Tag: hegemony (page 1 of 2)

Chinese Hegemony in Asia is Unlikely, so AirSea Battle Unnecessarily Provokes the Security Dilemma

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The following is a re-up of a piece I wrote for the Diplomat last month as part of an informal back-and-forth series with the National Interest this summer on the US pivot to Asia and AirSea Battle. (Here and here are some of the other entries.) That pic, which has got to be the grossest river in all China, is from here.

In brief, I increasingly think that ASB is a mistake, because it’s almost impossible to read it as anything other than hugely provocative from the Chinese point of view, no matter what we say to them about our peaceful intentions. (Read this, and tell me reasonable Chinese wouldn’t flip out.) It’s a classic example of the security dilemma, but as I argue below, I am not really convinced that we actually need this high-tech, super-fearsome-sounding ASB right up in their face. More generally though, the pivot to Asia – a sharpening of American attention on the region – is probably a good idea. China is vastly more influential on American life than Israel or Iran. But the Middle East and Islam activates belligerent American religiosity so much, that I doubt we’ll really be able to pivot. In any case, the essay follows the jump and is written in an op-ed style.

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Flexibility and Constraint in Hegemonic Orders

About a year ago I introduced an ocasional series called “Quarter-Baked Ideas.” The idea was to blog about semi-formed thoughts related to international affairs. The whole notion turned about to be quarter-baked: I haven’t done another one until now.

Do rising powers have an intrinsic advantage in “flexibility” when compared to dominant ones? The answer to this question matters a great deal, I submit, to debates over the persistence and decline of hegemonic orders. As I’ve alluded to before, there’s a curious blindspot in mainstream hegemonic-order theory.

On the one hand, hegemonic-order theories emphasize the significance of, well, hegemonic orders. The costs and benefits of those orders are supposed to influence the disposition of second-tier states and thus whether they challenge the dominant power. Gilpin noted, in particular, the allocation of status as a key factor in accounting for whether rising powers adopted a status-quo or revisionist approach to hegemonic orders. Ikenberry, among others, sees the character of hegemonic orders as of central importance: the US-led order, he argues, is durable because it provides “voice opportunities” for other states and involves multiple mechanisms (“self-retraining” or “self-binding” elements) that limit the potential for American predation.

On the other hand, such theorists don’t really treat order itself as an object of contention. The character of the order might be important, but all the action occurs at the level of alterations in the distribution of state capacity. Hegemony lasts so long as the dominant power avoids, or prevails over, rising revisionist states. Yet, as should be obvious, hegemony isn’t separable from order. A political community might stand at the apex of the international pyramid of power, but if doesn’t build and maintain an order then it isn’t exercising hegemony. Indeed, this is why Ikenberry invests a great deal of energy in arguing that the liberal order can persist even without unipolarity, and that states might even accept US security primacy after relative decline.

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Notes on Hegemony and Symbolic Capital

This is of interest only to international-relations theorists and fellow travelers.

A long-standing claims about hegemonic orders is that they are normative ones: that a dominant power uses a wide variety of power resources to create a set of international rules and regimes conducive to its ideological and material interests. After World War II the United States worked actively to promote norms and institutions consistent with a broadly “liberal internationalist” environment, albeit ones refracted through the prism of Cold War competition. After the Cold War the United States enlarged the order, however unevenly, and during the Bush Administration it sought, but generally failed, to recast that order along neoconservative lines.

The two most importnat “mainstream” pieces to focus on the normative dimensions of hegemonic orders are probably John Ruggie’s “International Regimes, Transactions, and Change: Embedded Liberalism in the Postwar Economic Order” and G. John Ikenberry’s and Charles Kupchan’s “Socialization and Hegemonic Power.”

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More on Abusing America’s ‘Exorbitant Privilege’: Will the Bond Market Turn on the US at a 100% Debt-to-GDP ratio?

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As part of a now lengthy chain (one, two, three, four) on US allies and the likelihood of US retrenchment, I argued that American hegemony, despite America’s huge debt and deficit, is more financially stable than almost anyone expected. Because foreigners’ appetite for dollars seems unquenchable and because we print the global reserve currency, borrow in it, and face no serious reserve challengers (the euro and RMB maybe, see below), US can exploit this ‘exorbitant privilege’ far worse than anyone ever thought.

For example, I think almost everyone expected the bond-market to turn against the US in the last decade given: exploding debt and deficits, huge welfare state expansions like Medicare part D and ObamaCare, the expensive and financially-unplanned GWoT, China’s relentless ascent, the Great Recession, and two rounds of quantitative easing. Wow – that’s a helluva list. Despite all that, interest rates and inflation are low, because we can exploit (and have) that exorbitant privilege. Stein’s Law says there must be a limit, but I think almost everyone is amazed at just how deep confidence in the dollar goes.

More simply put, foreigners so want dollars, that America can just print more and more dollars without consequent inflation, and borrow a lot from foreigners very cheaply (because they want those dollars so much). This means America can borrow and/or just print huge amounts of money at very low interest and inflation rates. That is ‘exorbitant,’ I presume, because no one else can do that without Greece-style financial trouble. We can borrow at low interest rates (the rate on the US ten-year bond is around 1.5% right now) and print lots of money (the recent quantitative easings, e.g.) without suffering like so many others who over-borrow and run the printing press. I find Barry Eichengreen’s book on this is helpful.

Vikash gave such good commentary on this tangle, that I have reposted our full debate on US borrowing and hegemony below. It gets fairly wonky, so please read the OP. Also, comments from anyone in IPE is much desired. Specifically, can someone tell me please when the US will finally hit the ‘soaring’ inflation and interest rates regularly predicted by deficit hawks at the WSJ or CNBC? This is what Romney means when he says we will become Greece, but I just don’t see any evidence of that. Does anyone have a good guess on the timeline for exploiting the exorbitant privilege? When does it finally give way? When do foreigners turn against us in the bond market? As I said in the OP, I think it (super cheap US borrowing) has gone on already far longer than anyone expected. But I also think that a 100% debt-to-GDP ratio might be the bond-market turning point. That is a pretty big psychological benchmark. And we’ll probably get there before the end of the decade.
So here is our debate on this:

Vikash Yadav: “While I generally agree with your argument about America’s exorbitant privilege (and I can just see DeGaulle and D’Estaing spinning in their graves) there may be some other ways to read the data on international reserves.

First, I believe the US dollar as a percent of international reserves kept by other countries has actually fallen from about 72% in 2000 to somewhere around 62% in 2011. It will tick back up a bit after this year, but certainly not back to what it was a decade ago. So there does seem to be a slow decline if we look at the composition of foreign exchange reserves. Of course, since there has been a dramatic increase in the amount of reserves being kept in the last decade, the US can borrow very easily.

Second, the dramatic growth in the amount of reserves being accumulated, particularly in Asian emerging markets since the Asian financial crisis, most likely represents a form of insurance against reliance on the IMF in crisis situations. As such, this somewhat weakens the ability of the IMF to advance a stark ideological agenda (through conditional lending in the context of a crisis) which has largely been shaped and spread by American trained economists (in what James Boughton rightly described as the Silent Revolution) and the US government since the 1982 debt crisis. If global hegemony consists of more than just the ability to project military power, then American hegemony is not rolling along all that smoothly. It is also worth noting that a very large chunk of the reserve holdings is probably attributable to two Asian countries, Japan and China. My hunch (and I haven’t checked the numbers) is that around three quarters of world reserves can be attributed to about seven or eight Asian countries (particularly if we include sovereign wealth funds in the mix). So I think it is inaccurate to imply that foreigners in general have an unquenchable desire to hold dollars.

Finally, to your point about China slowing down and thereby giving the US a breather or a chance to “recover in a way”… China is currently set to surpass US GDP in 2018 if it grows at 7.75% in real terms and the US grows at around 2.5%. Let’s say the Chinese growth rate slows to 5% because it fails to make serious reforms, the US won’t get more than three years of a breather b/c Chinese would still surpass the US in 2021 (for underlying assumptions see:
http://www.economist.com/blogs… ). It is in the realm of possibility that China could derail in the next decade, but China does not really need to make major reforms to surpass the US. And since the neo-liberal American state has squandered its borrowing on wars and consumption, it hardly has made the kind of infrastructural and human capital investments that could spark a resurgence in the next decade. Meanwhile, if China does reform at least its monetary policies and shore up its banking sector by injecting its banks with capital, Christine Lagarde has stated that the Yuan could become an international reserve currency in the future – a prospect not wholly threatening to the Chinese government.”

