The Default Power and the Sword of Damocles

Josef Joffe's recent article in Foreign Affairs, "The Default Power", argues that despite recent suggestions that American power may be waning, America remains firmly on top: its military is unmatched, its leadership in resolving the financial crisis is evidence of its unparalleled economic strength, and its ideals are attractive enough to ensure American rule for a long time to come. While there is no denying American military power, this power could become a liability if America feels compelled to bear the burden of policing an increasingly multi-polar economic world alone. American ideals are indeed attractive to the world's peoples, but America's conduct in Iraq especially has called that into question.

Joffe's main thesis relies on straw men, oversimplifications, and far-fetched extrapolations.  He attacks what he calls "declinism" as a form of cyclical panic, citing the "prophecies of doom" that followed Soviet detonation of a nuclear weapon, the launch of Sputnik, and the general missile gap of the late-fifties, as though a false argument to an effect proves the effect itself false.  However, it was these "prophecies of doom" that compelled the Kennedy Administration to start the Apollo program and prevent the Soviets from placing missiles 90 miles from Key West.  Perhaps Joffe's "prophecies of doom" would be more aptly called "trenchant criticism taken seriously by elites."  Joffe continues to detail the history of "declinism" under the false premise that because past predictions of the demise of American power turned out to be false, all current and future predictions of the demise of American power must also be false:

A decade (after Jimmy Carter's "malaise" speech), academics such as Yale historian Paul Kennedy predicted the ruin of the United States, driven by overextension abroad and profligacy at home.  The United States was at risk of "imperial overstretch," Kennedy wrote in 1987, arguing that "the sum total of the United States' global interests and obligations is nowadays far larger than the country's power to defend them all simultaneously."  But three years later, Washington dispatched 600,000 soldiers to fight the first Iraq War--without reinstating the draft or raising taxes.  The only price of "overstretch" turned out to be the mild recession of 1991. 

This is akin to arguing that because the contention that the sky is blue because God likes blue is false, the sky must not be blue.  Furthermore, this analysis ignores the realities of the Gulf War.  The Gulf War had limited goals: push Saddam out of Kuwait and open his regime to UN nuclear inspection.  It consequently lasted only seven months and cost 379 allied lives.  Compare this to the 6,000+ allied troops killed in a combined fourteen and a half years in Iraq and Afghanistan.  The latter war has no end in sight, and there is a planned escalation of hostilities.

Furthermore, two thirds of the $60 billion cost of the Gulf War was paid by Saudi Arabia.  In the "Global War on Terror," the U.S. has already officially spent more than $800 billion--forty times what it spent on the Gulf War--with an estimated $3 trillion cost to the U.S. economy.  These figures already dwarf Vietnam, yet a lot of the actual costs of the "War on Terror" are hidden in escalating Pentagon operating budgets and non-earmarked DoD spending appropriations.  The non-partisan Congressional Budget Office has estimated true costs to be upwards of $1 trillion.  As Reason puts it:

How much money is $1 trillion?  Enough to pay for the entire 1976 federal budget, adjusted for inflation.  Enough to write a check for $37,500 to every Iraqi man, woman, and child.  Enough to buy 169,492 Black Hawk helicopters, or 455 stealth bombers.  Enough, in nominal terms, to pay for the entire federal government from 1789 to 1957.  And it's 10 times more than what specialists predict it would take to eradicate malaria once and for all.  

The Gulf War featured a coalition of 34 countries, plus financial contributions from Germany and Japan.  In the 2003 Invasion of Iraq, George W. Bush spurned the international community and acted unilaterally (with only a small "coalition of the willing"), excoriating the standard for international cooperation set, ironically, by his father, and forcing the U.S. to cope disproportionately with the uncertainties of two wars.

There is no doubt America is overextended.  It's survival as the sole hegemon rests on the fact that no one country or group of countries is powerful enough or organized enough to make a power play. While America has been stuck in the quagmires of Iraq and Afghanistan, future challengers have been left unchecked, and they have been unfettered by America's distractions.  During the "War on Terror," North Korea and Iran increased uranium enrichment and nuclear proliferation, Venezuela and Bolivia kicked out U.S. diplomats and built stronger ties with Russia, the Shanghai Cooperation Organization conducted military exercises in Central Asia, and Vladimir Putin's Russia has engaged in aggressive behavior relating to energy and regional autonomy, despite an expert on Russia, Condoleeza Rice, being the U.S. Secretary of State.  It's revealing that Bush's criticism of the 2008 Russian invasion of Georgia fell largely on deaf ears.  According to Gamel Abdel Gawad at al-Ahram Center for Political and Strategic Studies in Cairo:

Bush did not realize that by intervening heavily in other countries' affairs, he would give the same right to other players.  The U.S. had no problem to interfere and separate provinces from bigger states like it did with Kosovo.  This is exactly what Russia is doing now: intervening to prevent the annexation of certain provinces to Georgia.  Russia is using the same logic that the U.S. used.

