Friday, October 20, 2006

The American Empire: In Need of New Management

Putting aside the issue of whether an empire is a desirable form of political and social organization, there is the not inconsiderable question of whether the empire is competently run. Many of those who have made the case that the American Empire plays a positive, indeed essential, role in the international system, pose the challenge: “Would you rather live in an empire run by anyone else?”

Whatever one’s existential response to the abstract query, let me make the far from abstract case that, at present, the American Empire is being atrociously mismanaged.

The case for empire is that it takes a dominating power to preside over the global economy, to keep the peace and to ensure that the other players in the system abide by its rules and norms. The empire is supposed to be a force for stability and security. To use the jargon, the dominating power of the day---in our case the American Empire---is expected to play the part of a “status quo” power. Amongst its tasks, it is expected to keep “revisionist powers”, those countries seeking a change in the global system, in check. If a transformation must occur, such as the rise of China, the empire is supposed to manage the change so that it does not threaten the overall stability of the system.

The American Empire, under the current management of the Bush administration, is ineptly handling two huge sets of questions: geopolitical issues; and the economic management of the system.

On the paramount issue of preventing the proliferation of nuclear weapons, the U.S. has bungled almost imaginably. The principal instrument to block non-nuclear states from developing nuclear arsenals is the Nuclear Non Proliferation Treaty. Along with the Nuclear Test Ban Treaty and the Anti-Ballistic Missile Treaty (abrogated by the Bush administration), this treaty is the keystone in the non-proliferation structure.

The Non-Proliferation Treaty is a two-sided affair. Non-nuclear powers have signed on to it, pledging that they will not develop a nuclear arsenal, in return for an undertaking by the nuclear powers not to use nuclear weapons against them, and a further undertaking that the nuclear powers will dismantle their stock of nuclear weapons over the long term.

Far from upholding the system that has been erected to prevent the further proliferation of nuclear weapons, the United States has undertaken repeated assaults against that system. The U.S. refuses to endorse the Nuclear Test Ban Treaty on the grounds that it intends to develop new generations of nuclear weapons, fine-tuned for such purposes as bunker-busting (small weapons that can obliterate underground facilities), and may need to test nukes in the future. That intention, at least implicitly, violates the American undertaking to dismantle its own stock of nuclear weapons. In addition, the U.S. abrogation of the ABM Treaty opens the door for the U.S. to shield itself against a limited nuclear attack, thus reinforcing its capacity to undertake a nuclear first strike against states with small nuclear arsenals without having to fear effective retaliation.

Further exacerbating the situation, in his State of the Union address in January 2002, President George W. Bush concocted the term “Axis of Evil” to put the governments of Iraq, Iran, and North Korea on a “wanted list” of rogue regimes that Washington intended to confront. Just over a year later, the U.S. invaded Iraq on the grounds that it possessed weapons of mass destruction (which it did not), and toppled the regime of Saddam Hussein. The message to the governments of Iran and North Korea was loud and clear---Washington was prepared to back its desire for regime change with military action. Possession of nuclear weapons, while no guarantee against a U.S. assault, was the prudent course to take.

Governments in non-nuclear states have closely watched the behaviour of the U.S. vis a vis India, Pakistan, and Israel, all non-signatories to the Nuclear Non-Proliferation Treaty. India and Pakistan have tested nuclear weapons. Following a period of official displeasure with India over its development of nuclear weapons, the Bush administration reached a deal with the Indian government in 2006, opening the way for the transfer of civilian nuclear material to that country, even though India remained outside the non-proliferation regime. Although Israel refuses to confirm its status as a nuclear power, it is an open secret that the country has developed a large nuclear arsenal, totaling as many as two hundred weapons. The lesson is that the United States is prepared to wink at those who escape the non-proliferation regime and will come to terms with “facts on the ground”.

While Iran is a signatory to the Nuclear Non-Proliferation Treaty, it claims the right to enrich uranium for what it asserts is a civilian nuclear energy program. Insisting that Teheran plans to develop nuclear weapons, the Bush administration has succeeded in pressing the UN Security Council to demand that Iran stop enriching uranium. North Korea, a signatory to the treaty, is the only country to have withdrawn from the treaty, a step it took in 2003. With its recent nuclear test, immediately condemned by the UN Security Council, Pyongyang has made the bet that it will hold a stronger hand with nukes than without them.

The Bush administration’s refusal to hold one-on-one talks with North Korea and to consider a non-aggression pact with that country in return for the dismantling of its nuclear program, has backed that paranoid regime ever further into a corner.

On nuclear weapons, the American insistence on retaining a completely free hand for itself has undermined a regime in which the U.S. was in the strongest position. Washington’s unwillingness to place any real limits on itself and its erratic behaviour toward potential nuclear states, has made the whole world, including the United States, less safe.

Meanwhile, the American position in Iraq, the “Axis of Evil” country it did invade, has become so perilous, that elites in Washington are now plotting a graceful way out of the civil-war torn country.

Matching its geo-political mismanagement has been the Bush administration’s disastrous handling of the global economic system and the position of the United States in it. There is an indissoluble link between these two aspects of the growing crisis of the American Empire.