Robert Kelly (me): “Stein’s Law – if something cannot go on forever, it will stop – was conceived with exactly this current account imbalance problem in mind, but printing the reserve currency seems to let it go on and on, long past what everyone ever thought. My inclination is to agree with you, and originally I thought a lot about retrenchment because of this concern. But US borrowing costs are going down (1.44%), not up; foreign ownership of US assets is going up, not down: http://www.cfr.org/content/pub… and informal dollarization is widespread: http://www.imf.org/external/pu…. Not even the GWoT-Great Recession-QE three-step – cue the Ron Paul freak-out over the gold standard – lead the bond-market to turn against the US. Wow. I just can’t figure that out…

I used to believe folks like Niall Ferguson or Barry Eichengreen on this: http://online.wsj.com/article/…. But these inaccurate predictions have been made since Nixon closed the gold window unilaterally – 40 years ago!

This tells me that there is a lot of confidence in the dollar, or to be more specific, there is little confidence in other fiat currencies, which is all the dollar really needs. The euro-zone crisis particularly is a huge boost for the US. And I am pretty skeptical of the internationalization of the RMB. Exchange rate manipulation has been a pretty central element in the ‘Asian miracle’ formula since 50s. Japan has never really permitted proper internationalization of the yen even though people talked about that a lot in the 80s and 90s. And given how much poorer and poorly governed China is by comparison, I have large doubts that China will internationalize the RMB properly or soon. Maybe, but just consider the amount of corporate governance improvement (all the sunlight in dark corners of the banking system) required for China’s banks to really open up. That could get really ugly and even threaten CCP rule because of the sheer scale of corruption I am almost positive it would unveil.

Finally, there is a problem in just comparing raw GDP sizes. As Wohlforth and Brooks argued in World Out of Balance, simply adding more and more poor people will eventually give any state the world’s largest GDP. Instead, absolute GDP must be cross-referenced against GDP per capita. What exactly is the right ratio of GDP vs GDP-per-capita in making the calculation of whether a state is great power or not, is actually a really good question. I.e., China won’t displace the US superpower when its GDP is larger absolutely, but it is also so demographically big, that it probably doesn’t need to equal US GDP per capita to displace the US either. What would a reasonable GDP per capita threshold be – 50%?”

VY: “First, like you, I don’t think the current account situation will force retrenchment of alliance partners. What we are seeing instead is a continued hollowing out of the state over time but this may be unrelated to the dollar’s status as the premier international reserve currency (a status propped up not so much by faith in the US economy as rational attempts by emerging markets to shield their sovereignty from American economic imperialism) except to the extent that the dollar’s status facilitates easy credit to continue the trend. An economically neo-liberal state stakes its claim to sovereignty mainly on the provision of (domestic and cross-border) security and opportunities for unrestrained consumer consumption. The evidence of US decline will not be found in military sector or in the prison industry; decline is evident in the neglect of infrastructure, education, healthcare, etc. while inequality grows and democratic governance fades. The state will still be able to project power for decades to come but it will gradually erode the basis for internally regenerating that power and it will have to rely more and more upon poaching talent, financing, and resources from other countries.

Second, the establishment of the Yuan as a reserve currency would take at least a decade, probably two — as it did for the US near the start of the 20th century. But I would not be too concerned about transparency in the banking sector. The US financial sector is clearly non-transparent, over leveraged, excessively inter-dependent, and brittle as the last crisis showed. Some reform is necessary to be sure in both countries, but the banking sector is not the main barrier to the Yuan becoming a reserve currency.Third, I think GDP at market rate is the appropriate comparison for our purposes. Measuring GDP per capita (particularly at PPP) is more useful as a rough indicator of economic development (if it is coupled with data on income distribution and broader indicators of human development). Aggregate GDP comparisons are more useful for our purposes because this tells us something about what the state can tax and use to build or purchase military resources.

The new great powers will be different from those of the last century, they will be characterized by the persistence of mass poverty alongside the accumulation of massive revenue — as great powers were before the industrial revolution. What is important to note is that China is on track to surpass the US and once it does it will continue to generate ever greater GDP even if it only increases productivity by a little bit each year. It will take about four decades before China catches up in per capita terms, but the Chinese state will gain significant resources well before then. Of course, (and as you noted) China has long since realized the pitfalls of translating economic power into military power too quickly — so I don’t think it will aim to displace the US so much as to assume its rightful place a major power.”

RK (me): “Our comments are becoming more dense than the post itself. I guess we are fairly close. I would add a few final points.

1. I am not sure how neoliberalism or the economic sovereignty of LDCs plays into this.

2. When it comes to hollowing out, I don’t actually see that so much. Borrowing allows the US to put off choosing between guns and butter, and that ‘putting off’ has lasted far, far longer than anyone ever thought possible. That is what is remarkable and what motivated the post. The last decade expanded, not hollowed out, the welfare state with Medicare Part D and ObamaCare. The real welfare question at home, IMO, is not raw levels of funding declining under the weight of defense spending, but distributional issues; i.e., transfers are increasingly upward, from poorer healthier workers, to wealthier, unhealthier retirees.

3. Obviously spending of any kind is fungible, so defense spending obviously leaves less for everything else. In that general sense, one could argue for hollowing out. But I think a better question is, if we can no longer borrow to have both guns and butter, what will be choose? One read of the GOP’s effort to delegitimize ObamaCare, SS, and Medicare is to pre-set the ground for this debate. If the GOP convinces Americans that the welfare state is for lazy slacker wimps, that makes it easier to ring-fence defense and so keep hegemony rolling along.

4. But I don’t honestly think Americans will choose guns over butter. No matter what the GOP says, SS, Medicare, and Medicaid are part of the US social contract now. They’ve been around a long time, and people have come to expect them; they feel they are ‘rights,’ not ‘programs.’ Norquist may think ‘starving the beast’ will work, but so far it hasn’t, because the government borrows, not cuts, when taxes short-fall. The GOP is fundamentally out of step with American expectations of government assistance, but it has (very destructively) convinced the median voter that he shouldn’t have to pay for such assistance (hence we borrow). So when Perry and others call SS/M/M ‘ponzi schemes,’ people worry, just like W’s second-term effort to privatize SS failed miserably. In fact, I think if Americans were really forced to choose between more aircraft carriers and checks for grandma, they would choose the latter. This is one reason I find the DC foreign policy consensus for hegemony so toxic and support retrenchment. I don’t think most Americans want ‘empire;’ they want welfare and safety nets (in part because exceptionalist, ‘foreign-aid-is-for-third-world-socialists’ Americans generally couldn’t care less about foreigners. It’s DC elites who get teary-eyed comparing the US to Pericles Funeral Oration and say we must be the ‘weary titan’ who sacrifices at home for a ‘national greatness’ cause abroad.

5. On RMB internationalization, I am far more skeptical than you. Agreed, the US banking sector is a mess, but comparable to China, really? The difference is still vast to my mind – can foreigners even list on Chinese stock markets? I wonder how many people would really be prepared to hold serious savings and value in a currency from a still technically communist state whose banking and corporate governance ‘rules’ are shot through with famialism, corruption, and informal political manipulation. These problems still plague the won and the yen, and Japan and SK are decades ahead of China in terms of openness and development. Is China really ready for serious, long-term foreign ownership of major assets and to allow the market to set the RMB’s value without tinkering? I doubt it; no one else in Asia does that and never has. I still think currency manipulation and other gimmicky nationalist barriers are central to the Asian growth model. Here is a nice example of just how bad this can be, even in supposedly-open Korea.

6. And that brings me to my last point on Asian self-insurance. I agree that some of Asian stockpiling is to prevent IMF ‘imperialism,’ but Japanese, Korean, and Chinese stockpiles go far, far beyond what is needed for reasonable exchange rate defense. In fact, all three purposely and regularly intervene to make their currencies even softer, making me wonder what ‘defense’ is needed. IMO, these reserves really reflect, 1) Asian mercantilism, the very deep social belief in these states that they absolutely must run a trade surplus, and 2) the enormous political power of mega-exporters in these states. Asian consumers are punished with insane foreign reserve levels and exorbitant prices because the kereitsu, chaebol, and Chinese super-exporters are deeply tied at the highest levels to political elites in tight collusive circles of corruption. The bizarre side-effect of this East Asian crony corporatism is massive US dollars holdings which the US can then borrow at insanely low rates – hence the point of the OP.”

Cross-posted at Asian Security Blog.

America’s ‘Exorbitant Privilege’ means it can Borrow to Sustain Hegemony Longer than Anyone Ever Expected

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Two of my posts this week (one, two) on hypothetical retrenchment under Ron Paul got a lot of traffic and comments. (H/t to Stephen Walt and Andrew Sullivan.) So here is some follow-up.