Joffe contends throughout "The Default Power" that China bulls shouldn't rely on linear projections of that nation's GDP to make inferences about the future global balance of power, a point with which I wholeheartedly agree.  Indeed, Joffe's analysis of China is especially apt.  The recent high growth rates are relatively new phenomena and are likely to come down to earth as they are affected more and more by the forces of world trade--there is always the potential for shocks and recessions.  However, to counter linear projections of China's future GDP, Joffe relies on linear projections of the populations of the U.S. and China to the year 2050.  He cites a single study by Goldman Sachs to assert that:

...the median age in the United States will be the lowest of any of the world's large powers, except India.  The United States' working age population will have grown by about 30%, whereas China's will have dropped by 3%.  The economic and strategic consequences will be enormous.  China's aging population will require a shifting of resources from investment to welfare, thus reducing China's growth...If China cannot dodge this, how can it expect to unseat the United States as the greatest military power the world has ever seen?      

This argument relies on a cocktail of assumptions such that its margin of error is many times the figures it projects.  First, it assumes that China will be in a position to suddenly develop a more comprehensive welfare program for a disproportionate number of retirees.  Second, it assumes there will be no significant increases in life expectancy in the developed world.  Were such a technology to come about, it would impact the United States to a far greater degree than it would impact China. (At this point, I'm imagining Ray Kurzweil and Josef Joffe having coffee together.)  Even increased access to antiseptics, higher standards for food safety, additional incentives against tobacco use, new stress management techniques, a religious revival, an atheist awakening, and other small unknown innovations could have major effects on the population growth of either country.  The high rate of immigration that population growth in the United States depends on could be affected by new healthcare legislation or a sudden wave of xenophobia.  Space aliens could come and kill every last American, there could be an outbreak of a retrovirus that decimates the population, the scenario from the film "Children of Men" could play out...the point is that 2050 is a very very long time from now.  Humans have never had a successful track record at predicting the future, and to rely on such projections to attack other projections is a self-serving contradiction.

Joffe suggests China is paralyzed because its GDP in large part depends on exports to the United States, however, Japan's GDP used to depend on exports to the United States (Exports still play a large role.), but Japan reallocated resources to build a domestic consumer economy during its rapid economic growth in the 1980s.  Indeed, Chinese central planners are already beginning such a shift.

Joffe's next point is about the considerable international leadership of the U.S.:

When (the U.S.) adopted a hands-off policy towards the Arab-Israeli conflict in the early years of the Bush Administration, no other state could fill the vacuum...Nor could any other state have harnessed the global coalition that has been fighting the Taliban in Afghanistan.  The six-party talks in North Korea were orchestrated by the United States; on the other hand, the three-party talks with Iran--led by France, Germany, and the United Kingdom--could not put a stop to Iran's nuclear ambitions...More recently, in 2008, it was the United Kingdom and the United States--rather than the G-20--that took the lead in battling the global financial crisis, with massive stimulus measures and injections of liquidity.      

There are many problems with this list.  First, Palestine and Israel have been fighting each other for sixty years, with few real breaks in the action.  The U.S., in addition to every other country, has been unable to broker a successful peace agreement.  Joffe is saying that no one could duplicate U.S. leadership, despite the failure of U.S. leadership to solve the problem.  This argument holds for Afghanistan as well, which is looking more and more like it will never stabilize.  Privileging the success of the six-party talks with North Korea over the three-party talks with Iran is a very charitable reading of two programs that failed to acheive anything, though, since the publication of "The Default Power", the latter might have reached an agreement that is to everyone's advantage.  Joffe's economic analysis uses a self-reinforcing measuring stick: because the U.S. and the U.K. spent the most money on trying to solve the financial crisis, they exhibited the most "leadership."  Yet the purchasing power parity of those two countries dropped dramatically compared to countries with more minimalist responses to the global financial crisis, like Switzerland and Japan. 

