After the big investors had pulled their money out of East Asia and left the area in deep recession, they turned to Russia. They calculated that there was little or no risk in buying Russian state bonds paying 12 percent interest because the Western world would not let a former superpower armed with nuclear weapons default. But the situation was further gone in Russia than these investors imagined, and so, in August 1998, the Russians defaulted on the interest payments (they still owe foreign investors perhaps $200 billion). If Russia does not repay these loans, it will be the largest default in history. These developments so scared the finance capitalists that they started pulling their money in from all over the world, threatening even well-run economies that had implemented all the economists’ nostrums on how to get rich like the North Americans. The Brazilian economy was so destabilized that in mid-November 1998 the IMF had to put together a $42 billion “precautionary package” to shore it up. Needless to say, the IMF has also helped plunge millions of poor Brazilians deeper into poverty. In order to meet the IMF’s austerity requirements, the Brazilian government even had to cancel a $250 million pilot project to save the Amazon rain forest. The result was that other countries withdrew their matching funds for the Amazon, and the degradation of an area that contributes 20 percent of the globe’s fresh-water supply resumed.19
In speeches in Russia and East Asia during the second half of 1998, President Clinton warned the peoples of these areas not to “backslide” and urged them to open their nations even further to American-style laissez-faire capitalism. But he had lost his audience. By now his listeners understood that the cause of their misery could not also be its cure. Many remembered that the Great Depression started as a financial panic then made worse by deflationary policies similar to those prescribed by the IMF in 1997 and 1998 for East Asia, Russia, and Brazil. The result in the early 1930s was a general collapse of purchasing power. That has not happened so far this time, largely because the United States went on a consumption binge and provided virtually all growth in demand for the excess output of the world. Can American “shop till we drop” be sustained indefinitely? No one knows.
The economic crisis at the end of the century had its origins in an American project to open up and make over the economies of its satellites and dependencies in East Asia. Its purpose was both to diminish them as competitors and to assert the primacy of the United States as the globe’s hegemonic power. Superficially it can be said to have succeeded. The globalization campaign significantly reduced the economic power and capitalist independence of at least some of the United States’ “tiger” competitors—even if, as with Russia and Brazil, the crisis could not be kept within the bounds of East Asia. This was, from a rather narrow point of view, a major American imperial success.
Despite such immediate results, however, the campaign against Asian-style capitalism (and the possibility that America’s satellite states in the area might gain independent political clout as well) was ill-founded and included serious blowback consequences. The United States failed to acknowledge that East Asian success had depended to a considerable extent on preferential, Cold War–based exports to the American market. By cloaking its campaign in the rhetoric of market opening and deregulation instead of the need to reform outdated Cold War arrangements, the United States both destroyed the credibility of its economic ideology and betrayed its Cold War supporters. The impoverishment and humiliation of huge populations from Indonesia to South Korea was itself blowback enough, even if the blowback for the time being spared ordinary Americans. But if and when the stricken economies recover, they will almost certainly start to seek leadership elsewhere than from the United States. At a bare minimum, they will try to protect themselves from ever again being smothered by the American embrace. In short, by refusing to reform its Cold War structures and instead insisting that other peoples emulate the American way, the United States gave itself an unnecessary, possibly terminal case of imperial overstretch. Instead of forestalling global instability, it helped make such instability inevitable.
The triumphalist rhetoric of American leaders basking in their economy’s “stellar performance” has also alarmed foreigners. When Alan Greenspan asserted to Congress that the crisis meant the world was moving toward “the Western form of free market capitalism,” almost no one thought that was either true, possible, or desirable. Economics has not displaced culture and history, regardless of the self-evaluation of the economics profession. Many leaders in East Asia know that globalization and the crisis that followed actually produced only pain for their people, with almost no discernible gains.20 Globalization seems to boil down to the spread of poverty to every country except the United States.
Clearly on the defensive, Richard N. Haass and Robert E. Litan, directors respectively of foreign policy and of economic studies at the Brookings Institution in Washington, lamented, “In some quarters [globalization] is seen as having caused the rapid flows of investment that moved in and out of countries as investor sentiment changed and were behind the Mexican [1995] and Asian financial crises.” But to them this would be a wrong conclusion. To accept it would be to “abandon America’s commitment to the spread of markets and democracy around the world at precisely the moment these ideas are ascendant.”21 But whether such ideas are actually ascendant is, thanks to the crisis, now in doubt, and such doubts are generating more blowback. The duties of “lone superpower” produced military overstretch; globalization led to economic overstretch; and both are contributing to an endemic crisis of blowback.
10
THE CONSEQUENCES OF EMPIRE
American officials and the media talk a great deal about “rogue states” like Iraq and North Korea, but we must ask ourselves whether the United States has itself become a rogue superpower. In November 1998, Tom Plate, a columnist on Pacific Rim affairs for the Los Angeles Times, described the United States as “a muscle-bound crackpot superpower with little more than cruise missiles for brains.”1 That same month a senior State Department specialist on North Korea, when asked by a right-wing journalist what it was like having to deal daily with a totally crazy regime, replied, “Which one?” Another former State Department official protested that military might does not equate with “leadership of the free world” and wrote that “Madeleine Albright is the first secretary of state in American history whose diplomatic specialty, if one can call it that, is lecturing other governments, using threatening language and tastelessly bragging of the power and virtue of her country.”2 It is possible to think of other secretaries of state who fit this description, going back to John Foster Dulles, but Albright does not even have the Cold War to justify her jingoism.
