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America Will Lead the World to Freedom

A review of Gideon Rachman’s Zero-Sum Future: American Power in an Age of Anxiety.

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Every age has its naysayers, its soothsayers, and its doomsayers. The last of these always command plenty of scorn. People don’t like to be told — whether by Oswald Spengler or Lyndon LaRouche — that they and their society are standing on the edge of a precipice. And yet every “paradigm shift,” to use an annoyingly trendy but necessary phrase, reveals more theoreticians of varying merit waiting to sell their solutions to the apocalypse.

Fortunately, not all books about our precarious future need be alarmist or demagogic or even the slightest bit emotional. It takes a writer of extraordinary grace and experience to resist these impulses, even if he’s bracing for what might come. That the world has entered an “age of anxiety” is certainly the view of Gideon Rachman, the foreign affairs columnist for the Financial Times, but his first book, Zero-Sum Future: American Power in an Age of Anxiety, is written in a refreshingly angst-free way.

To know where we’re headed Rachman believes it’s best to see where we’ve been. In his sober telling, the last three decades can be divided into distinct phases: the Age of Transformation, the Age of Optimism, and the Age of Anxiety. The first two, which comprised the years from 1978 to 2008, refer to a world of enormous economic advancement and possibility, a world of “win-win” logic (Rachman’s phrase) in which free trade, globalization, and Western democratic values were perceived as beneficial to all countries.

The world’s most powerful nations operated in symbiosis, behaving as though one’s gain could actually be another’s also. The role of the United States was that of leader and dynamo and the prevailing dream was of a

“more prosperous and peaceful world, pulled together by the ineluctable forces of globalization and regulated by markets and American power.”

The global economic crash of 2008, however, obliterated this optimism. Nations fell back to their primitive instincts of nationalism and protectionism. Capitalism and free trade went on the defensive and countries now risk treating international relations as a zero-sum game. Some have already begun to adopt the stance of neo-mercantilism. “More protectionist and defensive attitudes in the West will spark a counterreaction in Asia and much of the developing world,” Rachman writes:

Emerging powers such as China, India, Brazil, and South Africa will be confirmed in their suspicions that the United States and Europe are not ready to accept the rise of non-Western powers. Put more simply, the new zero-sum logic means that one country’s gain looks like another’s loss.

It sounds bleak, but we can at least be comforted by Rachman’s staid delivery. The story begins not on a dark and stormy night but at the third plenary session of the eleventh Central Committee of the Chinese Communist Party. It is December 1978. Mao Tse-Tung has been dead as a doornail for two years, having dragged China through the nadir of the Great Leap Forward and the violent orgasms of the Cultural Revolution. The Chinese people endured decades of terror, torture, and starvation. The task of pushing the nation into the future is up to Deng Xiaoping.

Like Mikhail Gorbachev, Deng had to navigate the forces of the status quo at every step. He had been targeted during Mao’s paranoid campaigns to root out “counter-revolutionaries” but with the help of other supporters in the party Deng maneuvered his way to power. His goal was to modernize China. The third plenum called its official policy “socialist modernization,” but as usual it was capitalism, not socialism, that proved itself the true revolutionary force. Deng’s reforms began slowly, first transferring power from central planners to local managers. Peasants took control of individual plots of land, releasing themselves from Maoist collectives. A modest beginning, to be sure. But within the next few years the so-called Special Economic Zones “drove the manufacturing boom in southern China” and were followed by the privatization of housing. Deng’s brilliance lay in his pragmatism:

He rejected both the socialist purity of those party members who wanted to avoid being tainted by the capitalist world and the “Middle Kingdom mentality” of Chinese nationalists.

China’s opening to the world of market economics (or what the CCP still insists on calling “socialism with Chinese characteristics”) meant that one-fifth of the world’s population had begun to take baby steps forward, if not a leap. The “Age of Transformation” had begun.

Even modern nations transformed in their own ways. In Britain, Margaret Thatcher, after inheriting the swollen dirigiste bureaucracy of James Callaghan, refused to accept that her job as prime minister consisted in “the orderly management of decline.” Thatcherism (that perennial slur of the British hard left) was the transatlantic cousin of Reaganomics; both the Iron Lady and the Gipper hammered socialism, not just with policy but intelligent and witty dismissals of the crumbling philosophy and its proponents.

The Cold War ended by realizing a kind of reverse domino theory: rather than further experiment with socialism, nations in Eastern Europe, Asia, and Latin America unshackled their political and economic systems.

