintage Books, 2001). FOREIGN POLICY has examined international power over the years. See Joseph S. Nye Jt’s “Soft Power” (Fall '1 990), Devesh Kapur’s “Who to Run the World?” (November/December 2000), Stephen D. Krasner’s “Think Again: Sovereignty” Maxillary/February 2.001), Robert Skidelsky’s “Imbalanca of Power” (March/April 2002), Immanuel Wallerstein’s “The Eagle Has Crash Landed” (July/August 2002.), and John Lewis Gaddis’s “A Grand Strategy of Transformation” (November/December 2002). » For links to relevant Web sites, access to the PP Archive, and a comprehensive index of relat- ed FOREIGN POLICY articles, go to www.foreignpolicy.com. 24 PUREJGN Putin Copyright© 2003 EBSCO Publishing ...
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Power_ Foreign Policy - A G THINK A IN By Niall Ferguson...

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