We document the behavior of trade prices during the Great Trade Collapse of 2008–2009 using transaction-level data from the US Bureau of Labor Statistics. First, we find that differentiated manufactures exhibited marked stability in their trade prices during the large decline in their trade volumes. Prices of non-differentiated manufactures, by contrast, declined sharply. Second, while the trade collapse was much steeper among differentiated durable manufacturers than among non-durables, prices in both categories barely changed. Third, despite this lack of movement in average price levels, the frequency and magnitude of price adjustments at the product level noticeably changed with the onset of the crisis.
Co-author Oleg Itskhoki is a professor of economics at Princeton University. Co-author Brent Neiman is at the
Booth School of Business at the University of Chicago.Download PDF
Global trade is of vital interest to citizens as well as policymakers, yet it is widely misunderstood. This compact exposition of the market forces underlying international commerce addresses both of these concerned groups, as well as the needs of students and scholars. Although it contains no equations, it is almost mathematical in its elegance, precision, and power of expression.Understanding Global Trade provides a thorough explanation of what shapes the international organization of production and distribution and the resulting trade flows. It reviews the evolution of knowledge in this field from Adam Smith to today as a process of theoretical modeling, accumulation of new empirical data, and then revision of analytical frameworks in response to evidence and changing circumstances. It explains the sources of comparative advantage and how they lead countries to specialize in making products which they then sell to other countries. While foreign trade contributes to the overall welfare of a nation, it also creates winners and losers, and Helpman describes mechanisms through which trade affects a country's income distribution.The book provides a clear and original account of the revolutions in trade theory of the 1980s and the most recent decade. It shows how scholars shifted the analysis of trade flows from the sectoral level to the business-firm level, to elucidate the growing roles of multinational corporations, offshoring, and outsourcing in the international division of labor. Helpman’s explanation of the latest research findings is essential for an understanding of world affairs.
Identifying causal mechanisms is a fundamental goal of social science. Researchers seek to study not only whether one variable affects another but also how such a causal relationship arises. Yet commonly used statistical methods for identifying causal mechanisms rely upon untestable assumptions and are often inappropriate even under those assumptions. Randomizing treatment and intermediate variables is also insufficient. Despite these difficulties, the study of causal mechanisms is too important to abandon. We make three contributions to improve research on causal mechanisms. First, we present a minimum set of assumptions required under standard designs of experimental and observational studies and develop a general algorithm for estimating causal mediation effects. Second, we provide a method for assessing the sensitivity of conclusions to potential violations of a key assumption. Third, we offer alternative research designs for identifying causal mechanisms under weaker assumptions. The proposed approach is illustrated using media framing experiments and incumbency advantage studies.
Barack Obama became US president, one of his top foreign policy
priorities was to improve relations with China. Yet on the eve of
President Hu Jintao's state visit to Washington, US-China relations are
worse, rather than better. Administration officials feel their efforts to reach out to China have been rebuffed. Ironically, in 2007, President Hu Jintao had told the 17th
Congress of the Communist Party that China needed to invest more in its
soft, or attractive, power. From the point of view of a country that was making enormous strides in economic and military power, this was a smart strategy.By accompanying the rise of its hard economic and military
power with efforts to make itself more attractive, China aimed to reduce
the fear and tendencies to balance Chinese power that might otherwise
grow among its neighbours. But China's performance has been just the opposite, and China has had a bad year and a half in foreign policy.Rising nationalismFor years, China had followed the advice of Deng Xiaoping to keep a low profile.However, with its successful economic recovery from the
recession, China passed Japan as the world's second largest economy, and
America's slow recovery led many Chinese to mistakenly conclude that
the United States was in decline.Given such beliefs, and with rising nationalism in China as it
prepares for the transition of power to the fifth generation of leaders
in 2012, many in China pressed for a more assertive foreign policy.In 2009, China was justly proud of its success in managing to
emerge from the world recession with a high 10% rate of economic
growth. But many Chinese believed that this represented a shift in
the world balance of power, and that China should be less deferential to
other countries, including the US. Chinese scholars began writing about the decline of the US. One dated the year 2000 as the peak of American power. "People are now looking down on the West, from leadership
circles, to academia, to everyday folks," said Professor Kang Xiaoguang
of Renmin University. This Chinese view is seriously
mistaken and China is unlikely to equal American economic, military or
soft power for decades to come. Nonetheless, this over-confidence in power assessment
(combined with insecurity in domestic affairs) led to more assertive
Chinese foreign policy behaviour in the last two years.China miscalculated by deviating from the smart strategy of a
rising power and violating the wisdom of Deng Xiaoping who advised that
China should proceed cautiously and "skilfully keep a low profile".But perceptions matter, even when they are wrong. China's new attitudes alienated the Obama administration. China stage-managed President Obama's trip to Beijing in
November 2009 in a heavy-handed way; it over-reacted to Obama's meeting
with the Dalai Lama, and the administration's long-expected and
relatively modest arms sales to Taiwan.When asked why they reacted so strongly to things they had
accepted in the past, some Chinese responded, "because we were weaker
then". Obama administration officials began to believe that efforts
at co-operation or conciliation would be interpreted by the Chinese as
proof that the US was in decline.Alienation and irritationChina's new assertiveness affected its relations with other countries as well. Its policies in the South China Sea created fear among the
Asean nations; and its over-reaction to Japan's actions after a ship
collision near the Senkaku Islands put an end to the Democratic Party of
Japan's hopes for a closer relationship with China. Instead, the Kan
administration reaffirmed the American alliance.Beijing alienated South Korea by failing to criticise North
Korea's shelling of a South Korean island; irritated India over border
and passport issues; and embarrassed itself in Europe and elsewhere by
over-reacting to the Nobel Peace Prize granted to the jailed dissident
Liu Xiaobo. How will these issues play out in the coming year? It is likely that China's leaders will draw back somewhat from the overly assertive posture that has proven so costly. President Hu Jintao's stated desire to co-operate on
terrorism, non-proliferation and clean energy will help to lead to a
reduction of tensions, but powerful domestic interest groups in the
export industries and in the People's Liberation Army will limit
economic or naval co-operation.And most important, given the nationalism that one sees on
the blogosphere in China, it will be difficult for Chinese top leaders
to change their policies too dramatically. Mr Hu's state visit will help improve matters, but the
relationship will remain difficult as long as the Chinese suffer from
hubris based on a mistaken belief in American decline.
“The statesman can only wait and listen until he
hears the footsteps of God resounding through events; then he must jump
up and grasp the hem of His coat, that is all.” Thus Otto von Bismarck,
the great Prussian statesman who united Germany and thereby reshaped
Europe’s balance of power nearly a century and a half ago.Last week, for the second time in his presidency,
Barack Obama heard those footsteps, jumped up to grasp a historic
opportunity … and missed it completely.In Bismarck’s case it was not so much God’s coattails he caught
as the revolutionary wave of mid-19th-century German nationalism. And
he did more than catch it; he managed to surf it in a direction of his
own choosing. The wave Obama just missed—again—is the revolutionary wave
of Middle Eastern democracy. It has surged through the region twice
since he was elected: once in Iran in the summer of 2009, the second
time right across North Africa, from Tunisia all the way down the Red
Sea to Yemen. But the swell has been biggest in Egypt, the Middle East’s
most populous country.In each case, the president faced stark
alternatives. He could try to catch the wave, Bismarck style, by lending
his support to the youthful revolutionaries and trying to ride it in a
direction advantageous to American interests. Or he could do nothing and
let the forces of reaction prevail. In the case of Iran, he did
nothing, and the thugs of the Islamic Republic ruthlessly crushed the
demonstrations. This time around, in Egypt, it was worse. He did
both—some days exhorting Egyptian President Hosni Mubarak to leave,
other days drawing back and recommending an “orderly transition.”The result has been a foreign-policy debacle. The
president has alienated everybody: not only Mubarak’s cronies in the
military, but also the youthful crowds in the streets of Cairo. Whoever
ultimately wins, Obama loses. And the alienation doesn’t end there.
