World Order Collapsing- Let’s Expand Free Trade!

nuclearexplosion

Luke Phillips

Robert Atkinson, of the Information Technology and Innovation Foundation (ITIF,) has an interesting piece out in the Christian Science Monitor today. He gets a lot right on the current state of international trade and American trade policy. Here’s Atkinson:

“It is time for Washington insiders to stop their pious defense of any and all trade, even when US trading partners slyly adopt mercantilist policies in a one-sided effort to skew markets for their own advantage. And it is time for outsiders to accept that globalization is here to stay. Both sides need to start advocating for a new approach to trade policy that welds together vigorous enforcement of global trade rules and a comprehensive national competitiveness strategy.”

So far, so good. Atkinson then claims that our problems can be resolved by merely enforcing the rules of the international trading order:

“The reality is that trade and globalization are in fact good for America, but only if the country’s trading partners play by the rules of the global trading system by refraining from mercantilist tricks, such as manipulating their currencies, forcing companies to transfer ownership of their innovative technologies as the price of market access, massively subsidizing their own exporters, and outright stealing intellectual property instead of innovating on their own.”

Here’s where I quibble. Force other countries to stop being mercantilists? Sounds a lot like forcing other countries to stop being dictatorships. If the experience of the debacles of 21st Century American foreign policy teach us anything, it’s this- we have a lot less ability to influence the internal workings and policies of other countries than we’d like to admit. Iraq. Afghanistan. The European Union’s crisis. Russian and Chinese aggression. The Iranian nuclear deal’s failures. Why do we expect that, simply by tricks of paper, we’d be able to convince Japan and China and Mexico to give up their “mercantilist tricks”?

Moreover, Atkinson- normally a fantastic scholar of the history of American economic policy- overlooks something more important. Namely, the fact that the American economy was built on said mercantilist tricks. We stole British technology, we played hardball with our currency (remember the free silver/gold standard debates?) we implemented subsidies and tariffs and all other sorts of protectionist, nationalist policies that developing nations need to implement if they are to flower into developed nations. Just as every single Westerner who signed the Paris Climate Accords is a hypocrite for telling India and China they should reduce their emissions even though the Western economies developed by spewing carbon emissions into the atmosphere, so every free-trading American is a hypocrite for telling Nigeria and Brazil and Indonesia that they shouldn’t develop their economies with “mercantilist tricks.”

Generally, international trade is just as much a battleground as international diplomacy, and should be treated as such- no nation should give up its own development and own advantages for the sake of a broader order, save, of course, if it has a strategic interest in such a broader order.

And to be fair, post-WWII, the free world needed such an order to unite against the Soviets. So Franklin Roosevelt, John Maynard Keynes, and all the rest hammered out the Bretton Woods system and opened American markets non-reciprocally to European and Japanese goods. Those economies developed into titans that could add an extra line of defense against the Soviets to America’s ocean walls, and the world was better for it. But like all orders, that order decayed. By the 1970s, America was again working at relatively mercantilist policies, such as declaring a veritable mini-trade war on our own ally, Japan, and taking ourselves off of the gold standard. (I’m no financial or trade historian, by the way, so my analysis is rough at best.)

But with the fall of the Soviet Union came another opportunity to rebuild the international trading order, this one, so it was thought, a universal one. In hindsight, it probably would have been better to open up a series of regional trade cooperation zones modeled off of the EU rather than passing stuff like the GATT and organizing the world economy off the WTO model. In any case, a relatively free universal trading order has been established by the early 2000s, and its official ideology was neoliberalism- a competitive and nation-less creed, as George Monbiot depicts it in an excellent recent piece at The Guardian.

How has that international order fared? In 2016, right-wing parties rise across the Western world, the Islamic world eats itself alive, Latin America is beset by corruption, Africa is as undeveloped as ever, and Russia, China, and Iran move to reassert their traditional spheres of influence. As many have argued, we’re at a point in world history where significant great power conflict is more likely than at any point since the 1930s. Now is not the time to split hairs about the details of trading agreements- now is the time to consolidate national power and prepare to weather out the storm ahead.

I think Donald Trump and Bernie Sanders’s reasons for protectionism are wrong- those jobs we “lost” to China are literally never coming back- but overall, their policy prescriptions of increasing American productive capacity, de-emphasizing free trade, and coordinating the national economy seem to me to be the right path. We’re not going to be able to force our allies or our rivals to change their trade behavior- so it’s better to meet them on their own terms and look out for ourselves.

I hate to be pessimistic, but my country comes first in my country’s policymaking. I’m not anti-trade- I’m for better trade. I support the TPP and TTIP deals because, it seems to me, they are generally pro-American export deals rather than consumption-oriented openings of the American market. As Michael Lind argued toward the end of Land of Promise, a better international trading order would be one where we abandoned utopian neoliberal fantasies about universal free trade and open borders, where independent and powerful nation-states looked upon each other as the self-interested states they are, and negotiated deals to mutual advantage and minimized trade-offs accordingly.

