FOREIGN

AFFAIRS

JULY/AUGUST 2003
VOLUME 82, NUMBER 4

After Saddam
Securing the Gulf Kenneth M Pollack 2
The sweeping military victory in Iraq has cleared the way for the United States to
establish yet another framework for Persian Gulf security. Ironically, with Saddam
Hussein gone, the problems are actually going to get more challenging in some
ways. The three main issues will be Iraqi power, Iran's nuclear weapons program,
and domestic unrest in the states of the Gulf Cooperation Council. None will be
easy to handle, let alone all three together.

The Shi'ites and the Future of Iraq Yitzhak Nakash 17

In the wake ofwar, important questions about Iraq remain. Will the newly energized
Shi'ite majority seek an Islamic government modeled after Iran's, or will its members
agree to share power with other communities? And will the United States succeed
in establishing itself as a credible broker, especially in Shi'ite eyes? The future of
Iraq may well depend on the answers.

The Protean Enemy Jessica Stern 27

Despite the setbacks al Qaeda has suffered over the last two years, it is far from
finished, as its recent bomb attacks testify. How has the group managed to survive
an unprecedented American onslaught? By shifting shape and forging new, sometimes
improbable, alliances. These tactics have made al Qaeda more dangerous than ever,
and Western governments must show similar flexibility in fighting the group.

The New American Way of War Max Boot 41

"The American way of war" refers to the grinding strategy of attrition that U.S.
generals traditionally employed to prevail in combat. But that was then. Spurred
by dramatic advances in information technology, the new American way of war
relies on speed, maneuver, flexibility, and surprise. This approach was put on display
in the invasion of Iraq and should reshape what the military looks like.
 Contents

Essays
U.S. Power and Strategy After Iraq Joseph S. Nye, Jr. 6o
The Bush administration's new national security strategy gets much right but may
turn out to be myopic.The world has changed in ways that make it impossible for the
most dominant power since Rome to go it alone. U.S. policymakers must realize that
power today lies not only in the might of one's sword but in the appeal of one's ideas.

Striking a New Transatlantic Bargain Andrew Moravcsik 74

How can the United States and Europe mend the Western alliance after the split
over Iraq? Some Europeans now favor engaging America head on, by building an
independent military. But the best answer lies in complementarity, not competition.
The two sides should focus on common goals, with each doing what it does best.

Blair's Britain After Iraq Steven PhilipKramer 9

The recent war in Iraq changed the dynamics not only between continental Europe,
the U.K., and the U.S., but also between British Prime Minister Tony Blair and
his Labour Party. To survive politically and ensure the U.K. is a vital player in the
European Union, Blair must affirm his country's European identity.

A High-Risk Trade Policy BernardK Gordon 105

Washington's unwise return to economic "regionalism," evidenced by the many
U.S. efforts to build new bilateral or regional free trade agreements, threatens to
damage both U.S. foreign and U.S. trade policy. The United States should work
instead to strengthen the WTO and the single world trade system it represents.

Adjusting to the New Asia

Morton Abramowitz and Stephen Bosworth 119
Transpacific relations are now shifting as dramatically as transatlantic ones. As Japan
slips in power and relevance, China grows ever stronger, and since September U,
Washington has become willing to let Beijing play a larger regional role. Meanwhile,
tensions in Korea could still provoke a war-or help reshape the continent.

The Future of Energy Policy

Timothy E. Wirth, C. Boyden Gray, andJohnD. Podesta 132
The debate over energy policy in the United States has consistently failed to grapple
with the large issues at stake. It is time for an ambitious new approach to U.S. strategic
energy policy, one that deals with the problems of oil dependence, climate change,
and the developing world's lack of access to energy.

Space Diplomacy
DavidBraunschvi, RichardL. Garwin, andJeremy C. Marwell 156
A new transatlantic dispute is rising over the horizon with the EU's development of
an independent satellite navigation system (called Galileo) that will challenge
America's GPS. The United States should not try to block it but should rise to the
occasion by reforming and enhancing its own system's capabilities.

[Ii] FOREIGN AFFAIRS Volume82No. 4

 Contents

Not in Oil's Name Leonardo Maugeri 165

Underpinning much of the current thinking on oil are two divisive myths-oil
scarcity and energy security. Policymakers must realize that some volatility in
oil prices is to be expected and focus instead on promoting better consumption
habits, more realistic public expectations, and sounder Middle East policies.

Reviews & Responses

We Didn't Start the Fire Sheri Berman 176
The Mindand theMarket shows that complaints about capitalism are older and more
respectable than most of the antagonists in today's globalization debates realize.

Two Agents, Two Paths ZacharyKarabell 182

New portraits of Richard Helms and William Colby show how the Central
Intelligence Agency evolved into the major player it is today.

The Great Revival DavdAikman 188

StrongReligion tries to find similarities in religious "fundamentalist" groups across the
world. But the book's real lesson is that profound religious belief is here to stay.

Putting It Together Barry Eichengreen 194

In John Gillingham's latest book, European integration is an economic story. But
how does that affect internal security issues and a common foreign policy?

Stayin' Alive
EdwardC. Luck, Anne-Marie Slaughter,andlan Hurd 201
Michael J. Glennon got it wrong: don't count the UN Security Council out yet.

How Best to Build Democracy Chappel/Lawson 206

The Dawishas' blueprint left some lingering questions. Lawson fills in the blanks.

Letters to the Editor 210

David Hoffman on Iraqi media; Martin Gross on the Mideast roadblock; and others.

Lurie's Foreign Affairs 214

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 After Saddam

REUTERS

An Iraqi man on a statueofSaddam Hussein,Kirkuk, Iraq,Aprilio, 2003

In some ways, the problems

in the Persian Gulf are now
actually going to get more
challenging instead of less.
Securingthe Gulf KennethM Pollack 2

The Shi'ites and the Future of Iraq YitzhakNakash 17

The Protean Enemy Jessica Stern 27
The New American Way of War Max Boot 41
 Securing the Gulf
Kenneth M. Pollack

ONCE MORE UNTO THE BREACH

IN 19 6 8, the United Kingdom relinquished its security responsibilities

"east of Suez," leaving the United States to pick up the pieces. Chief
among the inherited obligations was ensuring the stability and security
of the strategically vital Persian Gulf region. In the decades since,
Washington has tried to do this job in various ways, relying on the
"twin pillars" of Iran and Saudi Arabia during the 197os, "tilting"
toward Iraq during the 198os, and pursuing the "dual containment"
of Iraq and Iran during the 199os. None of these approaches worked
very well, and as a result, the United States has had to intervene
directly three times in the last 16 years against regional threats-Iran
in 1987-88 and Iraq in 1991 and this past spring.
The sweeping American and British military victory in Oper-
ation Iraqi Freedom has now cleared the way for the United States
to try to establish a more durable framework for Persian Gulf se-
curity. Indeed, the Bush administration is already starting to do so
by withdrawing the vast majority of American troops from Saudi
Arabia, although this move seems more about closing an old
chapter of American involvement than about opening a new one.
With Saddam Hussein gone, a broad rethinking of U.S. strategy
toward the region is necessary, because in some ways the security
problems of the Persian Gulf are now likely to get more challenging
instead of less.

KENNETH M. POLLACK is Director of Research at the Saban Center for

Middle East Policy at the Brookings Institution. From 1995 to 1996 and
1999 to 2OO, he served as Director for Persian Gulf Affairs on the staff of
the National Security Council.

[2 ]
 Securing the Gulf
For example, Iran's naval threat to Persian Gulf shipping in the
198os was easy to handle, because the vast preponderance of power
enjoyed by U.S. naval and air forces enabled a relatively small military
campaign to achieve the desired effect. Similarly, although the air and
ground threat from Saddam's Iraq eventually required a pair of much
greater efforts to eliminate it, in essence it too was a relatively straight-
forward military problem. The threats that the United States and its
allies will confront in the future, however, are unlikely to be as simple
or discrete as these. The Bush administration must therefore start
thinking now about how to counter them, or risk leaving the United
States ill prepared for what it will encounter down the road.

IT'S THE OIL, STUPID

AMERICA'S PRIMARY INTEREST in the Persian Gulf lies in ensuring

the free and stable flow of oil from the region to the world at large.
This fact has nothing to do with the conspiracy theories leveled
against the Bush administration during the run-up to the recent war.
U.S. interests do not center on whether gas is $2 or $3 at the pump,
or whether Exxon gets contracts instead of Lukoil or Total. Nor do
they depend on the amount of oil that the United States itself imports
from the Persian Gulf or anywhere else. The reason the United States
has a legitimate and critical interest in seeing that Persian Gulf oil
continues to flow copiously and relatively cheaply is simply that the
global economy built over the last 50 years rests on a foundation of
inexpensive, plentiful oil, and if that foundation were removed, the
global economy would collapse.
Today, roughly 25 percent of the world's oil production comes from
the Persian Gulf, with Saudi Arabia alone responsible for roughly
15 percent-a figure expected to increase rather than decrease in
the future. The Persian Gulf region has as much as two-thirds of the
world's proven oil reserves, and its oil is absurdly economical to pro-
duce, with a barrel from Saudi Arabia costing anywhere from a fifth
to a tenth of the price of a barrel from Russia. Saudi Arabia is not only
the world's largest oil producer and the holder of the world's largest
oil reserves, but it also has a majority of the world's excess production
capacity, which the Saudis use to stabilize and control the price of oil

FOREIGN AFFAIRS .July/August2003

 Kenneth M Pollack
by increasing or decreasing production as needed. Because of the im-
portance of both Saudi production and Saudi slack capacity, the sudden
loss of the Saudi oil network would paralyze the global economy,
probably causing a global downturn at least as devastating as the Great
Depression of the 193os, if not worse. So the fact that the United
States does not import most of its oil from the Persian Gulf is irrelevant:
if Saudi oil production were to vanish, the price of oil in general
would shoot through the ceiling, destroying the American economy
along with everybody else's.
But the United States is not simply concerned with keeping oil
flowing out of the Persian Gulf; it also has an interest in preventing
any potentially hostile state from gaining control over the region and
is resources and using such control to amass vast power or blackmail
the world. And it has an interest in maintaining military access to the
Persian Gulf because of the region's geostrategically critical location,
near the Middle East, Central Asia, eastern Africa, and South Asia.
If the United States were denied access to the Persian Gulf, its ability
to influence events in many other key regions of the world would
be greatly diminished. (Much of the air war against Afghanistan, for
example, was mounted from bases in the Persian Gulf.) The tragedy
of September 11, 2001, finally, has demonstrated that the United
States also has an interest in stamping out the terrorist groups that
flourish in the region.

TRIPLE THREAT

THE THREE MAIN PROBLEMS likely to bedevil Persian Gulf security

over the next several years will be Iraq's security dilemma, Iran's
nuclear weapons program, and potential internal unrest in the countries
of the Gulf Cooperation Council (GCC): Bahrain, Kuwait, Oman, Qatar,
Saudi Arabia, and the United Arab Emirates. Unfortunately, there
are no easy answers to these problems separately, let alone together,
and so difficult tradeoffs will have to be made.
The paradox of Iraqi power can be put simply: any Iraq that is
strong enough to balance and contain Iran will inevitably be capable
of overrunning Kuwait and Saudi Arabia. This was the problem the
region faced at the end of the Iran-Iraq War, when Iraq's destruction

FOREIGN AFFAIRS Volume82No. 4

 CO RB IS

Stillfriends? US. troops sharetea with a Saudi man, 199o

of the Iranian army and air force left it in a position to conquer

Kuwait and threaten Saudi oil fields soon afterward. The recent
American victory over Saddam will do little to affect this basic dy-
namic, because it stems less from the nature of Iraq's leadership
than from simple geopolitics. Like postwar Germany and Japan,
post-Saddam Iraq will almost certainly be forbidden from developing
weapons of mass destruction (WMD) ever again. But it will still
have to find some way of protecting itself from a real, albeit distant,
threat from Iran. If Iraq is not going to be allowed to possess WMD,
then it will have to obtain some kind of credible external security
guarantee or maintain substantial-and threatening-conventional
military capabilities.
As for Iran, according to the latest estimates of U.S. intelligence
and even of the International Atomic Energy Agency, its nuclear
program has gone into overdrive and unless stopped-from inside
or outside-is likely to produce one or more nuclear weapons
within five years. (Of course, the mistaken estimates of Iraq's nuclear
program over the last 20 years reinforce the uncertainty underlying
all such assessments.) In the case of Iraq, preemptive intervention

F O R E I G N A F FA I R S •July/August 2003
 Kenneth M Pollack
was a thinkable (and ultimately doable) option because the United
States could invade and occupy the country without a massive mobi-
lization. But that is simply not true in the case of Iran. Its population
is three times the size of Iraq's, its landmass is four times the size, its
terrain is difficult and would make operations a logistical nightmare,
and its population has generally rallied around the regime in the
face of foreign threats. Invading Iran would be such a major under-
taking that the option is essentially unthinkable in all but the most
extraordinary circumstances.
Of course, it is possible that the Iranian nuclear problem might
solve itself.The Iranian people are deeply unhappy with the reactionary
clerics who cling to power in Tehran, and since 1997, they have voted
consistently and overwhelmingly against the hard-liners. Moreover,
Iran's population is very young, and the Iran-
It is only prudent to ian youth most strongly oppose the current
regime and favor a more democratic system
assume that Iran of government. Thus time is on the side of
will acquire nuclear Iran's reformers. What's more, most Iranian
reformers have expressed an interest in good
weapons while its relations with the United States.
hard-liners are still All this matters because although the
in power. United States preaches a policy of universal
nuclear nonproliferation, in practice, Wash-
ington has consistently, and probably correctly, been much more
concerned with proliferation by its enemies (such as Iraq and North
Korea) than by its friends (such as Israel and, to a lesser extent, India).
American fears about Iran's nuclear program might well be lessened,
therefore, by the emergence of a pluralist and pro-American govern-
ment in Tehran (although even then Iranian nuclear advances would
cause a major headache because of their inevitable effects on prolif-
eration elsewhere in the region).
The problem is that no one can be certain that the reformers will
triumph in Iran or, if so, when. In particular, it is not clear that the
hard-liners will fall before Iran has obtained nuclear weapons. It is
thus only prudent to assume that Iran will acquire nuclear weapons
while its hard-line clerics are still in power, and so the United States
must be prepared for that contingency. But the very actions that might

FOREIGN AFFAIRS" Volume82No. 4

 Securing the Gulf
be indicated in such circumstances-continued diplomatic and eco-
nomic pressure, an aggressive military posture on Iran's borders, even
threats to use force-could easily backfire in the maelstrom of Iranian
domestic politics in ways that undermine or forestall the prospects for
a "velvet revolution" in Tehran. Iran's hard-liners maintain power in
part by stoking popular fears that the United States seeks to rule
the country and control its policies, and so aggressive containment or
active counterproliferation measures could play right into their
hands. The Iranian paradox, in other words,
is that preparing to deal with the worst-case The best way for
scenario of Iranian hard-liners possessing
nuclear weapons might very well make that Washington to address
scenario more likely, the threat of instability
Tehran appears to want nuclear weapons in the Gulf states would
principally to deter an American attack.
Once it gets them, however, its strategic be to reduce its military
calculus might change and it might be em- presence in the region.
boldened to pursue a more aggressive foreign
policy. Iran's armed forces are still too weak to contemplate either
a ground advance through Iraq into the Arabian Peninsula or an
amphibious operation across the Persian Gulf, and they will remain
so for a while. So the risk is not so much conventional military invasion
as attempts to shut down tanker traffic in the Strait of Hormuz as a
method of blackmail or foment insurrections in neighboring
countries. Unfortunately, the security posture that would best deter
future Iranian aggression-sizable American forces dispersed throughout
the Persian Gulf-is the worst option of all from the perspective of
dealing with the third major problem, terrorism and internal instability
in the states of the Gcc.
Terrorism and internal instability in the Persian Gulf are ultimately
fueled by the political, economic, and social stagnation ofthe local Arab
states. It is true that American policies anger many Arabs and that the
Palestinian issue is a matter of great popular concern. But these are not
really what creates fertile ground for domestic insurrection or the
recruitment efforts of radical Islamist groups such as al Qaeda. What
is more important is that too many Arabs are unemployed or under-
employed because of the utter failure of their economic systems.

