Clinton's World

The Fiscal Crunch

For much of the post-second world war period American leaders have struggled to fund history's most sweeping foreign-policy agenda while satisfying the American public's entirely understandable desire for more government benefits and guarantees--just like those enjoyed in most of the advanced industrialized countries we have defended. Complicating the challenge have been Americans' limited appetite for higher taxes, the economy's inability to grow as fast as the popular demand for social spending, and the fact that the costs of our foreign-policy responsibilities and consequent defense burdens have not been borne by our protectorates. Rather than cut domestic programs or significantly reduce defense spending, American Presidents from Lyndon Johnson to George Bush simply ran enormous budget or international-payments deficits.

With debt repayments now exceeding our military budgets each year, it's clear that profligacy is no longer a workable fiscal policy. The demise of the Soviet Union may have let us off the hook by permitting us to "do more with less," as Clinton has argued. But the new President intends to cut defense spending by only five percent more than President Bush would have, and thus to leave our military budget significantly higher in real terms than it was in 1981--shortly after the Soviets invaded Afghanistan.

These cuts will shrink military spending as a share of gross national product down to a level (3.5 percent) not seen since before Pearl Harbor. If we could afford defense budgets that ate up eight or nine percent of GNP thirty and forty years ago, some foreign-policy mandarins wonder, why can't we afford this relatively much smaller defense burden today?

There are two reasons. First, we had an even more parsimonious welfare state then than we have now, along with a much smaller deficit. Therefore it was easier to be fiscally responsible while accommodating heavy defense spending. Of course, in terms of raw numbers, the main culprits responsible for the big deficits have been greatly expanded and underfunded domestic programs--chiefly entitlements indexed to inflation. But as Clinton recognizes, a deficit-reduction plan that zeroes in on entitlements alone is a deficit-reduction plan going nowhere.

Second, optimism about funding our international agenda seems to assume that we're already meeting our domestic needs pretty well. Yet even if entitlements could be slashed, the new President favors spending vast new sums on infrastructure and education. His plans for addressing the health-care crisis, the drug crisis, and the urban crisis will surely cost a great deal as well. And his desire to give business tax incentives to encourage productive investment (not to mention giving tax relief to the middle class) will also strain the budget--at least in the short run.

Moreover, as the outgoing budget director, Richard Darman, warned, there are literally hundreds of billions of dollars in underfunded, off-budget federal liabilities--deposit insurance, mortgages, student loans, small and minority business loans--lying in wait, in his memorable phrase, like hidden Pac-Men, ready to gobble up lines of resource dots if economic conditions stay sluggish enough long enough.

Deep cuts in U.S. defense spending alone--which would inevitably mean a very different, less grandiose foreign policy--would not solve our budget crisis. But they could help break the fundamental budgetary impasse, which is not economic but political. By supporting a defense establishment that will consume nearly one of every five tax dollars for the indefinite future, the policies that Clinton espoused during the campaign practically guarantee a further weakening of the compact that must lie at the heart of successful tax policy in any reasonably democratic system: the taxpayer will pay only if he is persuaded that most of his money will be spent in a way that benefits him.

Because the United States is so secure geopolitically, it has always been difficult for American Presidents to persuade voters to make sacrifices for national-security objectives like anti-communist containment in far-off regions. That's why Lyndon Johnson and Richard Nixon tried to fight in Vietnam on a business-as-usual basis. Now that the Cold War is over, how will American leaders justify the "shared sacrifice" that all thinking people acknowledge is necessary to solve the budget crisis--and do so, moreover, while so much of our national wealth goes to defending rich economic rivals, such as Germany and Japan, against threats that no longer exist? Without a presidential confession that Washington's priorities have long neglected domestic needs, together with energetic efforts to right the balance, voters probably won't respond.

How Much World Order?

