A World of Unforeseen Complexities

A World of Unforeseen Complexities

Remarks to the British Columbia Public Sector Pension Conference

Ambassador Chas W. Freeman, Jr. (USFS, Ret.)
Victoria, British Columbia                1 May 2014

We live in an age of discontinuities.  Internationally, at least, the past and present no longer serve as reliable guides to the future.  Our expectations are regularly shown to be unrealistic.  It’s clear that we misperceive the present as often as we comprehend it.   So we are constantly surprised by trends and events.

We did not anticipate the major factors that shaped the world after the Cold War ended.  We were stunned by the implosion of the Soviet Union and blindsided by the rapid return of China to wealth and power.  Triumphalism born of the Soviet collapse led many to hope that history had culminated in the global victory of liberal democracy and the vindication of Western values.  But American efforts to implant these values in places like Afghanistan, Egypt, and Iraq fostered anarchy instead.

History may have taken a vacation but it’s back with renewed vigor, at least in Eastern Europe and East Asia.  Europe and the United States are again in a tug of war with Russia over both its frontiers and the political orientation of its neighbors.  China, Japan, Korea, the Philippines, and Vietnam now posture belligerently over the ownership of islets, rocks, and reefs in the empty seas between them.  Borders fixed in the eras of colonialism and the Cold War are no longer immutable.

Some democratically elected governments have been overthrown by mobs.  Other democracies, including Canada and the United States, enthusiastically supported these crowd-sourced regime changes because we disliked the elected governments they overthrew or found their policies inconvenient.  Whatever the organizing principle of the age may be, it is no longer the defense of democracy against those who view it as an obstacle to political navigation.

Few foresaw that Wall Street’s tower of derivatives and credit swaps would suddenly tumble down.  Banks too big to fail were revealed to have been piling up profits and moral hazard in equal proportions.  They are still doing this, but the laissez-faire “Washington consensus” – once extolled as embodying irrefutable wisdom about greed – is now largely discredited.  Many fear that declining labor participation rates and continuing sluggishness in mature economies mark a secular trend rather than a recessionary business cycle from which we will soon recover.

Fear of energy shortages from an imagined “peak” in oil production has been displaced by surging yields of shale gas and tight oil.  Returns on capital exceed profits from the production of goods and services and compounded financial gains exceed them greatly.  Karl Marx would be gratified to see his predictions belatedly playing out.

Privately held capital is accumulating faster than economies are growing.  As a result, the world is everywhere nurturing new plutocratic castes.  In the United States and some other democracies, the disappearance of socio-economic consensus and political give and take has crippled democratic decision-making and paralyzed fiscal policy, leaving the management of economic recovery to currency manipulation by central banks.

Both global institutions and the industrial democracies are seriously underperforming at governance.  Much of the West is afflicted with self-doubt.  Confidence in government and levels of political participation are both at historic lows.  A few authoritarian regimes like China’s meanwhile respond with apparent confidence and efficiency to the huge socio-economic challenges before them.

After the end of the Cold War, most expected parochialism to be washed away by globalization.  Instead, religious and national identity issues have emerged as central drivers of events in a world whose dynamics increasingly play out at the regional, not the global level.  Blowback from Western interventions in the Middle East impassions and empowers reactionary fanatics with global reach.  Our reliance on the use of force to the exclusion of other instruments of statecraft, including diplomatic suasion, feeds this trend.

Military power, however irresistible,  has regularly failed to transform the political economies or alter the mores of the foreign societies to which we have applied it.  Coercive diplomacy based on sanctions and backed by military superiority has consistently proven useless.  In Ukraine, most recently, it proved irrelevant to Russia’s ingenious use of flash mobs to filch territory.  Sanctions inflict pain but do not change the policies of foreign powers for the better.  Yet, when these or other coercive measures don’t work, our response is to repeat them, only more expensively and harder.