America’s two closest friends in the region—Israel and Saudi Arabia—are
both disgusted. The Saudis, who dread all manifestations of revolution,
are appalled at Washington’s failure to resolutely prop up Mubarak. The
Israelis, meanwhile, are dismayed by the administration’s apparent
cluelessness.Last week, while other commentators ran around
Cairo’s Tahrir Square, hyperventilating about what they saw as an Arab
1989, I flew to Tel Aviv for the annual Herzliya security conference.
The consensus among the assembled experts on the Middle East? A colossal
failure of American foreign policy.This failure was not the result of bad luck. It was
the predictable consequence of the Obama administration’s lack of any
kind of coherent grand strategy, a deficit about which more than a few
veterans of U.S. foreign policy making have long worried. The president
himself is not wholly to blame. Although cosmopolitan by both birth and
upbringing, Obama was an unusually parochial politician prior to his
election, judging by his scant public pronouncements on foreign-policy
issues.Yet no president can be
expected to be omniscient. That is what advisers are for. The real
responsibility for the current strategic vacuum lies not with Obama
himself, but with the National Security Council, and in particular with
the man who ran it until last October: retired Gen. James L. Jones. I
suspected at the time of his appointment that General Jones was a poor
choice. A big, bluff Marine, he once astonished me by recommending that
Turkish troops might lend the United States support in Iraq. He seemed
mildly surprised when I suggested the Iraqis might resent such a
reminder of centuries of Ottoman Turkish rule.The best national-security advisers have combined
deep knowledge of international relations with an ability to play the
Machiavellian Beltway game, which means competing for the president’s
ear against the other would-be players in the policymaking process: not
only the defense secretary but also the secretary of state and the head
of the Central Intelligence Agency. No one has ever done this better
than Henry Kissinger. But the crucial thing about Kissinger as
national-security adviser was not the speed with which he learned the
dark arts of interdepartmental turf warfare. It was the skill with which
he, in partnership with Richard Nixon, forged a grand strategy for the
United States at a time of alarming geopolitical instability.The essence of that strategy was, first, to
prioritize (for example, détente with the Soviets before human-rights
issues within the U.S.S.R.) and then to exert pressure by deliberately
linking key issues. In their hardest task—salvaging peace with honor in
Indochina by preserving the independence of South Vietnam—Nixon and
Kissinger ultimately could not succeed. But in the Middle East they were
able to eject the Soviets from a position of influence and turn Egypt
from a threat into a malleable ally. And their overtures to China
exploited the divisions within the Communist bloc, helping to set
Beijing on an epoch-making new course of economic openness.The contrast between the foreign policy of the
Nixon-Ford years and that of President Jimmy Carter is a stark reminder
of how easily foreign policy can founder when there is a failure of
strategic thinking. The Iranian Revolution of 1979, which took the
Carter administration wholly by surprise, was a catastrophe far greater
than the loss of South Vietnam.Remind you of anything? “This is what happens when you get caught by surprise,” an anonymous American official told The New York Times
last week. “We’ve had endless strategy sessions for the past two years
on Mideast peace, on containing Iran. And how many of them factored in
the possibility that Egypt moves from stability to turmoil? None.”I can think of no more damning indictment of the
administration’s strategic thinking than this: it never once considered a
scenario in which Mubarak faced a popular revolt. Yet the very essence
of rigorous strategic thinking is to devise such a scenario and to think
through the best responses to them, preferably two or three moves ahead
of actual or potential adversaries. It is only by doing these
things—ranking priorities and gaming scenarios—that a coherent foreign
policy can be made. The Israelis have been hard at work doing this. All
the president and his NSC team seem to have done is to draft
touchy-feely speeches like the one he delivered in Cairo early in his
presidency.These were his words back in June 2009:America and Islam are not exclusive and need not be in competition.
Instead, they overlap, and share common principles—principles of justice
and progress; tolerance and the dignity of all human beings.Those lines will come back to haunt Obama if, as
cannot be ruled out, the ultimate beneficiary of his bungling in Egypt
is the Muslim Brotherhood, which remains by far the best organized
opposition force in the country—and wholly committed to the restoration
of the caliphate and the strict application of Sharia. Would such an
outcome advance “tolerance and the dignity of all human beings” in
Egypt? Somehow, I don’t think so.Grand strategy is all about the necessity of
choice. Today, it means choosing between a daunting list of objectives:
to resist the spread of radical Islam, to limit Iran’s ambition to
become dominant in the Middle East, to contain the rise of China as an
economic rival, to guard against a Russian “reconquista” of Eastern
Europe—and so on. The defining characteristic of Obama’s foreign policy
has been not just a failure to prioritize, but also a failure to
recognize the need to do so. A succession of speeches saying, in
essence, “I am not George W. Bush” is no substitute for a strategy.Bismarck knew how to choose. He understood that
riding the nationalist wave would enable Prussia to become the dominant
force in Germany, but that thereafter the No. 1 objective must be to
keep France and Russia from uniting against his new Reich. When asked
for his opinion about colonizing Africa, Bismarck famously replied: “My
map of Africa lies in Europe. Here lies Russia and here lies France, and
we are in the middle. That is my map of Africa.”Tragically, no one knows where Barack Obama’s map
of the Middle East is. At best, it is in the heartland states of
America, where the fate of his presidency will be decided next year,
just as Jimmy Carter’s was back in 1980.At worst, he has no map at all.
What do the recent events in Egypt mean for the US? The answer is a lot more complicated than it might seem. Egypt is important to the US for a number of reasons. Topping the list is oil, and the flow of oil, for which the Suez Canal is an important transit conduit. There is no reason to believe that a successor to the Mubarak government would interrupt the flow of oil, but you could imagine events in the area that could interrupt the flow, and we’re seeing this concern reflected in the markets.
There is also the concern that what is happening in Egypt is contagious, and that it could lead to instability in other, seemingly analogous states—the most important of which is Saudi Arabia. There are regions in which the governments seem very sclerotic, the people running them seem old, the youth vote seems large, and the number of educated citizens who don’t seem adequately challenged seems to be growing. Such elements characterize quite a number of states in the region, including those that are important to the US for various reasons.
Egypt has been a major ally of the US when it comes to relations with Israel, where the resulting peace, though cold, has created a stable border, and is thus considered one of the great achievements of the last many decades. In the role of counterterrorism, Egypt has been a significant and cooperative ally on questions about Hamas, al-Qaida, or Hezbollah.
Finally, with respect to governance, Egypt is dealing with an autocratic regime that significantly restricts the political rights of the population. This has been a problem for the US, as it directly conflicts with American objectives and rhetoric. Nevertheless, such issues are of a lesser concern in the hierarchy of interests, as things like oil attract greater attention.
I suspect that peaceful relations between Egypt and Israel would be sustained. A new Egyptian government of any stripe will have so much to do that it will not want to take on any additional problems. On the other hand, Egypt’s current mix finds organized groups like the Muslim Brotherhood. The Brotherhood’s recent statements have been more internationally acceptable, but traditionally they have had quite strong and different views with respect to Israel. As you can imagine, if a Muslim Brotherhood group emerges after whatever process of transition Egypt undergoes, such a group might maintain a contrary view.
The best way to think about the issue is to consider alternative futures. One possibility is that Mubarak and the current regime will survive. I’d say this is very unlikely, though, with only about a five to ten percent chance of happening.
A second possibility is that a transitional process will take place, resulting in an emerging democratic government. I’d say that this second alternative is the most hopeful, but not the most likely scenario.
Another scenario features a tumultuous process in which a more or less participatory and democratic system emerges. If this scenario were to play out, I would bet on the most organized groups emerging as leaders. In this case, the most organized group is the military, which means that we would see the emergence of a military-dominated regime with a civilian face. That would be a good outcome as far as the US is concerned. A variation of that scenario is the possibility that the Muslim Brotherhood could step up to take control of the government, an outcome that would present its own opportunities and risks.