We Americans deeply believe that our role in the world is virtuous—that our actions are almost invariably for the good of others as well as ourselves. Even when our country’s actions have led to disaster, we assume that the motives behind them were honorable. But the evidence is building up that in the decade following the end of the Cold War, the United States largely abandoned a reliance on diplomacy, economic aid, international law, and multilateral institutions in carrying out its foreign policies and resorted much of the time to bluster, military force, and financial manipulation.
The world is not a safer place as a result. Those who support a singular American hegemonic role in world affairs argue, as did Mark Yost, an editor of the Wall Street Journal, “It’s all but assured that the number of nuclear powers abroad would increase significantly with the withdrawal or reduction of U.S. forces [in Asia].”3 But in May 1998, with American forces deployed as widely as in the final days of the Cold War, the worst case of nuclear proliferation since the 1960s occurred in South Asia. Both India and Pakistan tested multiple nuclear devices, committing their countries to perfecting nuclear weapons and developing the missiles needed to deliver them—in essence, setting off a full-scale nuclear arms race in South Asia. There can be little question that a serious policy of nuclear disarmament led by the United States would have been far more
effective in halting or even reversing the nuclearization of the world than the continuing policy of forward deployment of nuclear-armed troops combined with further research on ever more advanced nuclear weaponry at America’s weapons laboratories.
In February 1998, Secretary of State Madeleine Albright, defending the use of cruise missiles against Iraq, declared, “If we have to use force, it is because we are America. We are the indispensable nation. We stand tall. We see farther into the future.”4 In this book I have tried to lay out some important aspects of America’s role in the world that suggest precisely the opposite. I have also tried to explain how the nature and shape of this role grew out of the structural characteristics of the Cold War itself and the strategies the United States pursued, particularly in East Asia, to achieve what it considered its interests during that period and after. I have argued that the United States created satellites in East Asia for the same reasons that the former Soviet Union created satellites in Eastern Europe. For over forty years, the policies needed to maintain these client states economically, while protecting and controlling them militarily, produced serious unintended consequences, most of which Americans have yet to fully grasp. They hollowed out our domestic manufacturing and bred a military establishment that is today close to being beyond civilian control. Given that the government only attempts to shore up, not change, these anachronistic arrangements, one must ask when, not whether, our accidental empire will start to unravel.
According to a Brookings Institution study, it has cost the United States $5.5 trillion to build and maintain our nuclear arsenal.5 It is now common knowledge that comparable costs in the former USSR led to its collapse. In 1988, just before the Berlin Wall fell, that elegant historian of imperial overextension Paul Kennedy detailed the numerous weaknesses of the Soviet economy but nonetheless concluded, “This does not mean that the USSR is close to collapse, any more than it should be viewed as a country of almost supernatural strength. It does mean that it is facing awkward choices.”6 This understandable misassessment by one of the world’s authorities on imperial collapse contains an important warning for the United States. Fifteen years ago no one in Russia or elsewhere imagined that the USSR could possibly be in danger of internal disintegration. There are parallels between what happened in the former USSR after the end of the Cold War and the state of the American polity at the end of the century, even acknowledging that economically the Soviet Union had long been a shell held together by a huge underground (and technically illegal) economy, while it displayed to the external world a vast imperial army and nuclear forces.
In March 1985, Mikhail Gorbachev succeeded Konstantin Chernenko as general secretary of the Communist Party of the Soviet Union. He was no more opposed to Soviet-style socialism than his counterparts in the United States were opposed to “democracy and free markets.” He was, however, keenly aware of the strains that an endless, unwinnable war in Afghanistan and the arms race with the United States were placing on an already shaky economy. A month after he came to power, Gorbachev launched a campaign of economic reform controlled from above that he called perestroika, or “restructuring.” Gorbachev’s relatively limited goal was to try to accelerate national economic performance by relaxing the Soviet system’s centralized planning. He did not fully appreciate that weakening the vertical structure of the Soviet system without first creating horizontal (even if ideologically unacceptable) institutions, such as markets, prices, and private property, would only lead to chaos. Communist colleagues with vested interests in the old system rebelled against even his modest domestic reforms and sabotaged them. In order to counter these attacks, in 1987 Gorbachev introduced something really new—glasnost, or freedom of speech. His intent was still only to achieve a more efficient system of production and improved living standards under the established Soviet political order.