We have inadvertently kindled religious wars in the realm of Islam.  We have no answer to what we have stirred up other than the assassination by drone warfare of sketchily identified,  presumed enemies.  This stokes outrage among the friends, relatives, compatriots, and coreligionists of those our machines kill and strengthens their determination to seek revenge.  If slaughter by robot of people targeted by remote control is the answer to some quandary, what, precisely, was the question it is supposed to address?  By what authority do we do it?  Drone warfare is a reminder, if we needed one, that international law has broken down and that we do not understand the impact of new technologies on our lives or how to protect ourselves from the vulnerabilities they create.

All this is to say that wherever our world has arrived, it is nowhere we wanted or expected to be.  We need to get our bearings if we are to chart a course in the sea of uncertainties on which we are now adrift.  What are the main winds and tides that will most affect that course?  Where are we headed?  We failed to predict the present.  What is our future going to look like?

It would be nice to be able to tell you the answer to this question.  (I think God may once have confided it to me, but I was reading emails and didn’t quite catch what She said.)  In the absence of an untroubled conscience and divine guidance, the best I can do is to speak to you about a few things to watch out for and some of the factors that now seem to be driving us toward a future we cannot yet discern.

I’d like to focus our discussion this morning on six of these factors.  They have to do with (1) the devolution of previously centralized global power to the world’s regions; (2) the intensification of nationalism; (3)  the reemergence of Asia as the world’s center of economic gravity; (4) how we settle disputes; (5) the disruptive effects of cybernetics; and (6), finally, the reactions of my own country – the United States – to these and other destabilizing developments.  For better or ill, given the United States’ global preeminence and power, Washington’s reactions to trends and events bear greatly on outcomes.  Americans are gradually realizing that providence has not empowered us to administer the world order in perpetuity, but this realization is sinking in slowly and painfully.  And not all of us yet get it.

The uncertainties before us are a real challenge to both statesmen and long-term investors.  In a situation of increasing turmoil, what should we now be watching out for?

Let me begin with an acknowledgment of the ongoing breakdown in global governance.  Institutions like the United Nations and International Monetary Fund (IMF) embody constellations of power that long ago wheeled off into the night.  They entrench the privileges of the victors of World War II.  They do not reflect the global and regional strengths of the rising powers of today.  This factor alone has robbed them of much legitimacy.  Washington’s frustration with its declining ability to dominate these institutions and its increasing tendency to ignore them have further impaired their effectiveness.  It does not help that the U.S. political system seems to have suffered the functional equivalent of a mentally incapacitating stroke.

Americans were the principal authors of the U.N. Charter and champions of a rule-bound world order.  But the United States has long exempted itself from the strictures of international law it seeks to apply to others, as the invasions of Grenada in 1983 and of Panama in 1989 are often cited to illustrate.  In 1998 and ‘99, the U.S. bypassed the U.N. and launched NATO on a war to detach Kosovo from Serbia.  NATO succeeded in doing this, though not in stabilizing Kosovo’s status as a newly independent state.  Washington defied the Security Council in its 2003 invasion and subsequent eight-year-long occupation of Iraq.  Some were appalled by these examples of great power disdain for the U.N. and the rules it was meant to enforce.  Others, among them Vladimir Putin, clearly seem to have found comfort and even inspiration in them.

As a result, it is hard to argue that international law now provides any protection at all from military mistreatment by a stronger foreign power.  Certainly, Georgians, Libyans, Syrians, and Ukrainians have not been able to rely upon it.  It has not protected the Palestinians.  Nor is it ever referred to as inhibiting an unprovoked assault on Iran.

As faith in the ability of the international system to deter and react to aggression declines and the constraints of the law (such as they were) disappear, military deterrence has reemerged as the only plausible bulwark against attack by more powerful opponents.  When the potential assailant is a nuclear power – like the United States,  Russia, or Israel – with a record of assaulting non-nuclear states, other countries readily conclude that they need their own nuclear deterrent to preclude foreign bullying or attack.  Scofflaw behavior evokes vigilant defiance and military self-help on the part of those it menaces.  It does not induce resignation to double standards.  It causes resentment and inflames the passions of nationalism.