The key idea that we should take away from this is that future developments are uncertain, and that it is entirely possible to describe an outcome that looks more like Iran —though I don’t think such an outcome is likely. Think about Ayatollah Khomeini in Paris until the Iranian revolution, Lenin going home to Russia in a single-carriage train. True, those situations weren’t exactly like the one happening now, but history reminds us that outcomes are often quite different from the ones people anticipate—and that looking at the aspirations that have spurred a revolution is hardly a good way to predict what the outcomes will actually be.
How different would the world be today if there had been no 9/11? What if the attacks had been foiled or bungled? One obvious answer is that Americans would probably care a lot less than they do about the rest of the world.
Back on the eve of destruction, in early September 2001, only 13 percent of Americans believed that the U.S. should be “the single world leader.” And fewer than a third favored higher defense spending. Now those figures are naturally much higher. Right?
Wrong. According to the most recent surveys, just 12 percent of Americans today think the U.S. should be the sole superpower—almost exactly the same proportion as on the eve of the 9/11 attacks. The share of Americans who want to see higher spending on national security is actually down to 26 percent. Paradoxically, Americans today seem less interested in the wider world than they were before the Twin Towers were felled.
In the past 10 years, the U.S. has directly or indirectly overthrown at least three governments in the Muslim world. Yet Americans today feel less powerful than they did then. In 2001 just over a quarter felt that the U.S. had “a less important role as a world leader compared to 10 years ago.” The latest figure is 41 percent.
Three explanations suggest themselves. First, wielding power abroad proved harder in practice than in neoconservative theory. Second, the financial crisis has dampened American spirits. A third possibility is that 9/11 simply didn’t have that big an impact on American opinion.
Yet to conclude that 9/11 didn’t change much is to misunderstand the historical process. The world is a seriously complex place, and a small change to the web of events can have huge consequences. Our difficulty is imagining what those consequences might have been.
So let’s play a game like the one my friends at the Muzzy Lane software company are currently designing, which has the working title “New World Disorder.” The game simulates the complex interaction of economics, politics, and international relations, allowing us to replay the past.
Let’s start in January 2001 and thwart the 9/11 attacks by having Condi Rice and Paul Wolfowitz heed Richard Clarke’s warnings about Al-Qaeda. The game starts off well. Al-Qaeda is preemptively decapitated, its leaders rounded up in a series of covert operations and left to the tender mercies of their home governments. President Bush gets to focus on tax cuts, his first love.
But then, three years later, the murky details of this operation surface on the front page of The New York Times. John Kerry, the Democratic candidate for the presidency, denounces the “criminal conduct” of the Bush administration. Liberal pundits foam at the mouth. Ordinary Americans, unseared by 9/11, are shocked. Osama bin Laden issues a fierce denunciation of the U.S. from his Saudi prison cell. It triggers a wave of popular anger in the Middle East that topples any regime seen as too close to Washington.
The government of Qatar - gone. The government of Kuwait - gone. Above all, the government of Saudi Arabia - gone. True to form, the experts are soon all over network TV explaining how this fundamentalist backlash against the U.S.-backed oil monarchies had been years in the making (even if they hadn’t quite gotten around to predicting it beforehand). “Who lost the Middle East?” demands Kerry, pointing an accusing finger at George W. Bush. (Remember, prior to 9/11 Bush favored a reduction of U.S. overseas commitments.) The Democrats win the 2004 election, where-upon bin Laden’s new Islamic Republic of Arabia takes hostages at the U.S. Embassy in Riyadh…
In other words, if things had happened differently 10 years ago - if there had been no 9/11 and no retaliatory invasions of Afghanistan and Iraq - we might be living through an Islamist Winter rather than an Arab Spring.
Replaying the history game without 9/11 suggests that, ironically, the real impact of the attacks was not on Americans but on the homelands of the attackers themselves.
After reading about the Greek debt crisis for over a year now, you might think you understand what it’s all about. You’re probably wrong. International media focus on how the Greek government and people spend their money. But an equally important problem is the inability of the Greek state to collect revenues.The story constantly aired by various news outlets is simple enough. Greece, we are told, free-rode on the security offered by the rest of Europe to attract money from foreign investors, and then spent it lavishly on its bloated public sector. In case you don’t get it, BBC’s website has a recurring instructional slide show titled “What went wrong in Greece?” Apparently, Greece’s adoption of the euro “made it easier for the country to borrow money.... Greece went on a big, debt-funded spending spree, including paying for high-profile projects such as the 2004 Athens Olympics.”This brief media lesson on Greek economics has proven very appealing to audiences abroad for two reasons. First, it rhymes with the stereotype of lazy Mediterranean people conning their hard-working North European partners and then shamelessly asking for a bailout. (Now that Italy may be heading the same way, there will be more of this coming.) It also resonates in the ears of the euro’s sworn opponents, above all in the UK.Unfortunately, it is only half the story. Greek public debt as a percentage of GDP did not dramatically rise right after Greece joined the euro. Greek debt actually accumulated back in the 1980s and early 90s, years before Europe got its common currency. The size of the Greek public sector (as a percentage of GDP or share of the labor market) is around or even below average compared to the rest of Europe. Greece did try to spend its way out of the global recession in 2008-2009 and ran large deficits; but so did most other developed countries, including the UK and the US.There are two sides of the public finance coin: expenditure and revenue. What is left out is that while Greek public spending and debt crept up, government revenue fell or remained constant in the years after Greece adopted the euro. Between 2001 and 2007 Greece’s average government revenues totaled 39.4% of GDP, whereas the EU average was 44.4%. Taxes are by far the largest component of government revenue. The issue is not unique to Greece. Declining tax revenues were observed in Ireland, Spain, and in the US after the Bush tax cuts kicked in.In Greece the culprit has been rampant tax evasion by corporations owing millions in taxes and self-employed professionals who can hide their earnings, unlike salaried employees and pensioners. Under international pressure to balance its budget, the outgoing Greek government axed salaries and pensions and slapped new taxes on the bulk of citizens who were not tax-delinquent. This only drove the country deeper into recession and insolvency, making it necessary for EU leaders to write off part of Greece’s debt in July and then again in October.Whether the government is reluctant to tax the very wealthy (as in the US) or lax in its duty to punish tax evasion (as in Greece), the results are similar. Revenues can’t keep up with expenditures and lenders become uneasy. Meanwhile, those who are taxed too leniently have an interest in shifting public attention towards cutting government spending. The bitter partisan quarrels in Washington and Athens lately have this much in common. Yet, this obvious point is conspicuously absent from reports on Greece in the English-speaking world.There is no denying that Greece overspent on security for its Olympics - they were the first games after 9/11. There is also no denying that the Greek public sector is very inefficient. But this has to do with how the money is used. Deep cuts will not make an inefficient public sector better. Other reforms, however, just might. Finally, there is no denying that the euro deprived Greece of the flexibility to devaluate its currency. However, Greece’s revenue collection problem has been perennial and is unrelated to the euro. The first reforms Greece’s new government should focus on are the tax and judicial systems.Casting the crisis ravaging Greece and closing in on Italy as a fundamental story of governments drunk on loans, doling out stacks of euros to their shortsighted citizens is a half-truth. It makes it easy to caricature on a national basis and to categorize Greeks, Italians, Germans or Americans as people who collectively live either within or beyond their means. It also masks the fact that there are differences within each country: Those who benefit the most from high-profile government contracts are the hardest ones to tax when the creditors come banging on your door.
In his new book The Future of Power, Joseph
S. Nye Jr. analyses the changing nature of power in the 21st century as
upheavals man-made and environmental alter the global terrain and as
both state and non-state entities jostle for dominance. Nye is a
proponent of “smart power,” a term he coined in 2004 to describe the
strategic combination of coercion and persuasion.Nye, a former assistant secretary of defense,
is a professor and former dean of the Harvard Kennedy School of
Government. His other books include Soft Power: The Means to Success in
World Politics and The Powers to Lead. He spoke from his home in
Boston.Q. Has the term “smart power” been corrupted over time?A. The
term has been picked up by the Obama administration and used by Hillary
Clinton to describe US foreign policy. But it is the older term “soft
power” that is more often corrupted when it’s mistakenly used to
describe anything that is not military power. More correctly, it refers
to the ability to get what you want through attraction and persuasion.