The OP was intended as an emergency exercise if the US were to face a truly significant crisis that forced retrenchment. The purpose was to ask who are the most important US allies and commitments if we were forced to choose. Right now, the US is not choosing. We are all over the place; if anything, we are taking on more commitments (Iraq, Afghanistan, Pakistan, Yemen, the Asian pivot). As I tried to say in the second post, I don’t think we are about to pull out of Japan or Egypt, but if we get to the point where we really can’t afford globe-spanning hegemony anymore, it would be help to try to prioritize what is genuinely strategically necessary, from what are ‘extras.’ One doesn’t hear this much, except for Ron Paul, whose debate performances motivated the post.

On this point, I should say that the bifurcation of the OP into two parts was not to indicate that those in part 2 should get the axe; it was just a matter of convenience. The point of the OP was to try to force a ranking – who is more important to the US than who? This is why I tried to limit the listees to a conventional ‘top 10.’ To go beyond that tight focus, would get us back into the global alliance sprawl the US is in now.

The above point raises the next, obvious question about whether we are therefore getting to a point of forced US retrenchment. There is a whole declinist literature that emphasizes long-term US problems, like atrocious public finances, too many wars, bad public schools, political gridlock, rising anti-Americanism in the world, etc. Zakaria’s ‘post-American world’ captures are lot of this, and apparently the Chinese believe the US is in decline too. A good quick version is Gideon Rachman’s take at FP.

I go back and forth on this myself. The economist in me finds it hard to imagine how the US can borrow $1-1.5T a year and stay on top. We’re borrowing around 9% (!) of GDP per annum, and the IMF calculates America’s debt-to-GDP ratio is 100% already (if you include state debts; it’s 75% now at just the federal level.) I wonder how we can fight so many wars without national exhaustion and diversion of investment from domestic priorities like infrastructure or health care. Signal markers in the decline and fall of empires are heavy borrowing and lots of wars, which sounds a lot like us, no?


That said, I am constantly amazed (and intellectually perplexed) that foreigners seem to have an unquenchable thirst for dollars. This is the big reason why all those claims that the US would collapse under its debt burden have never materialized. Longstanding lefty critics of US foreign policy, like Noam Chomsky, Johann Galtung, or Walter LaFeber, have been saying this stuff since Vietnam, and it doesn’t happen. (Continental Europeans particularly seem to relish predicting US decline.) I am genuinely amazed the catastrophic one-two punch of the Great Recession and the flown-badly-off-the-rails GWoT in less than a decade did not dramatically set-back US power. Remember when S&P downgraded the US last summer, and yet the very next day, US interest rates went down as everyone fled to the greenback safe-haven? America’sexorbitant privilege’ of printing the reserve currency is even more exorbitant than anyone ever expected.

I remember last decade, when people said the Bush administration’s $400B annual borrowing was unsustainable. Yet for the last 5 years, we borrowed triple that, with another decade projected at that level – but with the lowest interest rates in US history. If your head feels like it is about to explode for sheer perplexity, yes – me too.

America’s ability to borrow, and thereby forestall retrenchment, is simply astonishing. The rate on the US 10-year T-bill is at an all-time low of 1.44%. If you factor in inflation across the ten-year maturity life-span, the borrower actually loses money! So If you want to know one big reason why the US fights so many wars, here you go: because we can, because foreigners make it so easy by practically begging us to take their money. It’s surreal how cheap we can borrow.

Krugman makes this really good point in his latest op-ed: “none of the disasters Republicans predicted have come to pass. Remember all those assertions that budget deficits would lead to soaring interest rates? Well, U.S. borrowing costs have just hit a record low. And remember those dire warnings about inflation and the “debasement” of the dollar? Well, inflation remains low, and the dollar has been stronger than it was in the Bush years.” My own deficit-hawk instincts say conservatives are right about the debt build-up, but in fact, Krugman has been borne out. So why not fight more wars (at least by economic criteria) when they are so cheap? Foreigners seem endlessly willing to fund our wars, which I find so bizarre and inexplicable that I wouldn’t believe it unless it were the reality around us right now.

Worse, for the declinist, retrenchment-will-be-forced-on-the-US position is that, the euro-crisis continues to make the US dollar a preferred safe-haven (so lowering US borrowing costs), that China must continue to lend to the US in order to hold-up the value of its current $3T+ reserves (yet again pushing down US borrowing costs, no matter how many commitments we take on), and finally that a growing body of evidence suggests that China cannot continue its astonishing growth levels without serious reform. Wen Jiabao himself said that China risks turmoil on the scale of the Cultural Revolution (!) without major changes. I tried to argue this also in the second half of the OP. If China slows, that automatically buys US hegemony a breather, because position in international politics is relative: if China slows, then the US recovers in a way. And it is increasingly obvious that there are lots of ways China could derail in the next 2 decades: whether through tightening environmental and demographic caps on growth, from political or democratic transition turmoil, by scaring its neighbors so much that they line-up to contain it.

In short, US hegemony and alliance sprawl is turning out to be a lot more durable during this period when the US is seemingly on the ropes, than I thought. In fact, I think a lot of people are amazed at the staggering ability of the US to borrow and keep our global hegemony rolling along. The US is exploiting its ‘exorbitant privilege’ worse than at any other time in its history – and the inflation-adjusted cost to us is zero! I just can’t figure that out, or what that means…

Cross-posted at Asian Security Blog.

Retrenchment & Liberal Internationalism don’t really Fit Together (1)

Taking Brian Rathbun’s advice, I was reading chapter 4 of Perception and Misperception, when it struck me that Jervis’ argument about values incongruity could be applied to the two most popular normative positions in IR today – that western power and international law can help reduce violence and nastiness in the world (R2P), and that a semi-imperial US is killing far too many people against a fairly minor threat and should retrench somewhat. But increasingly I think that retrenchment, which is traditionally associated with the left in IR (US ‘imperialism’), has become a realist position.
1. IR isn’t that conservative anymore

Both of these positions are arguably left-of-center, which is where I feel like our field is drifting. During the Cold War, IR was fairly conservative. At least US IR (not Europe though) broadly supported the Vietnam War, or at least we understood the theory of escalated punishment and falling dominoes that lay behind it. We knew what MAD, defection spirals, extended deterrence, etc. were, so we said freaky stuff like nuclear weapons are good and first strikes make sense. We thought détente was unlikely to work, because bipolarity was so stark and seemingly zero-sum. We broadly accepted that the USSR was a leninist-revisionist threat. (Yes there was post-Vietnam revisionism, but that was more a diplomatic history than IR phenomenon.) As a result realism was everywhere, and Waltz was king of the 80s along with Michael Jackson.

But then the USSR disappeared, and without a war, for no obvious IR reason. Realism couldn’t prove to the rest of the field’s satisfaction that it could explain what just happened (a blow from which I think realism has never really recovered), and there were no equivalent other threats to justify the enormous, continuing US military posture through the 90s. Nuclear weapons faded, so we in IR thankfully stopped talking as if we were Dr. Strangelove. Increasingly the post-Cold War US talked like an empire indispensible nation, which made us kind of nervous, although we did try to argue the US was a ‘benign hegemon.’

So we tried to direct that power towards humanitarian do-goodery like Bosnia and Kosovo, but then came 9/11 and the neocons. Liberal internationalism seemed to get hijacked out of nowhere by neocons who re-wrote US liberalism as a ‘national greatness’ agenda in which freedom and American nationalism elided into what really did start to look like empire. On top of that, the US couldn’t afford it all anyway. As MacDonald and Parent note, most of us in IR now think the US is in relative decline and retrenchment is pretty much inevitable.

So IR is drifting left – the USSR and nuclear theory are over, realism isn’t taught as the dominant paradigm anymore, our belief in liberalism does not make us American nationalist neocons (Washington is, but not us), and the size of the US defense budget and the globalist ambition of the US foreign policy elite go well beyond the requirements of unipolarity. Even though we study war, we hardly support it as the regular tool of US post-Cold War diplomacy that it has become (we’re too far from real DC power for that temptation). Contrary to what people in the humanities think, I don’t think we’re militarists or all that affectionate of the national security state.

So by any realist or even liberal definition of IR, the US is now far too activist and killing far too many people. To our credit, just about everyone in IR was uncomfortable with the Iraq War before it started. (Remember that ad in the NYT against the war?) It’s true we didn’t oppose it that much, but at least we didn’t become the cheerleaders for it as happened at the big op-ed pages and DC think-tanks. The national security state clampdown at home makes us fairly uncomfortable (especially as academics strongly committed to free speech), as does the inevitable nativism and militarism stirred up by a decade-plus of war. The US public’s indifference to the huge numbers of brown Muslims we have killed in the last decade is horrifying (‘we don’t do body-counts’), a point lots of Ducks like Vikash have made again and again. US basing is way beyond any reasonable threat assessment to the US homeland. My guess is that most of us not only empirically think retrenchment is coming, but also desperately want it too. We may have shared the neocon intoxication with US power for a few years after 9/11, but my sense is that IR now is really, really nervous about what the GWoT is doing to America. Again, we study war, but we’re not the Kagans.

