6 America at the Crossroads

Where does the collapse of the Soviet empire leave the United States? In a profound crisis of national identity. We have learned to think of the world in terms of two superpowers confronting each other and we have had no difficulty in casting ourselves in the role of the good guy confronting the evil empire. This way of looking at the world had its pitfalls - it allowed us to engage in certain practices in places like Central and South America that were no better than those of our adversaries - but at least there was an evil empire confronting us which could be used as an excuse for activities that could not be justified any other way. Now we are losing the most reliable guidepost of our foreign policy, the enemy in terms of whom we can define ourselves. The abominable snowman is melting before our eyes and we are left looking somewhat ridiculous - dressed for the cold war in a warm climate.

The emergence of Europe as an integrated economy is similarly disorienting. We have come to realize that the United States may not be the strongest economy in the world, on account of the rapid rise of Japan, but we remained secure in the knowledge that it was the largest. Now that is no longer true. The European Community is actually larger than the United States, and with the addition of East Germany, not to mention the other East European countries, it is going to become even larger.

Being the largest economy and a military superpower are key features of the American self-image. It will take a profound and wrenching adjustment to renounce them. We like to be the defenders of the free world; we are used to having the last word with our allies; we have veto power in the international financial institutions and we are inclined to downgrade the United Nations exactly because we do not control it.

Our crisis of national identity is much less acute than that of the Soviet Union. But whereas Gorbachev has done some profound `new thinking,' especially in the sphere of international relations, we have done hardly any new thinking at all. Our approach to international relations is firmly grounded in the doctrine of geopolitics, which holds that national interests are determined by objective factors like geography which will prevail in the long run over the subjective views of politicians. I need hardly point out that geopolitics is in conflict with the theory of reflexivity which holds that the views of the participants, exactly because they are biased, have a way of affecting the fundamentals. The present is a case in point. Gorbachev has redefined the policy objectives of the Soviet Union and the fundamentals are clearly not the same as they were before.

The doctrine of geopolitics gained ascendancy as a reaction to the well-meaning idealistic approach to international relations that proved so inadequate in dealing with Stalin's Soviet Union. It is ironic that the well-meaning idealistic approach of Gorbachev should now show up the inadequacy of geopolitics. No wonder that the hardheaded professionals of our foreign policy establishment should suspect a ruse! The weight of evidence is gradually forcing them to revise their views, but much valuable time has been lost in the process. As a result, the United States has been reacting to events rather than taking the lead.

That is a great pity. The participants' perceptions always diverge from reality, but it makes all the difference whether they anticipate or lag behind the actual state of affairs. For better or worse, the United States still occupies the leadership position in the world and if it fails to exercise it, events are going to follow the line of least resistance - we have seen where that is likely to lead.

The Bush administration seems to suffer from a strange inhibition. If feels that it ought not to take the lead in offering economic assistance to Eastern Europe because it lacks the financial means to back up its promises. This attitude reflects a fundamental misconception. The USA is financially constrained today exactly because it has spent so much on defense. As a result, it enjoys a position of uncontested military leadership; and if it is not ready to use that position, what was the point of running up a tremendous budget deficit in the process of attaining it? In other words, the United States has already paid its dues and it can draw on its accumulated credit; the rest of the world ought to put up the cash. They are willing to do so. The Germans are held back only by their desire not to be seen to be going too far on their own - that is why the French initiative to launch an East European Investment Bank was so successful. Japan also wants to be a player in world politics and it is up to the United States to provide the initiative. World leadership is ours for the asking; but if we fail to seize it, we shall lose it. Our military preparedness loses its value as the Soviet threat diminishes; and the economic and financial superiority of Japan is growing by the hour.

The choice confronting the United States can be formulated as follows: do we want to remain a superpower or do we want to be leaders of the free world? The choice has never been presented in these terms. On the contrary, we have come to believe that the two goals go together. They did indeed, as long as the free world was confronted by the `evil empire.' But that is no longer the case and nothing drives home the point better than to contrast world leadership with superpower status. If we insist on preserving our superpower status, we are no longer doing it in order to protect the free world but to satisfy our image of ourselves. If we want to retain our leadership role, we must help bring about a world which is no longer dominated by superpowers.