The Chinese president, for example, declared in 2007 that China needed
to increase its soft power, and they have invested billions of dollars
to that end.Q. Are you saying that smart power is soft power backed up by hard power?A. I
think of smart power as the ability to combine hard and soft power.
There may be situations in which you don’t want any hard power, and
there may be others where soft power is not effective; stopping North
Korea’s nuclear weapons program, for example.Q. Does it require an underlying belief in American dominance?A. Soft
power and smart power are both available to any size country, not just
the US or China. But the US, when it lives up to its values, probably
has more soft power than a small country and certainly has more hard
power. Our leadership resides in our ability to create the right
combinations in the right circumstances.Q. You use the term “values.’’ But don’t you characterize smart power as morally neutral?A. Well,
smart power is neutral in the sense that it can be used by bad states
as well as good states. But it does depend in part on values which are
more often the sources of soft power. Ironically, Osama bin Laden had
soft power when he inspired people to fly into the World Trade Center
and the Pentagon. They did so because they believed in bin Laden’s
values. In that sense values matter. They can, however, be used as
instruments by bad as well as good people.Q. Do you have a moral position that you edited out of this book?A. I try to write as
an analyst when I argue that there is something to be said for soft
power as a more ethical means. For example, even if I have bad ends and
want to steal your money, I can use hard power — shoot you and take your
money — or soft power — persuade you that I’m a guru and that you
should give me your money. In the first case you don’t have anything to
say about it, in the second case you do. If one believes in the value of
individual autonomy and choice, as I do, soft power allows more of that
individual autonomy even if the overall action is a bad one.Q. Your strategy has been called the friendly face of American imperialism. How do you respond to that?A. That
criticism is often made by people who don’t understand the theory.
Other countries besides the US can use soft power therefore it’s not an
apology for the US or an instrument of American imperialism. In this
book I try to describe the role of military, economic and soft power in
an information age and to persuade people that we need to think in a
more sophisticated way about what power means whether it be American,
Chinese, or otherwise.Q. With all that you’ve seen, do you find it hard to write a phrase such as “winning hearts and minds” without irony?A. There
is a risk of trivializing ideas. “Winning hearts and minds” has been
around since the Vietnam War. On the other hand, when one tries to
understand General Petraeus’s counterinsurgency doctrine (and whether
he’ll succeed or not we don’t know) it is interesting to note that what
he is trying to do is save civilian lives. The idea is not to kill as
many people as possible but to win the minds of those who form the sea
in which the insurgents swim. The insight is an important one and has a
long standing in history.Q. Do you see the uprising in Tunisia and now in Egypt as a test case of US commitment to smart power?A. Smart
power in this current case will require US foreign policy to align with
the aspirations of people seeking democracy while at the same time not
creating chaos in the region which would undercut our support for Israel
and our efforts to prevent the spread of nuclear weapons. Smart power
would aim to accomplish both a human rights democracy agenda as well as a
more traditional agenda.Q. Do you see that happening?A. I’m always hopeful.
ongoing nuclear crisis at the Fukushima Daiichi plant in the town of
Ohkuma continues, and plant engineers and first responders endanger
their lives to keep fuel rods and containment units cool, it is critical
to consider how Japan’s commitment to nuclear power arose in the first
place. It was no twist of fate or invisible market-hand that created 55
nuclear reactors in a seismically active country smaller than the state
of California. Japanese bureaucrats and politicians have made it a
priority to create an indigenous source of power that provides an
alternative to imported oil and coal.Despite this understandable rationale, it’s
still surprising that the only nation in the world against which atomic
weaponry has been used—twice, no less—has created the world’s most
advanced commercial nuclear program. It is especially surprising when
you consider that countries like France, Germany, and the United States
have given up their attempts at fast breeder reactor technology because
of concerns about proliferation and hazard. What has driven Japan to
pursue its advanced program of nuclear power, and why have nuclear power
plants ended up in incredibly vulnerable positions along Japan’s
coasts?While the United States
has provided some support for nuclear power (for example, the
Price-Anderson Act, which commits the federal government to absorbing
some of the financial costs of potential nuclear accidents), as a source
of alternative energy, it has never been fully embraced. This tradition
of fence-sitting continues today, as seen in the Obama administration’s
decision to end funding for the planned high-level radioactive waste
repository at Yucca Mountain after two and a half decades of struggle
over the site. Completion of the facility would have helped pro-nuclear
groups convince skeptics that offsite waste disposal was possible. (The
difficulty in securing permanent storage sites for nuclear waste is what
leads U.S. and Japanese nuclear power plants to store their used fuel
rods on site where they are most vulnerable.)In contrast, the Japanese government has gone far beyond this approach.
The origins of its enthusiasm can be traced to the postwar period. In
1955, at the urging of then-Diet Memberand later Prime Minister
Yasuhiro Nakasone, the Japanese government granted more than 5 billion
yen—about $14 million in 1955 currency—to the Japan-based Agency for
Industrial Science and Technology to begin research under the aegis of
the “atoms for peace” banner raised by Dwight Eisenhower.
In recent decades, the Japanese central government has supported the
regional power utilities—including Tokyo Electric Power Company (TEPCO),
which runs Fukushima, and its counterparts—through research funding,
risk amortization, and financial and logistical support. Unlike France,
for example, which explicitly nationalized and then partly privatized
their main nuclear-power-promoting utility company, Japan did not
nationalize its energy industry, and some Japan experts have
characterized the relationship between the state and utility firms as
contentious. Yet both sides got what they wanted over the past 50 years:
The government guided Japanese firms to produce nearly one-third of the
nation’s power through nuclear plants, and the utilities obtained
credible commitment against risk and financial backing for their
expensive investments. The Japanese people, as readers might imagine, have not been solid
supporters of these government-initiated policies. Just as the
government hoped to start its nuclear program in 1954, a highly
publicized accident—in which crewmates onboard the poorly named Lucky
Dragon Number 5 ship were exposed to radioactive fallout from an
American hydrogen bomb test—resulted in the death of a radioman from
radiation exposure. This spurred the creation of one of the world’s
first national anti-nuclear movements (known as Gensuikyō)
and a petition against nuclear weapons that obtained more than 20
million signatures. Attempts to build a number of plants around the
country since the mid-1950s have resulted in petitions, public outcries,
demonstrations, sit-ins, marches, and the occupation of town councils
by anti-nuclear activists. While the anti-nuclear movement has not
demonstrated the kind of violence shown by the anti-Narita Airport
protests in the 1960s—during which a number of police officers and
anti-airport farmers and students were killed in struggle over land
expropriation—the success rate for the building of nuclear power plant
has been roughly 50 percent. (That is, for every two attempts to
construct a new plant, only one has gone forward.)
To minimize these fights over nuclear power in a society where people
are deeply sympathetic to victims of atomic energy, the government has
taken a two-pronged approach. First, it has worked tirelessly with the
regional utilities to map out villages and towns that are the best
locations for plants, according to the utilities’ needs. Bureaucrats
within MITI (the Ministry of International Trade and Industry, which
became METI, the Ministry of Economy, Trade, and Industry,
as of 2001) provided funding for geographical and demographic surveys
of potential grounds. Power companies have often targeted rural,
depopulated coastal communities, where the population of local fishermen
are declining. But, while legitimate criteria, such as distance from
high-population areas, shock-resistant bedrock, and access to cooling
water, have played a role in such plant site selections, the inability
of the local population to coordinate anti-nuclear mobilization has
often been the dominant factor.Second, the government has created an extensive framework of
policy instruments to manage and dampen anti-nuclear contestation. Where
the Japanese authorities have been content to use standard, Weberian
tools against anti-facility movements in other areas—such as dam
construction and airport building—they have never resorted to
land-expropriation in struggles over nuclear power plants, despite clear
legal precedent for them to do so. Rather, the government has created a
series of hard- and soft-control tools alongside deep incentives for
communities willing to take on nuclear reactors. For example, students
in Japanese middle schools may take science courses emphasizing the
safety and necessity of nuclear power plants, with curricula written by
government bureaucrats rather than teachers. Farmers and fishermen in
these communities are regularly offered jobs at government-sponsored
facilities to compensate for signing away sea rights in the surrounding
fishing area. To further assuage the resistance that fishermen and
farmers have shown in the past (because of concerns over “nuclear
blight”—potential customers avoiding crops or fish because of fears of
nuclear contamination), the government sponsors a yearly fair in
Yokohama, in which only communities that host nuclear power plants can
display and sell their goods. Finally, the government has created a
monumental program called The Three Power Source Development Laws (Dengen Sanpō),
which funnels roughly $20 million per year to acquiescent host
communities. The money—which comes not from the politically vulnerable
and annually vetted budget, but, instead, from an invisible tax on all
electricity use across the nation—purchases roads, buildings, job
re-training, medical facilities, and good will. In these far-flung rural
communities that are, by and large, dying through depopulation and
aging, these funds can provide vital support.