Einstein called nationalism “an infantile disease – the measles of mankind.”  It and religious fervor are now everywhere intensifying and, with them, xenophobia, economic recrimination, delusions of persecution, protectionism, and the sanctimonious stereotyping of others in misleading narratives.  Publics in the major powers are increasingly suspicious of each other’s governments.  Americans, Indians, and Japanese don’t trust Beijing.  Chinese and Russians don’t trust Washington.  No one trusts Islamabad, Moscow, Tehran, or Tokyo.  And so forth.

Mutual mistrust impairs rational decisions and deal-making.  Suspicion entails opportunity costs. Resource nationalism impedes the development of energy, minerals, and other raw materials.  One cannot now assume that, just because a transaction is good for everyone economically, it will go through.  Military anxieties inhibit exchanges of technology.  All this retards the realization of comparative advantage, troubles relationships, and depresses economic growth.

As a close cousin of truculence, nationalism, of course, is a menace to much more than trade and investment.  The theorists of inevitable war between established and rising powers are now on all the talk shows.  This is dangerous if only because, as George Kennan observed: “a war regarded as inevitable or even probable, and therefore much prepared for, has a very good chance of eventually being fought.”

China, in particular, is becoming more assertive about defending its near seas and the islands and rocks it claims in them.  The United States seems determined to continue to dominate China’s coasts and has consistently sided de facto against China in its territorial disputes with all of its neighbors.  Beijing and Washington now treat each other as the enemies of choice for purposes of war planning.  Some see parallels to the combination of intensifying strategic rivalry and complacency about the unlikelihood of armed conflict  that preceded World War I.  That shambles reminds us that the fact that something is senseless and desired by no one does not mean it can’t and won’t happen.

The escalation of regional military modernization efforts and arms races is evidenced in annual increases in the global arms trade of around 14 percent.  Military spending is falling in the West but rising everywhere else, especially in countries that have come to identify the United States as the primary potential threat to their sovereignty and independence.  And the turn to greater reliance on military power alone for security almost certainly also foretells an acceleration of nuclear proliferation.

One entirely rational reaction to the ramp-up in defense spending in former colonies and dependencies of the West would be to invest in one’s own country’s defense industries.  The market for what they make seems certain to continue its current robust growth.  Another, less narrowly focused, more thoughtful, and – arguably – more effective response is to step up the effort to assess and hedge against political risk.  With the notion of a rule-bound international order in retreat, the use of force or intimidation to settle disputes is becoming more likely, making trends and events even less predictable than they have been.

In the past, Western nations tended to see foreign policy as something we could inflict on others with impunity.  The mentality was nicely captured in Hillaire Belloc’s poem about Western technological advantages in warfare in which the protagonist

“… stood upon a little mound / Cast his lethargic eyes around, / And said beneath his breath: / ‘Whatever happens, we have got / The Maxim Gun, and they have not.'”  

No more.  One clear but unwelcome – and therefore mostly unstated – lesson of 9/11 is that, if the West strikes at its former colonies and dependencies, people there will find a way to strike back.  A terrorist is someone with a grudge and a bomb but no air force.  There are ever more people with grudges out there and new thoughts about how to make bombs.  There are beginning to be more air forces too.

The escalation of political risk implicit in the declining effectiveness of the institutions of global governance goes beyond terrorism and the politico-military sphere.  Consider the IMF and its role in sustaining a stable global monetary order by facilitating trade and investment flows and in mitigating or curing instances of national financial dysfunction.  Both these roles are now at risk.

In 2010, the U.S. responded to demands by rising economic powers for a greater say in global monetary policies and financial crisis management by proposing relatively minor adjustments in IMF governance.  These reforms remain stymied by congressional concern that they might lessen U.S. control of the IMF.  This recalcitrance is based on an overestimation of current U.S. leverage amidst shifting international balances of financial power.  One result is to hamstring international efforts to stabilize places like Ukraine and reform the international monetary system to reduce financial risks.  Another is to undercut the very U.S. influence the opponents of reform seek to preserve.

At their just-concluded meeting in Washington, IMF members suggested quite firmly that U.S. failure to approve the 2010 reforms would cause them to develop some sort of work-around or alternative to U.S. participation in future decision-making on the management of the global monetary system.  Maybe they mean to do this.  Maybe they don’t.  Time will tell.  The outcome will determine how the international reserve and monetary systems of the future function.

