by Mitt Romney
America will remain the leading nation in the world only if we overcome our challenges. We will be strong, free, prosperous, and safe. But if we do not face them, I suspect the United States will become the France of the twenty-first century—still a great country, but no longer the world’s leading nation. What’s chilling to consider is that if America is not the superpower, others will take our place. What nation or nations would rise, and what would be the consequences for our safety, freedom, and prosperity?
The world is a safer place when America is strong. Ronald Reagan remarked that of the four wars in my lifetime, none came about because the U.S. was too strong. America’s strength destroyed Hitler’s fascism. It stopped the North Koreans and Chinese at the 38th parallel and allowed South Koreans to claim their freedom and reach prosperity. American strength kicked Saddam Hussein out of Kuwait, and later pulled him out of his spider hole.
There are a number of thoughtful people around the world who don’t welcome America’s strength. In 2007, several reputable polls asked European citizens which nation they perceived as the greatest threat to international peace. Their answer was the United States. I was incredulous when I first read this, and presumed the respondents must have had the Iraq War on their minds when they answered. Surely they hadn’t considered what Russia would do in Eastern Europe if America was weak; what China would do in Taiwan; what the Taliban would do in Afghanistan; what Fidel Castro, Hugo Chávez, Kim Jong-il, or Mahmoud Ahmadinejad would have in mind for their neighbors. The very existence of American power helps to hold tyrants in check and reduces the risk of precipitous war.
Does America make mistakes? Absolutely. We never fully understood the enormously complex political, economic, and military issues we faced in Vietnam, and we were wrong in our assessment of Iraq’s weapons of mass destruction programs. But in every case throughout modern history in which America has exercised military power, we have acted with good intention—not to colonize, not to subjugate, never to oppress.
During my tenure as governor of Massachusetts, I had the opportunity to join a small group of people in meeting Shimon Peres, Israel’s former prime minister and current president. In casual conversation, someone asked him what he thought about the ongoing conflict in Iraq. Given his American audience, I expected him to respond diplomatically but with a degree of criticism. But what he said caught me very much by surprise.
First, I must put something in context, he began. America is unique in the history of the world. In the history of the world, whenever there has been war, the nation that is victorious has taken land from the nation that has been defeated—land has always been the basis of wealth on our planet. Only one nation in history, and this during the last century, was willing to lay down hundreds of thousands of lives and take no land in its victory—no land from Germany, no land from Japan. America. America is unique in the history of the world for its willingness to sacrifice so many lives of its precious sons and daughters for liberty, not solely for itself but also for its friends.
Everyone in the room was silent for a moment, and no one pressed him further on his opinion about Iraq. I was deeply moved. And I was reminded of former secretary of state Colin Powell’s observation that the only land America took after World War II was what was needed to bury our dead.
Some argue that the world would be safer if America’s strength were balanced by another superpower, or perhaps by two or three. And others believe that we should simply accept the notion that our power is limited. British Marxist historian Eric Hobsbawm in his book, On Empire, asserts, It is also troubling that there is no historical precedent for the global superiority that the American government has been trying to establish and it is quite clear to any good historian and to all rational observers of the world scene that this project will almost certainly fail.
I take a different view. The United States is unique. American strength does not threaten world peace. American strength helps preserve world peace.
It is true that the emergence of other great powers is not entirely up to us—several other nations are building economic and military power and we will not stop them from doing so. But we can determine, entirely on our own, that we will not fall behind them. And the only way I know to stay even is to aim unabashedly at staying ahead.
Four Strategies to Achieve World Power
A number of nations and groups are intent on replacing America as the world’s political, economic, and military leader. In fact, there are four major strategies that are currently being pursued to achieve world leadership. I use the word strategy advisedly. For nearly ten years, I worked as a management strategy consultant, first with the Boston Consulting Group (BCG) and then with Bain & Company. BCG’s founder, Bruce Henderson, observed that in order to become a success, a business doesn’t just have to do well, it also has to do better than its competitors. Being number one isn’t just about bragging rights. Often it means the difference between prospering and merely hanging on. Accordingly, a few hundred of us were hired to help companies develop strategies that would allow them to outperform their competition.
Most people can recognize strategy as it plays out in the world of business. Facing Microsoft’s PCs, Apple’s strategy was to appeal to a different segment of customers and win among those buyers. It focused on educational and creative users rather than typical business users. It targeted the young and the hip. From creating products like the iPod, the iPhone, and the Mac, to their design, advertising, and image, Apple tailored every dimension of its offering to its brand of customer. The strategy appears to be working: in 2008, it generated 9 billion in cash.
Countries, like businesses, need strategies to survive and prosper. A nation’s strategy should be designed to propel it beyond its competitors and to increase the security and prosperity of its citizens. While there are as many national strategies as there are countries on the global map, there are four specific approaches to geopolitics that have been embraced by various major players on the world stage. We must recognize and understand these if we are to be fully aware of the challenges ahead.