Part 2, on why this conflict with our defense of R2P, will come in a few days.

Cross-posted at Asian Security Blog.

Replace the Dollar?

A friend writes,* “What the end of hegemony looks like…”

In another indication that China is growing increasingly concerned about holding huge dollar reserves, the head of its central bank has called for the eventual creation of a new international currency reserve to replace the dollar.

In a paper released Monday, Zhou Xiaochuan, governor of the People’s Bank of China, said a new currency reserve system controlled by the International Monetary Fund could prove more stable and economically viable.

A new system is necessary, he said, because the global economic crisis has revealed the “inherent vulnerabilities and systemic risks in the existing international monetary system.”

On the one hand, true. China’s over $1 trillion in dollar-denominated reserves aren’t as safe as they once were, and a devaluation of that asset through inflation would not be good for China. But, where else are they going to go?

While few analysts believe that the dollar will be replaced as the world’s dominant foreign exchange reserve anytime soon, the proposal suggests that China is preparing to assume a more influential role in the world. Russia recently made a similar proposal.

Lets look at this more closely. The Dollar has its privileged position in the world economy because a) many economists believe that the world economy needs some sort of stable reserve currency, b) the US is willing and can afford to maintain such a strong currency, and c) the rest of the world has left this arrangement unchallenged and benefits from it. Much of this is classic Kindleberger–the world economy needs a stabilizer, one stabilizer, to stabilize the global economy as market, currency, and lender of last resort. The US is that stabilizer.

The third of those reasons–acceptance by other world powers–is now under some degree of threat as China starts to fret about its dollar position. However, absent another actor willing and able to play the role of stabilizer, everyone–China included–risks putting themselves in a significantly worse position should the dollar lose its pride of place in the international economic system.

China suggests that the IMF’s SDR form a new reserve currency. This indicates they really aren’t all that serious about actually doing anything to dislodge the dollar. For one, to have a currency able to act as a reserve currency requires backing of a stable, authoritative, empowered entity that can manipulate fiscal and monetary policy as needed to protect the value of its currency. We call this a sovereign state. To give the IMF such rights would make the IMF a de-facto global economic sovereign. China has no demonstrated desire to create supra-national authority, not at the UN, nor the IMF. Moreover, there is a significant and real cost to maintaining a strong reserve currency. The strength of the dollar makes the US a great destination for products–we can afford to buy others’ cheap stuff. A significantly de-valued dollar (coupled with an increased value of other currencies like the Yuan or Yen or Won) would be a disaster to economies that rely on exports. China would need to show that it is willing and able to take on a stabilizing role in the global economy, which just doesn’t seem in the cards as of yet.

Perhaps, though, this might be read as an attempt to gain leverage:

The timing of the Chinese announcement, analysts said, could also be aimed at giving Beijing more leverage to negotiate with the United States and other nations in London on trade and on proposals about how to stabilize the global economy.

All that said, it would be foolish for US policy planners to simply ignore China’s (and others) growing dissatisfaction with the Bretton Woods legacy system that now constitutes the global economy. The fundamental bargains that made such a hegemonic system possible (cf Ikenberry) have become frayed, and while neither China nor the EU (nor India, for that matter) are poised to overthrow US hegemony in the short term, they can clearly erode US hegemony by driving up the cost of acting as a stabilizer. In the medium term, this imposes a cost on everyone, as the global economy (and security order) falters without a clear stabilizer, but from a realist perspective, the relative gains (or in this case declines) could benefit the challengers to US hegemony–at least that’s what they are betting on.

*as in, a friend of mine forwarded me a link to that article with the caption. I have never met David Barboza, the author of the NYT article.

Hegemony, the Economy, and Baseball’s Winter Meetings

Baseball’s winter meetings start today in Vegas, which means loads of hot-stove league excitement for baseball fans like myself. However, I don’t expect my team to make one of the marquee deals, those big money contracts are usually the province of the big market, big money teams like the Yankees, Mets, Sawks, and Angles.

The art of rooting for a small market team is to understand how to do more with less, and, most importantly, how to minimize risk in the land of free-agent mega-contracts. If you’re the Yankees, you can sign a Carl Pavano, say, to a 4-year, $40 million contract, and when misses 2 full seasons and large portions of two more, you grouse about it and then go sign another pitcher to replace him and continue about your merry way. If you’re a small market GM, however, such contracts aren’t even an option. You can’t afford to put so much of your scarce revenue into a non-performing player. So, small market teams must look for diamonds in the rough, offering low risk, in terms of guaranteed money, contracts to a number of players, hoping one works out because they can’t afford to be wrong on a guaranteed, multi-year, mega-million dollar deal that would cripple the franchise.

In short, the key difference between the big money teams and small market teams is their capacity to absorb a mistake.

Which brings us to tonight’s word: weathering the global recession.

In grading a series of papers for my Hegemony class, an interesting theme emerged. While many contemporary commentators are lamenting the fact that the current global economic meltdown has put a damper on US global leadership, I think that there is an under-appreciated aspect to the economic crisis. Namely, the US is in a position to weather the storm, absorb the hit, and recover. Yes, there is certainly more economic pain to come and, for certain, it will hurt. But, if you haven’t noticed, this economic crisis is global, and its going to hurt the rest of the world a lot more than it will hurt the USA.

With the price of oil now down to $43/barrel, oil producing nations are in dire straits. The promises they made at $140 are ludicrous, and much of their basic economic models are simply unsustainable at prices this low. Russia, Venezuela, Saudi Arabia–they are all in serious trouble.

Even China, the supposed great rival to US hegemony, is in dire economic straits. They have proposed a $500 billion stimulus package, but depend on the health of global export markets to keep factories humming and producing the 9-11% annual economic growth they need to maintain domestic political stability. This puts the CCP in a real political bind.

All of which is to say, the US standing in the world might not be as drastically reduced as a result of the global economic crisis as one might initially think. Everyone will take a hit, but the Yankees / Yanquis are in a much stronger position to be able to absorb the hit and remain competitive. We are strong enough to recover from our own mistakes. Others are not so bit or so fortunate.

Bretton Woods 2.0

If British Prime Minister Gordon Brown and French President Nicolas Sarkozy have their way, the advanced industrialized nations will come together to negotiate a new economic order. But they will do so in a world in which the US and the European Union enjoy roughly equal GDP (with a slight advantage for the EU right now). When Bretton Woods was negotiated, in contrast, the US controlled about half of global economic production.

In other words, any such bargain would be the product less of US hegemony than US-EU comity, with China, Japan, and India as important players in the mix. This is, whatever one thinks of its merits or chances, a bold call to build a multipolar economic institutional order. It signals how much the world has changed not only since 1945, but also since the “unipolar moment” of the 1990s.

Barak Obama and the Renewal of American Hegemony

By way of introduction… I’ve been pondering a post along these lines for a short while now, but this isn’t going to exactly be the post I had originally envisioned. Rather, inspired by the ongoing financial crisis and some things I read this evening, a slightly different version has emerged. Now, onto the show:

A significant challenge for the next President will be dealing with the percipitous decline in American Hegemony since 2001. All three pillars of American power have severely eroded, leaving an open to mount a challenge to America’s international leadership. Following Iraq and Afghanistan, the US military is stretched thin. More significantly, the success of insurgency warfare coupled with the failure of non-proliferation policies in North Korea and Iran have shown the door to resist US military pressure–build a nuke or threaten to draw the US into a protracted guerrilla conflict that mitigates its conventional military advantage. Economically, the current credit crisis is now spreading globally, calling the US economic leadership into significant question. And, socially, the past 7 years have eroded the US moral authority and respect around the world.

The real question, though, is what will the next president do? These declines, while significant, are not necessarily the end of the American Era. My core argument is that Obama, unlike McCain, has the unique potential to restore American leadership in at least 2 of these critical foundations of US power.

Most importantly, Obama has the potential to restore America’s moral authority, its international standing and respect, and its legitimacy as a world leader. This is not to say that he’s the candidate that the Europeans like. Rather, this is to say that the idea of Obama represents such a shift for America’s image in the rest of the world that he offers the chance to restore America’s lost luster. Obama gains the moral authority as a world leader capable of speaking directly to the people of the world, inspiring them to follow a path with the US leading the way.