Only thus can a multipolar world be brought to some kind of order. Before we have our Trumanite moment, we’ll need to have our Nixonian moment- a recalibration of our interests, our political economy, our alliance system, to adjust for the realities of the Post-American world.

And not a moment too soon. President Carter’s National Security Advisor, Zbigniew Brzezinski, published a fascinating piece yesterday at The American Interest on the state of global order and its chaos. Ultimately, says NSA Zbig, we’re in over our heads- the world is going to get a lot more interesting, and we’ll have to deal with it.

zbig

“Five basic verities regarding the emerging redistribution of global political power and the violent political awakening in the Middle East are signaling the coming of a new global realignment.

The first of these verities is that the United States is still the world’s politically, economically, and militarily most powerful entity but, given complex geopolitical shifts in regional balances, it is no longer the globally imperial power. But neither is any other major power. 

The second verity is that Russia is experiencing the latest convulsive phase of its imperial devolution. A painful process, Russia is not fatally precluded – if it acts wisely – from becoming eventually a leading European nation-state. However, currently it is pointlessly alienating some of its former subjects in the Islamic southwest of its once extensive empire, as well as Ukraine, Belarus, and Georgia, not to mention the Baltic States.

The third verity is that China is rising steadily, if more slowly as of late, as America’s eventual coequal and likely rival; but for the time being it is careful not to pose an outright challenge to America. Militarily, it seems to be seeking a breakthrough in a new generation of weapons while patiently enhancing its still very limited naval power.

The fourth verity is that Europe is not now and is not likely to become a global power. But it can play a constructive role in taking the lead in regard to transnational threats to global wellbeing and even human survival. Additionally, Europe is politically and culturally aligned with and supportive of core U.S. interests in the Middle East, and European steadfastness within NATO is essential to an eventually constructive resolution of the Russia-Ukraine crisis.

The fifth verity is that the currently violent political awakening among post-colonial Muslims is, in part, a belated reaction to their occasionally brutal suppression mostly by European powers. It fuses a delayed but deeply felt sense of injustice with a religious motivation that is unifying large numbers of Muslims against the outside world; but at the same time, because of historic sectarian schisms within Islam that have nothing to do with the West, the recent welling up of historical grievances is also divisive within Islam. 

Taken together as a unified framework, these five verities tell us that the United States must take the lead in realigning the global power architecture in such a way that the violence erupting within and occasionally projected beyond the Muslim world—and in the future possibly from other parts of what used to be called the Third World—can be contained without destroying the global order. We can sketch this new architecture by elaborating briefly each of the five foregoing verities… 

…Given all this, a long and painful road toward an initially limited regional accommodation is the only viable option for the United States, Russia, China, and the pertinent Middle Eastern entities. For the United States, that will require patient persistence in forging cooperative relationships with some new partners (particularly Russia and China) as well as joint efforts with more established and historically rooted Muslim states (Turkey, Iran, Egypt, and Saudi Arabia if it can detach its foreign policy from Wahhabi extremism) in shaping a wider framework of regional stability. Our European allies, previously dominant in the region, can still be helpful in that regard…

The alternative to a constructive vision, and especially the quest for a one-sided militarily and ideologically imposed outcome, can only result in prolonged and self-destructive futility. For America, that could entail enduring conflict, fatigue, and conceivably even a demoralizing withdrawal to its pre-20th century isolationism. For Russia, it could mean major defeat, increasing the likelihood of subordination in some fashion to Chinese predominance. For China, it could portend war not only with the United States but also, perhaps separately, with either Japan or India or with both. And, in any case, a prolonged phase of sustained ethnic, quasi-religious wars pursued through the Middle East with self-righteous fanaticism would generate escalating bloodshed within and outside the region, and growing cruelty everywhere….”

Nasty world we’re going into, huh. Zbig’s piece doesn’t even mention, by the way, the new nuclear arms race (here’s the New York Times’s coverage of that one.)

The global order as we have known it for the last two decades is undergoing severe stress and, as Brzezinski notes towards the end of his article, will likely be no more within another two decades. The trends that President Nixon and Secretary Kissinger dealt with so many years ago- the rise of the developing world, increasing great-power competition, chaos in key sectors- have consummated and replaced the old trends. Someday we’ll have to forge a new order, and we should start articulating the outlines of that order now, probably based on the Nixon model.

But we won’t be able to implement that order for quite some time. It seems to me that the task of the next few decades will be crisis management and great power maneuvering, typical Metternichian statecraft. That means we need statesmen of the Nixon-Kissinger caliber and mindset. And most unfortunately, it’s hard to see any such statesmen on the near horizon.

What we can do, though, is make sure they have the tools to manage American strength when they do rise to power. Which is why a new system of better trade deals and neo-mercantilism in international commerce would be so useful- such a system would preserve American productive capacity so that, in the event of a “superpower showdown,” we’d have the assets we need to get through it.

I’m serious, everyone. The world’s getting scarier. Time to be hard-nosed and tough-minded.

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