Without reform, international institutions created in the aftermath of World War II have a limited half life.  This is true of a growing range of global bodies and activities beyond the U.N. or IMF, like trade liberalization talks under the World Trade Organization (WTO), the system of web addresses and domain names that organize cyberspace, the management of internet security, global arms control and non-proliferation regimes, development assistance to poor nations, and so forth.  In each case, multilateral organizations, processes, and regulatory systems are being superseded by sub-global, regional, and  national work-arounds and regulatory regimes.

The world is in the process of devolving into blocs, coalitions, and regional orders that respond to the agendas of their members rather than those of the United States, other outside powers, or the international community at large.  You can see this trend almost everywhere.  Consider, for example, the disintegration of greater Syria,  the dismemberment of Ukraine, the chaos in the Sahel and central Africa, and the renewed antagonism between Japan and Korea as well as Japan and China.   No one knows how these fragments of the decaying world order of the past will evolve, still less how they will fit together.  Meanwhile, shifting coalitions of the willing are replacing the rigid alliance structures of the Cold War.  Alliances now facilitate cooperation; they no longer oblige it.  Hence the insatiable demand by allies of the United States for strategic reassurance.

This devolution adds to the unpredictability of world events, including economic as well as political and military events.  The uncertainty is all the greater because the disintegration of global authority coincides with the emergence of the Indo-Pacific at the center of the globalized world economy.  For the first time in two centuries, the heirs of the Euro-American Enlightenment are no longer in a position to control or set the pace of global political-economy.  The world expects that Asian powers, partially Westernized by the bruising imperatives of modernization but with their own very different values and traditions, will now take the lead.  But will they?  What if squabbles between them preclude this?  What if they want the prestige but not the burdens of leadership?

Sadly, as world leaders gather in New York each fall for the opening of the U.N. General Assembly, no one looks anymore to the U.S. president for leadership. new ideas, or bold initiatives.  Everyone knows that he’s there to use the U.N. as a prop for a speech to a domestic U.S. audience or because if you aren’t at the table, you’re on the menu.  Tired as it is of American hectoring and hypocrisy, the world is listening carefully for new ideas from China, India, and other rising powers about how to manage the challenges facing our species and its diverse societies.  So far, it must be admitted, it hasn’t heard many.

This is, in part, because Asians are drawn together by resentment of past domination by the West but divided by remarkably different languages, histories, religious traditions, customs, and political and socio-economic systems.  The most powerful Asian states – China, India, Japan, Korea, Pakistan, Russia, Vietnam – are strategic rivals who are so embittered by history as to be immune to empathy and severely diplomatically challenged.  Then, too, the Indo-Pacific region does not have the cultural coherence, including the inheritance of the Greco-Roman heritage and the Judeo-Christian tradition or the devotion to the rule of law, that marks Atlantic civilization.

To say that someone is European, American, or Canadian tells you something.  So does identifying him or her as Chinese, Indian, Indonesian, or Japanese.  To say that someone is Asian tells you nothing much at all.  Efforts to define “Asian values” seldom get past the dimwittedly self-evident initial observation that they’re “non-Western.”  Asians do not have much of a common agenda.  But they are beginning to have an increasing impact on the world order.

Ironically, the primary way in which Asians have done this is not by advancing “non-Western” ideas but through their adamant defense of concepts they first resisted and then imported from the West a hundred or more years ago.  They have become passionately committed to the concept of the sovereign equality of states that is the central thesis of the Westphalian order.  China and India, in particular, have been at the forefront of those standing firm against any kind of foreign intervention in the internal affairs of other states.  They oppose any and all limits on sovereignty – for example, to justify “humanitarian intervention.”  Unfortunately for peace and stability in the Indo-Pacific region, this aversion to limits on sovereignty has the side effect of preventing  the organization of regional bodies that could temper or mediate disputes between its states.