Each of the four approaches is being pursued to achieve world leadership status—superpower status—and perhaps dominion of the global order. Their adherents are fully convinced that they have chosen the strategy that will propel them beyond their geopolitical rivals.
The first of these strategies is represented by the United States. Ours is a strategy based on two fundamental principles: economic freedom and political freedom. The two are not only harmonious, they actually empower one another. Individual freedom stimulates a spirit of entrepreneurship that in turn leads to innovation and enterprise. And the freedom to walk away from a job and create one’s own enterprise breeds a sense of independence in a culture that prizes individual freedoms. It’s a strategy that has led America to become the most powerful nation in the history of the earth. It has also created powerhouses like Japan, Germany, and South Korea, nations that had been devastated by war. And it has helped the twenty-seven-member nations of the European Union create economies whose combined gross domestic product (GDP) is 30 percent of the world’s total, roughly the same as the combined GDP of the United States and Canada.
While the nations that pursue this American strategy are collectively referred to as the West, not all of them do so in a uniform manner. Sweden and several other European nations, for example, place a far heavier governmental hand on free enterprise and on economic freedom than does the United States. Citizens are highly taxed to provide not only a very substantial social safety net but also a relatively comfortable lifestyle. Businesses and employment are highly regulated. Despite the differences among Western nations, economic freedom and political freedom are at the core.
A second strategy is pursued by China. As with the West, theirs is based on free enterprise. Unlike the West, it is also based on authoritarian rule. On its face, the strategy is contradictory: the oppression of an authoritarian regime that severely limits individual freedoms must
surely stifle entrepreneurship and enterprise. The conflict is so apparent that many Western observers have predicted that as China’s economy and trade develop, the country will trend toward democracy and freedom.
China’s leaders see things quite differently. They believe that the economic vitality produced by free enterprise, combined with the stability and vision of wise leaders, unaffected by popular whim, creates the winning strategy. Autocracies of the twentieth century were often wedded to socialism; its abject economic failure doomed these governments. But China is banking that having embraced a form of free enterprise, their autocratic future will be very different than their past failures.
I had expected to find the Chinese people frustrated with Communist rule and to encounter many who were agitating for the basic freedoms enjoyed in the West. But when I met with Chinese students at Tsinghua University in Beijing in 2006, they seemed much more interested in pursuing the lessons of American-style free enterprise than they were in promoting American-style freedom. The Chinese I met during the 2008 Beijing Olympic Games likewise had little apparent discontent with Communist rule. Perhaps they were on their best behavior when I spoke with them, out of fear of government reprisal. But there was another, more open expression of support for the government during the Games. The Opening Ceremonies were attended by over 90,000 people, the vast majority of whom were Chinese. When President Hu Jintao was introduced over the National Stadium’s loudspeakers, the audience erupted in cheers. I did not hear a single boo. From months on the presidential campaign trail, I’ve learned that boos stand out, even in the midst of a much larger number of people who are clapping and cheering. I remember popular Massachusetts politicians being drowned out at Boston’s Fenway Park by a small minority of Bronx cheers. But there were no boos for Hu Jintao; instead, there were loud and exuberant cheers.
What has happened in China to the spirit of Tiananmen Square? It may simply be hidden for now, at least from public view. Or it may be that brutal repression and incarceration of dissidents has pushed the democracy movement far below the surface. Every year, there are literally thousands of protests in China, although these are typically directed at the corruption of local bureaucrats and politicians. Perhaps the combination of nationalistic pride and the elixir of newfound economic opportunity have, at least for a time, quieted the clamor for political freedom. In the long term, however, I am convinced that as the Chinese study abroad, trade with free nations, build enterprises, and become increasingly exposed to people and cultures from around the world, they will demand freedom and genuine democratic reforms. But what is uncertain is when that pursuit will reach a critical level, and whether the Communist Party will accede to popular demand. For now, and perhaps for a very long time to come, China’s strategy is deeply grounded in authoritarian rule.
It’s surprising to some that China’s strategy is also based on free enterprise. Communism is, in fact, the opposite of free enterprise—at its core is state-owned industry and public land. But Chinese leaders watched carefully as the economies of the Soviet Union and its fellow travelers like North Korea and Cuba collapsed. In a head-to-head economic contest, carried out over half a century, Communism was the undisputed loser. Free enterprise won, hands down, and so the Chinese Communist Party adopted free enterprise. The Chinese are an enormously practical and intelligent people; their leaders saw that Communism could not feed China, much less make it prosperous. Free enterprise could do both, and the modern tools of repression have allowed the Chinese leadership elites to reap its benefits . . . for the time being.
Chinese free enterprise is not like that of the West, as least not yet. Major industries continue to be state-owned and -operated. And absent from the Chinese system is the rule of law and regulation that shapes free enterprise elsewhere. It has failed to prevent widespread practices that have tainted products from dog food to infant formula, and it quite clearly welcomes the rampant theft of intellectual property from Western businesses. It is free enterprise on steroids—anything goes. China brazenly sells sensitive technologies to Iran and buys oil from genocidal Sudan, and it vigorously defends these nations against international sanction.