Japan’s choices—to sway public opinion through subsidies, social control
tools, and manipulation—have left little room for public debate on the
issue of nuclear power. The local residents—whom we see bearing the
heaviest burden of the ongoing crisis in Fukushima and who have been
exposed to radiation by past accidents at the Monju FBR, the fatal
accident at Tokaimura, and elsewhere—are seen not as partners, but as
targets for policy tools. A plan-rational approach, as Chalmers Johnson
might have called it, has placed reactors in areas vulnerable to the
threat of tsunami and pushed rural communities into dependence on the
economic side payments which accompany these facilities. Now, as Japan
struggles to avert catastrophe, it is the time for a real discussion
between civil society and state over the future of nuclear power.
Daniel P. Aldrich is a former Advanced Research Fellow (2006–2007) of the Program on U.S.-Japan Relations and a former Graduate Student Associate of the Weatherhead Center (2002–2005).
The human race is interconnected as never before. Is that a good thing? Ask the Lords of the Internet—the men running the companies Eric Schmidt of Google recently called “the Four Horsemen”: Amazon, Apple, Facebook, and Google—and you’ll get an unequivocal “yes.” But is it true? In view of the extraordinary economic and political instability of recent months, it’s worth asking if the Netlords are the Four Horsemen of a new kind of information apocalypse.
Don’t get me wrong. I love all that these companies have achieved. I order practically everything except haircuts from Amazon. I write this column on a MacBook Pro. I communicate with my kids via Facebook. It’s 6:55 a.m., and I’ve already run six searches on Google. Did I forget to mention that I’ve already received 29 emails and sent 14?
I also really like the Netlords. They are among the smartest guys on the planet. Yet they are also self-deprecating and sometimes very funny. (OK, not Steve Jobs.) So my question for them is a real question, not some kind of Luddite rant: does the incredible network you have created, with its unprecedented scale and speed, not contain a vulnerability? I’m not talking here about the danger of its exploitation by Islamist extremists or its incapacitation by Chinese cyberwarriors, though I worry about those things too. No, I mean the possibility that the global computer network formed by technologically unified human minds is inherently unstable—and that it is ushering in an era of intolerable volatility.
The communications revolution we are living through has been driven by two great forces. One is Gordon E. Moore’s “law” (which he first proposed in 1965) that the number of transistors that can be placed inexpensively on an integrated circuit doubles approximately every 18 months. In its simplified form, Moore’s Law says that computing power will double every two years, implying a roughly 30-fold increase in 10 years. This exponential trend has now continued for more than half a century and is expected by the techies to continue until at least 2015 or 2020.
The other force is the exponential growth of human networks. The first email was sent at the Massachusetts Institute of Technology in the same year Moore’s Law was born. In 2006 people sent 50 billion emails; last year it was 300 billion. The Internet was born in 1982. As recently as 1993 only 1 percent of two-way telecommunication went through it. By 2000 it was 51 percent. Now it’s 97 percent. Facebook was dreamed up by an über-nerd at my university in 2004. It has 800 million active users today—eight times the number of three years ago.
Russian venture capitalist Yuri Milner sees this trend as our friend (it has certainly been his). As the number of people online doubles from 2 billion to 4 billion over the next 10 years and the number of Internet-linked devices quadruples from 5 billion to 20 billion, mankind collectively gets more knowledge—and gets smarter. Speaking at a conference in Ukraine in mid-September, Milner asserted that data equivalent to the total volume of information created from the beginning of human civilization until 2003 can now be generated in the space of just two days. To cope with this information overload, he looks forward to “the emergence of the global brain, which consists of all the humans connected to each other and to the machine and interacting in a very unique and profound way, creating an intelligence that does not belong to any single human being or computer.”
In the future as imagined by Google, this global brain will do much of our thinking for us, telling us (through our handheld devices) which of our friends is just around the next corner and where we can buy that new suit we need for the best price. And if the best price is on Amazon, we’ll just click once and look forward to its next-day delivery. Maybe it’ll already be there when we get home.
That’s the kind of sci-fi scenario that gets a true nerd out of bed in the morning. But is it just a bit too utopian?
Exhibit one for a contrarian view is the recent behavior of global financial markets, the area of human activity furthest down the road of computerization and automation. According to math wonk Kevin Slavin, algorithms with names like the “Boston Shuffler” are the new masters of the financial universe. Whole tower blocks have been hollowed out to accommodate the computing power required by high-frequency (and very high-speed) trading. So how is this brave new world of robot traders doing?
Well, the VIX index of volatility—Wall Street’s so-called fear gauge, which infers the expected volatility of the U.S. stock market from options prices—reached an all-time high of 80 in the aftermath of Lehman Brothers’ failure and surged back up above 30 in early 2010 and again this summer. Part of this is just a good old-fashioned, man-made financial crisis, of course. But some of the volatility we’ve seen in the past four years is surely attributable to technology: think only of the “flash crash” of May 6 last year, when the Dow Jones industrial average plummeted 9 percent and then rallied in a matter of minutes.
Could the same kind of volatility spread into other markets as these become as wired and as integrated as Planet Finance? The answer must be yes. Consider how Greece’s fiscal woes have destabilized markets across Europe and around the world in recent months. Then there’s the market for consumer durables. We know that the speed with which new technologies have been adopted by American households has increased around eightfold over the past hundred years. But that speed of adoption has its obverse in the speed of obsolescence. Consumers are becoming ever more fickle. Millions bought RIM’s BlackBerry after its advent in 1999. But today the iPhone is the hotter handheld device, and I am far from alone in having a dead BlackBerry in my bottom desk drawer. In late September Amazon launched the Kindle Fire in a bid to challenge the iPad’s dominance of the tablet market. The name is appropriate. The market for such devices is on fire. The whole world is on wi-fire.
In politics, too, online electorates are becoming more volatile. The current race to find a Republican candidate for the presidency is a case in point. Only the other day Sarah Palin was a serious contender. Then Mitt Romney was a shoe-in. Until Rick Perry came along. Until Chris Christie came along. Meanwhile, the number of independent voters who have uncoupled themselves from the traditional parties has reached a historic high of 37 percent. Floating voters are the high-frequency traders of the political market.
Computing power has grown exponentially. So has the human network. But the brain of Homo sapiens remains pretty much the same organ that evolved in the heads of African hunter-gatherers 200,000 years ago. And that brain has a tendency to swing in its mood, from greed to fear and from love to hate.
The reality may be that by joining us all together and deluging us with data, the Netlords have ushered in a new Age of Volatility, in which our primeval emotions are combined and amplified as never before.
We are LinkedIn, but StressedOut. And that “cloud” of downloadable data may yet turn out to be a thundercloud.
It was a scene to curdle liberal blood. A ballroom full of New York hedge-fund managers playing poker…to raise money for charter schools.
That’s where I found myself last Wednesday: at a Texas Hold ’Em tournament to raise money for the Success Charter Network, which currently runs nine schools in some of New York’s poorest neighborhoods.
While Naomi Wolf was being arrested for showing solidarity with the Occupy Wall Street movement, there I was, consorting with the 1 percent the protesters hate. It’s no surprise that the bread-heads enjoy gambling. But to see them using their ill-gotten gains to subvert this nation’s great system of public education! I was shocked, shocked.