The embrace of democratic capitalism was so complete and so powerful — there’s that “paradigm shift” again — it led to futurist theories in which all doubts about liberal democracy had been removed by the abject failure of communism. In a book such as this, concerned as much with political economy as with macro-history, it was only a matter of time before we heard the name Francis Fukuyama. (Alas, no mention of Samuel Huntington.) Fukuyama’s famous idea of the “end of history” captured the optimism of the time and, according to Rachman, was “powerful and brilliant” despite also being “whimsical.” It’s easy to see why at least the last of those adjectives holds true. In Fukuyama’s eschatology, the end of the Cold War signified,

the end point of mankind’s ideological evolution and the universalization of Western liberal democracy as the final form of human government.

http://www.youtube.com/watch?v=v2Vp1moqTKs&feature=related

What is striking about this theory, celebratory though it is of the triumph of Western capitalism, is its quasi-Marxist flavor. Communism, too, was meant to be history’s terminus. How ironic, then, that so much of the post-Cold War verve was based essentially on another version of the dialectic, this time with a free-market twist. While Rachman acknowledges that the blissful thinking of the period from the fall of the Berlin Wall to September 11 (11/9 to 9/11) coincided with some pretty nasty turns of fate — Somalia, Bosnia, Rwanda, and Kosovo being the bloodiest — he believes there was never any serious doubt about the viability of globalization and American power. Even after the invasion of Iraq in 2003, when the popularity of the U.S. fell, the belief in America’s superpower status endured.

“It’s only when the tide goes out,” Warren Buffett once said, “that you learn who’s been swimming naked.”

When Western markets sputtered and then collapsed in 2008, it became clear that what had been driving the previous years’ growth was an engine of pure illusion. The flat world of Tom Friedman began to warp and curl at the edges. The tone of geopolitics shifted toward the paranoid. China and the U.S. accused one another of “currency manipulation.” Naomi Klein-style attacks on globalization, available — as with all anti-corporate broadsides — at corporate bookstores, got a second wind.

There was some suspicious talk of trade wars and the occasional reference to the Smoot-Hawley Tariff Act. We had entered the Age of Anxiety, but one might think of it as what Robert Kagan, contra Fukuyama, called the return of history: the realization that the party is over, and that geopolitics did not reach a permanent stasis after the Cold War. Rachman believes the crisis “spread a new sense of American vulnerability” by calling into question “the two fundamental underpinnings of the post-cold war order: American power and free-market ideology.” He is concerned that the “clash of national interests” is what defines the new international order. At least for the moment, feel-good internationalism is dead.

How do we deal with Russia and China in the new age of zero-sum logic? Will there be genuine trade wars? How do we handle Iran and its nuclear ambitions?

This is an extraordinarily relevant book, and its thesis stands up to an objective look at what the facts of our world have become.

Rachman is a tested journalist, and one feels this experience in the “real world” is what accounts for the book’s lack of glibness and sophistry. He writes with clarity but also an admirable modesty. Its weakest point, apart from the author’s tendency to repeat himself toward the end, is a few conspicuously overlooked opportunities for deeper analysis.

Some chapters have a rushed and superficial feel to them, and Rachman, perhaps in his haste to get all his ideas on paper, doesn’t unpack some of his own assumptions about the future. For instance, you might find that the book adds nothing to your knowledge of the Chinese economy after the crash of 2008. I don’t count Rachman among the self-generating and ever-expanding group of China alarmists, but he unfortunately shares with many of them a tendency to write about the Middle Kingdom as though it had been inoculated against the vagaries of fate.

He gives us almost no information, for instance, on what social and economic troubles await China in the so-called Age of Anxiety. We get no mention of its commercial real-estate bubble, no forecast of how years of currency-pegging and yuan inflation might affect Chinese markets or create new bubbles, and very little analysis of its internal political struggles and rampant corruption. There’s only a scant mention of the horrific poverty that still affects most of the countryside and no serious evaluation of its military capability or its demographic problems. Instead, the “rise of China” is assumed to be a necessary fact of the universe, not an empirical question to be weighed against other variables.

Rachman is also vague about what he thinks could serve as the anxiolytic of our age. He recommends three general courses of action. First, to follow the old British slogan to “keep calm and carry on.” Second, “creative leadership,” and third, rebuilding American and European economies.

Easy, no?

Writing as an orthodox liberal, his faith is in enhanced “cooperation” — by this he means a more globalized government, not merely more diplomacy among sovereign nations. He fails to explain sufficiently, however, why nations and their leaders would have either the insight or the foresight to cooperate if they are operating with zero-sum logic. If your argument is that people are not cooperating, you cannot suggest as a “solution” that they cooperate, any more than you can tell a drug addict that the best way to abandon drugs is to stop taking them. This is not analysis but tautology.

Still, readers might be surprised at how a book that is so thoroughly enamored of the EU model can also be so pro-American. I write this as someone who has come to think, whether rightly or wrongly, that any call for a stronger “international community” is an oblique snipe at the idea of American sovereignty.

Rachman has at least introduced some nuance into a prescription that is usually peddled by the one-trick “citizen of the world”: he doesn’t believe that a U.S.-free world is one that would be desirable or peaceful. On the contrary. If this weren’t a book about anxiety, the last sentence could have easily been the first because of its sweeping confidence and, dare I say, optimism:

Eighty years after the Great Depression, a strong, successful, and confident America remains the best hope for a stable and prosperous world.