FOREIGN AFFAIRS .July/August2003

 CORBIS

On the hook: streetscene in SaudiArabia,1991

Too many feel powerless and humiliated by despotic governments that

do less and less for them while preventing them from having any say in
their own governance. And too many feel both threatened and stifled
within a society that cannot come to grips with modernity.
Most Middle East experts think that a revolution or civil war in any
of the GCC states within the next few years is unlikely, but few say so
now as confidently as they once did. In fact, even the Persian Gulf
regimes themselves are increasingly fearful of their mounting internal
turmoil, something that has prompted all of them to announce demo-
cratic and economic reform packages at some point during the last ten
years. From Crown Prince Abdullah of Saudi Arabia to the emir of
Qatar to the new king of Bahrain, the Persian Gulf rulers recognize
the pressure building among their populations and the need to let off
some of the steam. If the reforms do not succeed and revolution or
civil war ensues, the United States might face some very difficult security
challenges. Widespread unrest in Saudi Arabia, for example, would
threaten Saudi oil exports just as surely as an Iranian invasion.
The best way for the United States to address the rise of terrorism
and the threat of internal instability in Saudi Arabia and the other GCC

FOREIGN AFFAIRS" Volume82No.4

 Securing the Guf
states would be to reduce its military presence in the region to the
absolute minimum, or even to withdraw entirely. The presence of
American troops fuels the terrorists' propaganda claims that the
United States seeks to prop up the hated local tyrants and control
the Middle East. And it is a source of humiliation and resentment for
pretty much all locals-a constant reminder that the descendants of
the great Islamic empires can no longer defend themselves and must
answer to infidel powers. So pulling back would diminish the internal
pressure on the Persian Gulf regimes and give them the political space
they need to enact the painful reforms that are vital to their long-term
stability. But such a withdrawal, in turn, would be the worst move
from the perspective of deterring and containing Iran-or of being in
a good position to respond swiftly to, say, a civil war in Saudi Arabia
should one ever emerge.
Given these conundrums, finding a workable new security architec-
ture for the Persian Gulf will be far from easy. Iraq must be kept
strong but not too strong. Iran must be kept in check while being
pushed to liberalize. The governments of the GCC states must be given
breathing room to reform but still be protected from their external
and internal enemies. Balancing these various interests, threats, and
constraints will be difficult, so much so that it would not be surprising
if the next American strategy for doing so ultimately failed, just as the
previous ones did. Still, the situation is not entirely hopeless. There
may not be a silver bullet, a perfect policy that secures every interest
and counters every threat while avoiding all the strategic, political, and
cultural minefields. But three broad approaches-pulling back "over
the horizon," trying to form a local NATO-like defense pact, or trying
to establish a security condominium-have enough merits to be
considered seriously.

BACK OVER THE HORIZON

THE MOST CONSERVATIVE approach to Persian Gulf securitywould
be to return to the initial American strategy of offshore balancing.
When tried in the 197os and 198os, this approach failed because Iran
and Iraq were still quite strong and the United States' over-the-horizon
posture was not a sufficient deterrent. Today, however, Iran and

FOREIGN AFFAIRS July/August 2003

 Kenneth M Pollack
Iraq are much weaker and are likely to remain so (at least until Iran
acquires nuclear weapons). Washington, meanwhile, has repeatedly
demonstrated that it will intervene in the Persian Gulf to protect its
interests and prevent aggression. So the strategy might work better
this time around.
In this approach, the United States would dramatically reduce its
military footprint in the region, leaving only the bare minimum of the
current arrangements in place. The headquarters of the 5th Fleet
would remain in Bahrain (where a U.S. Navy flag has been wel-
come for 50 years), but fewer American
The United States warships would ply the waters of the Gulf.
The air force would retain its huge new base
could model its at al Udeid in Qatar, again because the
approach to the Gulf on Qataris seem pleased to have it there. The army
the arms control might keep some prepositioned equipment in
Kuwait and Qatar and might regularly rotate
experiences in Europe in battalions to train on it-if those states
at the end of the were comfortable with such guests. In addi-
tion, if a future Iraqi government were
Cold War. amenable, the United States might retain an
air base and some ground presence there.
Alternately, army bases in the region might be dispensed with altogether,
and instead the United States could simply rely on equipment stored on
container ships stationed at Diego Garcia, in the Indian Ocean.
On the political level, the United States would preserve its informal
relationships with the Gcc states and possibly add a similar associ-
ation with a friendly new Iraqi government. It would continue to contain
Iran by making clear that any Iranian aggression would be met by
an American military response. And it would continue its efforts
to secure European, Japanese, and Russian support in pressuring
Tehran both economically and diplomatically so as to end Iran's support
for terror and its unconventional weapons programs.
This smaller military footprint would go a long way toward alle-
viating the internal problems caused by the presence of U.S. combat
forces in the Persian Gulf region-so not surprisingly, this is the
strategy that the Gulf Arabs themselves favor. With Saddam gone,
their overriding goal now is to minimize domestic discontent, and

[lO] FOREIGN AFFAIRS* Volume82No. 4

 Securing the Gulf
they believe that the United States can keep peace in the region with a
minimal presence. This approach would also be popular in certain quar-
ters of the American military, which would be glad to shed the burdens
of policing an inhospitable and less than luxurious region far from home.
On the other hand, the mere fact that the Persian Gulf states are
so enamored of this strategy ought to give American planners pause.
With the exception of Kuwait after the Iraqi invasion, most of these
countries have shown a distressing determination over the years to
ignore their problems-both external and internal-rather than
confront them. Although returning to a mostly over-the-horizon
presence could provide the Persian Gulf states with the leeway they
need to push through reforms, it is equally likely that they will see
the withdrawal of U.S. forces as a panacea for all their problems
and decide that internal reforms are therefore unnecessary. A reduced
U.S. military and political presence, in turn, would weaken Wash-
ington's ability to press its local allies to make the tough choices they
need to for their own long-term well-being.
A return to an over-the-horizon posture would also risk re-creating
some of the same problems that made the strategy untenable the first
time around. If Iran were to acquire nuclear weapons, a minimal
American presence in the region might tempt it to new aggression.
The ccc countries have often shown a willingness to accommodate
powerfl, aggressive neighbors, and a reduced American presence could
increase their willingness to do so again-giving Iran, say, an unhealthy
degree of control over oil flows. Finally, a limited American presence
might tempt other outside powers-such as China-to fish in the
Gulf's troubled waters at some point down the road.

A MIDDLE EASTERN NATO

A SECOND APPROACH to securing the Persian Gulf would be to

create a new regional defense alliance of the kind that worked so well
in Europe during the Cold War. This approach has an even worse
reputation in the region than offshore balancing, but it is somewhat
undeserved. In 1954, the United States convinced Iran, Iraq, Pakistan,
Turkey, and the United Kingdom to sign the Baghdad Pact, pledging
them to mutual defense. Four years later, Iraq withdrew, leaving Iran,

FOREIGN AFFAIRS .July/August2003 Ili]

 Kenneth M Pollack
Pakistan, and Turkey to form the Central Treaty Organization, which
became little more than a vehicle for the United States to arm the shah
of Iran for the next 20 years. These alliances performed poorly because
their members had widely divergent security problems (Pakistan was
concerned with India, Turkey with Russia and Greece, and Iran with the
Middle East) and because of the revolutions in Iraq in 1958 and Iran in
1979, which knocked out the central players. In today's circumstances, a
regional alliance would stand a better chance of succeeding.
The idea would be for the United States to establish a formal defense
alliance with the GCC states and a new government of Iraq. To para-
phrase Lord Ismay's famous quip about NATO, the goal would be to keep
the Americans in, the Iranians out, and the Iraqis down. A formal
defense pledge would be the best way to lock in an unflinching Ameri-
can commitment to the security of the region; would serve as the best
deterrent to outright Iranian aggression; and, by'extending a security
guarantee to Iraq, would effectively solve Baghdad's security dilemma as
well, providing a benign framework for Iraq's conventional rearmament
while obviating the need for it to acquire WMD to deter Iran. As a bonus,
if Persian Gulf publics could be convinced that American forces were
there as part of a community of equals, such an arrangement might also
help legitimize the U.S. presence in the region. Such an alliance should
be more viable than its predecessors, meanwhile, because the GCC states
and Iraq share the same primary external security threat: Iran.
Still, this approach also has its drawbacks. In particular, the GCC states
do not actually want a formal alliance relationship with the United
States, at least not at the moment. Gcc leaders fear that far from
legitimizing an American presence, such an alliance would be seen as
the ultimate act of colonialism and cronyism and would thus help to
delegitimize their own regimes. Even a very pro-American Iraqi
government might be uneasy with a formal treaty relationship, for
similar reasons. It is also unclear how such an alliance system could
address the threat of domestic instability in the GCC. Because of the
weakness of its armed forces, if Tehran does ever decide to pursue a more
aggressive policy, it is more likely to try to undermine its neighbors
from within than attack them directly from without. And despite
its fearsome punching power, a Persian Gulf alliance would still be
vulnerable to an enemy that hits below the belt.

112 ] FOREIGN AFFAIRS Volume82No. 4

 Securing the Guf

A GULF SECURITY CONDOMINIUM

IF A RETURN to offshore balancing might be inadequate to deal with

external aggression and a new alliance system might be inadequate to
deal with internal instability, a third course offers the tantalizing
prospect of handling both problems simultaneously. This approach
would have the United States pursue a security condominium for the
Persian Gulf, modeled on the arms control experiences in Europe at
the end of the Cold War.
Beginning in the 197os, NATO and the Warsaw Pact engaged in a
host of security engagement forums, confidence-building measures,
and arms control agreements (such as the Commission on Security and
Cooperation in Europe, the Mutual and Balanced Force Reductions
talks, and the Treaty on Conventional Forces in Europe) that were
intended to deal with all of the continent's various security issues as a
whole. Negotiating these deals took over two decades of painful
wrangling. But in the end, they produced a Europe that was much
more stable and secure than ever before.
In the Persian Gulf, such a security condominium would entail a
similar set of activities bringing together the United States, the GCC
countries, Iraq, and Iran. The process would begin by establishing a
regional security forum at which relevant issues could be debated and
discussed, information exchanged, and agreements framed. The mem-
bers could then move on to confidence-building measures, such as
notification of exercises, exchanges ofobservers, and information swaps.
Ultimately, the intention would be to proceed to eventual arms control
agreements that might include demilitarized zones, bans on destabi-
lizing weapons systems, and balanced force reductions for all parties.
In particular, the group might aim for a ban on all WMD, complete with
penalties for violators and a multilateral (or international) inspection
program to enforce compliance.
Such an approach has a lot to recommend it. It would be the least
rancorous way to handle the inevitable prohibition on Iraqi WMD, for
example. Framing the ban within a larger process in which all of
the regional states were working toward similar disarmament and
Iraq was simply the one leading off would help the pill go down more
easily in Baghdad. Likewise, for the GCC states, if a regional security

FOREIGN AFFAIRS .July/August 2003 [13]

 Kenneth M Pollack
condominium succeeded in eventually defanging Iran and locking in
limitations on Iraq, it would address their security problems without
having to rely on a heavy, destabilizing American military presence.
Moreover, U.S.-GCC military relations might be more agreeable to
the Persian Gulf populations if they took place within the rubric of a
regionwide forum.
Another advantage would be that the Iranians might actually be
willing to participate. For 20 years, Iran has demanded that the United
States, Iraq, and the ccc take its security concerns seriously, and this
process would grant Iran a venue and an opportunity to discuss those
concerns for the first time. Inviting Iran to discuss security issues in the
Persian Gulf at the same table with the United States would give Tehran
the sense that it was finally getting the respect from Washington that it
believes it deserves. More to the point, such a process is the only possible
way that Iran could affect the military forces of its toughest opponent,
the United States. For such a system to work, Washington would have
to be willing, as it was in Europe, to agree
Inviting Iran to talk to limitations on its regional deployments.
Such limitations by themselves might be
with the United States worth the price of admission for Iran.
would give Iranians Even if the hard-liners in Tehran opted
the sense they are finally not to participate, that would not be a disaster,
since they would likely isolate themselves
getting the respect both internally and internationally as a result.
they deserve. At home, it would be very difficult for them
to justify any action based on a supposed
threat from the United States (or Iraq or the
ccc) if they were unwilling to participate in a process in which they
would have the opportunity to address that threat through diplomacy
and arms control. To foreign audiences, meanwhile, Tehran's refusal
to accept such an olive branch from the United States would demon-
strate that Iran was a pariah state uninterested in peaceful means of
addressing its security concerns. This, in turn, would make it easier for
Washington to muster international support for tighter sanctions and
other forms of pressure.
Some might oppose such a system for fear that it would legitimize
the current Iranian government. But it need not do so unduly, and it

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 Securing the Gulf
would not stand in the way of regime change if that was where political
development in Iran seemed to be heading. After all, a similar process
did not impede regime change in Russia and Eastern Europe.
The real problem with this approach is that such a regional security
condominium might be impossible to achieve. It is worth remembering
that in Europe it took between 20 and 25 years of excruciating nego-
tiations to produce a workable system. The United States has had
agonizing experiences negotiating multilateral agreements in the
Middle East, and there is no reason to believe this one will be any easier.
All of the parties will come to the table with their own agendas and
will attempt to subvert or structure the process to address only those
issues that interest them. One of the dirty little secrets of the Persian
Gulf is that GCC unity is a fiction: the Qataris want American military
bases not to shield them from Iran or Iraq but to deter Saudi Arabia.
Likewise, Bahrain wants powerful missiles not to make it an effective
member of the Peninsula Shield Force but so that it can strike Qatar
if it ever feels the need. A regional security forum coupled with arms
control measures could bring out all of these intra-Gcc insecurities,
further complicating the process.
The Iranians, meanwhile, might try to scuttle the entire effort by
demanding Israel's inclusion, a call that would have tremendous
resonance among the Arab populations of the Persian Gulf. Bringing
Israel into such a system would mean saddling the Persian Gulf security
system with the additional problems and endless disputes of the
Arab-Israeli peace process and the Middle East as a whole, which
would clearly be impractical.
Still, if it could somehow be made to work, a regional security
condominium would offer the best prospect of creating a stable, secure
Persian Gulf But making it work will be quite a feat and take years,
if not decades. The United States should thus enshrine this as its ulti-
mate goal and start moving in that direction promptly. The mere
process of announcing it as Washington's intention and convening
a conference on Persian Gulf security, in fact, could have powerful
positive effects, legitimizing the U.S. presence in the region and
discrediting those who oppose it.
A condominium, however, should not become the sole focus of
American efforts to create a new security architecture in the region,

FOREIGN AFFAIRS .July/August2oo3 1151

because better solutions are
needed for the more immediate
term. In truth, the three models
proposed above are not mutu-
ally exclusive and perhaps
might most usefully be seen as
steps in an ongoing process.
The United States could make
some moves today to diminish
force levels in accord with the
offshore balancing approach.
Meanwhile, it could begin ex-
ploring the possibility of either
a new alliance system in the re-
gion or the inauguration of a
process to construct a security
condominium. Indeed, the
threat of a new U.S.-Gcc-Iraqi
alliance might be another power-
ful incentive for Iran to partici-
pate in a security condominium,
whereas the articulation of such
a goal might make an alliance
more acceptable to the GCC
states. Ultimately, if the security
condominium succeeds, peace is
maintained, and forces through-
out the region are considerably
reduced, the road may be clear
for a truly over-the-horizon
American presence in the Per-
sian Gulf-a development that
would be greatly welcomed by
all concerned.0

[16]
 The Shi'ites and
the Future of Iraq
Titzhak Nakash

LAMENT AND REMEMBRANCE

IN LATE APRIL, barely two weeks after the collapse of the Baath
regime, elated Iraqi Shi'ites flocked to the shrine of Imam Hussein in
Karbala, renewing an annual ritual of lament and remembrance that
had been banned by the Iraqi government since 1977. Hussein, a
grandson of the Prophet Muhammad, died at the battle of Karbala in
AD 68o while attempting to claim the caliphate from the Umayyads,
having been betrayed by the people of Kufa in southern Iraq. His
martyrdom has come to symbolize the quest of Shi'ites for justice,
and their visitation of his shrine is both an act of protest and an
expression of hope. Amid the power vacuum created by the downfall
of Saddam Hussein's regime and with foreign forces occupying Iraq,
the procession this year assumed a concrete meaning relating to both the
grievances and the aspirations of Iraqi Shi'ites. As one pilgrim put it
to an American television network, "We just got rid of one tyrant ruler.
We don't want a new tyrant instead. We want a just government, not
one which is imposed on us."
In the wake of the war, important questions about Iraq remain.
Will the newly energized Shi'ite majority seek an Islamic government
modeled after Iran, or will its members agree to share power with
other communities? Will the United States succeed in establishing
itself as a credible broker, especially in Shi'ite eyes? The future of Iraq
may well depend on the answers.