Except that I wasn’t. I was hugely cheered up. America’s financial elite needs a compelling answer to Occupy Wall Street. This could be it: educate Harlem…with our poker chips.
Life, after all, is a lot like poker. No matter how innately smart you may be, it’s very hard to win if you are dealt a bad hand.
Americans used to believe in social mobility regardless of the hand you’re dealt. Ten years ago, polls showed that about two thirds believed “people are rewarded for intelligence and skill,” the highest percentage across 27 countries surveyed. Fewer than a fifth thought that “coming from a wealthy family is essential [or] very important to getting ahead.” Such views made Americans more tolerant than Europeans and Canadians of inequality and more suspicious of government attempts to reduce it.
Yet the hardships of the Great Recession may be changing that, giving an unexpected resonance to the Occupy Wall Street movement. Falling wages and rising unemployment are making us appreciate what we ignored during the good times. Social mobility is actually lower in the U.S. than in most other developed countries—and falling.
Academic studies show that if a child is born into the poorest quintile (20 percent) of the U.S. population, his chance of making it into the top decile (10 percent) is around 1 in 20, whereas a kid born into the top quintile has a better than 40 percent chance. On average, then, a father’s earnings are a pretty good predictor of his son’s earnings. This is less true in Europe or Canada. What’s more, American social mobility has declined markedly in the past 30 years.
A compelling explanation for our increasingly rigid social system is that American public education is failing poor kids. One way it does this is by stopping them from getting to college. If your parents are in the bottom quintile, you have a 19 percent chance of getting into the top quintile with a college degree—but a miserable 5 percent chance without one.
Your ZIP code can be your destiny, because poor neighborhoods tend to have bad schools, and bad schools perpetuate poverty. But the answer is not to increase spending on this failed system—nor to expand it at the kindergarten level, as proposed by Nicholas Kristof in The New York Times last week. As brave reformers like Eva Moskowitz know, the stranglehold exerted by the teachers’ unions makes it almost impossible to raise the quality of education in subprime public schools.
The right answer is to promote the kind of diversity and competition that already make the American university system the world’s best. And one highly effective way of doing this is by setting up more charter schools—publicly funded but independently run and union-free. The performance of the Success Charter Network speaks for itself. In New York City’s public schools, 60 percent of third, fourth, and fifth graders passed their math exams last year. The figure at Harlem Success was 94 percent.
The American Dream is about social mobility, not enforced equality. It’s about competition, not public monopoly. It’s also about philanthropy, not confiscatory taxation.
I’ll cheer up even more when I hear those words at a Republican presidential debate. Or maybe next week we should just tell the candidates to shut up and play poker.
The Palestinian leader Mahmoud Abbas’s bid for full U.N. membership was dead on arrival in New York. So why bother even raising the subject? The answer: to drum up international sympathy for the plight of the Palestinians. Yet other defeated peoples have suffered far more than they. Think only of how—and at whose expense—the U.N. itself began.
Born in the gently foggy city of San Francisco, the U.N. was conceived in the Ukrainian resort of Yalta. Though nestled amid the green Crimean hills and lapped by the Black Sea’s languid waves, the city was severely battle-scarred in February 1945; Winston Churchill dubbed it “the Riviera of Hades.” Its diabolical master was the Soviet despot Joseph Stalin, who acted as host to Churchill and the ailing American President Franklin Roosevelt.
Of the Big Three, as Sergei Plokhy shows in his riveting study Yalta: The Price of Peace, Roosevelt alone truly believed in the dream of a world parliament, and even he knew the U.N. would need to give greater weight to the great powers than its ill-starred predecessor, the League of Nations. Thus it was Roosevelt who proposed a Security Council on which the war’s victors—plus France and China—would be permanently represented and armed with veto powers.
Churchill and Stalin were realists. They saw the postwar world in terms of “spheres of influence.” Though perfectly capable of such realism in practice, Roosevelt still yearned for the idealist’s world of peace based on collective security. Yet Churchill was deeply reluctant to accept that Stalin’s postwar sphere of influence would include Poland. His predecessor had acquiesced in the destruction of Czechoslovakia at Munich but had gone to war when Hitler (and Stalin) carved up Poland between them. Was Yalta to be the Poles’ Munich?
“We can’t agree,” grumbled Churchill, “that Poland shall be a mere puppet state of Russia, where the people who don’t agree with Stalin are bumped off.” But that was exactly what postwar Poland became.
A staggering 19 percent of the prewar population of Poland had been killed as a result of World War II, including a huge proportion of the country’s large Jewish population. Yalta inflicted further punishment. The country not only shrank; it was also shifted westward so that Stalin could keep his gains from the 1939 Nazi-Soviet Pact. And it became a Soviet vassal state for the next half century. After Yalta, chess players devised a variant of their game for three players, using a six-sided board. As at the conference, in the game “Yalta” two players can join forces against the third, but all such alliances are temporary. Briefly, Churchill got Roosevelt on his side over Poland, but the American cared more about getting Stalin to agree to join the U.N.; Poland was a pawn to be sacrificed.
Having got what he wanted, Roosevelt left Yalta early. His destination? The Middle East, which he was intent on adding to ... the American sphere of influence. The conflicting commitments he made on that trip—to the Arabs and the Jews—have bedeviled U.S. foreign policy ever since. Asked by Roosevelt if he was a Zionist, Stalin replied elliptically that he “was one in principle, but he recognized the difficulty.”
That “difficulty” remains that a Jewish state could be created only at the expense of non-Jews living in Palestine. The Arabs resisted Israel’s creation, but they lost. So it goes. A trip to Yalta provides a salutary reminder that throughout history those who lose at war generally lose land, too, and sometimes sovereignty with it. By comparison with what the Poles endured last century, the Palestinians have got off lightly.
They will get their own state eventually. But not until all the permanent members of the Security Council are convinced the Palestinians will not abuse the privileges of statehood.
Like it or not, that was how the U.N. was meant to work when the Big Three conceived it on Hell’s Riviera.
Fareed Zakaria is one of our most perceptive analysts of
America's role in the world, and I generally agree with him. But in the case of
his new special essay for Time, "Are
America's Best Days Behind Us?," I think he paints too gloomy a picture of
American decline. Americans are prone to cycles of belief in decline, and the
term itself confuses various dimensions of changing power relations.
the American problem as imperial overstretch (though as a percentage of
GDP, the United States spends half as much on defense as it did during
the Cold War); some see the
problem as relative decline caused by the rise of others (though that
could still leave the United States more powerful than any other
country); and still
others see it as a process of absolute decline or decay such as occurred
fall of ancient Rome (though Rome was an agrarian society with stagnant
economic growth and internecine strife).
Such projections are not new. As Zakaria notes, America's Founding
Fathers worried about comparisons to the decline of the Roman Republic.
A strand of cultural pessimism is simply very American, extending back
the country's Puritan roots. English novelist Charles Dickens observed a century and a half
ago: "[I]f its individual citizens, to a man, are to be believed, [America]
always is depressed, and always is stagnated, and always is at an alarming
crisis, and never was otherwise."
In the last half-century, polls showed
Americans believed in their decline after the Soviet Union launched
1957, after Richard Nixon's devaluation of the dollar and the oil shocks
in the 1970s,
and after the closing of Rust Belt industries and the budget deficits of
Reagan's administration in the 1980s. At the end of that decade, a
majority of Americans believed their country was in decline; yet within
the next 10
years they believed that America was the sole superpower. And now, after
the 2008 financial crisis and recession, polls show a majority believes
decline again. These
cycles of declinism tell us more about Americans'
collective psychology than underlying shifts in power resources, but as
journalist Gideon Rachman argued
in these pages recently, maybe this time decline is real. After all, as the
Congressional Budget Office warns, on current trends the U.S. national debt
will be equal to its GDP in a decade, and that will undermine confidence in the
Zakaria lists other worrying
indicators related to education and infrastructure. According to the OECD,
American 15-year-olds rank 17th in the world in science and 25th in math. The
United States is 12th in college graduation rates, 23rd in infrastructure, and
27th in life expectancy. On the other side of the ledger, America ranks first among
rich countries in guns, crime, and debt.