As the current economic crisis unfolds, I think this has incredibly significant economic implications. The post-War international economic order that persists to this day is one of Embedded Liberalism. As Ruggie has argued, this order reflected a social purpose emblematic of US national identity, shaping the world order in its own image. As that image has fallen internationally in recent years, so too has the legitimacy of the current international order.

Obama would find himself in a unique position to ask the world to update that order. Now, I happen to think that come February 2009, whoever is the next President will be asking the rest of the world for many of the same things. Take, for instance, Europe. Both McCain and Obama will probably be asking the Europeans for help in Afghanistan, as well with help in responding to the fall-out of this economic crisis. The Europeans can much more easily ignore McCain. Ignoring Obama is much more difficult.

More significantly, Obama has an ability that few US presidents have had–the ability to “go public,” going over the heads of the European leaders and speaking directly to the European public, mobilizing them on behalf of his agenda, putting pressure on potentially reluctant governments.

The proximate inspiration for my slight shift in thinking is an NYT article about the current financial crisis stoking fears of a global recession. As this crisis grows in scope and complexity, the existing institutions of the US established international economic order are increasingly on the sidelines, leaving fewer and fewer pathways to coordinated global action to address a growing global economic meltdown.

The trouble is, these institutions no longer have the resources or authority to lead such an effort. The I.M.F., which played a central role in the Asian crisis, has been relegated to the sidelines this time — its credibility tarnished by that episode and its skills ill-suited to a crisis in advanced economies. These days, it mainly issues lonely warnings about the impact on developing countries.

The Group of 7, which once functioned as a sort of command center for the global economy, is similarly depleted, according to critics. It no longer represents the world’s economic drivers, they said, and badly needs to be expanded to include rising powers like China and India.

“The globalization of the crisis means we need a globalization of responses,” said C. Fred Bergsten, the director of the Peterson Institute for International Economics. “But most of the responses will be national. For all the institutions we have, we don’t have the right institutions to do this.”

That is particularly true in Europe, which has an effective central bank but lacks a unified legislature or treasury to coordinate or finance a rescue of the banking system. So far, economists say, Europe’s response to the crisis in its banks has been mostly marked by denial and dissension.

Having the financial resources to respond to the crisis is a matter of material power. Having the authority to act is an element of social power, producing the legitimacy for an institution or material capability to command the respect of others.

This is vitally important when the heart of the current crisis is a crisis of confidence in financial markets. Additional funds can restore liquidity. Restoring confidence requires the social power to restore the legitimacy of the financial institutions in the economy. The Government (any government of any nation) does not have the money to back the entire economy of a nation. But, that government can restore confidence in national institutions with guarantees that bestow credibility and legitimacy. Similarly, credible and functional international institutions could potentially do the same for the global economy. As
Robert Reich
points out:

Leadership isn’t just about passing a big piece of legislation. It’s about explaining and thereby gaining trust and confidence from a public — including a global public — that’s otherwise afraid and confused. A credible and powerful explanation is necessary right now — about where we’ve been, how we got into this mess, and how a particular plan (in this case, the bailout), will get us out of it.

The next president will need to exercise global leadership on two fronts. First, he will need to inspire the basic confidence in the global economy that it needs to function. Second, he will need to ask the countries of the world to reform the existing institutions in order to create something capable of dealing with such crises in the future.

A president able to legitimate such a project has the potential to renew America’s global leadership and American hegemony.

In my view, Obama has that potential. McCain does not.

Scribbles in My Notebook on AIG

One of my favorite Cleveland sports columnists often does a column of brief observations and insights after a game or big event. I don’t scribble, and I lack a notebook, but watching the AIG bailout has me thinking about a few things:

Wow, that’s a lot of money. To put this in perspective, recall the 2004 Presidential Election, when Kerry was rolled for being for the $87 billion before he was against it. That was a yearly supplemental appropriation to fund the war in Iraq and Afghanistan. Paulson spent about the same to bail out AIG in one day.

This may have avoided an imminent financial crisis, but (and I’m not the first to say this, but its so important as to bear repeating) this 1) did nothing to address the roots of this crisis that got us to this point in the first place and 2) did nothing to address the fact that another shoe dropping seems imminent. Shouldn’t there be hearings on emergency financial sector reform or something?

I think Sebastian Mallaby made a good point in the Post yesterday:

If Paulson’s gamble pays off, it could affect the character of globalization. For the past two decades or so, international finance has developed largely on U.S. terms and in the U.S. image. The Federal Reserve has stood behind the dollar, which is the world’s dominant reserve currency, and the world’s faith in the dollar has allowed the Fed to cut interest rates in response to global shocks such as Russia’s default in 1998 without risking a run on the currency. Meanwhile, U.S. banks have dreamed up funky new financial instruments that have been marketed all over the world. To a considerable extent, the globalization of finance has meant its Americanization.

The first 12 months of this crisis scrambled that equation. The Fed cut interest rates, as it often does in response to trouble. But this time the world lost confidence in the dollar, which failed to play its traditional role as a safe store of value in tough times and instead seesawed wildly. The innovative U.S. banks lost billions of dollars and were forced to turn for help to the new masters of finance — foreign sovereign wealth funds. And U.S.-style financial innovation suffered a massive reputational blow. No less a commentator than Paul Volcker, the former Fed chairman, has emerged to denounce it.

The longer the financial turbulence goes on, the greater the likely backlash against U.S.-style financial globalization. But Paulson’s gamble — if it succeeds — could limit the damage. By refusing to use the Fed’s balance sheet to bail out Lehman, he may have saved the Fed from becoming further bogged down in its crisis-management role, freeing it to focus more on preserving the value of the dollar. And by repealing the too-entangled doctrine, Paulson may have strengthened market penalties for banks that mismanage modern financial instruments — thereby increasing the chances that sophisticated, market-based finance can flourish safely.

I don’ think folks yet understand how profound this crisis might become. The Dollar as Global Reserve currency allows the US to do all kinds of things that no other country can get away with. The US budget looks more like Argentina in a bad year than the IMF recommended Washington Consensus, but the US can get away with it and Argentina can’t because the US can always sell debt, and there remains a market for dollar-denominated debt. If the dollar loses this preeminent position, the US is in for major major economic turbulence.

In less than a week, the Dow lost nearly 1000 points reacting to the AIG bailout. But, this is a highly skewed indicator, because AID is one of the 30 stocks that make up the Dow. AIG’s loss in value has a direct impact on the Dow–the decline is not a great indicator of the degree of investor mood. Better would be the Dow without AIG or some other indicator. But, the Dow, S&P 500, and NASDAQ are all down about 4-5% today (AIG is part of the S&P also).

Lots of people are making a comparison to the bailout of Chrysler back in the early 80’s. I wonder if the bailout of Mexico in 1994 might be more appropriate–the Treasury and Fed acting on their own to bail out a bad and highly interconnected position in the global economy.

One really hopes that Krugman is right about this: Bernanke is a leading expert on the Great Depression, so he might be able to keep it from happening again.

Courting Influence

The NY Times has a very interesting article out today reporting that the influence of the US Supreme Court is waning–internationally. While the Court holds no jurisdiction beyond the US borders, for a long time it served as an intellectual leader in world judicial opinion. Other nations looking to develop a strong judicial system looked to the US Supreme Court as a model, and looked to the Court’s opinions as cutting-edge legal thought that could–and did–shape legal arguments elsewhere.

The signature innovations of the American legal system — a written Constitution, a Bill of Rights protecting individual freedoms and an independent judiciary with the power to strike down legislation — have been consciously emulated in much of the world. And American constitutional law has been cited and discussed in countless decisions of courts in Australia, Canada, Germany, India, Israel, Japan, New Zealand, South Africa and elsewhere.

In a 1996 decision striking down a law that made it a crime to possess pornography, for instance, the Constitutional Court of South Africa conducted a broad survey of American First Amendment jurisprudence, citing some 40 decisions of the United States Supreme Court. That same year, the High Court of Australia followed a 1989 decision of the Supreme Court in a separation-of-powers case, ruling that a judge was permitted to prepare a report for a government minister about threats to aboriginal areas because the assignment did not undermine the integrity of the judicial branch.

Sending American ideas about the rule of law abroad has long been a source of pride. “The United States Supreme Court is the oldest constitutional court in the world — the most respected, the most legitimate,” said Charles Fried, a law professor at Harvard who served as solicitor general in the Reagan administration.