YI T ZHA K NA KA SH is Associate Professor of Middle Eastern History

at Brandeis University and the author of The Ski'is oflraq.

[17]
 Yitzhak Nakash

THE PAST AS PROLOGUE?

ALTHOUGH MANY of the formative events of Shi'ite Islam took

place in Iraq, Shi'ites became a majority there only during the
nineteenth century, as the bulk of the country's nomadic Arab tribes
settled down and took up agriculture. These tribesmen, both those
who converted to the Shi'ite sect in the south and those who remained
Sunni because they kept to their desert way of life in central Iraq, still
share Arab cultural attributes. Behind the power struggle between
Sunnis and Shi'ites in modern Iraq, therefore, lie two sectarian groups
that are quite similar. The divisions between them are primarily politi-
cal rather than ethnic or cultural, and reflect the competition of the
two groups over the right to rule and to define the meaning of na-
tionalism in the country. Whereas the Sunni ruling elite adopted a
wider Arab nationalism as its main ideology, the Shi'ites have preferred
Iraqi nationalism, which stresses the distinct values and heritage
of Iraqi society.
Both communities have had a stake in preserving the country's
territorial integrity ever since the British creation of modern Iraq in
1921. For the Sunni minority, which forms 17 percent of the population,
an intact Iraq is a matter of survival. For the Shi'ite majority, which
constitutes 6o percent, the question is rather one of gains and losses.
Were Iraq to splinter, Shi'ites in the south would lose Baghdad,
despite the fact that Shi'ites constitute at least half the city's population.
The Shi'ites would also lose the shrine cities of Kazimain and Samarra,
and substantial revenues from oil wells in the north. They would also
have to give up their dream of controlling a large and prosperous state,
a dream nourished since their failed 192o revolt against the British.
In the months leading up to that revolt-which occurred amid a
power vacuum between the fall of Ottoman rule and the solidification
of its British successor-the Shi'ite religious leaders in Iraq forged an
alliance with the Sunni Sharifians led by King Faysal, who were then
based in Syria. The two groups agreed on a formula advocating an Arab
Islamic state ruled by an Arab emir bound by a legislative assembly.
Whereas the Sharifians considered this formula an opening for their
rule, the Shi'ite clerics hoped that it would enable them to oversee the
legislative process once British control of the country was removed.

[18] FOREIGN AFFAIRS' Volume82No. 4

 AGENCE FRANCE-PRESSE CORBIS

Twofaces oflraqi Shi'ism. Muqtadaal-SadrandMuhammadBaqiral-Hakim

The Shi'ite tribes duly rose in revolt, but they were crushed by superior
British arms. And then, to the Shi'ites' dismay, the British brought
in the Sharifians and a group of ex-Ottoman officers to rule. In sub-
sequent years, Shi'ites would claim that their uprising had enabled
the Sunni minority to attain power and enjoy all the fruits of office. The
feeling among Iraqi Shi'ites that they were robbed of power back then
is still strong today and explains their objection to any power arrange-
ment that would again assign them a marginal role in Iraq's politics.
Iraq's Sunni rulers, both the Sharifians and the ex-Ottoman officers
who ruled until 1958 and then the Baathists who captured power a
decade later, exercised a monopoly over lawmaking and built an army
capable of checking Shi'ite opposition. The Sunni ruling elite split the
Shi'ite leadership, co-opting the tribal sheikhs and reducing the power
of the clergy. The state dealt a blow to the intellectual position and
sources of income of the religious seminaries in Najaf,which in 1946 lost
its standing as the leading Shi'ite center of learning to Qum in Iran.
The Baath government also executed senior Shi'ite Arab clerics, notably
members of the Sadr and the Hakim families, to make sure that a strong
and unified Shi'ite religious establishment capable of playing a role in
national politics did not emerge.
The events surrounding the 1978-79 Iranian Islamic revolution
emboldened Iraqi Shi'ites and led them to openly confront the Baath

FOREIGN AFFAIRS .July/August 2003 [19]

 Yitzhak Nakash
regime. But as the cleric Muhammad Baqir al-Sadr acknowledged
before his execution in 198o, the socioeconomic and political conditions
in Iraq were not ripe for an Islamic revolution. Moreover, the concept
of the rule of the jurist, who commands absolute religious and political
authority, as developed by Ayatollah Khomeini and implemented in
Iran after 1979, did not gain ground among the large majority of Iraqi
Shi'ites, including lay members of the Islamic Daawa Party. In any
case, the power of the Daawa inside Iraq was broken during the 198os,
_ and subsequently the organization split into
The feeling among Iraqi various groups based, until recently, in Qum,
Damascus, and London.
Shi'ites that they were The differences between Iraqi and Iranian
robbed of power once Shi'ism were borne out during the Iran-Iraq
before is still strong. War of 198o-88 and the 1991 Shi'ite upris-
ing in southern Iraq. During the war with
Iran, Iraqi Shi'ites, who formed a majority
of the rank and file of the Iraqi infantry, fought against their Iranian
coreligionists, showing that their loyalty to the Iraqi state over-
rode their sectarian allegiance and their discontent with the Sunni-
dominated Baath regime. The 1991 uprising, in turn, was spontaneous
and disorganized, lacking a prominent religious leader to inspire and
direct it. It was only after rebels took control of large parts of southern
Iraq that the grand Shi'ite religious leader Abu al-Qasim al-Khoei
(who died in Najaf in 1992) reluctantly sanctioned a form of Shi'ite
governing body in Iraq, although he did not call for an Islamic govern-
ment along the lines advocated by Khomeini.
Khoei's reluctance to get involved in worldly affairs-in essence, an
attempt on his part to shield the highest Shi'ite religious leadership, the
marjazyya, from politics-reflected an old tension within Shi'ite Islam
between two conflicting tendencies, quietism and activism. Whether
clerics should confine their activities to religious affairs or also seek a role
in politics has been a matter of fierce debate among Shi'ites for well over
a century. This tension erupted this past March, in the power vacuum
created by the war and the collapse of the Baath regime. The tension has
been reinforced by a competition for power within the Iraqi Shi'ite
religious hierarchy, Iran's attempt to influence that competition, and
the presence of U.S. troops in the shrine cities of Najaf and Karbala.

[20 ] FOREIGN AFFAIRS Volume82No.4

 The Shiites and the Futureoflraq
The most senior religious leader, Ali Sistani (a student of Khoei
and an advocate of quietism), refused to let himself and the marjaiyya
be dragged into the political turmoil and found himself the target of
death threats. Some low-ranking clerics, meanwhile, most notably
the young Muqtada al-Sadr of Najaf and Muhammad al-Fartusi in
Baghdad, issued bold statements, inspired by the religious leader
Kazim al-Husseini al-Hairi of Qum, calling for an Islamic government
in Iraq. They also moved to extend their influence in some Shi'ite
cities in the south and in the slum area of Baghdad known before the
war as Saddam City (now renamed Sadr City, after the religious
leader Muhammad Sadiq al-Sadr, who was gunned down in Najaf
in 1999). The fierce struggle within Shi'ite religious circles took an
ominous turn on April 1o with the murder ofAbd al-Majid al-Khoei,
son of Abu al-Qasim, who had been brought to Najaf by American
forces in the hopes that he would be able to exert his influence in the
city. The killing of Abd al-Majid, a man who exemplified the sober
and moderate face of Iraqi Shi'ism, has underscored the role of violence
in Iraqi politics as well as the difficulty of reaching an agreement on
power-sharing in postwar Iraq.

A JUST GOVERNMENT

who in theory are expected to obey their rulers and

U N L I K E S U N N I S,
even tolerate a tyrant in order to avoid civil strife and preserve the
cohesion of the Muslim community, observant Shi'ites recognize
no authority on earth except that of the imam. The twelfth imam is
believed to be hidden from view and is expected to return one day
as a messianic figure, the Mahdi. In his absence, there can be no
human sovereign who is fully legitimate. This ambivalence toward
worldly power has resulted in different interpretations within Shi'ite
Islam regarding government accountability and the role of the clerics
in state affairs. Khomeini's concept of the rule of the jurist is only one
among several competing views.
The collapse of Saddam's regime has given Shi'ite debates on the
meaning of a just government in the Iraqi context a greater urgency.
There are constituencies, including some elements of the Daawa
Party and its offshoots, that advocate an Islamic government in Iraq.

FOREIGN AFFAIRS .July/August2003 121]

 Yitzhak Nakash
They have conflicting visions, however, of what an Islamic government
should be, ranging from Khomeini-style rule of the jurist to an Islamic
government run primarily by laymen-a form generally more in tune
with the modern experience of Sunni Islamists. Some members of
these groups are prepared to pursue their goals through violence.
Nevertheless, the large majority of Iraqi Shi'ites probably have no
desire to mimic the Islamic Republic of Iran. They are aware of the
situation there and do not want to move from a secular totalitarian
system to an overbearing theocracy. Iraq's political culture and social
makeup, moreover, are very different from those of Iran. Quite apart
from the existence of Sunnis, Kurds, Chaldeans, and Turkmen in
the country, the Iraqi Shi'ite community is itself diverse. There are
secularists (including liberals and communists) and various religious
groups, urban and rural dwellers, rich and poor, Shi'ites who have
never left Iraq and those who have spent decades in exile. There is no
single leader who can speak for all Iraqi Shi'ites, let alone oversee
the transformation of postwar Iraq into an
There is no single Iranian-style Islamic republic.
That said, defining the relationship between
leader who can speak religion and politics in Iraq will be a major
for all Iraqi Shi'ites. challenge facing Shi'ite religious groups.
Ayatollah Muhammad Baqir al-Hakim,
head of the Supreme Council for the Islamic
Revolution in Iraq, who in the past advocated an Islamic government,
has more recently adopted a different tone. Hakim returned to Najaf
this past May after 23 years in exile, and he is positioning himself as
a contender for Shi'ite religious leadership in Iraq. It remains to be
seen what course he will choose, given the complex social reality in Iraq
and the U.S. presence there. If he adopts a pragmatic course, Hakim
will be following in the footsteps of the Lebanese cleric Muhammad
Hussein Fadlallah, who acknowledged that the conditions for an
Islamic state did not exist in Lebanon.
The Iraqi Shi'ites, together with their non-Shi'ite compatriots,
will need to develop a national identity broad enough to unite the
country. Together, Shi'ite and Sunni Arabs constitute 75 percent of
the population. The two groups are linked by a large number of mixed
marriages and share social codes and cultural attributes that could

[2 2] FOREIGN AFFAIRS Volume82No. 4

 The Shi'ites and the Future oflraq
form the basis of an Iraqi nationalism drawing on the ideas of the
literary figure Ali al-Sharqi, who died in 1964. Sharqi offered a vision
of nationalism that built on the strong Arab tribal character of Iraqi
society. He advocated the development of a nationalist ideology that
combined broadly Eastern and Arab elements with specifically Iraqi
values and heritage. Sharqi's vision was also clearly influenced by the
effort of Egyptians to use their ancient past as a foundation myth. His
ideas have influenced later generations of Iraqi intellectuals, and they
may be further developed as a new Iraqi nation takes shape.
As part of the founding principles of a new Iraq, the Arab majority
will need to offer the Kurds a pact safeguarding their sociopolitical
and cultural rights. The 197o accord signed between Saddam and
Kurdish leader Mustafa Barzani has been referred to over the years
by both Iraqi Arabs and Kurds as a basis for addressing the Kurdish
question in Iraq. In return for a similar offer, backed by the United
States and the UN and receiving Turkey's tacit approval, the Kurds
should be prepared to forge new links with their Arab compatriots
and undertake to resolve the "Kurdish problem" within the frame-
work of a unified Iraq.
Until such time as political parties have had the opportunity to
develop and Iraqis are ready to elect a national leader, it will be necessary
to have an interim government that represents the entire communal
makeup of Iraq and includes both secular and religious figures. To
maintain the credibility of the government and avoid exacerbating an
already tense political situation, ministerial posts should be filled by
Iraqis who are respected within the country. Power could be shared
among Iraq's major communities according to an agreed formula.
The main communities are likely to develop religious and sociocultural
institutions that would operate on the principle of checks and balances.
These institutions would not necessarily reinforce sectarian and ethnic
divisions, but rather would manage the competition among various
groups within each community and reduce tension between Shi'ites,
Sunnis, and Kurds.
Whether in the long run Iraq can move from a confessional system
to become a democratic state based on individual representation is a
question that will be answered primarily by the actions and wishes of
Iraqis themselves.

FOREIGN AFFAIRS.Juy/ugust 2003 1231

 Yitzhak Nakash

FOOL ME ONCE ...