Despite Joffe's assertion that the U.S.'s position is secure for years to come, there are many scenarios, however unlikely, that could oust the U.S. from its position of authority.  Thankfully, the Obama Administration seems to be maneuvering to minimize risk, but many scenarios involving a decline of American power are beyond the abilities of the White House to prevent. 

A few weeks ago, the Independent ran a news story that Gulf Arabs had conspired with Iran, Russia, France, Japan, and China in switching from the U.S. dollar to a basket of currencies to use for trade in oil, in order to hedge their bets against the inflation many predict as a result of America's aforementioned "massive stimulus measures and injections of liquidity."  It turns out the story was a hoax, but it presented a relatively trivial event which exposed the weakness of the American currency.  Were oil to move from being backed by dollars to being backed by a basket of currencies, it would likely inspire other global commodities conglomerates to do the same.  Eventually, such a paradigm shift could take hold of the central banks themselves, and before America could adjust--if in fact it is possible to adjust to such a thing--the collateral against its debt would be detroyed when it was at its economically weakest.  Such a scenario, though false, revealed a strength that, because of U.S. overextension, could prove a liability.

New Japanese Prime Minister, Yukio Hatoyama, has announced that he seeks an Asian currency union on the EU model and an integrated, regional economy.  Currently, U.S. diplomacy in East Asia relies on splitting the interests of China and its neighbors.  Countries such as Japan and South Korea see U.S. military power as a hedge against Chinese expansion, but if an Asian Union took hold, they might gravitate more to China for leadership in cases where it suited their own interests.  Such an Asian Union would create a tri-polar world, where the EU and AU would team up on occasion to check the ambitions of the U.S. 

These are just two known scenarios that show that remaining only the leader by default is dangerous.  Other countries, especially European ones, have an incentive to rely on the U.S. for military purposes, while simultaneously castigating America for being belligerent.  Despite the London and Madrid bombings, America absorbed the brunt of the blowback for Western actions against the Soviet Union in the form of 9/11, and America will continue to absorb the effects of being world police.  Josef Joffe closes "The Default Power" with:

A final point to ponder: Who would actually want to live in a world dominated by China, India, Japan, Russia, or even Europe, which, for all its enormous appeal, can't even take care of its own backyard?  Not even those who have been trading in glee and gloom decade after decade would prefer any of them to take over as housekeeper of the world.

Unfortunately, world powers are not chosen by democratic election.  Were that the case, surely America would defeat any would-be rivals.  As the European Union and the countries of East Asia continue to grow in economic influence, the U.S. military, by far the largest and most powerful on earth, will continue to be relied upon for protection.  Currently, American economic might and the ability to convene effective coalitions to greater purpose allows privileged leadership.  However, in a world in which the U.S. abuses its power or fails to provide economic stability, it could lose its advantage while still footing the bill for worldwide security.

Fixing the incentives requires a shift to collective global responsibility for security: the paradigm set by the Gulf War must be restored.  This allows the US to still effectively convene coalitions and to socialize both losses and gains.  In the case of the Iraq War and the War on Terror especially, gains are socialized: a more stable world without al-Qaeda benefits everybody.  But losses are capitalized, since the U.S. is the main recipient of blowback and is paying most of the costs.  The U.S. needs to avoid getting involved in these sorts of wars in the future.   

The United States has the strange dichotomy of being perceived as both highly civilized and highly militant. To say these elements don't exist for all cultures is a form of nationalist exceptionalism, however, America is both the artist of the world and its chief of police. Rome was in a similar position 2000 years ago, when moderate statesman, Marcus Tullius Cicero, included "The Sword of Damocles" in his Tusculan Disputations, intending to popularize stoic moral uprightness in the last days of the Roman Republic. "The Sword of Damocles" tells of a coutier who trades places with a tyrant for a day, only to realize that, for all of his riches and power, the tyrant has a sword above his throne, suspended by a single horse hair. The parallels between Cicero's Rome and today's American Republic are striking: Cicero wrote "The Sword of Damocles" as a metaphor for the fate that awaits those who abuse their power; Josef Jaffe castigates the parables of modern Ciceros as irrelevent.

Whether or not America likes it, it is in a position of management of the international community.  America needs to seek and receive international support for its international action to ensure that its power does not breed resentment.  The Obama Administration is doing an excellent job thus far of rebuilding America's crumbling alliances and preparing for the unknown, but America still has much work to do if it wants to be not just the default power, but the power by choice.