Interesting enough, while the US Courts serve as a source for other countries legal arguments, US judges don’t often rely on International Law. Some, like recently retired Justice Sandra Day O’Conner or current Justice Anthony Kennedy, would like to see a greater use of international law. But, as one scholar observed

“We are used to encouraging other countries to adopt American constitutional norms, “ he wrote in an essay last month, “but we have never accepted the idea that we should adopt theirs.”

“It’s American exceptionalism,” Professor Posner added in an interview. “The view going back 200 years is that we’ve figured it out and people should follow our lead.”

Henry Paulson as “The Stabilizer”

The US bailout of Fannie Mae and Freddie Mac was a massive government intervention into the securities market. Why do this?

Dan Drezner gives some insightful instant analysis, noting how the fall-out has reverberated through the global economy, hitting China, Russia, Sovereign Wealth Funds, and many other key international actors. The US Government:

is also trying to soothe financial markets and-more important-please foreign creditors. China is far and away the largest foreign investor in long-term U.S. government agency debt-more than $375 billion. In the past month Chinese officials had warned about the implications of a collapse of the two housing giants.

Beijing was not the only foreign government to raise hackles about the status quo-other foreign officials voiced their concerns directly to Treasury Secretary Henry Paulson. Senator Chuck Schumer told the Wall Street Journal that, “There was a real fear that foreign governments would start dumping Fannie and Freddie…and not buy the bonds.”

As long as the United States runs a current account deficit of more than $500 billion a year, it will need the trust of foreign capital and foreign governments. Judging by the global market reaction, seizing Fannie Mae and Freddie Mac helped preserve that goodwill abroad. One reason this happened on a Sunday was so that Asian stock markets would have the first opportunity to respond.

How necessary was this reassurance to international capital markets? The nightmare scenario Paulson faced was:

But let’s say that the Treasury did not support the debt of the mortgage agencies. The Chinese bought over $300 billion of that stuff and they were told that it is essentially riskless. The flow of capital from them and from other central banks, sovereign wealth funds, and plain old ordinary investors would shut down very quickly. The dollar would fall say 30-40 percent in a week, there would be payments system gridlock, margin calls at the clearinghouses would go unmet, and only a trading shutdown would stop the Dow from shedding half its value. Most of the U.S. banking system would be insolvent. Emergency Fed/Treasury action would recapitalize the FDIC but we would lose an independent central bank and setting the money supply would be a crapshoot. The rate of unemployment would climb into double digits and stay there. Many Americans would not have access to their savings. The future supply of foreign investment would be noticeably lower. The Federal government would lose its AAA rating and we would pay much more in borrowing costs. The deficit would skyrocket.

Charles Kindleberger famously observed:

For the world economy to be stabilized, there has to be a stabilizer–one stabilizer.

Here you have the US acting to stabilize the international economy in the face of a potential global meltdown. They left themselves no choice.

Closing Olympic Observations

The Olympics ended about 12 hours ago, but NBC is giving us the tape-delayed broadcast this evening. One last set of semi-structured Olympic thoughts…

Its pretty clear that these games had massive political undertones. China viewed this as a coming out / coming of age celebration and invested accordingly. The infrastructure was impressive (gotta love that water cube), and their performance was impressive, with the top gold medal haul, though the US was tops in overall medals. If you use the Boswell formula, China edged the US in total performance, a big thing for them.

–The political overtones were even clear to the sports columnists who don’t usually venture into the political. In today’s WP, Boswell observed

In decades at The Post, this is the first event I’ve covered at which I was certain that the main point of the exercise was to co-opt the Western media, including NBC, with a splendidly pretty, sparsely attended, completely controlled sports event inside a quasi-military compound. We had little alternative but to be a conduit for happy-Olympics, progressive-China propaganda. I suspect it worked.

Everything that met my eye at every venue was perfect. Everybody smiled. Everybody pretended to speak English. Until you got past “Hello.” Everyone was helpful until you went one inch past where you were supposed to go. Then, arms sprang out to stop you. Everywhere you went, even alone at 2 a.m., you felt completely safe. Because every hundred feet there were a pair of guards — at attention in the middle of the night.

As sports spectacles go, I’ve never seen one more efficiently or soulessly executed than this one.

–Who is Joshua (in the booth with Costas)? Costas’s question to him: where does China go from here? He’s giving all the political tidbits, like the ever so important nugget as the Mayor of Beijing hands the Olympic flag over to the Mayor London, the host for the 2012 games: “Chinese viewers will recall that the last hand-over between these two nations involved Hong Kong.” I know you were all thinking about that.

–The NYT today had a very fascinating behind the scenes look at just how influential NBC really is in the games, emphasizing that though these remain a global spectacle, they are made a spectacle for the American market (which is why China was so adamant at putting on a good show for the Americans). The very structure of the games—when they would be held, when the events would be schedules—was set years in advance to accommodate the US media market. Its not just that the US / NBC asked for this, but its that the IOC and Olympic Organizers though it so important to do so, and were so taken by the intricacies of the American TV ratings game.

Switching swimming and gymnastics to prime time was not the biggest scheduling coup Mr. Ebersol helped pull off. Long before that, during the Games in Sydney, Mr. Ebersol played the central role in a move to alter the weeks when the Beijing Games would be held.

By the summer of 2000, NBC already possessed the rights to the Winter and Summer Games through 2008. The network had made a deal in 1995 to secure them all even before the Games were awarded to any cities — a notion Mr. Ebersol sold effectively to the I.O.C. as a better way to go than having the cities make plans without knowing how much they were going to acquire in TV rights.

But the Sydney Games, which took place in late September, were not doing especially well in the ratings. Juan Antonio Samaranch, then the I.O.C. president, left Sydney after the first day because of the death of his wife. When he returned, Mr. Ebersol related, he visited the NBC broadcast center and observed that the ratings were not what NBC had hoped. He asked Mr. Ebersol if there was anything he could do to help.

“Not for these Games,” Mr. Ebersol said he told him. But he wanted to plant another thought. “I believed China was going to win the bid for 2008,” he said. And he had heard that China planned to bid based on dates similar to Sydney. He asked Mr. Samaranch if China could move the dates of its bid four weeks back into August.

“If you’re into September, you’re going to lose a big percentage of your male viewers,” Mr. Ebersol said. “There’s N.F.L. coverage on Sundays and Mondays, and college football is now on four or five nights a week. All of that goes away if you start in mid-August.”

Also, he said, moving the dates back meant bringing in children who would be in school a month later and thus not allowed to stay up late to see American stars like Nastia Liukin on the balance beam. “The Olympics are about the last event that gets the whole family viewing together,” Mr. Ebersol said.
Mr. Samaranch listened to the arguments carefully. “Forty-eight hours later, when the Chinese made their official bid, the dates were in mid-August,” Mr. Ebersol said.

In both cases when NBC’s desires were accommodated, “no money changed hands,” Mr. Ebersol said. The $894 million that NBC paid for the American television rights was already in a Chinese bank, Mr. Ebersol noted. But the I.O.C. has an intense interest in assuring that its American TV partner has a success with the Games, he said, because American television money accounts for more cash for the I.O.C. than all the world’s other broadcasters combined. (By contrast, he said China paid $17 million for its television rights, while selling $400 million worth of ads.)

It’s a well known fact that US defense spending exceeds the rest of the world combined, and it is a foundational fact in any argument about US hegemony. The parallel with TV money is more than interesting.

–Most important mystery resolved: why the divers shower after the dive. Now, about those shammys… did you get them from Billy Maize?

–Of all the great / rising powers in the world (say the G-7 + BRIC), only one massively underperforms at the Olympics. China launched a special program to up its medal count in sports that aren’t big in China, like rowing and track and field, and with a billion people, you can imagine that at least one or two should have aptitude in these areas. Yet, India, the second largest country on earth, a vibrant democracy and vibrant economy, has a mere 3 medals. Another column in today’s Post opines:

China has set about systematically striving for Olympic success since it re-entered global competition after years of isolation, but India has remained mostly complacent about its lack of sporting prowess. Where China lobbied hard for the right to host the Olympics within two decades of its return to the Games, India has rested on its laurels after hosting the Asian Games in New Delhi in 1982. This is widely believed to leave it even farther behind in the competition for Olympic host-hood than it was two decades ago.

Where China embarked on what its sports leaders call “Project 119,” a program devised specifically to boost the country’s Olympic medal standings (the number 119 refers to the number of golds awarded at the 2000 Sydney Games in what Sports Illustrated calls “the medal-rich sports of track and field, swimming, rowing, sailing and canoe/kayak”), Indians wondered whether they’d be able to crack the magic ceiling of two, the highest number of medals their giant country has ever won. Where China, eyeing the number of medals awarded in kayaking, decided to create a team to master a sport hitherto unknown to the Middle Kingdom, India didn’t even petition successfully to have the Games include the few sports it does play well, such as polo, kabbadi (a form of tag-team wrestling) or cricket, which was played in the Olympics of 1900 and has been omitted ever since.