The “five principles of peaceful coexistence” (or panch sheela) formulated by China and India in 1954, and proclaimed as an Asian consensus at Bandung in 1955, were seen at the time as a declaration of non-alignment in the Cold War.  They were that.  But, more fundamentally, they were an Asian endorsement of the Westphalian state system.  As such, they represented a decisive repudiation of previous Asian models for regional and international order, including the imperial Chinese “tributary system” and the Indo-Ottoman notion of suzerainty as an alternative to sovereign equality.  Such premodern notions are now never invoked by Asians as operative concepts.  One hears of them only from polemicists seeking to make Beijing’s maritime territorial disputes with its neighbors into inscrutably oriental zero-sum games requiring an American military response.

The Indo-Pacific region is now moving in three somewhat contradictory directions.

First.  Countries in the region are integrating their economies.  The China mainland, Hong Kong, Macau, and Taiwan are becoming an economic commonwealth and its prosperity is creating a regional economic order that centers on this new “greater China.”   Indo-Pacific supply chains, business networks, transportation links, and financial lines of communication increasingly converge in Chinese cities.  More and more roads lead to Beijing, Hong Kong, Shanghai, and Taipei.

Prospects for the conclusion of a pan-Asian “Regional Comprehensive Economic Partnership” (RCEP) by the end of next year (2015) are good.  This partnership would bring Australia, China, India, Japan, south Korea, New Zealand, and the ten member countries of the Association of Southeast Asian Nations (ASEAN) into a single free-trade area.  The area includes some of the world’s fastest growing economies.  Together, its participants have 46 percent of world population and about one-fourth of the global economy.  (By comparison, NAFTA and the EU each account for about one-fifth of the world’s economy and have, respectively, 6 and 7 percent of its people.)

Second.  Reform is once again a dominant component of regional dynamics.  Japan is experimenting with radical approaches to reinvigorating its economy.  China has embarked on another round of  fundamental economic restructuring and liberalization, this time including major reform of capital markets.  India seeks renewed market opening and reform.  A decade ago, an initial round of liberalization boosted India’s growth rate and filled it with patriotic optimism.  More recently, reform and growth have both lost momentum.  Indonesia, at present an  unattractive place for foreign investment due to resource nationalism and corruption, is trying to get its groove back.  The Indo-Pacific region is refashioning itself for a prosperous future in which its global role will be even larger than today.

Third.  China’s rising military power and political influence are quite predictably stimulating the formation of coalitions calculated to balance it.  They are also dividing Asia into continental and maritime domains.  The United States backs Japanese and Filipino resistance to accommodating China.  India seeks strategic partnership with Japan.  Korea – as usual – is caught in the middle.  ASEAN is now divided on issues relating to China.  Even as China’s rise integrates the Indo-Pacific region economically, it is splitting it politically.

The proximate cause of political division is disputes over borders.  There is, of course, nothing new about these disputes.  Differences over the location of the Sino-Indian frontier originated under British imperialism.  India and China fought a war over these differences in 1962.  Disputes over maritime borders in the East and South China Seas date back more than a century.  What is new is the capacity of the various claimants to islands, rocks, and reefs – China, Japan, Malaysia, the Philippines, Vietnam – to assert their claims against each other with competent navies and coast guards and to use these quarrels to mobilize nationalism to legitimize their actions.  Asia now provides daily reminders of the insight that a nation is “a group of people united by a mistaken view about the past and a hatred of their neighbors.”[1]

What is most disturbing about these controversies is that there is currently no obvious mechanism for resolving them by measures short of war.  There are no agreements or structures in place in Asia comparable to those in Europe.  There, the danger of war between the West and Russia over Ukraine has just been mitigated by joint referral to the Organization for Security and Cooperation in Europe (OSCE).  There is no real record of mediation by third parties of such disputes in the Indo-Pacific region.

In Europe and the Americas, resort to arbitration has come to be seen as a desirable alternative to armed conflict.  By contrast, the Asian variant of Westphalianism appears to leave no room for dispute settlement by reference to international law.  Japan denies that there is or can be any dispute at all about sovereignty over the Senkaku islands for it to litigate with China.  South Korea takes the same uncompromising position with regard to Japan’s claim to Dokdo.  China rejects the Philippines’ attempt to refer disputes over South China Sea islands, rocks, and reefs to arbitration by a UN tribunal.  And so forth.