All these are very real problems,
but one could also note that the United States is still first in total R&D
expenditures, first in university rankings, first in Nobel prizes, first on
indices of entrepreneurship, and according to the World Economic Forum, the
fourth-most competitive economy in the world (behind the small states of
Switzerland, Sweden, and Singapore).The
United States remains at the forefront of technologies of the future like biotechnology
and nanotechnology. This is hardly a picture of absolute economic decay, ancient
Rome style. The truth is that one can draw a picture of the United States today
that emphasizes either dark or bright colors without being wrong. No one can be
sure which shade better portrays the future because the number of potential
futures is vast, and which one comes to pass will depend in part on decisions
not yet made.
Drawing on the thinking of Mancur
Olson, the late great political economist, Zakaria believes that America's very
success has made its decision processes sclerotic, like that of industrial Britain. But
American culture is far more entrepreneurial and decentralized than that of Britain,
where the sons of industrial entrepreneurs sought aristocratic titles and
honors in London. If Olson is right, Zakaria says, the solution is to "stay
flexible." And despite recurrent historical bouts of concern about it,
immigration helps keep America flexible. In 2005, according to Forbes, foreign-born immigrants had
participated in one of every four technology start-ups in the previous decade.
As Singapore's Lee Kuan Yew once put it, China can draw on a talent pool of 1.3
billion people, but the United States not only draws on a talent pool of 7
billion, but can recombine them in a diverse culture that enhances creativity
in a way that ethnic Han nationalism cannot.
Zakaria also worries about the
inefficient American political system. But the Founding Fathers created a
of checks and balances precisely to preserve liberties at the price of
efficiency. Moreover, just because we are now going through a period of
partisan politics and mistrust of government doesn't mean the American
political system is in decline. Some aspects of the
current mood are probably cyclical and related to unemployment, while
represent discontent with the bickering and deadlock in today's
process. Compared with the recent past, party politics has indeed become
polarized, but nasty politics is nothing new and goes all the way back
to the Founding Fathers. Supporters of John Adams reputedly once called
Jefferson "a mean-spirited, low-lived fellow, the son of a
half-breed Indian squaw, sired by a Virginia mulatto father."
the problem of accurate assessment is that faith in government became
abnormally high among the generation that survived the Great Depression and won World
War II. Over the long view of American history, it was overconfidence in
government in the 1950s and early 1960s, not low levels thereafter, that was
the anomaly. American government and politics have always had problems,
sometimes worse than today's. In assessing political decline, one must beware of
the golden glow of the past. It is easy to show decline if one compares the
good in the past with the bad in the present.
addition, we sometimes mistakenly idealize the efficiency of the
process in authoritarian countries like China. When it comes to
for example, it is far easier to build high-speed rail lines where there
weak property rights and few lawyers. But if one looks at the important
question of how Chinese leaders are struggling to implement their 12th
five-year plan -- reducing dependence on exports, shifting to internal
reducing regional inequality by moving industry to the west -- China is
efficient. Although central bankers and economic planners know that
yuan would promote these goals and help head off inflation, a strong
of coastal export industries and associated local party bosses seeks to
preserve the status quo.
notes that one Asian country after another is learning the secrets of Western
success, and he is right. In The Future
of Power, I argue that one of the two great power shifts of this century is
the recovery of Asia to what it represented before the Industrial Revolution
led to the ascendance of the West: more than half the world's population and its
economic production. We should herald Asia's recovery -- it has brought
millions out of dire poverty-- but
those with excessive fear of China should remember that Asia is not one entity.
In his important book Rivals, Bill
Emmott reminds us that Japan, India, and others that are concerned about the
rise of China welcome an American presence. Can anyone similarly imagine Canada
and Mexico seeking a Chinese alliance to balance American power in their
Nor is China likely to surpass
America anytime soon. Yes, barring political uncertainties, China's size
high rate of economic growth will almost certainly increase its strength
to that of the United States. Still, China won't necessarily become the
powerful country as a result. Even if China suffers no major domestic
setback, many of the current projections based on GDP growth alone are
too one-dimensional. They ignore what are likely to be enduring U.S.
military and soft-power advantages, as well as China's geopolitical
disadvantages in the internal
Asian balance of power.
is correct that the United States faces serious problems. But issues that
preoccupy us today, such as long-term debt, are not insoluble; see for example,
of the Simpson-Bowles commission, and remember that only a decade ago some
people worried about the government surplus.
Of course, such solutions may forever remain out of reach. But it is worth
distinguishing situations for which there are no solutions from those that could,
in principle, be solved.
danger to America is not debt, political paralysis, or China; it is parochialism,
turning away from the openness that is the source of its strength and resting
on its laurels. As Zakaria says, in the past, worrying about decline has helped
avert it. Let us hope that his intelligent though darkly drawn picture will yet
again start that healthy process.
Seen from Tokyo, America’s relationship with Japan faces a crisis.
The immediate problem is deadlock over a plan to move an American
military base on the island of Okinawa. It sounds simple, but this is
an issue with a long back story that could create a serious rift with
one of our most crucial allies. When I was in the Pentagon more
than a decade ago, we began planning to reduce the burden that our
presence places on Okinawa, which houses more than half of the 47,000
American troops in Japan. The Marine Corps Air Station Futenma was a
particular problem because of its proximity to a crowded city, Ginowan.
After years of negotiation, the Japanese and American governments
agreed in 2006 to move the base to a less populated part of Okinawa and
to move 8,000 Marines from Okinawa to Guam by 2014.The plan was
thrown into jeopardy last summer when the Japanese voted out the
Liberal Democratic Party that had governed the country for nearly half
a century in favor of the Democratic Party of Japan. The new prime
minister, Yukio Hatoyama, leads a government that is inexperienced,
divided and still in the thrall of campaign promises to move the base
off the island or out of Japan completely. The Pentagon is
properly annoyed that Mr. Hatoyama is trying to go back on an agreement
that took more than a decade to work out and that has major
implications for the Marine Corps’ budget and force realignment.
Secretary of Defense Robert Gates expressed displeasure during a trip
to Japan in October, calling any reassessment of the plan
“counterproductive.” When he visited Tokyo in November, President Obama
agreed to a high-level working group to consider the Futenma question.
But since then, Mr. Hatoyama has said he will delay a final decision on
relocation until at least May. Not surprisingly, some in
Washington want to play hardball with the new Japanese government. But
that would be unwise, for Mr. Hatoyama is caught in a vise, with the
Americans squeezing from one side and a small left-wing party (upon
which his majority in the upper house of the legislature depends)
threatening to quit the coalition if he makes any significant
concessions to the Americans. Further complicating matters, the future
of Futenma is deeply contentious for Okinawans. Even if Mr.
Hatoyama eventually gives in on the base plan, we need a more patient
and strategic approach to Japan. We are allowing a second-order issue
to threaten our long-term strategy for East Asia. Futenma, it is worth
noting, is not the only matter that the new government has raised. It
also speaks of wanting a more equal alliance and better relations with
China, and of creating an East Asian community—though it is far from
clear what any of this means. When I helped to develop the
Pentagon’s East Asian Strategy Report in 1995, we started with the
reality that there were three major powers in the region—the United
States, Japan and China—and that maintaining our alliance with Japan
would shape the environment into which China was emerging. We wanted to
integrate China into the international system by, say, inviting it to
join the World Trade Organization, but we needed to hedge against the
danger that a future and stronger China might turn aggressive. After
a year and a half of extensive negotiations, the United States and
Japan agreed that our alliance, rather than representing a cold war
relic, was the basis for stability and prosperity in the region.
President Bill Clinton and Prime Minister Ryutaro Hashimoto affirmed
that in their 1996 Tokyo declaration.
This strategy of “integrate, but hedge” continued to guide American
foreign policy through the years of the Bush administration. This year is the 50th anniversary of the United States–Japan security treaty.