–The cultural links between what sports are big where remain fascinating to me. Some of this is obviously economic and geographic. There’s a reason that Scandanavian countries dominate the Winter games but not the summer, there’s a reason that Jamaica doesn’t field a real bobsled team (yeah, whatever, that movie was all Disney, though it would be fun to see Usain Bolt on the bobsled). The legacy of the Soviet athletic training programs continue to give Russia a strong team. But, why is water polo so big in Hungary? Why is swimming so big in Australia? In running, why do Caribbean nations excel in the sprints while the African nations excel in distance? And Romania always seems to do well in women’s gymnastics but not too much else. How did China get so good at the precision sports of gymnastics and diving, but continues to be so bad in track, field, swimming, and the like?

–And seriously, what on earth is BMX biking doing as an Olympic sport? I saw one race, and it joins the group of sports I want to see banished. Other members of club DTM include synchronize swimming and rhythmic gymnastics. You might as well replace them with some other legit global sports like Rugby or Cricket or what not. Not that I am a fan of those sports, but they certainly belong ahead of BMX biking.

Russia-US relations: Russia as spoiler?

Peter Baker contributes a rather odd story to The New York Times about all the ways Russia can make life difficult for the United States.

Baker’s central discussion, which chronicles how a revisionist Russia can really mess with US interests, is excellent. For example:

f Russia’s invasion of Georgia ushers in a sustained period of renewed animosity with the West, Washington fears that a newly emboldened but estranged Moscow could use its influence, money, energy resources, United Nations Security Council veto and, yes, its arms industry to undermine American interests around the world.


Although Russia has long supplied arms to Syria, it has held back until now on providing the next generation of surface-to-surface missiles. But the Syrian president, Bashar al-Assad, made clear that he was hoping to capitalize on rising tensions between Moscow and the West when he rushed to the resort city of Sochi to meet with his Russian counterpart, Dmitri A. Medvedev.

The list of ways a more hostile Russia could cause problems for the United States extends far beyond Syria and the mountains of Georgia. In addition to escalated arms sales to other anti-American states like Iran and Venezuela, policy makers and specialists in Washington envision a freeze on counterterrorism and nuclear nonproliferation cooperation, manipulation of oil and natural gas supplies, pressure against United States military bases in Central Asia and the collapse of efforts to extend cold war-era arms control treaties.

“It’s Iran, it’s the U.N., it’s all the counterterrorism and counternarcotics programs, Syria, Venezuela, Hamas — there are any number of issues over which they can be less cooperative than they’ve been,” said Angela E. Stent, who served as the top Russia officer at the United States government’s National Intelligence Council until 2006 and now directs Russian studies at Georgetown University. “And of course, energy.”

What I find strange, rather, is Baker’s summary of his conversation with Michael McFaul:

Michael McFaul, a Stanford University professor and the chief Russia adviser for Senator Barack Obama, the presumptive Democratic presidential nominee, said Russia appeared intent on trying to “disrupt the international order” and had the capacity to succeed. “The potential is big because at the end of the day, they are the hegemon in that region and we are not and that’s a fact,” Professor McFaul said.

McFaul’s conditional point is rather sensible: if the Russians want to disrupt the international order, they can do a lot of damage to US interests and goals.

But before the August Russo-Georgia War, Russia was going out of its way not to push the United States too far. Recall Chavez’s anti-US rhetoric in Moscow, and the ways that the Kremlin distanced themselves from it.

This isn’t a matter of Russia suddenly deciding to play the spoiler, but of a combination of Russian assertiveness and US inflexibility. I see no grounds for concluding that Russia seems “intent on trying to ‘disrupt the international order,'” and it isn’t even clear to me that McFaul said so.

Indeed, the ultimate direction of US-Russian relations remains in flux, and how it plays out is up to both Washington and Moscow. And there are signs that the United States is starting to take a more even line on the Georgia crisis, which is all for the good:

The former US Ambassador to Bulgaria John Beyrle, who is already in charge of the American Embassy in Moscow, said Russia was justified in responding to the Georgian attacks on the Russian peacekeepers in South Ossetia.

In an interview for the Russian newspaper Komersant, Beyrle points out the United States repeatedly tried to persuade the Georgian leadership not to make any offensive steps.

In his words both Russia and America had been trying to resolve the frozen conflicts on Georgia’s territory for a long time.

The Russian response to the shelling of the South Ossetian capital Tskhinvali by the Georgian forces was justified, according to Beyrle.

Yet, he makes it clear that after the initial stage of the conflict the Russian troops had penetrated deep into Georgia, and had threatened the territorial integrity of the country.

Georgia: Thoughts on what it might mean

With the Confrontation in the Caucasus seemingly over, I wanted to try to think through some of the implications for US foreign policy. Although it was a short conflagration, these past 5 days have the feeling of an important turning point. I don’t think that the Confrontation itself has fundamentally altered the nature of International Politics, but rather it seems endemic of a slow shift that had been underway for some time. Though the past order may have eroded gradually, Russia’s stark exploitation of the situation reveals the full extent of the shift.

First, US credibility and influence has taken a severe blow. Georgia had been a “darling” of the US, sending troops to Iraq, a model of democracy and liberalism in the Caucasus, and potential NATO member. There are clearly mixed signals as to who knew what when. Georgia seems to think that it had either implicit US backing for its moves in South Ossetia or a tacit promise of support should Russia retaliate. Russia seems to have at least thought it had a free hand to intervene within South Ossetia. Its possible the US signaled all of this, just as its possible that the US didn’t intend to signal any of this. As Rob points out, mixed signals happen all the time in IR and we have no shortage of theories to explain it. (Update: The NYT does some reporting on the mixed messages sent by the US).

Regardless of who may have said what to whom, what matters now is who is affixing what meaning to who’s actions. Importantly, Russia’s ability to escalate with relative impunity against a Western ally coupled with such a tepid US, European, NATO, and Western response certainly sends a message. First and foremost: Sending troops to Iraq doesn’t buy you much, get the Article V guarantee first. In other words, aligning with the US doesn’t buy you much in terms of real security because there really isn’t much the US can do in a situation like this. No one (rather I should say no credible and sane person) has suggested that the US intervene to support Georgia and take in Russia.

In a sense, it sounds like the opening chapter of some of the novels on my table for beach reading on my upcoming vacation: A set of covert and suspicious circumstances halfway around the world from two leaders determined to advance their own power agendas leads to a conflict that soon spirals out of control. Pressure builds, and the US is on the verge of intervention, which would mean war between nuclear superpowers, the nightmare of nuclear World War III everyone thought had died in 1991. Only Jack Ryan / Mitch Rapp / Austin Powers can stop nuclear Armageddon…

That’s fiction. The reality is that the limits of US influence have been exposed. Russia had a relatively free hand to do what it did in Georgia and there was nothing that the US (or anyone else for that matter) was going to do about it. If you’re Poland, do you think twice about hosting a missile defense site? If you’re Estonia, do you think twice about your statues? Now, these are NATO allies, but they will now require reassurance, a complex intra-Alliance game. More to the point, what of the rest of the Caucuses and central Asia? What does China think about Taiwan or Mongolia?

It also forces a re-thinking of Bush’s foreign policy legacy. Now, the Administration itself has already completed this process, moving far away from its first term international activism to a more traditional second term pragmatism. The greatest element of Bush’s policy was its promotion of democracy. The multi-colored revolutions, including the Rose in Georgia, were seen, in part, as a successful demonstration effect of Bush’s democratization agenda. This agenda was threatening to Russia and China (and Iran…), where democracy promotion is seen as a form of US imperialism. From a US perspective, the success of Democracy in the Ukraine, Georgia, Iraq, Afghanistan, and such pressures Russia, China, Iran, and such. Putin’s increasingly authoritarian Russia was able to spank Georgia’s Rose Revolution, again setting a marker limiting the influence of US-backed democratization movements.

While democracy promotion may be a normatively preferred plank in US strategy, it suffered a blow here. The pleadings of neoconservatives, still committed to the original Bush project, for intervention on behalf of Georgia drives the agenda to its logical end, a reduction-ad-absurdum that somehow bolsters the appeal of a more traditional realpolitik.