And there is another way in which Chinese enterprise is distinguished from other economic systems around the world: it is winning. China is fast becoming the world’s factory, successfully capturing the lion’s share of world manufacturing for a growing list of products. The country is no longer content to make only toys and trinkets. It is manufacturing cars, aircraft, televisions, and computers. Foreign companies that have invested in China have certainly smiled as their sales and profits have grown, but their smiles aren’t as wide as they once were, now that their Chinese partners are opening facilities of their own and appropriating foreign know-how and technology. All this has led to breathtaking growth for China’s economy, now predicted to be larger than ours within the next twenty years.
The numerous Chinese leaders with whom I have met have always been very gracious. Typically, these formal meetings are held with a large number of observers. The two principals are seated next to each other, separated by flowers and interpreters, rather than sitting face-to-face and eye-to-eye. As a result, what is said tends to feel more like a speech for the gathered assembly than like a direct and personal exchange of views. It can be difficult to discern just what the Chinese are thinking and planning within the boundaries of their relatively closed society. Uniformly, I have been assured by the leaders with whom I’ve met that China has no global ambition. They remind me that China is still a very poor country in comparison with nations like ours. That may well be true, but I am certain that China intends to become a very powerful nation, and ultimately to become even stronger than the United States. If and when that happens, who knows what intentions China will harbor?
Russia is pursuing a third global strategy. Like China, it favors authoritarian rule, but Russia’s economic strategy is primarily based on energy. By controlling people and energy, Russia aims to reassert itself as a global superpower.
To many of us, it is inconceivable that Russia could ever again compete for world leadership. Didn’t the Soviet Union completely collapse? Wasn’t its economy a basket case? Russian products were the laughingstock of free economies around the world. Even its military was in shambles because its feeble economy didn’t permit it to maintain its armaments, its bases, or even a large part of its personnel. Hadn’t Russia thrown in the towel?
Yes and no. There was indeed a time when Russia sought aid from the West, and when democracy was energetically, even heroically, pursued. Free enterprise was unleashed, despite concerns. Russia appeared poised to join the family of responsible nations, free nations. But that has changed under Russia’s former president and current prime minister, Vladimir Putin.
Russia’s rediscovered ambition for superpower status is fueled by its massive energy reserves. Russia has the world’s largest reserves of natural gas and the second largest reserves of coal. It is second in the production of oil, following only Saudi Arabia. In all forms of energy, Russia already is the largest exporter in the world, actually outpacing Saudi Arabia. In 2008, Russia reached 300 billion in energy sales, a figure about two-thirds the size of the entire United States defense budget that year. Had Russia enjoyed comparable energy revenues during the Cold War, we might not have been able to so dominate the arms race that drove them to capitulate. We won the Cold War at the right time.
Russia’s energy strategy has not crowded out the rest of its economy. Despite rampant corruption, a frightening level of organized crime, and the loss of investment predictability due to Putin’s confiscations of private property, Russia has enjoyed the most rapid recent growth of any of the G-8 nations. Under Putin, the country’s GDP has nearly doubled, averaging growth of approximately 7 percent per year. Adjusted for purchasing power parity, the Russian economy is now the world’s seventh largest.
Beyond energy and commodities, Russia also relies on the strength of its science and technolog
y sectors. I remember a conversation I had with Jim Sims, founder and CEO of a company called GEN3 Partners. His business concept was to provide research for American companies that had closed down their own research efforts. In effect, his company would become their various laboratories, enjoying the benefits of scale and the cross-fertilization of ideas. But as he went about hiring American scientists, he found they were in short supply. Ultimately, he found the research scientists he needed in Russia. There, he explained, the scientists were well educated, hardworking, and abundant. Russian enterprises take advantage of the same talent pool to achieve success in such fields as information technology, software, space technology, nuclear engineering, and military weaponry. Combined with its massive energy resources, Russia’s technology sectors bolster its prospects to someday regain superpower status.
Russia’s energy strategy explains a good part of what Vladimir Putin is doing internationally. Georgia has several thousand ethnic Russians, which provided a pretext for Russian aggression in the summer of 2008. But it was really Georgian geography with its energy pipelines that motivated Putin. The Ukrainians can’t help but look at Russia the way Little Red Riding Hood looked at the wolf—Russia is hungry for a direct energy route to the Black Sea. It is not just energy reserves that Russia is counting on to propel its return to power; it is also monopoly power over the gas pipelines that provide energy to Europe and the West. When Putin shut gas off to Ukraine and Europe during the winter of 2009, The New York Times reported that it sent an unmistakable message about the Continent’s reliance on Russian supplies—and Mr. Putin’s willingness to wield energy as a political weapon.
On the surface, Russia’s support for Iran doesn’t seem to make sense; after all, if Iran goes nuclear, its missiles will be a lot closer to Russia than they will be to the United States. But a nuclear Iran would become a Middle East superpower, and if Russia could influence Iran, it could have even more power over world energy supplies. The same holds true with Russia’s burgeoning relationship with Venezuela.