It so happens that the creation of a new world order would coincide with our narrow self-interest. The gap between the reality of our position and our image of ourselves has widened to the point where it has become unsustainable. The trouble is that we spend more than we earn, both as a country and as a government. The excess in spending almost exactly matches the increase in our military expenditures since President Ronald Reagan took office in 1981 . As a result, our economic competitiveness has eroded and our financial condition has deteriorated to a point where the dollar is no longer qualified to serve as the reserve currency of the world.

The crisis is not acute, and we are only dimly aware of it because we have a willing partner, Japan, that is happy to produce more than it consumes and to lend us the excess. The partnership allows us to maintain our military power, and it allows Japan to increase its economic and financial dominance. Everybody gets what he wants, but in the long term the United States is bound to lose. Many empires have maintained their hegemony by exacting tributes from their vassals; but none have done so by borrowing from their allies. The problem could be resolved by down-sizing our military commitments. The budget deficit could be not only reduced but eliminated and we could recover our economic and financial strength.

What would happen to the world if we stopped standing guard over it? Until recently, virtually all local conflicts have been exploited, but also contained, by superpower rivalry. If the superpowers withdrew, the conflicts could rage out of control. Even at the height of their influence, there were many conflicts that the superpowers were unable to contain. If their power wanes, local wars may proliferate.

Superpower rivalry was a form of global organization; if we abandon it, some other form of organization must take its place. Since the United Nations and the Bretton Woods organizations have manifested their imperfections, we need to improve and strengthen the international institutional framework.

The instrument is readily at hand. The so-called CSCE (Conference on Security and Cooperation in Europe) process has already produced the Helsinki and the Vienna agreements. Gorbachev has asked for the convening of a thirty-five-nation conference later this year. It will provide the setting in which far-reaching new security and cooperation arrangements can be made. As Italian foreign minister Gianni deMichelis suggested, the conference could be converted into a permanent organisation.

The CSCE process is based on the principle of unanimity. While the principle may bring useful results on specific occasions, it needs to be modified, and some element of sovereignty sacrificed, if cooperation and peace are to prevail in the long term. Is the United States willing to accept an international authority that is not under its control? That is where our image of ourselves stands in the way of creating a new world order. To renounce superpower status would require a reshaping of our entire outlook on the world.

Our outlook is based on the doctrine of the survival of the fittest, which we extend both to the economy and to international relations. We recognize the debilitating effect of government intervention, and we extol the virtues of free enterprise. The doctrine of social Darwinism is especially appealing if you are the fittest. That is why it has become so intricately bound up with our superpower status. Like any other doctrine. it contains some inherent inconsistencies. To mention only the most obvious, superpower status implies government intervention on a very large scale - in other people's affairs as well as our own. One way to resolve the contradiction is to withdraw from international relations altogether - there has always been a strong isolationist streak in American politics - but withdrawal is not a viable option. The Soviet Union is on the verge of chaos. Europe needs an American presence and the CSCE process would not be possible without American participation. We need to go a step further in revising our view of the world.

The doctrine of the survival of the fittest emphasizes the need to compete and to come out on top. But unrestrained competition is not sufficient to ensure the survival of the system. Civilized existence requires both competition and control. The Soviet Union discovered that control without competition does not work; we need to recognize that competition without control is equally unsatisfactory. That is true in the economy - stock markets can crash; freely floating exchange rates can disrupt the economy; unrestrained mergers, acquisitions and leveraged buyouts can destabilize the corporate structure. It is true in ecology, as we are beginning to discover after two centuries of unrestrained competition in exploiting natural resources. And it is equally true in international relations. The survival of the fittest is a nineteenth-century idea; a century of unprecedented growth has highlighted the problems of the system as a whole.

The question is, can the needs of the system take precedence over the needs of the participants? The issue does not arise when a system has no thinking participants. Only when there are people capable of formulating alternatives does a conscious choice present itself. At that point, the participants' views become an important element in shaping the system and their attitude towards the system becomes a critical issue. Do they care about the system or only about their place within it? I pointed out in the theoretical framework that open society suffers from a potential weakness: the lack of allegiance to the concept of an open society. Now the problem presents itself in a practical form.