THE DECISION of Shi'ites not to rebel against the regime of Saddam

during the recent war has underscored their ambivalence toward the
United States as well as their strong Iraqi national identity. Their in-
action can largely be explained by their sense that they were betrayed
by the United States during their uprising at the end of the first Gulf
War. In 1991, President George H.W. Bush encouraged Iraqis to take
matters into their own hands and overthrow their leader, but when
the Shi'ites rose up his administration refused to help, enabling army
units loyal to Saddam to crush the uprising.
The U.S. decision to abandon the Shi'ites in 1991 touched a
collective nerve and evoked memories of their long history of be-
trayal, stretching back to the events surrounding the martyrdom
of Imam Hussein in Karbala in 68o. In 2003, these memories of
the past fused with nationalist and religious sentiments to make
Iraqi Shi'ites leery of the invading foreign, Christian forces. Al-
though Iraqi Shi'ites yearned for the collapse of the Baath regime,
they were also concerned about their image in the Arab world,
which is predominantly Sunni. They sought to avoid accusations
similar to those leveled against them after 1991, namely that they
constitute a fifth column within Iraq and are collaborators with
Western powers. Shi'ites are unsure, moreover, about long-term
U.S. goals. As Iraqi nationalists, they dislike the prospect of a
lengthy U.S. occupation. They abhor the idea of an Iraqi govern-
ment installed by the United States to further America's interests,
just as the Sharifians were brought in by the British in 1921. In
spite of repeated assurances by the Bush administration that Iraq's
oil belongs to its people, the Shi'ites still seem worried that the
United States is essentially seeking to dominate the oil resources
of their country.
There is a big gap, in short, between the Bush administration's
vision of a new Iraq and the expectations of Shi'ites for the post-
Saddam era. Whereas some members of the administration have
envisaged a Western-style democratic Iraq led by a secular pro-U.S.
government, Shi'ites (and many other Iraqis) appear to prefer an
independent Iraq with a system of government that reflects their own

[24] FOREIGN AFFAIRS- Volume82No. 4

 The Shi'ites and the Futureoflraq
culture and traditions and that does not serve as a base for U.S.
troops in the Persian Gulf. The destruction caused by the war, and
the delay in restoring services and security, has further widened the
gap. Defining the new U.S.-Iraqi relationship will not be easy,
therefore, and will require compromises on both sides.
In the period since the war, America's credibility has been put
to the test in Iraq. The Bush administration has thus far made little
effort to reconcile the contradiction between its grand vision of a
new Iraq and the limited resources it has actually committed to re-
building the country. Making matters worse, the administration
has been sharply divided internally over how to proceed. And
America, for understandable reasons, has refrained from projecting
itself as the power in Iraq and has not indicated how long it intends
to stay in the country. But unless the United States makes it clear that
it intends to stay for the long haul, important Iraqi constituencies
will not cooperate with the U.S. civilian authority, considering it
politically imprudent. They will show either indifference or hostility
toward the U.S. presence in the country.
Washington needs to ensure that the civil disorder in southern
Iraq and parts of Baghdad does not develop into a large-scale anti-
American protest movement or even into a revolt, as happened in
1920 following the British occupation. One sensible move would
be for the Bush administration to reach out to the Shi'ites and ac-
knowledge that the United States made a mistake in not coming
to their aid in 1991. As the victorious power, the United States can
afford to appear humble. An apology to the Shi'ites followed by
some kind of concrete gesture would not undercut U.S. stature in
the country but would rather help rebuild American credibility
both in Iraq and among Shi'ites in the larger Arab world. Officials
involved in the reconstruction effort also need to work with moder-
ate Shi'ite religious and tribal leaders, isolate the radical clerics, and
take pains to revive the secular middle class and the intelligentsia,
many of whose members are Shi'ites. Over the course of more than
three decades, the Baathists wiped out all forms of civil secular organ-
ization not controlled directly by the party. A reinvigorated middle
class would help check the power of those religious groups that have
taken advantage of the power vacuum to emerge as the country's most

FOREIGN AFFAIRS .July/August2003 [251

 Yitzhak Nakash
vocal, organized, and politically mobilized force. Washington will
not be able to satisfy all Iraqi Shi'ites, but it may be able to slowly win
the hearts of the silent majority.
Over time, a relationship between the United States and Iraqi
Shi'ites built on trust could facilitate a modus vivendi, perhaps even
a dialogue, between America and Iran. In the wake of the September u
attacks, the threat to U.S. interests in the Persian Gulf does not emanate
from an Iranian Shi'ite revolution that has lost its fervor, but rather from
the growth of Sunni Islamic radicalism influenced by the Wahhabi-
Hanbali school dominant in Saudi Arabia. Wahhabism's hatred
for America is rivaled only by its hostility to Shi'ism. To contain
its spread, the United States will need to build bridges to Shi'ites
in the Arab world as well as to the reformers in Iran. How the
Bush administration handles the Iraqi Shi'ites, therefore, will be
crucial not only for the future of Iraq but also for the future of the
entire region.0,

[26] FOREIGN AFFAIRS Volume82No.4

 The Protean Enemy
Jessica Stern

WHAT'S NEXT FROM AL QAEDA?

HAVING SUFFERED the destruction of its sanctuary in Afghanistan

two years ago, al Qaeda's already decentralized organization has become
more decentralized still. The group's leaders have largely dispersed to
Pakistan, Iran, Iraq, and elsewhere around the world (only a few still
remain in Afghanistan's lawless border regions). And with many of the
planet's intelligence agencies now focusing on destroying its network,
al Qaeda's ability to carry out large-scale attacks has been degraded.
Yet despite these setbacks, al Qaeda and its affiliates remain among
the most significant threats to U.S. national security today. In fact,
according to George Tenet, the CIA's director, they will continue to be this
dangerous for the next two to five years. An alleged al Qaeda spokes-
person has warned that the group is planning another strike similar
to those of September u. On May 12, simultaneous bombings of three
housing complexes in Riyadh, Saudi Arabia, killed at least 29 people and
injured over 200, many of them Westerners. Intelligence officials in
the United States, Europe, and Africa report that al Qaeda has stepped
up its recruitment drive in response to the war in Iraq. And the target
audience for its recruitment has also changed. They are now younger,
with an even more "menacing attitude," as France's top investigative
judge on terrorism-related cases, Jean-Louis Brugui6re, describes them.
More of them are converts to Islam. And more of them are women.
What accounts for al Qaeda's ongoing effectiveness in the face
of an unprecedented onslaught? The answer lies in the organization's

JESSICA STERN is Lecturer in Public Policy at Harvard's John E

Kennedy School of Government and the author of The Ultimate Terrorists
and the forthcoming Terrorin the Name of God. Why ReligiousMilitantsKill.

[27]
 Jessica Stern

remarkably protean nature. Over its life span, al Qaeda has constantly
evolved and shown a surprising willingness to adapt its mission. This
capacity for change has consistently made the group more appealing
to recruits, attracted surprising new allies, and-most worrisome
from a Western perspective-made it harder to detect and destroy.
Unless Washington and its allies show a similar adaptability, the war
on terrorism won't be won anytime soon, and the death toll is likely
to mount.

MALLEABLE MISSIONS

WHY DO religious terrorists kill? In interviews over the last five years,
many terrorists and their supporters have suggested to me that people
first join such groups to make the world a better place-at least for
the particular populations they aim to serve. Over time, however,
militants have told me, terrorism can become a career as much as a
passion. Leaders harness humiliation and anomie and turn them into
weapons. Jihad becomes addictive, militants report, and with some
individuals or groups-the "professional" terrorists-grievances can
evolve into greed: for money, political power, status, or attention.
In such "professional" terrorist groups, simply perpetuating their
cadres becomes a central goal, and what started out as a moral crusade
becomes a sophisticated organization. Ensuring the survival of the
group demands flexibility in many areas, but especially in terms of
mission. Objectives thus evolve in a variety of ways. Some groups find
a new cause once their first one is achieved-much as the March of
Dimes broadened its mission from finding a cure for polio to fighting
birth defects after the Salk vaccine was developed. Other groups
broaden their goals in order to attract a wider variety of recruits. Still
other organizations transform themselves into profit-driven organized
criminals, or form alliances with groups that have ideologies different
from their own, forcing both to adapt. Some terrorist groups hold fast
to their original missions. But only the spry survive.
Consider, for example, Egyptian Islamic Jihad (EIJ). Eij's original
objective was to fight the oppressive, secular rulers of Egypt and turn
the country into an Islamic state. But the group fell on hard times
after its leader, Sheikh Omar Abdel Rahman, was imprisoned in the

[28-1 FOREIGN AFFAIRS Volume82No.4

 The ProteanEnemy
United States and other EIJ leaders were killed or forced into exile.
Thus in the early 199os, Ayman al-Zawahiri decided to shift the
group's sights from its "near enemy"-the secular rulers of Egypt-
to the "far enemy," namely the United States and other Western
countries. Switching goals in this way allowed the group to align itself
with another terrorist aiming to attack the West and able to provide
a significant influx of cash: Osama bin Laden. In return for bin Laden's
financial assistance, Zawahiri provided some 200 loyal, disciplined, and
well-trained followers, who became the core of al Qaeda's leadership.
A second group that has changed its mission over time to secure a
more reliable source of funding is the Islamic Movement ofUzbekistan
(IMu), which, like EIJ, eventually joined forces with the Taliban and al
Qaeda. The IMU's original mission was to topple Uzbekistan's corrupt
and repressive post-Soviet dictator, Islam Karimov. Once the IMU
formed an alliance with the Taliban's leader, Mullah Omar, however, it
began promoting the Taliban's anti-American and anti-Western agenda,
also condemning music, cigarettes, sex, and alcohol. This new puritanism
reduced its appeal among its original, less-ideological supporters in
Uzbekistan-one downside to switching missions.
Even Osama bin Laden himself has changed his objectives over
time. The Saudi terrorist inherited an organization devoted to fighting
Soviet forces in Afghanistan. But he turned it into a flexible group of
ruthless warriors ready to fight on behalf of multiple causes. His first
call to holy war, issued in 1992, urged believers to kill American soldiers
in Saudi Arabia and the Horn of Africa but barely mentioned Palestine.
The second, issued in 1996, was a 40-page document listing atrocities
and injustices committed against Muslims, mainly by Western powers.
With the release of his third manifesto in February 1998, however, bin
Laden began urging his followers to start deliberately targeting
American civilians, rather than soldiers. (Some al Qaeda members
were reportedly distressed by this shift to civilian targets and left the
group.) Although this third declaration mentioned the Palestinian
struggle, it was still only one among a litany of grievances. Only in
bin Laden's fourth call to arms-issued to the al Jazeera network on
October 7, 2ool, to coincide with the U.S. aerial bombardment of
Afghanistan-did he emphasize Israel's occupation of Palestinian
lands and the suffering of Iraqi children under UN sanctions, concerns

FOREIGN AFFAIRS .Ju/y/August2oo3 [ 293]

 AP/WIDE WORLD PHOTOS AP/WIDE WORLD PHOTOS AP/WIDE WORLD PHOTOS

Newfriends in low places. Osama bin Laden, Ahmed Omar SaeedSheikh,

MirAimalKansi ...

broadly shared in the Islamic world. By extending his appeal, bin Laden
sought to turn the war on terrorism into a war between all of Islam
and the West. The events of September ii, he charged, split the world
into two camps-believers and infidels-and the time had come for
"every Muslim to defend his religion."
One of the masterminds of the September ii attacks, Ramzi bin
al-Shibh, later described violence as "the tax" that Muslims must pay
"for gaining authority on earth." This comment points to yet another
way that al Qaeda's ends have mutated over the years. In his putative
autobiography, Zawahiri calls the "New World Order" a source of
humiliation for Muslims. It is better, he says, for the youth of Islam
to carry arms and defend their religion with pride and dignity than to
submit to this humiliation. One of al Qaeda's aims in fighting the
West, in other words, has become to restore the dignity of humiliated
young Muslims. This idea is similar to the anticolonialist theoretician
Frantz Fanon's notion that violence is a "cleansing force" that frees
oppressed youth from "inferiority complexes," "despair," and "inaction,"
making them fearless and restoring their self-respect. The real target
audience of violent attacks is therefore not necessarily the victims
and their sympathizers, but the perpetrators and their sympathizers.
Violence becomes a way to bolster support for the organization and
the movement it represents. Hence, among the justifications for "special
operations" listed in al Qaeda's terrorist manual are "bringing new
members to the organization's ranks" and "boosting Islamic morale
and lowering that of the enemy." The United States may have become

[30] FOREIGN AFFAIRS" Volume82No. 4

 AP/WIDE WORLD PHOTOS AP/WIDE WORLD PHOTOS GETTY

... Ramzi bin al-Shibh, AftabAnsari, andMattHale

al Qaeda's principal enemy, but raising the morale of Islamist fighters

and their sympathizers is now one of its principal goals.

FRIENDS OF CONVENIENCE

APART FROM the flexibility of its mission, another explanation for al

Qaeda's remarkable staying power is its willingness to forge broad-
and sometimes unlikely-alliances. In an effort to expand his network,
bin Laden created the International Islamic Front forJihad Against the
Jews and Crusaders (IIF) in February 1998. In addition to bin Laden
and EIJ'S Zawahiri, members included the head of Egypt's Gama'a al
Islamiya, the secretary-general of the Pakistani religious party known
as the Jamiat-ul-Ulema-e-Islam (ui), and the head of Bangladesh's
Jihad Movement. Later, the IIF was expanded to include the Pakistani
jibadi organizations Lashkar-e-Taiba, Harkat-ul-Muahideen, and
Sipah-e-Sahaba Pakistan, the last an anti-Shi'a sectarian party. Senior
al Qaeda lieutenant Abu Zubaydah was captured at a Lashkar-e-Taiba
safe house in Faisalabad in March 2002, suggesting that some of
Lashkar-e-Taiba's members are facilitating and assisting the move-
ment of al Qaeda members in Pakistan. And Indian sources claim that
Lashkar-e-Taiba is now trying to play a role similar to that once played
by al Qaeda itself, coordinating and in some cases funding pro-bin
Laden networks, especially in Southeast Asia and the Persian Gulf.
In addition to its formal alliances through the IIF, bin Laden's
organization has also nurtured ties and now works closely with a

FOREIGN AFFAIRS .July/August2003 [31]

 Jessica Stern
variety of still other groups around the world, including Ansar al
Islam, based mainly in Iraq and Europe; Jemaah Islamiah in Southeast
Asia; Abu Sayyaf and the Moro Islamic Liberation Front in the
Philippines; and many Pakistani jibadi groups. In some cases, al
Qaeda has provided these allies with funding and direction. In others,
the groups have shared camps, operatives, and logistics. Some "fran-
chise groups," such as Jemaah Islamiah, have raised money for joint
operations with al Qaeda.
Perhaps most surprising (and alarming) is the increasing evidence
that al Qaeda, a Sunni organization, is now cooperating with the
Shi'a group Hezbollah, considered to be the most sophisticated terrorist
group in the world. Hezbollah, which enjoys backing from Syria and
Iran, is based in southern Lebanon and in the lawless "triborder" region
of South America, where Paraguay, Brazil, and Argentina meet. The
group has also maintained a fundraising presence in the United States
since the 198os. According to the CIA'S Tenet, however, the group has
lately stepped up its U.S. activities and was recently spotted "casing
and surveilling American facilities." Although low-level cooperation
between al Qaeda and Hezbollah has been evident for some time-
their logistical cooperation was revealed in the trial of al Qaeda
operatives involved in the 1998 embassy bombing attacks in east
Africa-the two groups have formed a much closer relationship since
al Qaeda was evicted from its base in Afghanistan. Representatives of
the two groups have lately met up in Lebanon, Paraguay, and an
unidentified African country. According to a report in Israel's Ha'aretz
newspaper, Imad Mughniyah, who directs Hezbollah in the triborder
area, has also been appointed by Iran to coordinate the group's activities
with Hamas and Palestinian Islamic Jihad.
The triborder region of South America has become the world's
new Libya, a place where terrorists with widely disparate ideologies-
Marxist Colombian rebels, American white supremacists, Hamas,
Hezbollah, and others-meet to swap tradecraft. Authorities now
worry that the more sophisticated groups will invite the American
radicals to help them. Moneys raised for terrorist organizations in the
United States are often funneled through Latin America, which has
also become an important stopover point for operatives entering the
United States. Reports that Venezuela's President Hugo Chvez is

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 The ProteanEnemy
allowing Colombian rebels and militant Islamist groups to operate in
his country are meanwhile becoming more credible, as are claims that
Venezuela's Margarita Island has become a terrorist haven.
As these developments suggest and Tenet confirms, "mixing and
matching of capabilities, swapping of training, and the use of common
facilities" have become the hallmark of professional terrorists today.
This fact has been borne out by the leader of a Pakistanijihadi group
affiliated with al Qaeda, who recently told me that informal contacts
between his group and Hezbollah, Hamas, and others have become
common. Operatives with particular skills loan themselves out to
different groups, with expenses being covered by the charities that
formed to fund the fight against the Soviet Union in Afghanistan.
Meanwhile, the Bush administration's claims that al Qaeda coop-
erated with the "infidel" (read: secular) Saddam Hussein while he was
still in office are now also gaining support, and from a surprising
source. Hamid Mir, bin Laden's "official biographer" and an analyst
for al Jazeera, spent two weeks filming in Iraq during the war. Unlike
most reporters, Mir wandered the country freely and was not em-
bedded with U.S. troops. He reports that he has "personal knowledge"
that one of Saddam's intelligence operatives, Farooq Hijazi, tried to
contact bin Laden in Afghanistan as early as 1998. At that time, bin
Laden was publicly still quite critical of the Iraqi leader, but he had
become far more circumspect by November 2001, when Mir interviewed
him for the third time. Mir also reports that he met a number of
Hezbollah operatives while in Iraq and was taken to a recruitment
center there.