Such rigidly self-righteous positions effectively preclude conflict resolution by either diplomatic dialogue or reference to international law or organizations.  They leave emotionally charged quarrels to fester indefinitely or to be settled by pushing and shoving or acts of war.  If this is the approach to dispute settlement that Asians plan to practice and export to the world, it heralds a very big step backwards from the 20^th century notion that the exercise of sovereignty can and should be constrained by internationally agreed rules and procedures.  Does the slow retreat of Western dominance foretell the fading of the global commitment to the rule of law?

Judging by what’s now happening in cyberspace, it may.  In economic terms, cyberspace is an all-pervasive medium that boosts productivity by annihilating distance and facilitating the efficient production and exchange of goods and services.  Entrepreneurs are only beginning to scratch and  explore its commercial potential.  The internet has rapidly become an indispensable mechanism for commercial and cultural collaboration, technological innovation, corporate operations, and all kinds of human transactions.  It has also become a lawless no man’s land in which rights are not protected against theft and liberties are infringed at will by both state and non-state actors.  It is essential to modern life and at the same time increasingly hazardous to it.

From a military point of view, cyberspace is a new-found domain through which to engage the enemy.  In war, both height and concealment confer advantage.  Airspace is above both the land and the sea.  In military terms, that makes it a superior domain to both.  Space is higher still, allowing the domination of the air, land, and sea from above.  In this logic, cyberspace, which permeates every place that man goes, including space, is the highest domain of all.  It is also one in which concealment is relatively easy.  Military establishments everywhere see it as an environment through which to attack and in which attack by others must be vigorously deterred.

In both space and cyberspace, America’s desire to retain technological supremacy and Russia’s need to offset its conventional military weakness encounter China’s disinterest in the rule of law and its focus on exploiting asymmetrical means of warfare to counter legacy American strengths.  The result is a complete lack of effort to develop rules of engagement and legal constraints that might limit the ways in which human beings can devastate each other’s societies through and  from these domains.

Stuxnet – the Israeli-American attack on Iran’s nuclear facilities – was, unfortunately, the first strike in a new age of militarily aggressive exploitation of cyberspace.  Cyberwarfare raises strategic and doctrinal challenges at least as novel and complex as those posed by the balance of nuclear terror.  Cyber attacks have already destroyed companies.  They have the potential to destroy countries too.

It is striking that issues like this – indeed, most of the things we now worry about – were not on our list of concerns even five years ago.  Who was then anxious about the rise of the surveillance state or the resurgence of Russia or whether China and Japan might go to war over a bunch of rocks with no strategic value inhabited only by goats?  Who worried about the euro or whether the U.S. would stand by its national debt?  Who took seriously the possibility that Scotland might vote to leave the United Kingdom?

Things have changed much more than our thinking about our world has.  We suffer from a strategy deficit.  As a result, we lurch from crisis to crisis and tactical response to tactical response.

Many such responses involve sanctions, always the first refuge of political poseurs.  Sanctions are useless except as part of an active bargaining process, but they are now commonly imposed as a politically more correct substitute for diplomatic dialogue and negotiation.  Such punitive measures are no substitute at all for diplomacy. They usually have little or no effect on the government they are ostensibly intended to influence, except to get its back up.

Sanctions do, of course, provide a convenient way for politicians to show outrage, seem to be doing something, and avoid a debate about  their own responsibility for whatever happened..  They make sure they have no stake in the private trade and investment ties they are disrupting.  Sanctions shove the costs of foreign policy failures onto businesses, workforces, and consumers in the country imposing them as well as those in the society on which they are imposed.  They are typically then evaluated in terms of the pain they inflict,  not the behavior they induce.

In today’s globalized economy and multipolar political order, most sanctions are easily circumvented.  One country’s self-imposed withdrawal from a foreign market is another’s business opportunity.  Sanctions are thus a pernicious — if politically predictable — response to unwelcome events abroad.  They illustrate why investors cannot afford to ignore foreign policy issues.  In an age of discontinuities, situational awareness is key to profitable survival.