The demise of the Soviet Union, rising ethnic and regional conflict around the globe, and George Bush's use of the term "new world order" set off a classic modern American foreign-policy debate about which of two utopian goals we should stake our national security and prosperity on: global stability or the worldwide triumph of democracy. Bush was seen--notably by Democrats--as having surrendered to prudence, siding with stability and kowtowing to tyrants who were doomed to fall. He countered by emphasizing the strategic importance of some dictatorships and the urgent need in a nuclear world to prevent complete international chaos.

Though loath to admit it, the two sides are promoting ideas rooted in the same venerable ground of American diplomatic thinking--namely, that the nation's welfare depends critically on a benign international environment. But American history has never borne this out. We have thrived even though we have been surrounded by dictatorships for most of our national life. Today, in a world greatly shrunken by technology, the international environment arguably affects us more than ever. At the same time, this environment is just as arguably becoming less controllable.

A more orderly, more democratic world would of course be wonderful. But both goals seem fanciful. Thus we need to stop thinking of foreign-policy planning as an exercise in creating wish lists and instead focus on questions that can actually provide useful guidance for policy-makers: How much international order and democracy do we really need? Are there some regions where we don't need much at all? What is achieving our goals worth to us in the way of defense and aid resources and human lives? What will it take in the way of economic resources to advance these goals? How are budget planners to proceed? How will we know when we have succeeded? Most important, given the difficulty of promoting peace and democratic change, and given our budgetary constraints, how can we enhance our own security and prosperity if much of the world remains turbulent and oppressed? What are our fallback positions--in other words, how can we hedge?

Nowhere is this new approach needed more than in our relations with the former Soviet Union--too big and too badly broken down to fix anytime soon with any politically realistic amount of Western aid, and still armed to the teeth with nuclear weapons. Aid programs designed to give Russian democracy "a fighting chance," in Clinton's words, implicitly admit that the situation is already hopeless. A truly responsible President would start thinking a lot more about shielding America from the worst effects of anarchy in this huge region. One way to do this would be to withdraw the vast majority of our military forces from Europe, and not leave 75,000-100,000 soldiers, as Clinton has suggested doing. If disorder in the former communist world spreads, American soldiers should be as far away as possible Moreover, if Clinton really is worried that a nuclear conflict among the former Soviet republics will endanger America, he'll devote a much larger share of defense spending to the task of developing conventional weapons that can find and destroy weapons of mass destruction held by any untrustworthy forces before they are used. In other words, in some instances the new international realities will force us to become more, not less, interventionist.

How Much Interdependence?

Many foreign-policy doers and thinkers view interdependence and its close relatives cooperation and globalization as America's salvation. These conditions are supposed to make great-power conflict obsolete--much as it was supposed, by Sir Norman Angell at least, on the eve of the First World War that the dense web of commerce connecting the great European powers made peace too profitable to jeopardize, at any rate for very long. Moreover, they are supposed to be the key to solving a series of new "transnational" problems, such as drug abuse, AIDS, and environmental destruction.

The idea seems to be that once mankind understands just how widespread interdependence et al. have become and what their true implications are, international relations will become an essentially harmonious enterprise. Power will no longer be important, and the struggle for advantage and for relative position will end. Regarding transnational problems, all countries will recognize that they have a stake in the solutions, and will promptly identify those responses that reason says are in every country's true best interests. It's the dream world of America's early-twentieth-century Progressives and other "good government" types revived and writ large. In the realm of economics, governments and special interests will finally recognize that nation-states have become anachronisms, step out of the way, and let capital flow to wherever in the world it will reap the highest return. The resulting international division of labor, based on nothing but considerations of efficiency, will bring the greatest good for the greatest number. It is hard to find a major official American speech on foreign economic policy which fails to endorse these goals wholeheartedly.