The two countries will miss a major opportunity if they let the base
controversy lead to bitter feelings or the further reduction of
American forces in Japan. The best guarantee of security in a region
where China remains a long-term challenge and a nuclear North Korea
poses a clear threat remains the presence of American troops, which
Japan helps to maintain with generous host nation support.Sometimes
Japanese officials quietly welcome “gaiatsu,” or foreign pressure, to
help resolve their own bureaucratic deadlocks. But that is not the case
here: if the United States undercuts the new Japanese government and
creates resentment among the Japanese public, then a victory on Futenma
could prove Pyrrhic.
S. Nye Jr., a professor of government at Harvard and the author of The
Powers to Lead, was an assistant secretary of defense from 1994 to
The United States has been widely blamed for the recent financial crisis. As the U.S. economy floundered and China continued to grow in the great recession of 2008–2009, Chinese authors launched "a flood of declinist commentary about the United States." One expert claimed that the high point of U.S. power projection was 2000. The Chinese were not alone in such statements. Goldman Sachs advanced the date at which it expects the size of the Chinese economy to surpass the U.S. economy to 2027. In a 2009 Pew Research Center poll, majorities or pluralities in 13 of 25 countries believed that China will replace the United States as the world's leading superpower. Even the U.S. government's National Intelligence Council projected in 2008 that U.S. dominance would be "much diminished" by 2025. President Dmitri Medvedev of Russia called the 2008 financial crisis a sign that the United States' global leadership is coming to an end, and even a sympathetic observer, Canadian opposition leader Michael Ignatieff, suggested that Canada should look beyond North America now that the "the noon hour of the United States and its global dominance are over."One should be wary, however, of extrapolating long-term trends from cyclical events, while being aware of misleading metaphors of organic decline. Nations are not like humans with predictable life spans. For example, after the United Kingdom lost its American colonies at the end of the eighteenth century, Horace Walpole lamented its reduction to "as insignificant a country as Denmark or Sardinia." He failed to foresee that the industrial revolution would give the United Kingdom a second century of even greater ascendency. Likewise, Rome remained dominant for more than three centuries after the apogee of Roman power. Even then, Rome did not succumb to the rise of another state, but died a death of a thousand cuts inflicted by various barbarian tribes. Indeed for all the fashionable predictions of Brazil, China, or India surpassing the United States in the next decades, the greater threats may come from cuts from modern barbarians and non-state actors.
What precisely constitutes an American bourgeoisie? Scholars have grappled with the question for a long time. Economic positions—the ownership of capital, for instance—most obviously define this group but cannot explain the emergence of shared identities or the capacity for collective action: after all, economic interests frequently drove capital-rich Americans apart as they competed for markets or governmental favors. Engaging fundamental questions about American society in the nineteenth century, this book argues that one of the most important factors in the self-definition of the bourgeoisie was its articulation of a shared culture.
American Grace is a major achievement, a fascinating look at
religion in today’s America. Unique among nations, America is deeply
religious, religiously diverse and remarkably tolerant. But in recent
decades, the nation’s religious landscape has been reshaped.
America has experienced three seismic shocks, say Robert Putnam and
David Campbell. In the 1960s religious observance plummeted. Then, in
the 1970s and 1980s a conservative reaction produced the rise of
evangelicalism and the Religious Right. Since the 1990s, however, young
people, turned off by that linkage between faith and conservative
politics, have abandoned organized religion entirely. The result:
growing polarization. The ranks of religious conservatives and secular
liberals have swelled, leaving a dwindling group of religious moderates
in between. At the same time, personal interfaith ties are
strengthening. Interfaith marriage has increased, while religious
identities are increasingly fluid. Putnam and Campbell show how this
denser web of personal ties brings surprising interfaith tolerance,
notwithstanding the so-called “culture wars.”American Grace is based on two of the most comprehensive
surveys ever conducted on religion and public life in America. It
includes a dozen in-depth profiles of diverse congregations across the
country, which illuminate the trends described by Putnam and Campbell in
the lives of real Americans. Nearly every chapter of American Grace contains a surprise about American religious life.
Background: There is rising evidence that relationships that bridge between immigrants and long-time residents are critical to immigrant integration and to the overall heath of communities. The processes by which this bridging social capital is built are not well understood. Schools in new immigrant destinations, as spaces in which diverse youth come together, provide a unique opportunity to examine how immigrant and long-time resident youth connect to each other and build relationships.
Purpose: This article examines the processes of building relationships between immigrant and long-time resident youth and explores the meaning and consequences of these processes for the individuals involved. The article further suggests ways in which schools might adopt strategies to promote personal interaction, cooperative action, and collective identification to aid in the development of these relationships.
Setting: Lewiston, Maine is the setting of this study. Between February 2001 and May 2003, 1,200 Somalis arrived in Lewiston, a town of 35,690 people, 97.3% of whom were White at the time of the 2000 Census.
Research Design: Using the methodology of portraiture, this study examines, as an exemplary case, one relationship between two students: a Somali immigrant, and a White long-time resident. Portraiture is a methodology built on relationships, which mirrors the theoretical issues under investigation.
Findings/Results: This study provides new insights into how bridging relationships are built. The participants capitalized on the common space of their new immigrant destination school to transform casual personal interactions into a bridging relationship based on collective identification. Through dialogue, particularly about race, they challenged each other and themselves, and each came to understand the other in new ways; they also became invested in each other and dependent on each other to grow and to understand themselves and their places in a changing town.
Conclusions/Recommendations: The research identifies processes of personal interaction, cooperative action, and collective identification as central to the building of bridging relationships. It also reveals the necessity of a focus on race when researching, analyzing, or cultivating these relationships. Lessons for educators and schools seeking to foster relationships between immigrant and long-time resident youth include engaging students in direct dialogue about race and cultivating skills in empathetic storytelling and listening in order to "double-think,"or receive a counter-story.
The proposal discussed in this paper is to levy a common charge on all emissions of greenhouse gases, worldwide. All countries would be covered in principle, but the proposal could be implemented with a much smaller number of countries, provided they covered most of the emissions. While all greenhouse gases should in principle be covered, this paper will address mainly carbon dioxide, quantitatively the most important greenhouse gas; extensions to other greenhouse gases could be made with little or (in the case of methane) much difficulty. The charge would be internationally adjusted from time to time, and each country would collect and keep the revenue it generated.
Competitive authoritarian regimes—in which autocrats submit to meaningful multiparty elections but engage in serious democratic abuse—proliferated in the post–Cold War era. Based on a detailed study of 35 cases in Africa, Asia, Latin America, and post-communist Eurasia, this book explores the fate of competitive authoritarian regimes between 1990 and 2008. It finds that where social, economic, and technocratic ties to the West were extensive, as in Eastern Europe and the Americas, the external cost of abuse led incumbents to cede power rather than crack down, which led to democratization. Where ties to the West were limited, external democratizing pressure was weaker and countries rarely democratized. In these cases, regime outcomes hinged on the character of state and ruling party organizations. Where incumbents possessed developed and cohesive coercive party structures, they could thwart opposition challenges, and competitive authoritarian regimes survived; where incumbents lacked such organizational tools, regimes were unstable but rarely democratized.
Focusing empirically on how political and economic forces are always mediated and interpreted by agents, both in individual countries and in the international sphere, Constructing the International Economy sets out what such constructions and what various forms of constructivism mean, both as ways of understanding the world and as sets of varying methods for achieving that understanding. It rejects the assumption that material interests either linearly or simply determine economic outcomes and demands that analysts consider, as a plausible hypothesis, that economies might vary substantially for nonmaterial reasons that affect both institutions and agents' interests.Constructing the International Economy portrays the diversity of models and approaches that exist among constructivists writing on the international political economy. The authors outline and relate several different arguments for why scholars might attend to social construction, inviting the widest possible array of scholars to engage with such approaches. They examine points of terminological or theoretical confusion that create unnecessary barriers to engagement between constructivists and nonconstructivist work and among different types of constructivism.
This book provides a tool kit that both constructivists and their critics can use to debate how much and when social construction matters in this deeply important realm