But far more than perestroika, glasnost would prove a critical miscalculation for a leader hoping to reform Soviet-style communism. Glasnost not only opened up the full horrors of the Stalinist past but also revealed the extent to which totalitarian controls had damaged all aspects of life in the USSR. Glasnost—the open discussion of the past—ended up discrediting the very institutions within which the Soviet people had worked since at least 1929, clearing the way for the abandonment of Communist ideology itself, and the subsequent loss of any form of political authority in Russia. A decade later the country was bankrupt, more or less leaderless, and riven with corruption. Russia has also become one of the world’s most important breeding grounds for resentment against the Western powers. Even as the United States gloats over its “victory” in the Cold War, future Russian revanchism becomes more and more likely.
The collapse of the USSR was not foreordained. The problems in Russia came to a head when the collective costs of the Cold War finally overwhelmed its productive capacities. Gorbachev’s remedies were, however, incommensurate with the problems and led to a loss of political authority, leaving the country with a crippled political system. As time ran out on the Soviet empire, Gorbachev’s military restraint in dealing with Eastern Europe was admirable, but the endgame of the Soviet Union remains a cautionary tale for any overextended empire that waits too long to try to halt the drift toward crisis. In contrast to the Soviet Union, China has thus far successfully demonstrated that it is possible to dismantle a Soviet-type economy without destroying its political arrangements.
No matter how humanely (or ineptly) Gorbachev handled the Soviet crisis of the 1980s, it was imperial overstretch that brought the Soviet Union down. Just as during the Cold War there was a symmetry between the USSR and the United States in terms of their respective empires in Eastern Europe and East Asia, so there are at least certain potential symmetries emerging in their post–Cold War fates. The United States believes that it is immune to the Soviet Union’s economic problems. That may be true, although America’s grossly inflated military establishment and its system of support for arms manufacturers offer parallels to the inefficiencies of the Soviet system. More significantly, unable to agree on a proper course for the country and made complacent by the wealth that flowed its way during the late 1990s, America’s leaders have allowed a process to develop that might in certain ways prove analogous to political conditions in post–Cold War Russia.
On December 19, 1998, a Republican Congress voted to impeach a Democratic president—the first time in American history that an elected president had been impeached. It did so for the most partisan and flimsy of reasons: that the president had lied about sexual encounters with a subordinate in his office. In the course of trying to extricate himself from this fratricidal political battle, the president twice resorted to military strikes against other countries, a precedent for which he might well have been justifiably impeached. In August 1998, on the day impeachment evidence against him was being released to the public, Bill Clinton ordered cruise missiles fired into a Sudanese pharmaceutical plant and old mujahideen camps in Afghanistan, allegedly the assets or training bases of an international terrorist ring that had attacked U.S. embassies in East Africa; and on the eve of the House of Representatives’ impeachment vote he sent cruise missiles into Iraq, allegedly once again to discipline Saddam Hussein. In neither case did the United States have United Nations or other international authority to act as it did.
The president’s acquittal on February 12, 1999, superficially resolved his dispute with Congress. But much like the warfare between Gorbachev and the Communist old guard in the Soviet Union, it had the effect of further weakening the structures of political authority. Congressional willingness to resort to so untested a device as impeachment combined with a president willing to try to divert attention through warlike actions suggests a loss of prudence, even a recklessness, on the part of American elites that could be fatal to the American empire in a time of crisis.
Even though the United States at century’s end appears to have the necessary firepower and economic resources to neutralize all challengers, I believe our v
ery hubris ensures our undoing. A classic mistake of empire managers is to come to believe that there is nowhere within their domain—in our case, nowhere on earth—in which their presence is not crucial. Sooner or later, it becomes psychologically impossible not to insist on involvement everywhere, which is, of course, a definition of imperial overextension.
Already, the United States cannot afford its various and ongoing global military deployments and interventions and has begun extracting ever growing amounts of “host-nation support” from its clients, or even direct subsidies from its “allies.” Japan, one of many allied nations that helped finance the massive American military effort in the Gulf War, paid up to the tune of $13 billion. (The U.S. government even claimed in the end to have made a profit on the venture.) Japan also pays more generously than any other nation for the American troops on its soil. On the economic front, the arrogance, contempt, and triumphalism with which the United States handled the East Asian financial crisis guarantees blowback for decades to come. Capitals like Jakarta and Seoul smolder with the sort of resentment that the Germans had in the 1920s, when inflation and the policies of Britain and France destabilized the Weimar regime.
In the long run, the people of the United States are neither militaristic enough nor rich enough to engage in the perpetual police actions, wars, and bailouts their government’s hegemonic policies will require. Moreover, in Asia the United States now faces a renascent China, not only the world’s oldest continuously existent civilization but the product of the biggest revolution among all historical cases. Today, China is both the world’s most populous society and its fastest-growing economy. The United States cannot hope to “contain” China; it can only adjust to it. But our policies of global hegemony leave us unprepared and far too clumsy in even our limited attempts to arrive at such an adjustment. Meanwhile, the Chinese are very much aware of the large American expeditionary force deployed within striking distance of their borders and the naval units permanently off their coastline. It does not take a Thucydides to predict that this developing situation portends conflict.
Blowback, Second Edition: The Costs and Consequences of American Empire Page 28