NEW-STYLE NETWORKS

AL QAEDA SEEMS to have learned that in order to evade detection

in the West, it must adopt some of the qualities of a "virtual network":
a style of organization used by American right-wing extremists for
operating in environments (such as the United States) that have
effective law enforcement agencies. American antigovernment groups
refer to this style as "leaderless resistance." The idea was popularized by
Louis Beam, the self-described ambassador-at-large, staff propagandist,
and "computer terrorist to the Chosen" for Aryan Nations, an American

FOREIGN AFFAIRS .July/AuguSt 2003 [33]

 JessicaStern
neo-Nazi group. Beam writes that hierarchical organization is extremely
dangerous for insurgents, especially in "technologically advanced
societies where electronic surveillance can often penetrate the structure,
revealing its chain of command." In leaderless organizations, how-
ever, "individuals and groups operate independently of each other,
and never report to a central headquarters or single leader for direction
or instruction, as would those who belong to a typical pyramid organ-
ization." Leaders do not issue orders or pay operatives; instead, they
inspire small cells or individuals to take action on their own initiative.
Lone-wolf terrorists typically act out of a mixture of ideology and
personal grievances. For example, Mir Aimal Kansi, the Pakistani
national who shot several CIA employees in 1993, described his actions
as "between jihad and tribal revenge"-jihad against America for its
support of Israel and revenge against the CIA, which he apparently
felt had mistreated his father during Afghanistan's war against the
Soviets. Meanwhile, John Allen Muhammad, one of the alleged
"Washington snipers," reportedly told a friend that he endorsed the
September ii attacks and disapproved of U.S. policy toward Muslim
states, but he appears to have been principally motivated by anger at
his ex-wife for keeping him from seeing their children, and some of his
victims seem to have been personal enemies. As increasingly powerful
weapons become more and more available, lone wolves, who face
few political constraints, will become more of a threat, whatever their
primary motivation.
The Internet has also greatly facilitated the spread of "virtual"
subcultures and has substantially increased the capacity of loosely
networked terrorist organizations. For example, Beam's essay on
the virtues of"leaderless resistance" has long been available on the
Web and, according to researcher Michael Reynolds, has been
highlighted by radical Muslim sites. Islamist Web sites also offer
on-line training courses in the production of explosives and urge
visitors to take action on their own. The "encyclopedia of jihad,"
parts of which are available on-line, provides instructions for creating
"clandestine activity cells," with units for intelligence, supply, planning
and preparation, and implementation.
The obstacles these Web sites pose for Western law enforcement
are obvious. In one article on the "culture ofjihad" available on-line,

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 The ProteanEnemy
a Saudi Islamist urges bin Laden's sympathizers to take action without
waiting for instructions. "I do not need to meet the Sheikh and ask
his permission to carry out some operation," he writes, "the same as
I do not need permission to pray, or to think about killing the Jews
and the Crusaders that gather on our lands." Nor does it make any
difference whether bin Laden is alive or dead: "There are a thousand
bin Ladens in this nation. We should not abandon our way, which the
Sheikh has paved for you, regardless of the existence of the Sheikh or
his absence." And according to U.S. government officials, al Qaeda
now uses chat rooms to recruit Latino Muslims with U.S. passports,
in the belief that they will arouse less suspicion as operatives than
would Arab-Americans. Finally, as the late neo-Nazi William Pierce
once told me, using the Web to recruit "leaderless resisters" offers still
another advantage: it attracts better-educated young people than do
more traditional methods, such as radio programs.
Already the effects of these leaderless cells have been felt. In Feb-
ruary 2002, Ahmed Omar Saeed Sheikh, the British national who
was recently sentenced to death for his involvement in the abduction
and murder of Wall Street Journalreporter Daniel Pearl, warned his
Pakistani interrogators that they would soon confront the threat of
small cells, working independently of the known organizations that
Pakistani President Pervez Musharraf had vowed to shut down. Sure
enough, soon after Omar Sheikh made this threat, unidentified ter-
rorists killed 5 people in an Islamabad church known to be frequented
by U.S. embassy personnel, and another group killed n French military
personnel in Karachi in May. And in July, still other unidentified
terrorists detonated a truck bomb at the entrance of the U.S. consulate
in Karachi, killing 12 Pakistanis.

JOINING THE FAMILY

VIRTUAL LINKS are only part of the problem; terrorists, including

members of bin Laden's IIF, have also started to forge ties with tradi-
tional organized crime groups, especially in India. One particularly
troubling example is the relationship established between Omar
Sheikh and an ambitious Indian gangster named Aftab Ansari. Asif
Reza Khan, the "chief executive" for Ansari's Indian operations, told

FOREIGN AFFAIRS July/August2o3 [35]

 JessicaStern

interrogators that he received military training at a camp in Khost,

Afghanistan, belonging to Lashkar-e-Taiba, and that "leaders of
different militant outfits in Pakistan were trying to use his network
for the purpose ofjihad, whereas [Ansari] was trying to use the militants'
networks for underworld operations."
Khan told his interrogators that the don provided money and
hideouts to his new partners, in one case transferring $1oo,ooo to
Omar Sheikh-money that Omar Sheikh, in turn, wired to Muhammad
Atta, the lead hijacker in the September 11 attacks. According to
Khan, Ansari viewed the $ioo,ooo gift as an "investment" in a
valuable relationship.
Still another set of unlikely links has sprung up in American prisons,
where Saudi charities now fund organizations that preach radical
Islam. According to Warith Deen Umar, who hired most of the Muslim
chaplains currently active in New York State prisons, prisoners who
are recent Muslim converts are natural recruits for Islamist organizations.
Umar, incidentally, told The Wall StreetJournalthat the September 11
hijackers should be honored as martyrs, and he traveled to Saudi Ara-
bia twice as part of an outreach program designed to spread Salafism
(a radical Muslim movement) in U.S. prisons.
Another organization now active in U.S. prisons is Jamaat ul-Fuqra,
a terrorist group committed to purifying Islam through violence.
(Daniel Pearl was abducted and murdered in Pakistan while attempting
to interview the group's leader, Sheikh Gilani, to investigate the claim
that Richard Reid-who attempted to blow up an international flight
with explosives hidden in his shoes-was acting under Gilani's
orders.) The group functions much like a cult in the United States;
members live in poverty in compounds, some of which are heavily
armed. Its members have been convicted of fraud, murder, and several
bombings, but so far, most of their crimes have been relatively
small scale. Clement Rodney Hampton-El, however, convicted of
participating with Omar Abdel Rahman in a 1993 plot to blow up
New York City landmarks, was linked to the group, and U.S. law en-
forcement authorities worry that the Fuqra has since come under the
influence of al Qaeda.
Still another surprising source of al Qaeda recruits is Tablighi
Jamaat (TAj), a revivalist organization that aims at creating better

[3 6 ] FOREIGN AFFAIRS" Volume82No. 4

 The ProteanEnemy
Muslims through "spiritual jihad": good deeds, contemplation, and
proselytizing. According to the historian Barbara Metcalf, TJ has
traditionally functioned as a self-help group, much like Alcoholics
Anonymous, and most specialists claim that it is no more prone to
violence than are the Seventh-Day Adventists, with whom Tj is
frequently compared. But several Americans known to have trained
in al Qaeda camps were brought to Southwest Asia by TJ and appear
to have been recruited intojibadiorganizations while traveling under
TJ auspices. For example, Jose Padilla (an American now being held
as an "enemy combatant" for planning to set off a "dirty" radiological
bomb in the United States) was a member of TJ, as were Richard Reid
and John Walker Lindh (the so-called American Taliban). According
to prosecutors, the "Lackawanna Six" group (an alleged al Qaeda
sleeper cell from a Buffalo, New York, suburb) similarly first went to
Pakistan to receive TJ religious training before proceeding to the al
Farooq training camp in Afghanistan. A Pakistani TJ member told
me that jibadi groups openly recruit at the organization's central
headquarters in Raiwind, Pakistan, including at the mosque. And TJ
members in Boston say that a lot of Muslims end up treating the
group, which is now active in American inner cities and prisons, as a
gateway tojihadiorganizations.
As such evidence suggests, although it may have been founded to
create better individuals, TJ has produced offshoots that have evolved
into more militant outfits. In October 1995, Pakistani authorities
uncovered a military plot to assassinate Prime Minister Benazir
Bhutto and establish a theocracy. Most of the officers involved in the
attempted coup were members of TJ. The group is said to have been
strongly influenced by retired Lieutenant General Javed Nasir, who
served as Pakistan's intelligence chief from 199o to 1993 but was
sacked under pressure from the United States for his support of militant
Islamists around the world.
Totalitarian Islamist revivalism has become the ideology of the
dystopian new world order. In an earlier era, radicals might have
described their grievances through other ideological lenses, perhaps
anarchism, Marxism, or Nazism. Today they choose extreme Islamism.
Radical transnational Islam, divorced from its countries of origin,
appeals to some jobless youths in depressed parts of Europe and the

FOREIGN AFFAIRS .July/lugust2oo3 [37]

 JessicaStern

United States. As the French scholar Olivier Roy points out, leaders
of radical Islamic groups often come from the middle classes, many of
them having trained in technical fields, but their followers tend be
working-class dropouts.
Focusing on economic and social alienation may help explain
why such a surprising array of groups has proved willing to join
forces with al Qaeda. Some white supremacists and extremist
Christians applaud al Qaeda's rejectionist goals and may eventu-
ally contribute to al Qaeda missions. Already a Swiss neo-Nazi
named Albert Huber has called for his followers to join forces
with Islamists. Indeed, Huber sat on the board of directors of the
Bank al Taqwa, which the U.S. government accuses of being a
major donor to al Qaeda. Meanwhile, Matt Hale, leader of the
white-supremacist World Church of the Creator, has published a
book indicting Jews and Israelis as the real culprits behind the at-
tacks of September i1. These groups, along with Horst Mahler (a
founder of the radical leftist German group the Red Army Faction),
view the September 11 attacks as the first shot in a war against
globalization, a phenomenon that they fear will exterminate na-
tional cultures. Leaderless resisters drawn from the ranks of white
supremacists or other groups are not currently capable of carrying
out massive attacks on their own, but they may be if they join
forces with al Qaeda.

MODERN METHODOLOGY

AL QAEDA HAS lately adopted innovative tactics as well as new al-

liances. Two new approaches are particularly alarming to intelligence
officials: efforts to use surface-to-air missiles to shoot down aircraft
and attempts to acquire chemical, nuclear, or biological weapons.
In November 2002, terrorists launched two shoulder-fired SA-7
missiles at an Israeli passenger jet taking off from Mombasa, Kenya,
with 271 passengers on board. Investigators say that the missiles came
from the same batch as those used in an earlier, also unsuccessful
attack on a U.S. military jet in Saudi Arabia. And intelligence
officials believe that Hezbollah contacts were used to smuggle the
missiles into Kenya from Somalia.

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 The ProteanEnemy
Meanwhile, according to Barton Gellman of The WashingtonPost,
documents seized in Pakistan in March 2003 reveal that al Qaeda has
acquired the necessary materials for producing botulinum and salmonella
toxins and the chemical agent cyanide-and is close to developing a
workable plan for producing anthrax, a far more lethal agent. Even
more worrisome is the possibility that al Qaeda, perhaps working
with Hezbollah or other terrorist groups, will recruit scientists with
access to sophisticated nuclear or biological weapons programs, possibly,
but not necessarily, ones that are state-run.
To fight such dangerous tactics, Western governments will also
need to adapt. In addition to military, intelligence, and law enforcement
responses, Washington should start thinking about how U.S. policies
are perceived by potential recruits to terrorist organizations. The
United States too often ignores the unintended consequences of its
actions, disregarding, for example, the negative message sent by
Washington's ongoing neglect of Afghanistan and of the chaos in
postwar Iraq. If the United States allows Iraq to become another
failed state, groups both inside and outside the country that support
al Qaeda's goals will benefit.
Terrorists, after all, depend on the broader population for support,
and the right U.S. policies could do much to diminish the appeal of
rejectionist groups. It does not make sense in such an atmosphere to
keep U.S. markets closed to Pakistani textiles or to insist on protecting
intellectual property with regard to drugs that needy populations in
developing countries cannot hope to afford.
In countries where extremist religious schools promote terrorism,
Washington should help develop alternative schools rather than attempt
to persuade the local government to shut down radical madrasahs.
In Pakistan, many children end up at extremist schools because
their parents cannot afford the alternatives; better funding for secular
education could therefore make a positive difference.
The appeal of radical Islam to alienated youth living in the West
is perhaps an even more difficult problem to address. Uneasiness
with liberal values, discomfort with uncertain identities, and re-
sentment of the privileged are perennial problems in modern societies.
What is new today is that radical leaders are using the tools of
globalization to construct new, transnational identities based on

FOREIGN AFFAIRS •July/August 2003 [39]

 Jessica Stern
death cults, turning grievances and alienation into powerful
weapons. To fight these tactics will require getting the input not
just of moderate Muslims, but of radical Islamist revivalists who
oppose violence.
To prevent terrorists from acquiring new weapons, meanwhile,
Western governments must make it harder for radicals to get their
hands on them. Especially important is the need to continue up-
grading security at vulnerable nuclear sites, many of which, in Russia
and other former Soviet states, are still vulnerable to theft. The
global system of disease monitoring-a system sorely tested during
the SARS epidemic-should also be upgraded, since biological attacks
may be difficult to distinguish from natural outbreaks. Only by
matching the radical innovation shown by professional terrorists
such as al Qaeda-and by showing a similar willingness to adapt
and adopt new methods and new ways of thinking-can the United
States and its allies make themselves safe from the ongoing threat
of terrorist attack.0

[40] FOREIGN AFFAIRS - Volume82 No. 4

 The New American
Way of War
Max Boot

WAGING MODERN WAR

"THE AMERICAN WAY OF WAR." That phrase-popularized by

the military historian Russell Weigley in his 1973 book-has come
to refer to a grinding strategy of attrition: the strategy employed
by Ulysses S. Grant to destroy Robert E. Lee's army in 1864-65, by
John J. Pershing to wear down the German army in 1918, and by the
U.S. Army Air Force to pulverize all the major cities of Germany and
Japan in 1944-45. In this view, the Civil War, World War I, and World
War II were won not by tactical or strategic brilliance but by the sheer
weight of numbers-the awesome destructive power that only a fully
mobilized and highly industrialized democracy can bring to bear. In
all these conflicts, U.S. armies composed of citizen-soldiers suffered
and inflicted massive casualties.
Much the same methods characterized the conflicts in Korea and
Vietnam, though with decreasing levels of success; the former being
a costly draw, the latter a bloody failure. The first Gulf War was much
more successful, but in many ways, it still fit the traditional, fire-
power-intensive mode: more than five weeks of relentless bombing
was followed by a massive armored onslaught. Although the "left
hook" that swept around Iraqi forces entrenched in Kuwait showed
some operational flair, it was hardly a gamble-the eight-division
allied force was so heavy that it simply crushed everything in its path.

