Foreign Affairs

Ian Bremmer’s most recent article in Foreign Affairs on state capitalism was rather interesting and analytical regarding the role of the government in an economy – until this sentence cropped up:

Deeper state intervention in an economy means that bureaucratic waste, inefficiency, and corruption are more likely to hold back growth.

Bremmer articles has gotten more than the usual amount of attention – George Will for example made it the basis for a column. Will rejects one of Bremmer’s basic premises though – that in the developed world, the recent forays into state capitalism are temporary:

[Bremmer] probably is wrong because he underestimates the pleasure politicians derive from using their nation’s wealth as a slush fund for purchasing political advantage.

Will implicitly accepts Bremmer’s above point here – pointing to a reason why government is less efficient than the market – because politics begins to affect it and detract from the bottom line.

Last night, I was at a discussion hosted by the Council on Foreign Relations with Bremmer and Felix Rohatyn on “the state’s growing influence on liberal market economics” – and this question came up a few times. Several people commented on this – and the questioned what I took to be the conventional wisdom on this subject. One, a banker or economist of some sort who assisted Eastern European countries by aiding their government entities (such as phone companies, etc.) transition from a Communist to a capitalist economy. He made it clear from his experience that these government entities were inefficient and wasteful. Rohatyn though made the point that this occurred in a closed, non-transparent economy – and these factors contributed to waste more than government involvement. Rohatyn also made the point – which had Bremmer nodding – that as we could see thanks to our insights into GM and the financial companies – that they seemed rather wasteful and inefficient as well. Rohatyn seemed to think efficiency was only possible if the right person was leading an organization – whether it be GM or the DMV. But I think it may be more a matter of transparency and competition. These are the essence of a free market – which for me should not be defined as the absence of the state from a market, but the presence of choice, of transparency, of competition. The state can engage in practices which destroy or undermine a free market – subsidizing certain companies and declaring monopolies by the state for example. The state must be mindful of how it affects the market if it chooses to compete with private companies.

All of this would be moot though if government is less efficient than private companies. But I wonder – and this is a question – if there is any proof that government is more inefficient than the private market. I mean – I can tell you from my own experience that government can be inefficient. But I can also tell you that private companies also can. In terms of health care, at least some studies have found that Medicare is more efficient at providing health care than private insurers – as they eliminate the first step of illegally rejecting all payments on claims as a matter of course.

Of course – the many examples of government efficiency are legendary – but wasn’t it one of our bastions of capitalism that spent millions on his own personal bathroom. Of course, waste is less galling if it isn’t done with our own money. But I’m hoping someone out there has a study proving this – or disproving it.

It seems to be one of those ideas that are just accepted – conventional wisdom.

[Photo courtesy of christhedunn.]

[digg-reddit-me]In an article in the New York Times evaluating John McCain’s foreign policy vision, Lawrence Eagleburger, secretary of state under the first President George Bush, described a fight currently being waged within the Republican party over the potential direction of McCain’s foreign policy: “It may be too strong a term to say a fight is going on over John McCain’s soul. But … there is at least going to be an attempt.” Eagleburger was referring to was the foreign policy chasm between the Republican party of Richard Nixon, Ronald Reagan ((One could argue that Ronald Reagan was not a pragmatist, but many of his administration were, and his foreign policy was essentially pragmatism wedded to extreme rhetoric.)) , and George H. W. Bush and the Republican party of George W. Bush; between the realists and the idealists; between the paleo-cons and the neo-cons.

John McCain been playing both sides of this intra-Republican war since George W. Bush took office. In his most prominent speech on foreign policy, he described himself as a “realistic idealist.” He explained that his particular approach to the world came from his idealistic core being tempered by “hard experience.” He claims to bridge the chasm between these two approaches, and through his career he has mainly managed to assuage both sides. On the most prominent issue in recent years, Iraq, most of the pragmatists questioned, and often publicly opposed, the decision to launch a preemptive war in the Middle East; the neo-cons were the main proponents of the war. McCain managed to placate both sides by criticizing the execution of the war and the tactical decisions of the Bush administration while defending the overall strategy strongly. In this, McCain was essentially taking the neo-con side in the long-term, but allying himself for the short-term with the realists.