Finally, it shows the end of the unipolar moment. While the US may still enjoy its position of hegemony (and probably will for some time), the end of US Unipolarity has come. Dan’s insight here is prescient and bears repeating:

Russia wants status, wealth, and predominance in what it considers its sphere of influence. Only the last goal brings it into conflict with the US, and perhaps it is time that a less subtle, and more credible, discussion of precisely what that sphere of influence entails needs to happen. It obviously cannot include the Baltic States, Poland, and Romania–and this is one reason why NATO cohesion must be at the top of the US agenda. But there’s something odd in claims that “sphere of influence” are somehow inherently immoral; the real issue seems to be that, in a “unipolar world,” a bid for a sphere of influence means relatively less influence for the US.

In a unipolar world, there is only one sphere of influence—the whole world is the US’s sphere of influence. Russia’s ability to carve any sphere of influence effectively ends Unipolarity (if there ever was such a moment).

The significance of the Confrontation in the Caucasus is not that it ended the Unipolar moment, but that it signaled the end of a unipolar order. Russia has taken an aggressive step in the art of the possible, pushing the boundaries of what a great power can do in this new age of multipolar / non-polar US hegemony.

Edited to correct my spelling mistakes.

Cleveland’s Global Icon

Nothing quite says Hegemon In Decline like: “LeBron would consider European offers.”

Obama and the end of Hegemonic Declinism

Its hard to miss the prevailing idea that American hegemony is in a precipitous decline. Earlier this year, Parag Khanna was “Waving Goodbye to Hegemony” in a New York Times Magazine cover story. In Foreign Affairs, Fareed Zakaria recently argued that America needs fundamental reform if it is to avoid a precipitous fall from grace. There have been countless discussions of the “rise of China,” and a resurgent Europe and the loss of America’s edge—even NBA stars are crossing the pond for more lucrative deals in Euros!

In the current World Affairs, Robert Lieber attacks the current phase of “American Declinism,” tracing it to a general malaise about American politics. Declinism, he writes, has “a political subtext” and theories of America’s decline “function as ideology by other means,” with “much of today’s resurgent declinism… propelled not only by arguments over real-world events, but also by a fierce reaction against the Bush presidency.” There is no doubt about the underlying political subtext, with a vast majority of Americans dissatisfied with the direction of the country. In recent polls, over 80% of respondents say that the country is on the “wrong track,” a level of dissatisfaction not seen since the early 1990’s. Not coincidentally, Lieber identifies that as the previous period of rampant declinism.

Lieber boils down the declinist project to its essence:

With impressive detail and more than a hint of condescension, the new declinists mine this data to make the case for an America in jeopardy—watching helplessly as its global power crumbles away. The solution: a more “realistic” America that lowers its sights and shifts course at home and abroad in line with the new realities.

Zakaria is a case in point. He calls for the US to adapt its policies to accommodate the “rise of the rest” but laments that “The U.S. political system has lost the ability to accept some pain now for great gain later on.”

Lieber takes umbrage at such empty calls for reform, asserting that “In the end, then, this country’s structural advantages matter much more than economic cycles, trade imbalances, or surging and receding tides of anti-Americanism. These advantages include America’s size, wealth, human and material resources, military strength, competitiveness, and liberal political and economic traditions, but also a remarkable flexibility, dynamism, and capacity for reinvention. Neither the rise of important regional powers, nor a globalized world economy, nor “imperial overstretch,” nor domestic weaknesses seem likely to negate these advantages in ways the declinists anticipate…”

Perhaps. But, in concluding as such, I think Lieber undercuts the power of his own argument and the potential for producing a more profound understanding of the “fierce urgency of now.” Lieber is merely asking for the declinists to shed the scales from their eyes and appreciate the underlying realities of international politics, as any card-carrying realist would. However, this sort of analysis divorces the structural advantages any one nation enjoys from the actions that nation has taken to create that position. In other words, it eschews any notion of agency for the hegemon, and puts US power at the mercy of a longer term hegemonic cycle of military strength and economic power. What if the “dynamism and capacity for reinvention” of the United States were put front and center? This is a political act, part and parcel of the very politics that Lieber blames for the rampant declinism he decries in the first place.

This requires a different way to understand US hegemony, one that acknowledges the unique structural position of the US in world affairs, but one that is not anchored in material power, be it military (realism) or economic (neo-liberalism). Rather, consider hegemony a dominant ideational framework for organizing politics, with an agent of hegemony setting the social purpose for an international order. In this case, the US leads an international order based on liberalism. The legitimacy of the United States is vital to the reproduction of this order, for as the US compromises its social purpose, it undermines the rules and norms that constitute the hegemonic order. In this analysis, then, Lieber’s analysis of declinism as a product of the “wrong track” politics in the US is much more damaging. And, historically, the moments he cites as moments of declinism are moments when the US seemed to lose its way not only at home, but also abroad, opening a political space to question the legitimacy of the hegemonic order.

The renewal of America’s sense of social purpose—morning again in America, if you will—also serves to renew the hegemonic order. The dynamism of American politics allows a political movement to rise that has the capacity to reinvent and re-inscribe the social purpose of the American Hegemonic Order.

This moment of declinism, then, is not independent of the ongoing Presidential campaign. The current campaign narrative, with both candidates running away from the Bush Administration as either a Maverick or agent of Change, suggests a renewal of American social purpose.

Obama, however, seems uniquely poised to both capitalize on this moment politically, as well as renew American hegemony. His message of Hope and Change has stirred a deep sense of political awakening, especially among younger voters who were previously alienated from politics over the past 8 years. His world tour, culminating in a speech with a crowd exceeding 200,000 in Berlin, revealed the potential to reassert America’s social purpose as leader of the international order. Indeed, as a number of commentators pointed out, as President, the things that Obama will have to say to the Germans won’t differ all that much from what the Bush Administration is saying. But how he says it, how he presents it, will change. Rather than present an American mission, Obama looks to present a global mission of multilateralism in service of shared values. While the resulting actions may look similar (ie, more troops in Afghanistan), the social purpose those actions serve will be significantly different. The significant difference will be the upholding of the international order instead of the decaying of that order creating the political space for resistance and challenge.

Thus, Obama’s message of hope and change, of a renewal of American politics, offers more than just a pathway from the current “wrong track” malaise gripping the country. At its height, it offers a renewal of America’s sense of social purpose, both at home and globally, and it is that renewal of social purpose that can arrest the very real sense of decline in the present hegemonic order.

Update: Maybe I should have simply titled the post Obama: “The One”

Still Soveriegn After All These Years

Madeline Albright’s op-ed in the NYT yesterday bemoans the fact that

the concept of national sovereignty as an inviolable and overriding principle of global law is once again gaining ground.

I think she doth protest too much, as the claims of sovereignty’s demise seem to have been slightly exaggerated.

Albright, of course is thinking back to the heady days when she was Secretary of State, when

the international community would recognize a responsibility to override sovereignty in emergency situations — to prevent ethnic cleansing or genocide, arrest war criminals, restore democracy or provide disaster relief when national governments were either unable or unwilling to do so.

The rhetorical slight of hand here, though, is to assume the “international community” where in fact no such actor exists. After all, what is the international community but for a group of powerful states who are able to intervene when they deem it appropriate. Namely, the US and its key allies. The examples she cites are all US led, US-supported interventions:

The administration of George H. W. Bush intervened to prevent famine in Somalia and to aid Kurds in northern Iraq; the Clinton administration returned an elected leader to power in Haiti; NATO ended the war in Bosnia and stopped Slobodan Milosevic’s campaign of terror in Kosovo; the British halted a civil war in Sierra Leone; and the United Nations authorized life-saving missions in East Timor and elsewhere.

Its not that the International community is ignoring Darfur–there have been European calls for action, and African peacekeepers dispatched to the region, but they are lacking the muscle, legitimacy, and systemic power that serious US involvement brings to the table. The obvious reason for this is Iraq–the US is too bogged down there to do much else, and the ‘international community’ is now very wary of any further US interventions following Iraq.

Albright does end on an important question, though.

At the heart of the debate is the question of what the international system is. Is it just a collection of legal nuts and bolts cobbled together by governments to protect governments? Or is it a living framework of rules intended to make the world a more humane place?

But she deliberately creates a false dichotomy here. Missing? Maybe the world is simply a collection of states seeking to protect themselves from other states by amassing what power they can. Or, maybe the world is really an American show, and as America changes its rules for intervention and identity in the eyes of the rest of the world, so too does reshape its ability to muster an ‘international community’ to bring wayward governments into compliance with its rules.

All that aside, I think she raises some good discussion points, and I’m thinking of adding this article to my syllabus for my freshmen in Intro to World Politics this fall.
(And we’ll see how smart they are, if they can find this blog post when we discuss it in class!)

B-2 Crash

A little water, and $1.4 billion goes up in flames…

via Rob at LGM

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