MAX BOOT is Olin Senior Fellow in National Security Studies at the

Council on Foreign Relations and the author of The Savage Wars ofPeace:
Small Wars and the Rise ofAmerican Power.

[41]
 Max Boot
As with all generalizations, this view of the American way of war
has always needed some qualification. There have always been some
generals, such as Stonewall Jackson and George S. Patton, who fa-
vored dazzling maneuvers over costly frontal assaults. And there have
been many "small wars" in America's past that were carried out in a far
more modest manner. But as a description of the main U.S. approach
to major conflicts, the American way of war has stood the test of time.
Its time is now past, however. Spurred by dramatic advances in
information technology, the U.S. military has adopted a new style
of warfare that eschews the bloody slogging matches of old. It seeks
a quick victory with minimal casualties on both sides. Its hallmarks
are speed, maneuver, flexibility, and surprise. It is heavily reliant
upon precision firepower, special forces, and psychological operations.
And it strives to integrate naval, air, and land power into a seamless
whole. This approach was put powerfully on display in the recent
invasion of Iraq, and its implications for the future of American war
fighting are profound.

TRANSFORMERS

THIS NEW American way of war has been a long time in the making;
its roots trace back to defense reforms of the 198os. In recent years its
most high-profile advocate has been Defense Secretary Donald
Rumsfeld. Around the Pentagon, his mantra of "transformation" has
become a bit of a joke-a buzzword that is applied to just about any
weapons system or program championed by any of the services. (The
army claimed that its canceled Crusader heavy howitzer was, you
guessed it, "transformational.") But when Rumsfeld and his senior aides,
such as Stephen Cambone and Dov Zakheim, talk about "transfor-
mation," they are referring to much more than a change of weapons
systems. They are referring to a change of mindset that will allow the
military to harness the technological advances of the information age
to gain a qualitative advantage over any potential foe.
The transformation of the American military was showcased in
Afghanistan in 2001. Instead of blundering into terrain that had
swallowed up past invading armies, the United States chose to fight
with a handful of special operations forces and massive amounts of

[42] FOREIGN AFFAIRS- Volume82No. 4

precision-guided munitions. This skillful ap-
plication of American power allowed the
Northern Alliance, which had been stale-
mated for years, to topple the Taliban in
just two months. Although generally
successful, the Afghan war also showed
the limitations of not using enough
ground forces. Osama bin Laden and
other top terrorists managed to escape
during the battle of Tora Bora, and even

The Numbers of War

First Gulf War, 1991

Troops deployed Casualties Duration Cost

U.S. 1 500,000 (est.) 300" 4 S80 billion

Sdays (est.)
Alies 160,000 65t d

Second Gulf War,2003

U.S. 129-
and 250, 000 (est.) 26 $20 billion
U.K. 31 daystt

*To hostile fire. t At least. 84 of these to hostile fire.

t+ 21 days to the fall of Baghdad.

after a new government was established in

Kabul, warlords were left in control of much of
the countryside.
The second Gulf War has proved to be more impressive than
the Afghan war because it was a truly combined-arms operation.
An examination of the conflict shows the potential of the new
American way of war and offers some lessons for the future.

FOREIGN AFFAIRS .July/August2003 [43]

 Max Boot
Coalition forces in the second Gulf War were less than half the
size of those deployed in the first one. Yet they achieved a much more
ambitious goal-occupying all of Iraq, rather than just kicking the
Iraqi army out of Kuwait-in almost half the time, with one-third
the casualties, and at one-fourth the cost of the first war. Many will
argue, in retrospect, that Saddam Hussein's forces were not all that
formidable to begin with, and there is no doubt a great deal of truth
in this. But they were capable enough when they fought the Iranian
army to a draw in the 198os and put down
The U.S. victory in Iraq Kurdish and Shi'ite insurgencies in the
199os. And, on paper at least, the Baathist
makes the German regime's military enjoyed a big numerical
blitzkrieg look advantage over U.S. and British forces. Al-
though the Iraqi army was much degraded
positively incompetent from its pre-1991 heyday, it still deployed
by comparison. more than 450,000 troops, including para-
military units, the Republican Guard, and
the Special Republican Guard, whose loyalty had been repeatedly
demonstrated. Traditionally, war colleges have taught that to be sure
of success, an attacking force must have a 3 to 1 advantage-a ratio
that goes up to 6 to 1 in difficult terrain such as urban areas. Far from
having a 3 to i advantage in Iraq, coalition ground forces (which never
numbered more than ioo,ooo) faced a 3 to 1 or 4 to 1 disadvantage.
That the United States and its allies won anyway-and won so
quickly-must rank as one of the signal achievements in military
history. Previously, the gold standard of operational excellence had
been the German blitzkrieg through the Low Countries and France
in 1940. The Germans managed to conquer France, the Netherlands,
and Belgium in just 44 days, at a cost of "only" 27,ooo dead soldiers.
The United States and Britain took just 26 days to conquer Iraq (a
country 8o percent of the size of France), at a cost of 161 dead, mak-
ing fabled generals such as Erwin Rommel and Heinz Guderian
seem positively incompetent by comparison.
This spectacular success was not achieved easily, however. It
required overcoming the traditional mentality of some active and
retired officers who sniped relentlessly at Rumsfeld right up until
the giant statue of Saddam fell in Baghdad's Firdos Square on

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 The New American Way of War
April 9, 2003. Winning the war in Iraq first required rooting out
the old American way of war from its Washington redoubts.

FIRST STRIKE

THE BATTLE over how to take Baghdad reached full intensity in

2002. General Tommy Franks, a stolid artillery officer who ran the
Central Command, initially proposed sending a large force, akin to
that used in Desert Storm, and paving their way with a two-week air
campaign. Secretary Rumsfeld and his advisers wanted to build on
the lessons of Afghanistan by sending a much smaller force and starting
air and ground operations simultaneously. In typical Washington
fashion, a compromise was reached, calling for about 300,000 personnel.
But by the time the war started on March 19, 2003, the force deployed
was closer to Rumsfeld's "transformational" model than to the traditional
heavy force advocated by army planners. Fewer than ioo,ooo allied
ground troops entered Iraq. The bulk of the combat punch was provided
by the Third Infantry Division (ID), which had about 20o MiA1 Abrams
tanks and 250 M2 Bradley Fighting Vehicles, and the First Marine
Expeditionary Force (MEF), which had about 12o Abrams tanks. These
forces were supplemented by the British First Armored Division, the
uth Aviation Regiment, the lost Airborne Division, and a brigade of
the 82nd Airborne Division.
The invasion force was lighter than expected because Turkey
refused to let the Fourth Infantry Division land on its soil. Franks had
insisted on keeping the Fourth ID's equipment anchored off Turkey
until the last minute, in part because there simply was not enough
dock space to unload in Kuwait. The division was not redirected to
Kuwait until after the war had started, and it never deployed in time
for the fighting. It is not clear why Franks did not wait for the Fourth
ID to start the war. One possible explanation is that he wanted to use
the division as a feint, figuring that the Iraqis would not expect the
invasion to start until it had landed. Another likely explanation is that
he did not want to delay the start of the war until mid-April, when
the weather in the Persian Gulf region heats up and makes operations
in chemical warfare suits difficult. Whatever the case, Franks' will-
ingness to start the war without overwhelming ground forces showed

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 Max Boot
that he was far bolder than his more flamboyant predecessor, "Stormin'
Norman" Schwarzkopf.
The improvisation extended to the start of the war. President
Bush's 48-hour ultimatum to Saddam expired on March 19. The war
plan called for giving special operations forces a couple of days to
work quietly in Iraq before bombing started on March 21. A ground
invasion was to come nine hours later. That schedule was thrown out
the window when the ClA discovered the location where Saddam and
his sons were believed to be meeting on March 19. After several hours
of deliberation at the White House, President Bush made the decision
to launch an air strike in an attempt to decapitate the Baathist regime.
Saddam's alleged meeting place was struck by 4o Tomahawk cruise
missiles and several satellite-guided bombs dropped by two F-117A
Stealth fighters. The strike failed to kill Saddam, perhaps because the
deliberations dragged on so long, but it was a gamble well worth taking.
With the first air strikes moved up, General Franks made a hurried
decision on Thursday, March 20, to move up the ground assault as well.
He had received intelligence that some oil wells in the giant Rumaila
fields were on fire. Determined to prevent the oil field destruction that
had occurred in the last Gulf War, he ordered the First MEF to advance
into Iraq ahead of schedule-and without a massive air bombardment
beforehand. There had been some "shaping" of the battlefield prior to
the start of ground operations by allied aircraft that were ostensibly
enforcing "no-fly" zones, but ordering the ground assault on March 20
was a gutsy call that no doubt caught the Iraqis by surprise.
Even before U.S. and British marines successfully occupied the
Rumaila oil fields, allied commandos-not only American but also
British, Polish, and Australian units-had gone to work. They had
been operating in Iraq for several months, focusing especially on the
search for weapons of mass destruction and missile launcher sites in
western Iraq. It was from there that Saddam had fired Scuds against
Israel, Kuwait, and Saudi Arabia during the first Gulf War. The com-
mandos' stealthy assault precluded similar dangers this time around.
Fifteen hours after the start of the ground war, the coalition began
its full-scale air assault on Baghdad. Despite all the hype about "shock
and awe," the initial bombardment was very restrained. In addition
to hitting the usual targets-air defenses and command-and-control

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 The New American Way of War
facilities-allied commanders seemed to take special glee in bombing
Baath Party headquarters and Saddam's palaces. They had apparently
hoped that the regime would collapse at the first whiff of gunpowder,
leaving its infrastructure intact. That overly optimistic expectation
was dashed when allied ground forces ran into stiffer-than-expected
resistance in southern Iraq.

FROM BASRA TO BAGHDAD

COALITION COMMANDERS had anticipated that Basra, a heavily

Shi'ite city that had rebelled against Saddam in 1991, would rise up
this time as well. Yet no such rebellion was forthcoming, in part
because Basra's citizens did not want to risk being slaughtered by
Baathist security forces, as they had been in 1991. Following the first
Gulf War, Saddam had formed the paramilitary Fedayeen to stiffen
resistance and prevent any further revolts. Their cruel efficiency
ensured that there were no massive uprisings or defections from the
Iraqi armed forces in the early days of the second Gulf War.
The coalition's response to this setback was to loosely cordon off
Basra. The British First Armored Division would spend the next
three weeks patiently chipping away at Iraqi defenses, all the while
being careful to avoid the kind of street fighting that Saddam clearly
hoped to trigger. Leaving the British behind, the rest of the coalition
forces raced north toward Baghdad along two parallel axes. The
Third ID took to the largely empty deserts west of the Euphrates
River. The First MEF advanced to its right, along the heavily populated
east bank of the Euphrates. The initial speed of the advance was
breathtaking, with the Third ID sprinting some 200 miles in three
days-far faster than its predecessor, the 24 th ID, had traveled during
the first Gulf War.
This bold dash toward the enemy capital left the U.S. lines of
communication temporarily exposed. In normal army doctrine, an
armored cavalry regiment would have been deployed to secure the
flanks, but Franks relied on airpower alone. The price of this gamble
was revealed when the Fedayeen and other Iraqi security forces began
attacking supply convoys. Things quickly turned ugly. On Sunday,
March 23, a convoy of the 5o7th Maintenance Company was ambushed

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 Max Boot
in Nasiriyah, and 12 soldiers were captured or killed. The next day,
more than 30 AH-64D Apache Longbows tried to attack Republican
Guard positions south of Karbala-only to run into a wall of small-arms
fire that downed one helicopter and damaged the rest. This was a
humiliating setback for the most advanced attack helicopters in the
world. To top things off, on March 24, much of southern Iraq was
enveloped in a blinding sandstorm. Helicopters could not fly and supply
convoys had to be delayed, leaving some forward units perilously short
on food and other necessities.
Senior commanders made a decision to slow down temporarily the
advance to allow their forces to get rested, regrouped, and resupplied-
and to secure rear areas. The 1l0st Airborne, which initially had been
slated to lead the charge into Baghdad, was instead used to secure
Najaf, Hillah, Karbala, and other towns along the route. The marines
undertook a week of hard street fighting to clear out Nasiriyah. One
brigade of the Third ID-a third of its strength-was sent back to
secure lines of communication.
On March 27, Lieutenant General William Wallace, commander of
the army's V Corps, which was in charge of all army units in Iraq, said in
an interview that "the enemy we're fighting is a bit different than the one
we war-gamed against." Unfortunately, when The Washington Post
reported his comment the next morning, it dropped "a bit," giving the
impression that U.S. forces had suffered a serious setback (The New York
Times rendered the quote accurately in one story but flubbed it in
another.) A media frenzy ensued, with numerous stories suggesting that
the offensive was bogged down and that the war could last months and
result in thousands of casualties. Leading the charge was a platoon of
retired generals who suggested that Rumsfeld had placed the invasion in
jeopardy by not sending enough troops.
This criticism vastly exaggerated the difficulties encountered by
U.S. forces. The Fedayeen turned out to be more of a nuisance than
a serious military menace. Many of their attacks were reckless to the
point of being suicidal. They would charge MiAl Abrams tanks and
M2 Bradley Fighting Vehicles in pickup trucks mounted with machine
guns. Sometimes the tanks would not even bother to open fire; they
would simply roll over the attacking vehicles. The "dead-enders" died
by the thousands; few U.S. troops were killed.