Though this approach has worked well for McCain as a senator, it would be impossible to continue as president because McCain would then have responsibility for both the overall strategy of the War on Terrorism and the tactics used.

For the moment, both the realist camps and the neo-conservative camps believe McCain is on their side at heart. But he can’t be on both sides. If we are to try to figure out what a McCain foreign policy would look like, it is unhelpful to list the specific policies and attitudes he has stated he will adopt towards particular nations. Foreign policy is a constantly shifting, adjusting use of power – and the single area of policy most directly and completely within the control of the executive. What is useful in trying to figure out what a McCain foreign policy would look like is an understanding of the basic assumptions McCain has about foreign policy.

A focus, first and foremost, on the overriding and existential threat of “radical Islamist extremism.”
McCain considers problems such as China’s rise, Russia’s increasing belligerence, and global climate change as far less important than the defining “national security challenge of our time.” I posited in an earlier post that it is because of the importance of the fight against Islamist extremism that McCain has flip-flopped on so many other domestic and national security issues: “After September 11, McCain had found a new enemy that was greater than the corruption of the political process and he was willing to put aside all of his domestic agenda to focus on the new enemy.”
A demand for moral clarity.
McCain has, throughout his career, sought enemies to fight. His personal sense of his self seems to demand that he be the white knight and those opposing him be the forces of evil itself. This is an exaggeration certainly ((Hopefully.)) , but this demand for absolute clarity leads to a poor understanding of the world, especially of our enemies. For example, McCain does not merely lack an understanding of the Muslim world; his positions indicate he has imposed a particular ideological framework on his understanding – a framework which does not allow for distinctions among radical groups. ((As his comments in Iraq made clear. Those who would defend McCain as having “mis-spoke” can look to at least three instances when he expressed the same idea.)) While many on the right praise McCain’s moral clarity for condemning radical Islamist extremists as the evil-doers they are, it seems an unquestionably poor strategy in a War on Terrorism to unite our enemies instead of attempting to divide them. It is notable that McCain does not mention the clear and tactically vital divisions among our enemies and among our allies in the Middle East. The words “Sunni” or “Shia” are not mentioned in either of McCain’s two attempts to lay out his entire foreign policy. In this way, McCain is continuing the tradition of George W. Bush.
Iraq as the central front in the War on Terrorism.
McCain cites Al Qaeda as proof that Iraq is a central front in the War on Terrorism. But Sun Tzu, ancient and wise author of The Art of War, has said that one of the first steps to winning a war is to choose the battlefield that gives you the most advantages. Al Qaeda apparently feels that Iraq plays to their advantages. In many ways, they are right. In an extraordinary article in The New Republic, Peter Bergen and Paul Cruickshank write of the “jihadist revolt against Bin Laden.” They cite a range of Muslim religious leaders, former and current terrorists, and a man described the “the ideological father of Al Qaeda” who were sympathetic to Bin Laden, even after September 11, who have all publicly broken from Al Qaeda in the past several years ((Most since 2005.)) . Bergen and Cruickshank caution that:

Most of these clerics and former militants, of course, have not suddenly switched to particularly progressive forms of Islam or fallen in love with the United States (all those we talked to saw the Iraqi insurgency as a defensive jihad)

