An Alternative Grand Strategy

Now, you are making an argument about what an alternative grand strategy would look like, and there are at least two elements that stand out: One is responding to a multipolar world, that if we're not there yet, we're getting there. That suggests that the other powers have to be consulted, that if you don't consult then you are going to discover that your goal is not going to be realized, because you're going to need them down the road. The other part that is rather interesting is that if you're serious about an economic strategy which will lead to economic development across the globe, and at least meet and work toward solving the problem of inequality, that you need to have a policy that's building a middle class worldwide. Talk a little about those two key components.

Yes, and, parenthetically, let me reassure you, I do know that there are multiple traditions in Texas. I am the proud editor of a book that Mike Lynn published, Made in Texas, which talks about the struggle between the two political culture traditions in Texas, and [talks about] which one George Bush represents. So I know there's a lot of good that has come from Texas. In fact, we can benefit from that other part of Texas that believed in public investment in science and technology ...

Ralph Yarborough, and some aspects of Lyndon Johnson.

Absolutely. And I think it would benefit us and the world if we took that part more seriously.

But that's a long way of getting back to your basic point, which is that if you understand that many American foreign policy goals which are legitimate in terms of wanting an order that is based on some semblance of democratic participation [depend on] good governance and, eventually, middle-class standards of living for people. If you want to contain and eventually reverse the crises cause by the collapse of multiethnic empires and states, especially in areas where trafficking of nefarious and dangerous materials might endanger international security, that requires a collective commitment to certain world order goals. And that, in turn, means that our foreign policy should be based on encouraging the emergence of other responsible centers of power and authority, both at the international level and national and sub-national levels, that are willing to commit resources and efforts in the common pursuit of these goals.

The United States has seduced itself into believing that nothing good can happen in the world unless the U.S. does it. But despite the fact that we have the largest economy and the largest military, the world order problems we're talking about dwarf American resources. We now feel constrained by the fact that we can't even do successful nation-building or state-building in Iraq and maintain military security there. Think of all the other problems that we'd have to deal with.

In the case of North Korea, we're discovering that we need our regional allies there, including China.

In fact, they're taking the lead. This is why we're already in a post-Bush world, the kind of world which I call an international governance. Multipolarity, tempered by international law and governance, has taken hold in the way that the problems in North Korea and Iran are being dealt with. You know, the solutions [in North Korea] won't be perfect, either, but having China's diplomatic and other resources, as well as Japanese and South Korean money, will help contain and manage it. It might be too much to solve totally until there's a full transition in North Korea, [but that approach] is absolutely critical to world order and American foreign policy interests, and, indeed, national security. We're very dependent on that.

We're very dependent on the ability of the Pakistani state to continue its own scientific intelligence community. But, in turn, that's dependent upon a responsible foreign policy and center of power in India. There's nothing America itself can overwhelmingly do, because even its foreign policy budget is not big enough to buy the state of Pakistan. And it doesn't have enough legitimacy, especially in the eyes of the Islamic participants in many parts of that [nation]. So we have to depend on others, or we have to try to steer and help command the resources of other people's power or resources, influence and legitimacy, to be able to solve these problems. And to my mind, that's just a matter of looking at the world and coming to a commonsense appreciation. You don't have to be a UN ideologue or anyone else, it's just a practical yet principled way of looking at the world.

One of the vulnerabilities that we have, as you point out very well in your articles, both in the Atlantic and in World Policy, is the debt that we are creating to manage the world in the way we're choosing to manage it, and especially [the fact that] the Chinese and the Japanese are buying that debt. Because we're opening our market to their products, they are willing to buy the bonds that we're selling to fund the near bankruptcy which these policies are pushing us toward.

Yes, there's a codependency relationship that we are aware of, that we tend to ignore. We also ignore that since we're, in essence, importing 4 percent to 5 percent of their GDP -- it moved up from about 2 percent to 3 percent in '97 to now over 5 percent ...

We're doing what now? Repeat that.

We're importing, because we're relying on capital flows, the equivalent of more than 5 percent of their GDP. It means that we wouldn't be able to invest and consume as much if we didn't have access to that. We're borrowing 5 percent. That allows us to feel wealthier and more powerful. That, in fact, pays for our entire military budget in some respects. But it allows Americans to feel wealthier. In fact, the Japanese and Chinese hold the 2004 election in their hands.

Now, that wasn't perhaps such a worry when the American economy seemed to be attractive to foreign private investors. But now it's a matter of state policy of Japan and China that they're saying, "We're not going to make money by buying treasuries, but we're part of the system of trying to keep this afloat because we want to sell our goods in the U.S." So it could last awhile, but the end result is that at some point we're going to be stuck with paying off a lot of interest and dividends, and giving away a lot of assets, because we haven't had a solvent foreign policy or we've lived beyond our means. So there's a day of reckoning -- it may be five years away, it may be ten years away. There will probably be small days of reckoning along that path. But we're not on a sustainable course, and that reinforces the first point, which is we need to have a foreign policy grand strategy that harnesses the resources and efforts of others in these common world order goals, because we're going to even have less influence and less resources down the road because of this basic economic reality.

If that is your recognition of the world reality, I would like you to talk about your idealistic thrust in your grand strategy. That is, the idea that you need policies that develop a middle class globally, so that the successful, creative element in our economic structure -- a prosperous middle class buying products that are made in factories, and buying the services that are available -- will be broadened globally, and therefore will create stability in a lot of places internally and at the international [level]. Talk a little bit about that.

You're quite right, it serves both a security or a stability role, in terms of creating healthy societies that are more stable, but it's also a necessary element to have a successful adjustment to a world that is no longer [dependant], or can no longer depend on the U.S. consumer market to drive increases in net aggregate demand in the world economy.

It's also idealistic, in the sense that it does take some of the best of what American development was about. America had its Clay period where it used terrorists to build an industrial structure, but then it had its period of where it promoted mass prosperity with both government and quasi-government programs that enabled people to build their own homes, buy their own homes on credit, and develop infrastructure [via] municipalities that can issue bonds to build a sewer system, or to bring electricity to all their homes or to improve their schools. Those were all core parts of this middle class prosperity that developed in the post-Depression America, and there are a lot of useful lessons to learn.

But you can't have countries as large as China or India, if they're going to fully develop, who are dependent on increases in demand in the American consumer market. American consumers are already stretched. We benefit from it in the short term, but it's not going to work in the long term. So let's find an overarching idea, rather than financial liberalization, which tries to keep them buying our bonds.

Let's find an idea that will both make those countries healthier societies and serve our security interest, but also help us work our way out of this very difficult economic problem that we're going to have, which is that we're accumulating all this debt, and we're increasingly becoming a country that consumes too much and produces too little: a country of consumers. Ultimately, while a certain amount of consumption is good, it's not healthy for us. In the end, you lose your moral compass if your society is built too much on consumption and not enough on [production]. Obviously, we still produce a wealth of things, in terms of ideas and certain high-tech industries, etc. But you know, the City of San Francisco is a good illustration, I'm not sure what San Francisco actually produces and sells to the world.

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