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 The New American Way of War
Although this fighting was going on in fidl view of the world's press,
an even more critical aspect of the campaign was taking place outside the
glare of television cameras: navy, air force, and marine aircraft, along with
army helicopters, artillery and rockets, were pounding Republican Guard
divisions dug in south of Baghdad. Some of their fire was directed by
aerial surveillance, some by special operations forces on the ground. The
assault took an especially devastating toll on the Iraqis during the heavy
sandstorm, when they mistakenly believed they could move around freely
and instead became easy targets for precision-guided munitions.
On March 29, the most important meeting of the war was convened
at Camp David. In a teleconference, the administration's "war cabinet"
considered whether to stop the advance and wait for reinforcements, as
many armchair strategists were suggesting. President Bush wisely
rejected this advice and directed that the focus be kept on Baghdad.
Senior ground commanders wanted to wait to advance until the Re-
publican Guard divisions south of Baghdad were judged to be at least half
strength. It took only a few days for intelligence officers to report that the
Medina Division was just 20 percent effective, and the other units were
not far behind. On the morning of April 1, the army and the marines
began their final dash for Baghdad. U.S. soldiers were surprised to find
that the supposedly formidable Republican Guard put up almost no re-
sistance. The guard divisions had all but ceased to exist as coherent fight-
ing forces. Those not killed simply threw off their uniforms and ran away.
The only remaining question was how much of a fight the coalition
would face in Baghdad. Right up until the last moment, a chorus of
gloomy commentators warned that the United States risked another
Stalingrad. That was apparently Saddam's expectation too. U.S. intel-
ligence believes he distributed copies of the movie Black Hawk Down
to give his commanders hints on what to do.
U.S. forces approached the capital with caution, but they became pro-
gressively bolder as their probing attacks revealed the weakness of Iraqi
defenses. On April 3, the Third ID's Seventh Cavalry Regiment seized
Saddam International Airport, on the outskirts of the capital. Two days
later, an armored column ofthe Third ID's Second Brigade knifed into the
center of the city, drawing heavy fire and killing perhaps a thousnd enemy
fighters while losing only one soldier. A heavy firefight on April 7 allowed
the Second Brigade to secure three key highway junctions leading into

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 Max Boot
Baghdad, which U.S. troops called Objectives Larry, Curly, and Moe.
Seeing that the defense of Baghdad was crumbling, U.S. commanders
ordered a final push, with the Third ID charging in from the west and the
First Marine Division from the east. On April 9, the giant statue of
Saddam fell in the heart of Baghdad, signaling the regime's demise.
Mopping up operations in the north took a few more days. A con-
ventional northern front had never really developed. The U.S. presence
was limited to a couple of thousand light infantrymen from the 173rd
Airborne Brigade and a few hundred U.S. special forces working with
the Kurdish Pesh Merga. In a reprise of Afghanistan, this force, backed
up by substantial airpower, routed the Ansar al Islam terrorist group out
of northern Iraq and took the key northern cities of Mosul and Kirkuk.
The occupation of the entire country was completed on April 14, when
marines rolled into Saddam's hometown ofTikrit. The hard task of"na-
tion building" lay ahead, but the bulk of the military campaign was over.

HOW THE WAR WAS WON

THIS THREE-WEEK CAMPAIGN will be studied and debated by his-

torians and military analysts for years to come, but even at this early
stage, it is possible to point to a number of factors that led to a relatively
easy U.S. victory. The most obvious point, of course, is the ineptitude of
the Iraqi defense. Saddam had to fight with a force degraded by years
of sanctions; his army was ill trained and ill equipped. Although they had
a few new gadgets, such as Russian-made Kornet antitank missiles and
devices that jammed Global Positioning System (GPS) satellite signals,
on the whole their equipment was woefilly out of date. There was little
chance the Iraqi forces could stand toe-to-toe with the mighty U.S. war
machine-and Saddam knew it. His strategy was designed to make the
best of a bad hand. The Iraqis planned to fall back into the cities and
utilize guerrilla warfare to drive up American and civilian casualties to
the point where, they hoped, domestic and international pressure would
force Washington to come to the bargaining table. This was a shrewd
plan similar to that used by the Chechens to bog down Russian invaders
on two occasions. But in Iraq it was undone by poor execution.
Time after time, Iraqi forces missed opportunities to make life
more difficult for the invading army. They did not blow up dams and

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 The New American Way of War
bridges, utilize chemical weapons, or barricade Baghdad. Why they
did none of this remains a mystery. It is possible that Iraqi troops
simply did not want to fight very hard for Saddam. But although Iraqi
bumbling and low morale provide part of the answer, American prowess
must not be overlooked.
Coalition forces, led by the United States, severely disrupted Iraqi
command-and-control systems and moved much faster than Iraqi forces
could handle. In military parlance, the United States got inside the Iraqis'
"decision cycle." This task was facilitated by the fact that Saddam ran a
highly centralized regime. Commanders were afraid to relay negative
news to Baghdad for fear of incurring the wrath of Saddam or his homi-
cidal sons. And once they were cut off from the center, commanders in
the field were afraid to exercise their own initiative for the same reason.
Saddam had actually set up systems to ensure that his army commanders
could not coordinate closely, for fear that they would plot against him.
Thus the Iraqi armed forces were organized on opposite principles from
those of the United States, namely decentralization and joint operations.
It was the difference in mindsets, as much as anything else, that allowed
U.S. forces always to stay several steps ahead of their adversaries.
Whereas the Iraqi military was built on the old Soviet model,
the U.S. armed forces specialize in what the Pentagon calls "net-
work-centric warfare." This approach means taking advantage of
information technology to radically enhance the effectiveness of
"c4isR"-command, control, communications, computers, intel-
ligence, surveillance, and reconnaissance.
The U.S. military operates a bewildering array of sensors to cut
through the fog of war. Just consider the lineup of unmanned aerial
vehicles (uAvs) that operated over Iraq, none of which was available in
1991. At the highest altitude, around 6o,ooo feet, a RQ-4A Global Hawk
provided U.S. commanders with a kaleidoscopic view of the Iraqi battle-
field. Lower down, at 15,ooo-25,ooo feet, flew RQ-1B Predators, some of
them armed with Hellfire antitank missiles. (Both Global Hawks and
Predators can stay on station for more than 24 hours at a stretch.) Beneath
them, buzzing just above the battlefield, were smaller, tactical UAVs, such
as the army's Hunter and the marines' Dragon Eye, which resembles a
model airplane. Then there were all the manned surveillance airplanes:
the high-flying u-2, with its synthetic aperture radar; the E-8 Joint

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 Max Boot
Surveillance and Target Attack Radar System 0STARS), which uses
ground-mapping radar to monitor the battlefield; the E-3 AWACS, which
coordinates air operations; and the RC-135 Rivet Joint, which intercepts
enemy communications. All the information they provide is comple-
mented by reports from ground units, which are equipped with GPS,
satellite telephones, and wireless Internet devices that allow them to feed
their coordinates to headquarters constantly.
In the first Gulf War, commanders took reports by radio and scribbled
down troop positions with grease pencils on a map. Now, troop deploy-
ments are displayed on digital screens, with friendly forces shown in blue
and the enemy in red. In the most advanced U.S. division, the Fourth
ID, this wireless Internet system, known as Force xxi Battle Command,
Brigade and Below, is installed on nearly every vehicle. But even units
such as the Third ID, which have not yet received Force xxi, are far more
networked than their predecessors were a decade ago. This advancement
cuts down, even if it does not eliminate, "friendly fire" accidents and
gives U.S. commanders much better knowledge of the battlefield than
their enemies possess. To give an indication of how blinded the Iraqis
were, at one point an Iraqi major general tried to escape Baghdad-and
drove straight into a marine checkpoint that he did not know was there.
He was killed in a hail of gunfire.
Once enemy forces are located, either through eyes in the sky or boots
on the ground, they can be hit faster than ever before. Coordination
among the services has improved even since Afghanistan, when the army
and the air force traded recriminations about failures of close air support
during Operation Anaconda in March 2002. And it is vastly better than
it was during the first Gulf War, when three days could elapse between
identifying and hitting a target. Then, air tasking orders had to be flown
to aircraft carriers. Now those interactions are performed via high-speed
satellite and radio relays. In one notable instance, only 45 minutes elapsed
on April 7 between the time an intelligence asset detected Saddam meet-
ing with top commanders in Baghdad and the time a B-1B bomber
dropped four 2,ooo-pound satellite-guided bombs on the restaurant.
The precision of U.S. airpower is by now well known and almost
taken'for granted, but it continues to improve. In the first Gulf War
only 9 percent of munitions were precision-guided. In the most
recent conflict, that figure soared to 70 percent. Much of this increase

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 The New American Way of War
was due to the deployment in the late 199os of Joint Direct Attack
Munitions (JDAMS), a cheap ($2o,ooo) kit that can turn dumb bombs
into satellite-guided smart bombs. Aside from their price tag, JDAMS
enjoy other important advantages over the laser-guided smart bombs
used in the first Gulf War: They can operate in all weather conditions
and at all altitudes. The use OfJDAMs has made it possible to turn even
high-flying bombers such as the B-i, B-2, and B-52 into close air support
platforms. Previously, they would have been judged too imprecise for
use close to friendly troops or in urban areas. No longer.
Paradoxically, increasing precision makes U.S. firepower both more
effective and less destructive. Because U.S. bombs can hit within a meter
or two of their aim point, they can carry a lighter load of explosives. U.S.
war planners tried hard to minimize collateral damage by employing the
smallest possible munitions to get the job done, on occasion going so far
as to drop bombs filled with nothing but concrete. Saddam's regime
sought to take advantage of U.S. sensitivities by locating military instal-
lations among schools, hospitals, and mosques. But even with such dire
provocations, U.S. forces still took great care to spare civilians. The U.S.
air campaign never deliberately targeted water and power facilities in
Baghdad, as had happened during the first Gulf War. (Electrical power
failed anyway on April 4 for reasons that remain mysterious.) Ground
forces also did their best to avoid killing civilians, even though Saddam's
thugs used human shields in blatant violation of the laws of war. Even
though U.S. Army doctrine favors nighttime operations, the lOst Air-
borne Division operated mainly during the daytime-because, as one of
its brigade commanders put it, "You can much more easily discern civil-
ians during the daytime." No one knows how many civilians were killed
in the second Gulf War, but even Saddam's regime, which had an obvi-
ous interest in exaggerating the figures, claimed the total was no more
than 1,254 as of April 3--a remarkably low number considering the sav-
agery of the fighting.
A large part of the reason why U.S. forces wanted to limit civilian
casualties was that they were fighting a battle for hearts and minds-
primarily in Iraq but also in the rest of the world. As part of this
campaign, a massive propaganda blitz preceded the start of ground
operations. U.S. forces used leaflets, radio broadcasts, faxes, e-mails,
and other means to urge Iraqi troops not to fight. This campaign did

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 Max Boot
not prevent all resistance, obviously, but it contributed to the decision
of most regular army units to stay out of the fray.
Saddam waged his own psychological operations campaign. In an
attempt to rally international public opinion against the war and to
keep his own people fighting, his TV station broadcast nonstop
pictures of U.S. prisoners of war and of Iraqi civilians supposedly
killed by coalition air strikes. U.S. forces were surprisingly slow to
target Iraqi TV transmitters, and even when a Predator took out a satel-
lite dish with its Hellfire missile on March 25, the Baathists managed
to keep broadcasting for a time with redundant systems. Gradually,
however, Iraqi propaganda became too far divorced from reality to be
effective. Information Minister Muhammad Saeed al-Sahhaf became
a global joke as he kept proclaiming that coalition troops were nowhere
near Baghdad-even as they were just a few miles away.
The United States waged a much smarter information war, the
centerpiece of which was the program of "embedding" reporters
among coalition units. This move succeeded in bridging the chasm
of distrust between the media and the military. Indeed, before long
reporters were referring to U.S. forces as "we" rather than "they"
("Lester, we're moving out now..."). The embedded reporters presented
a convincing picture of the professionalism, heroism, and restraint of
U.S. and British soldiers. This may not have won over the Arab world,
where the media focused almost exclusively on alleged American atroc-
ities, but it did help to sway many Westerners who had been skeptical
of the war. As the war's success became evident, support surged in
public opinion polls across Europe, America, Australia, and Canada.
Psychological operations are the responsibility of the Special
Operations Command. The commandos also handled a number of
other missions, from securing western Iraq, to leading Kurdish resis-
tance in the north, to hunting down leadership targets in Baghdad,
contributing greatly to the final outcome. In the first Gulf War,
Schwarzkopf was wary of the "snake eaters" and used them sparingly.
In the second Gulf War, Franks made better use of them, and they
delivered outstanding results as "force multipliers."
Although special operations forces are the best of the best, U.S.
troops as a whole displayed remarkable skills in Iraq. They were able
to fight effectively for long stretches at a time, react quickly to events,

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 The New American Way of War
and avoid most of the traps the Iraqis had laid for them. The little-
heralded logisticians deserve special praise for keeping so many
fast-moving troops so well supplied.
Rumsfeld and Franks tried to sell the story that everything went
"according to plan." It did not, but the true genius of U.S. forces was
their ability to improvise on the spot rather than stick to a rigid blueprint.
The troops' fighting edge, honed by realistic training programs, and
nonstop overseas operations since the end of the Cold War, allowed
coalition forces to fully leverage the benefits of superior technology.

FIGHTING THE NEXT WAR

WHAT LESSONS does the second Gulf War offer about the future
shape of the U.S. military? Although the increased potency of air-
power was clearly on display-it took six weeks to destroy the Re-
publican Guard in 1991 and just a week this time around-the air
force still has not realized the dreams of Giulio Douhet, Billy
Mitchell, and other early advocates of airpower, who claimed that
aerial bombardment could win wars by itself.NATO tried that approach
in Kosovo in 1999, and it was not stunningly successful: II weeks of
bombing left most of the Serbian army intact. Slobodan Milosevic
eventually sued for peace, in large part because he was abandoned by
Russia and feared that he might face a ground invasion, but it is
doubtful that he would have capitulated if the allied goal had been to
liberate the entire country rather than just one province. Four days of
air raids against Iraq in December 1988-Operation Desert Fox-
achieved even less. Nor did Saddam's regime crumble during the first
few days of the more recent bombing of Baghdad; he was neither
shocked nor awed by the initial onslaught. The problem is that air-
power's edge can be blunted by dispersing and concealing defensive
forces; it takes ground forces to root out hidden troops. Airpower by
itself is also incapable of preventing Scud launchings or oil-field
destruction, both of which were precluded in the second Gulf War
through early ground action by conventional and commando forces.
But if the new American way of war cannot obviate the need for
"ground pounders," it can make them more lethal, thereby reducing
the need for numbers. As the conflict in Iraq repeatedly demonstrated,

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 Max Boot
a good deal of the firepower that once could be delivered only by tanks
and howitzers can now come from the air.
This could leave the future of armored forces in some doubt. It
should not. The heavy units proved their worth in Iraq. There was no
replay of Black Hawk Down largely because U.S. forces fighting in Iraqi
cities had armor, and those who fought in Mogadishu in 1993 did not.
Having these armored beasts at their disposal allowed U.S. forces in
Iraq to advance at a fast clip, with great confidence that they could
handle anything thrown their way. Only three Abrams tanks were
disabled, and all their crew members survived.
The problem with armored forces is that they are hard to deploy and
hard to supply. (The Abrams tank weighs 70 tons and gets half a mile
per gallon of fuel.) The experience of the Fourth ID, which never got into
the fight, shows just how formidable these challenges can be. Army
old-timers who argued for more heavy forces ignored the difficulties of
funneling them through Kuwait's single port and keeping them supplied
over hundreds of miles. To address this problem, the army is equipping
six brigades with the Stryker, a wheeled fighting vehicle that is much
lighter, and hence more easily deployable, than an Abrams tank. But
the lightness comes with a price: the Stryker's armor cannot stop any-
thing heavier than a .5o caliber bullet. The Stryker should be fine for
peacekeeping, but for high-intensity combat the army needs to hold on
to its armored forces, though possibly not as many as it currently deploys.
It may make sense to transform some heavy armored units into
lighter, more deployable formations. It makes no sense to reduce the
size of the army as whole, an idea that Rumsfeld once toyed with.
The army has already shrunk from 18 active-duty divisions in 199o
to io today-a force that is not adequate for all its responsibilities,
which include deployments in Afghanistan, Bosnia, Kosovo, Sinai,
South Korea, and now Iraq. The army is overstretched and having
to lean more heavily on the reserves and the National Guard for vital
functions such as policing and civil affairs. These part-time soldiers
are not happy about becoming full-timers. The marines should pick
up some of the slack by shouldering occupation duties in Iraq and
elsewhere. But the active-duty army still needs to be increased in
size. Airpower, no matter how awesome, cannot police newly liber-
ated countries-or build democratic governments.