But Bergen and Cruickshank still believe that the anti-Al Qaeda positions of these radicals are making Americans safer. John McCain refuses to differentiate between the insurgency and the forces of Al Qaeda in Iraq – an enormous tactical blunder. And it is mainly because of this confusion that he has declared that Iraq is the central front of the War on Terrorism, when in fact, it is one of the few areas that unite jihadists opposed to Al Qaeda and Al Qaeda itself. ((The distinction here should be a bit more subtle as the jihadists referenced by Bergen and Cruickshank oppose Al Qaeda’s tactics in Iraq, so they are not totally united on that issue.))
Premised on the exclusive power of nation-states.
In contrast to Richard Haas, editor of Foreign Affairs magazine, who believes we are in an age of non-polarity with non-state forces multiplying and state power dispersing, McCain premises his foreign policy on the power of nation-states – both America’s power and that of other nations – to affect virtually every area of policy. As McCain sets forth his foreign policy vision, he describes his policy country by country; for those issues he considered global, he describes how he will get other countries to act with us. While his aims here are clearly worthy, he seems to misunderstand how the world has been developing since the end of the Cold War. This assumption also underlies his focus on Iraq in the War on Terrorism. Even as Al Qaeda did much of the planning for it’s attacks in the lawless areas of Pakistan and within the free societies of Berlin, London, and New York City, McCain, like Bush, has focused on the role of states in assisting terrorism. Although this is certainly one component of any War Against Terrorism, it clearly should not be the main focus. One of the achievements of four years of a McCain presidency would be, according to a speech given by the candidate two weeks ago, that “There is no longer any place in the world al Qaeda can consider a safe haven.” Certainly a worthy goal – but it is belied by the fact that Al Qaeda can function within the freedoms offered by a Western democracy. The theory underpinning this claim, this hope, of McCain’s is that Al Qaeda can only function with some form of state sponsorship – which does not seem to be a supportable assumption.
Demonstrations of toughness.
Since John F. Kennedy suffered through his meeting with Kruschev in Vienna ((And probably before.)) , presidents have been trying to prove their toughness to the world. The Cuban Missile Crisis was mainly a demonstration of toughness on the part of Kennedy; Lyndon Johnson pushed the line in Vietnam to show he was tough; Ronald Reagan invaded Grenada to demonstrate his toughness after retreating when attacked by Muslim extremists in Lebanon; Bill Clinton bombed countries to show his toughness; George W. Bush invaded Iraq and authorized torture. In the current campaign, each of the remaining candidates has tried to demonstrate their toughness in revealing ways. Hillary Clinton threatened to obliterate Iran; Barack Obama vowed to take out Bin Laden or a top Al Qaeda operative with or without Pakistan’s permission; John McCain has promised to continue the War in Iraq. The lesson I take from the historical examples is that “demonstrations of toughness” provide a boost domestically for a short time but rarely make the desired impression internationally, and are an exceptionally bad basis for a policy. McCain, by promising not to back down from Al Qaeda in Iraq, is buying into the Bush doctrine of replacing a genuine strategy to combat terrorism with “demonstrations of toughness”.
Acting as “good global citizens.”
This is the central difference between John McCain’s foreign policy vision and George W. Bush’s. He believes it is important that America act as a “good global citizen” and a good ally. For McCain, this means working internationally to combat global climate change, being open to persuasion by our allies, ending the policy of military torture of detainees ((Torture by the CIA is apparently still a deliberately gray area.)) , and numerous goodwill gestures. The Bush administration has begun to move in this direction in his second term already. McCain would be able to move further along, and could make genuine progress on global climate change.
Inherent American exceptionalism.
This idea is directly related to McCain’s demand for moral clarity. Just as he sees himself as essentially incorruptible, so he sees America. This idealization of America is what made his opposition to torture so inspiring. He was calling on the ideal conception of America to combat a corrupting evil which had been introduced into our system. In a similar way, he used his ideal conception of America to argue for the reform of our political process in his 2000 campaign. His foreign policy though demonstrates how this can be a very bad assumption to make. It is one thing to point to American history and to say that we have been an exceptional nation – as Obama regularly does. McCain implies an inherence to America’s goodness, one that exists irrespective of our actions. This assumption underlies McCain’s insistence that the decision to invade Iraq was right ((For if America is inherently good, it cannot be ill-motivated.)) ; that the Bush administration’s strategy in the War on Terrorism is essentially sound; that a change in tone is what is mainly needed to rally our allies; that we remain the world’s “only monument of human rights” in spite of Abu Ghraib, Guantanamo, secret prisons, torture, and Iraq; that we must still “protect and promote” democracy to the Middle East; and that America offers a “unique form of leadership – the antithesis of empire – [which] gives us moral credibility, which is more powerful than any show of arms ((One of McCain’s top foreign policy advisors, Niall Ferguson, wrote a book explaining that by virtually any definition, America is an empire.)) .” This is a dangerous idea in a large part because it is not shared by most of the world. For example, although we can declare we are the “antithesis of empire”, we will still be treated as one as long as we are projecting our military, economic, and political power around the world and occupying a sovereign nation.

Some questions remain about McCain’s basic views on foreign policy – many stemming from his triangulation between the neo-cons and realists for the past decade. I’ll be posting some of them later.