Historically, the United States has a profound commitment to the ideal of an open society. It is enshrined in the constitution and it has also imbued the conduct of foreign affairs. Its influence on foreign policy has not been wholly beneficial. Although it may have helped to keep the country out of foreign alliances until after the Second World War, there were some episodes that came suspiciously close to colonial conquests; and, of course, the United States got involved in two world wars on the side of the Western democracies. At the end of both wars, the United States took the lead in trying to establish a world organization that would prevent world wars in the future. But in the first case the United States itself refused to become a member; and in the second, the Soviet Union rendered the organization all but ineffective. The most glorious demonstration of the open society principle was the treatment of the defeated countries after the Second World War and the Marshall Plan in particular. At that time, the United States dominated the world economy to such an extent that there was practically no distinction between the needs of the system as a whole and the self-interest of the United States.

The United States has now lost its paramount position in the world economy so that the interests of the system as a whole and narrow self-interest are no longer identical. It is the Japanese who are the main beneficiaries. There is also a conflict between being a military superpower that requires heavy spending on defense and being a democracy that satisfies the electorate. The conflict has been resolved along the line of least resistance, through deficit financing. Deficit financing, in turn, has been an important element in our loss of economic hegemony.

A powerful military-industrial complex has come into existence which permeates our economic and political life. Its main drive is self preservation and it is very successful at it. President Eisenhower warned us against it in his parting speech, but it has grown greatly in influence since then. It is the main base of our technology and an important feature of our self image. It even has an ideology: social Darwinism and geopolitics. Unfortunately, there is no countervailing force because deficit financing has obscured the costs. As the last two elections have demonstrated, the electorate simply does not recognize the budget deficit as a problem. Mondale lost because he made it an issue and Dukakis did not even try.

Open Society as an ideal has been relegated to the status of all other ideals: a suitable dressing to cover actions that would be offensive to the public eye in their naked form. Anti-Communism and the defense of freedom are empty phrases to be used in presidential speeches. Policies are determined by cold calculations of self-interest. Since the various self interests national, institutional and personal - are in conflict, their reconciliation is the art of politics. Those who practice it are professionals, those who are motivated by ideals that transcend self interest are amateurs. Any suggestion of generosity or a larger point of view is treated with disdain; even the Marshall Plan has become a dirty word.

There is something fundamentally wrong in prevailing attitudes. The pursuit of self-interest is simply not sufficient to ensure the survival of the system. There has to be a commitment to the system as a whole that transcends other interests; otherwise, a deficiency of purpose will self-destruct open society. It is easy to be generous and to make sacrifices for the sake of the system when one is the main beneficiary of it; it is much less appealing to subordinate one's own interests to the greater good when the benefits accrue to others; and it is downright galling to do so when one has lost one's previously dominant position. That is the position the United States finds itself in and that it why it is so painful to engage in any radical new thinking. It is much more tempting to hang on to the illusion of power.

Our attachment to superpower status is understandable, but it is none the less regrettable because it prevents the resolution of a simmering crisis. The crisis will have to become more acute before it prompts any radical rethinking. In the meantime, a historic opportunity will be lost.

Yet the solution to our problems is close at hand. We no longer need to stand guard over the world; we can relinquish our burdens provided we are willing to abide by collective security arrangements. In the new dispensation the United States would no longer occupy the pre-eminent position it enjoyed at the end of the Second World War; but it would still be a world leader. More importantly, the United States would reaffirm its commitment to open society as a desirable form of social organization and in doing so it would rediscover the purpose which has led to its creation in the first place.

It is ironic that the leaders of the Soviet Union should demonstrate greater devotion to the ideal of an open society than our own administration, but it is not really surprising. Freedom has greater value when one is deprived of it. Moreover, people in the Soviet Union have been cut off from the Western world since Stalin's time and they have preserved Western values as they used to be in the past, while in the West values have changed. Thus the advocates of glasnost can now provide the West with the inspiration it has lost. The fact that Stalin's system has contributed to the degradation of Western values adds to the irony of the situation.

A note of caution is necessary. The gap between Gorbachev's vision and the reality in the Soviet Union is wide enough to sink the concept of open society. It will require the active and aggressive engagement of the Western world to bridge the gap, and even with the best will in the world, success is far from ensured. As we have seen, the best we can do is to slow down the process of disintegration so as to allow the infrastructure of an open society to develop. Gorbachev's failure would reinforce those who preach the gospel of social Darwinism and geopolitics.

Thus there are two ways to interpret the present situation, both of which are internally consistent, self-reinforcing and self-validating and, of course, in conflict with each other. One of them stresses the survival of the fittest; the other advocates the merits of open society. Which of them will prevail depends primarily on the values that are applied. The outcome, in turn, will determine the shape of the world to come. We are truly at a critical decision point in history.