As has been the case with earlier empires, America faces the problem of imperial overstretch. For the Americans, convincing their upper classes to submit to a level of taxation required to sustain the empire is a daunting problem. Ruling classes never submit easily to the idea of paying their way. But some have done a better job of it than others. The British ruling class, for instance, with its quasi-aristocratic background and its schooling in traditional toryism, proved more capable of taking the long view than has been the case with the Americans. The American ruling class, by contrast, has lacked the ideological and class cohesion that served the British ruling class so well. Moreover, the American ruling class has been deeply attached to the liberal idea of the small state. This idea, whose practical benefit has been low taxes for them, makes it extremely difficult for political leaders to convince the rich in America to pay enough to safeguard their position for the long term.

The segment of the American political elite that most fervently favours a higher military budget for the United States is also the wing of the American leadership that is mostly strongly opposed to high taxes. Since George W. Bush was sworn in as president in January 2001, this militarist wing of the U.S. leadership has held the reins of power, controlling not only the White House, but since the Congressional elections of 2002, both houses of Congress as well. The Bush administration carried out invasions of Afghanistan and Iraq in 2001 and 2003, while simultaneously pushing tax cuts through Congress, tax cuts whose benefits went disproportionately to the wealthy. As a consequence of its policies during a period of reduced economic growth, the Bush administration has saddled the United States with record high government deficits. The soaring deficits have come just a few years after the Clinton administration achieved the first balanced budget and then surplus in many years. The result is that the federal government of the United States is plunging into debt, a debt on which interest must be paid. A high proportion of the treasury bills sold to finance the U.S. debt are held by foreigners, approximately two trillion dollars of this by the central banks of Japan and China.

The position of the U.S. dollar as the world’s reserve currency is becoming ever more precarious. The Euro has been in the wings for years as a potential alternative reserve currency and even though the economic performance of the leading Euro countries has been sluggish, the countries of the Euro zone have a rock solid current account performance. For countries highly dependent on selling raw materials, particularly crude oil and natural gas, the temptation to dominate their sales in Euros rather than in depreciating dollars has been growing ever stronger. If the U.S. dollar was to lose its position as global reserve currency, either partially or generally, it would hit the American economy with price shocks in the broad area of primary products, most importantly petroleum. In addition, the freedom of the U.S. to run a continuous current account deficit would be sharply curtailed if the Euro were to seriously challenge the dollar as a reserve currency. This is because major central banks and corporations would be bound to shift their holdings to a considerable extent from dollars to Euros, a development that would accelerate the downward pressure on the American dollar and would force a sharp hike in U.S. interest rates to prevent a flight of foreign capital from U.S. securities.

While other major countries would have a strong interest in managing such a transition from dollar to Euro as responsibly as possible, the risk of a severe crisis could not be ruled out. Not since the end of the First World War has the world seen a transition of the kind that could be in the offing. Moreover, the world economy is enormously more global in its functioning than it was eight or nine decades ago, with capital and currency transfers from market to market dwarfing those made in the days when the British pound was floundering and the dollar was taking its place.

Both the geopolitical and the economic aspects of the crisis of the American Empire are forcing a basic reconsideration of global strategy onto the American political agenda.

Everywhere one looks, the United States faces a series of interrelated problems. While the American Empire is by no means in imminent peril of collapse, it could be forced to pull back from some of its more exposed positions in particular in the Middle East. In the process, some influential voices in the U.S. will opt for moving over to a more multilateral strategy, bringing other major powers into its confidence, so that the burdens of empire can be shared with the Western Europeans, the Japanese and others. Accepting the restraints that would accompany multilateralism would be no easy thing for the American leadership, certainly the neo-conservative leadership that has been at the helm under George W. Bush. For the neo-conservatives, sharing power with the Europeans and the Japanese has been anathema, a sure way to blunt the effectiveness of American power in sensitive regions of the world. Despite their rapidly waning credibility, the neo-conservatives can be expected to insist on staying the course in the Middle East and Central Asia as well as in East Asia. To win they will have to count on molding a more martial culture in the United States, one in which both the elites and the people are willing to accept the long-term burdens of empire.

The challenges that now confront the American Empire are similar to the problems faced by previous empires---problems of imperial overstretch and of the challenge of fashioning legitimacy for their rule. What makes it especially difficult for the American political leadership to cope with these challenges is the extent to which the norms of American political culture confuse the issues and make it difficult to confront them directly. It is no easy thing to plan for the long-term viability of an empire in a political culture in which the very existence of the empire needs to be constantly denied, at least in public discourse.

Atrocious management has pushed the American Empire into a major crisis less than two decades after the expiration of its Soviet rival. It is almost unimaginable that the fruits of victory in the Cold War could have been so rapidly squandered.


PurpleLiberal said...

I don't frickin' believe it! Harper has CALLED AN ELECTION for during the Liberal Leadership Convention? Is there no end to how low this scumbag will stoop for political advantage!!??

AdamX said...

Don't forget that we Americans own the entire universe now.

On an unrelated note, "Discovering America" and "The Border" are two of my top favorite books. If you and yours ever find a need to travel to Grand Rapids, Michigan, rest assured you will have a free warm place to stay and a hearty meal.

James Laxer said...

Thanks, for the generous offer. We do get to Michigan, a favourite state of mine, from time to time.