We live in a time in which, past experience suggests, something currently unimaginable – we don’t know what – is certainly about to happen.  In hindsight, whatever that is will come to be seen after the fact as having been obvious and inevitable.  Later still, it will be understood to have laid the basis for still more unforeseen but subsequently obvious developments.

The good news is that it is very often possible to detect what is obvious in retrospect before it actually happens.  The trick is to ignore most punditry and to be open-minded and alert to impending change.  Intelligence failure is almost always the result of unwillingness to notice, accept, and understand events that don’t fit prevailing preconceptions or the canons of political correctness.

Unfortunately, with a few notable exceptions, the media now mainly supply news that fits within and reinforces established narratives.  Our paper and electronic press does not provide the kind of unbiased reporting and analysis that helps to anticipate foreign policy developments that can make or break business opportunities and investments across borders.  Governments attempt to do this but don’t understand or are indifferent to business interests and often succumb to group think.  This is why there is an expanding industry devoted to strategic forecasting and the ongoing assessment of the implications of foreign trends and events.  Since I am not myself in that business, I feel comfortable calling your attention to such consultancies and urging you to make use of their services.  You’ll have a better chance of staying on top of things if you do.

Frankly, the world would also be a great deal more predictable if the United States developed a coherent strategy to address the series of changes in the world order that began with the end of the Cold War.  Attempting to shore up the presumed advantages of a crumbling status quo is an investment in the past, not the future.  The alternative to strategy is piecemeal policy adjustment.  That way lies damaging unpredictability and instability.

The past twenty-five years have transformed political and economic realities at both the global and regional levels.  Is a network of formal alliances unaltered (except by enlargement) since it was created to contain a hostile Soviet Union and China an affordable or effective way to manage the very different security challenges before this changed world?  Americans regard standing by our defense commitments as a matter of honor.  In the Cold War, we extended such commitments as part of a global effort to balance and block Soviet expansionism.  There is now no Soviet Union.  Is the purpose of these U.S. defense commitments now simply to protect other countries from their immediate neighbors?   If so, are the costs and risks of doing this justified by specific American interests?

Do these alliances stimulate allies to provide for their own defense and sustain regional balances of power to protect themselves or do they encourage them to look to Washington to perform these tasks for them?  Do U.S. defense commitments facilitate the resolution of regional disputes between the parties to these disputes or have the effect of freezing them, perpetuating the risk that Americans will be dragged into wars over them, whether or not the U.S. has any direct interest in the issue at hand?  Do defense commitments that involve the United States in quarrels between other nations that are of little or no direct interest to the American people contribute or detract from U.S. security and prosperity?  Is controlling the seas off China more important to China or the United States?  If the answer is that it is more important to China, is pretending otherwise a sound and sustainable approach?

These are questions that a paralyzed U.S. political establishment does not want to hear and is currently incapable of addressing.  But, with time and the need to set priorities, a review of inherited strategy will ultimately be unavoidable.  In my view, any serious review will justify major adjustments in U.S. overseas commitments and deployments as part of an American turn toward a less militaristic and more agile foreign policy.  The underlying strengths of the United States are so great that it can still make all the difference.  But, what sort of difference it makes depends on how linked American strategic behavior is to regional realities, resource constraints, and international prestige and influence.

Just as climate change entails more violent weather, changes in geopolitics promise greater volatility in exchange rates, more frequent political shocks to public markets, the rebirth of significant regional variations in trading and investment regimes, and continuing problems in concerting global action to address global issues.  The danger that international frictions could lead to unintended conflict and great power hostilities is substantial.  Life was simpler and safer when the so-called “free world” exploded to embrace the globe and Washington was pretty much running things.  The bad news is that no one is any longer in charge.  The United States cannot be blamed for this.  Stuff happens.  The good news is that there are historical precedents for long periods of peace and stability under collectively managed balances of power.  We must hope that the current uncertainties herald our passage to another such era.  Perhaps they do.