Of course, interdependence, cooperation, and globalization are extremely important and becoming more so. But they hardly eliminate the need to think in terms of power and advantage. What the mainstream forgets is that they are inevitably complex. As long as we live in a world of multiple sovereign political units (and economic integration in Europe and elsewhere doesn't alter this reality; it simply changes the size of the units), these conditions will have structure, and particular content. And their structure and content are going to be determined by someone or something. If we assume that states will all have the same preferences as to how to solve problems, then power may indeed be unimportant. Similarly, we need not worry about power if we assume that whose preferences prevail is unimportant. But all those who assume that the different sizes, locations, strengths, cultures, and histories of states and other units will regularly produce different preferences, some of them more desirable than others, will care deeply about power. They will care because in all negotiations not refereed by a commonly accepted authority, power will decide which preferences prevail. Only an academic political scientist could seriously argue that success at international negotiations is a matter of convincing one's interlocutor that one's ideas have everyone's best interests at heart. Winners are determined not primarily by merit but by how much material wherewithal they bring to the table--the better to bribe or coerce others or to create realities that others must accommodate.

Hence the growing importance of interdependence et al. demands that the United States pay much more attention than it has so far to accumulating and preserving national military and economic strength. This shift, in turn, requires us to rethink our determination to put America's economic fate entirely in the hands of free-market forces, an objective that makes it all too easy to rationalize the loss of key industries and technologies to other countries. In an age of interdependence, intelligent economic nationalism--striking a balance between efficiency and self-reliance--becomes more important than ever.

The Romanization of American Life

The very prominence of national security in American life for the past forty years has seriously warped American politics, society, and culture. During the Cold War this Romanization of American life was probably unavoidable. But we need to rethink it now that we are no longer maintaining a state of national emergency.

America's defining political system, which consists in a limited government resting on the principle of the separation of powers, was never meant to help exercise the kind of active world leadership that we have pursued since 1945. Decades of an outsized foreign policy have put it under considerable strain. That foreign policy has produced excessive secrecy in government. It has helped to imbue our leadership classes inside and outside government with a contempt for the man in the street which has been growing since the 1930s--when the public ostensibly was determined to ignore the fascist threat--and contributed to the alienation from these leaders that Americans have developed in return.

The Romanization of American life has also generated some troubling theories about America's national identity and purpose which have become all too uncontroversial. Specifically, many of us have come to believe that America will never be true to its best traditions unless it is engaged in some kind of world mission, that creating a more perfect United States is not a noble or an ambitious enough goal for a truly great people, that we will be morally and spiritually deficient unless we continue to be the kind of globe-girdling power we have been for the past half century.

One important strain of the conventional wisdom has seen the lack of connection between national-security imperatives and America's eighteenth-century political institutions as evidence that the institutions should be brought up-to-date. Yet the end of the Cold War reveals another possibility: that we should work harder to put national security in its proper place. We need, for example, to move away from viewing public opinion as an impediment to an effective foreign policy. To the contrary, public opinion in this geopolitically secure and economically strong country has been serving as a desperately needed commonsense check on the utopian security and economic designs of the foreign-policy industry. The more democratic foreign-policy decision-making in America becomes, the more effective it may well be. Consequently, the new President should start thinking about ways to open up the process, perhaps using some variant of Ross Perot's electronic town hall to permit the public to make the kinds of foreign-policy decisions in which the national-security stakes are low but the risks to certain groups of Americans are potentially great--for example, military intervention in a strategically marginal hot spot like Bosnia.

Above all, Bill Clinton needs to understand that foreign policy is not an end in itself but a means to a highly specific end: enhancing the safety and prosperity of the American people. A domestic focus is imperative not in order to rebuild the foundation for American world leadership but to prepare America for a world that cannot be led or stabilized or organized or managed in any meaningful sense of those words.

Tying foreign-policy initiatives tightly to domestic needs will unquestionably carry risks. Third World conflicts we ignore might spread, regions in which we reduce our military presence might become less stable, opportunities to bolster international law and institutions might be lost for years or forever, and one day America might indeed rue a decision to retrench.

But the risks of continuing to neglect domestic problems or of seeking their solutions in promoting millennial global change are much greater--and they are not conjectural. Recognizing these risks is not a matter of being a declinist or a protectionist or an isolationist. It is not a matter of sticking our heads in the sand. It is not a matter of being selfish or parochial. It is a matter of drawing axiomatic distinctions--between needs and wants, between the likely and the unlikely, between present realities and future hopes. It is a matter, that is, of governing.