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 The New American Way of War
The army needs to tackle the task of "imperial" policing-not a
popular duty, but one that is as vital to safeguarding U.S. interests in the
long run as are the more conventional war-fighting skills on display dur-
ing the second Gulf War. The ArmyWar College's decision to shut down
its Peacekeeping Institute is not a good sign; it means that the army still
wants to avoid focusing on noncombat missions. The army brass should
realize that battlefield victories in places like Afghanistan and Iraq can
easily be squandered if they do not do enough to win the peace.
The air force has taken a starring role in recent years primarily through
bombing missions in support of ground forces. This has been a bit of
culture shock for a service that has traditionally favored either air-to-air
engagements or "strategic" bombing. "Tactical" bombing is derided as
"tank plinking." This is an old story going all the way back to World War
II, when the only way that Eisenhower could be sure of getting adequate
air support for D-Day was to gain operational control of the tactical air
forces; left to their own devices, air force generals would have allocated
all their aircraft for bombing German cities. The air force has done a great
deal to overcome this mindset in recent years, but traces of it still linger.
The air force has only 6o B-lB bombers (and only 36 of them are
combat-ready) and 21 B-2 bombers (16 combat-ready), forcing it to
continue relying on 76 aging B-52HS (44 combat-ready) and on short-
range, low-capacity fighter/bombers such as the F-15 and the F-16. The
last B-52 was built in 1962, and they are scheduled to stay in service past
2040. Yet the air force has no immediate plans to acquire more bombers,
and it is anxious to retire the slow-flying A-10 Warthog, which is designed
expressly for ground support and which proved its worth again in Iraq.
Its big acquisitions projects are the F/A-22 Raptor and, in conjunction with
the navy and the marines, the F-35 Joint Strike Fighter-both short-range
aircraft with limited bomb capacity, which makes them dependent on
forward bases that may not always be available. Building one new fighter
makes sense, but two seems excessive, given that in Iraq, as in just about
every conflict since Vietnam, the air force's mission was ground attack.
Congress should repeal the absurd law that prevents the army, with
some minor exceptions, from fielding any fixed-wing aviation of its own.
If the air force does not want the A-10, let the army take it over to sup-
plement its helicopters, the vulnerability of which to ground fire and
plain old mechanical malfunctions was once again demonstrated in Iraq.

FOREIGN AFFAIRS .July/August 2oo3 [57]

 Max Boot
Just as the air force is slowly weaning itself from the excitement of air-
to-air engagements, so the navy is learning to live in a world in which
ship-to-ship battles are increasingly rare. Like that of the air force, the
primary function of the navy these days is support ofground operations.
Roughly half the coalition aircraft in the second Gulf War came from
five navy carriers positioned in the Mediterranean and the Persian Gulf.
Yet the navy's most capable ground-attack aircraft, the A-6 Intruder,
which delivered more ordnance during Vietnam than the B-52, was
mothballed after the first Gulf War. The navy is forced to rely on F-14S
and F-18S, which have short ranges and limited bomb capacity. The navy,
too, needs to concentrate more on ground support-a mission that
marine aviators, who also operate off carriers, specialize in.
These are only a few examples of how the military must continue the
transformation process after the second Gulf War. More surveillance
platforms, such as the JSTARS and the Global Hawk, are needed, as well
as more bandwidth to allow all these systems to communicate with one
another. U.S. forces used 30 times more bandwidth in Operation Iraqi
Freedom than in Desert Storm, and the need for speed will only keep
growing. Satisfying this need, and many others, will be expensive. Even
though the defense budget is starting to grow again, it is still inadequate
to address all of the military's deficiencies after the procurement holiday
of the 199os. A transformational military will actually cost more than
the old force, but the result will be worth it, since it will allow the U.S.
military to continue winning wars at a small cost in lives.
Beyond purely technical considerations, there are also important
personnel issues. The services have made great strides in working
together, but they need to do more to make their systems and mindsets
interoperable. The military, which often succumbs to excessive caution
in peacetime, also needs to encourage the spirit of innovation and
audacity on display on the Iraqi battlefield. These are both high
priorities for Rumsfeld, who is pushing an ambitious package of
personnel reforms that is sure to be resisted by the Pentagon bureaucracy.
Transformation is by no means finished-nor will it ever be. It is
an ongoing process. But the victory in Iraq shows that the military
is making impressive progress toward making the American way of
war both more effective and more humane.0

[581 FOREIGN AFFAIRS Volume82No. 4

 Essays

1)/AD
/

Both the neo-Wilsonian and the Jacksonian

strands of the new unilateralism prefer
their alliances a la carte.
U.S. Power and Strategy After Iraq Joseph S. Nye, Jr. 6o

Striking a New Transatlantic Bargain Andrew Moravcsik 74

Blair's Britain After Iraq Steven Philip Kramer 90
A High-Risk Trade Policy BernardK Gordon 1oS
Adjusting to the New Asia Morton Abramowitz and Stephen Bosworth U9
The Future of Energy Policy Timothy E. Wirth,
C. Boyden Gray, andJohnD. Podesta 132

Space Diplomacy DavidBraunschvig,

RichardL. Garwin, andJeremy C. Marwell 156
Not in Oil's Name Leonardo Maugeri 165
 U.S. Power and Strategy
After Iraq
?Iosepb S. Nye, 7r.

THE VIEW FROM THE TOP

THE WORLD is off balance. If anyone doubted the overwhelming

nature of U.S. military power, Iraq settled the issue. With the United
States representing nearly half of the world's military expenditures,
no countervailing coalition can create a traditional military balance
of power. Not since Rome has one nation loomed so large above
the others. Indeed, the word "empire" has come out of the closet.
Respected analysts on both the left and the right are beginning to
refer to "American empire" approvingly as the dominant narrative of
the twenty-first century. And the military victory in Iraq seems only
to have confirmed this new world order.
Americans, however, often misunderstand the nature of their
power and tend to extrapolate the present into the future. A little more
than a decade ago, the conventional wisdom held that the United
States was in decline. In 1992, a presidential candidate won votes by
proclaiming that the Cold War was over and Japan had won. Now
Americans are told that their unipolar moment will last and that
they can do as they will because others have no choice but to follow.
But focusing on the imbalance of military power among states is mis-
leading. Beneath that surface structure, the world changed in profound
ways during the last decades of the twentieth century. September 11,
2001, was like a flash of lightning on a summer evening that displayed

JOSEPH S. NYE, JR., is Dean of Harvard's Kennedy School of Government

and the author of The ParadoxofAmerican Power: Why the World's Only
Superpower Can't Go ItAlone.

[60]
 US. Powerand StrategyAfter Iraq
an altered landscape, leaving U.S. policymakers and analysts still groping
in the dark, still wondering how to understand and respond.

ABOUT-FACE

GEORGE W. BUS H entered office committed to a realist foreign policy

that would focus on great powers such as China and Russia and eschew
nation building in failed states of the less-developed world. China
was to be "a strategic competitor," not the "strategic partner" of Bill
Clinton's era, and the United States was to take a tougher stance with
Russia. But in September 2002, the Bush administration issued a new
national security strategy, declaring that "we are menaced less by
fleets and armies than by catastrophic technologies falling into the
hands of the embittered few." Instead of strategic rivalry, "today,
the world's great powers find ourselves on the same side-united by
common dangers ofterrorist violence and chaos." Not only was Chinese
PresidentJiang Zemin welcomed to Bush's ranch in Crawford, Texas,
but Bush's strategy embraces "the emergence of a strong, peaceful,
and prosperous China." And it commits the United States to in-
creasing its development assistance and efforts to combat HIV/AIDS,
because "weak states, like Afghanistan, can pose as great a danger to
our national interest as strong states." Moreover, these policies will
be "guided by the conviction that no nation can build a safer, better
world alone." How the world turned in one year! And, between the
lines, Iraq came to be viewed as the new strategy's first test, even
though another member of the "axis of evil" was much closer to
developing nuclear weapons.
The rhetoric of the new strategy attracted criticism at home and
abroad. The trumpeting ofAmerican primacy violated Teddy Roosevelt's
advice about speaking softly when you carry a big stick. The United
States will remain number one, but there was no need to rub others'
noses in it. The neo-Wilsonian promises to promote democracy and
freedom struck some traditional realists as dangerously unbounded.
The statements about cooperation and coalitions were not followed
by equal discussion of institutions. And the much-criticized assertion
of a right to preempt could be interpreted either as routine self-defense
or as a dangerous precedent.

FOREIGN AFFAIRS .July/August200 3 [ 61]

 Joseph S. Nye, Jr.
These criticisms notwithstanding, the Bush administration was
correct in its change of focus. The distinguished historian John Lewis
Gaddis has compared the new strategy to the seminal days that
redefined American foreign policy in the 194os. Although that com-
parison may be exaggerated, the new strategy does respond to the
deep trends in world politics that were illuminated by the events of
September 11. Globalization, for instance, has proved itself to be more
than just an economic phenomenon; it has been wearing away at the
natural buffers that distance and two oceans have always provided to
. the United States. September ii thus drama-
The new U.S. national tized how dreadful conditions in poor, weak
countries halfway around the world can have
security strategy was terrible consequences for the United States.
correct in its change The information revolution and techno-
of focus. logical change have elevated the importance
of transnational issues and have empowered
nonstate actors to play a larger role in world
politics. A few decades ago, instantaneous global communications
were out of the financial reach of all but governments or large organ-
izations such as multinational corporations or the Catholic Church.
At the same time, the United States and the Soviet Union were
secretly spending billions of dollars on overhead space photography.
Now inexpensive commercial satellite photos are available to anyone,
and the Internet enabled 1,50o nongovernmental organizations to
inexpensively coordinate the "battle of Seattle" that disrupted the
World Trade Organization's meeting in December 1999.
Most worrying are the effects of these deep trends on terrorism.
Terrorism itself is nothing new, but the "democratization of technology"
over the past decades has been making terrorists more lethal and more
agile, and the trend is likely to continue. In the twentieth century, a
pathological individual-a Hitler or a Stalin-needed the power of
a government to be able to kill millions of people. If twenty-first-century
terrorists get hold of weapons of mass destruction, this devastating
power will for the first time become available to deviant groups and
individuals. Traditional state-centric analysts think that punishing
states that sponsor terrorism can solve the problem. Such punitive
measures might help, but in the end they cannot stop individuals who

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 US. Power and StrategyAfter Iraq
have already gained access to destructive technology. After all, Timothy
McVeigh in the United States and Aum Shinrikyo in Japan were not
sponsored by states. And in 2001, one surprise attack by a transnational
terrorist group killed more Americans than the state of Japan did in
1941. The "privatization of war" is not only a major historical change
in world politics; its potential impact on U.S. cities could drastically
alter the nature of American civilization. This shifting ground is what
the new Bush strategy gets right.

A STRATEGY DIVIDED

WHAT THE BUSH ADMINISTRATION has notyet sorted out is how

to go about implementing its new approach. At first glance, it appears
that the Iraq war settled the issue. But the war can be interpreted as
the last chapter of the twentieth century rather than the first chapter
of the twenty-first. Not only was it unfinished business in the minds of
its planners, but it also rested on more than a decade of unfulfilled UN
Security Council resolutions. A number of close observers-such as
British Ambassador to the UN Sir Jeremy Greenstock-believe that
with a little more patience and diplomacy, the administration could
have obtained another resolution that would have focused on the
sins of Saddam Hussein rather than allowing France and Russia to
turn the problem into one of American power. If that close call had
come out differently, the continuity with the past would be clearer
today. Moreover, the administration is currently faced with another
dangerous dictator who is months rather than years away from having
nuclear weapons and thus fits the criteria of the new strategy even
more closely than Iraq did. North Korea may prove to be the real test
of how to implement the new strategy. Thus far, the Bush adminis-
tration has responded cautiously and in close consultation with U.S.
allies. Deterrence seems to have worked, although in this case it was
North Korea's conventional capacity to wreak havoc on Seoul in the
event of war that deterred U.S. military action.
There is also a larger struggle involved in the debate over how to
implement the new strategy. The administration is deeply divided
between those who want to escape the constraints of the post-1945
institutional framework that the United States helped to build and

FOREIGN AFFAIRS .July/A ugust2003 [ 63]

 Joseph S. Nye, Jr.
those who believe U.S. goals are better achieved by working within
that framework. The neoconservative "Wilsonians of the right" and
the "Jacksonian unilateralists" (to adapt terms coined by historian
Walter Russell Mead) are pitted against the more multilateral and
cautious traditional realists. The tug of war within the administration
was visible both in the strategy document and in the run-up to the
Iraq war. Vice President Dick Cheney and Secretary of Defense
Donald Rumsfeld disparaged the UN as a "false comfort," traditional
realist Republicans such as Brent Scowcroft and James Baker urged a
multilateral approach, and President Bush's September 12, 2002, speech
to the UN represented a temporary victory for the coalition of U.S.
Secretary of State Colin Powell and British Prime Minister Tony
Blair. The failure to obtain a second Security Council resolution and
the success of the war, however, have ensured the ascendancy of the
Jacksonians and the neo-Wilsonians.
Earlier, in 2001, the columnist Charles Krauthammer presaged
their vision when he argued for a "new unilateralism," one in which
the United States refuses to play the role of a "docile international
citizen" and unashamedly pursues its own ends. For most analysts,
unilateralism and multilateralism are simply two ends of a spectrum
of diplomatic tactics; few leaders follow one or the other approach
exclusively. But the new unilateralists go a step further. They believe
that today Washington faces new threats of such dire nature that it
must escape the constraints of the multilateral structures it helped
build after World War II. In their view, the implementation of a new
strategy requires more radical change. As Philip Stephens of the
FinancialTimes put it, they would like to reverse Dean Acheson's
famous title and be "present at the destruction." They deliberately
resisted calling upon NATO after Washington's allies invoked Article 5,
offering collective self-defense in the wake of the September U terrorist
attacks. They sought to minimize the role of the UN in Iraq before
and after the war, and they now talk of a "disaggregation" approach
to Europe rather than traditional support for European union. In
Rumsfeld's words, the issues should determine the coalitions, not
vice versa. Some advocates do not shrink from an explicitly imperial
approach. In the words ofWilliam Kristol, editor of The Weekly Standard,
"if people want to say we are an imperial power, fine."

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 US. Power and StrategyAfter Iraq

ONE-DIMENSIONAL THINKING

ALTHOUGH THE NEW UNILATERALISTS are right that maintaining

U.S. military strength is crucial and that pure multilateralism is im-
possible, they make important mistakes that will ultimately undercut
the implementation of the new security strategy. Their first mistake is
to focus too heavily on military power alone. U.S. military power
is essential to global stability and is a critical part of the response
to terrorism. But the metaphor of war should not blind Americans to
the fact that suppressing terrorism will take years of patient, unspec-
tacular civilian cooperation with other countries in areas such as
intelligence sharing, police work, tracing financial flows, and border
controls. For example, the American military success in Afghanistan
dealt with the easiest part of the problem: toppling an oppressive and
weak government in a poor country. But all the precision bombing
destroyed only a small fraction of al Qaeda's network, which retains
cells in some 6o countries. And bombing cannot resolve the problem
of cells in Hamburg or Detroit. Rather than proving the new unilat-
eralists' point, the partial nature of the success in Afghanistan illustrates
the continuing need for cooperation. The best response to transnational
terrorist networks is networks of cooperating government agencies.
Power is the ability to obtain the outcomes one wants, and the
changes sketched out above have made its distribution more complex
than first meets the eye. The agenda of world politics has become like
a three-dimensional chess game in which one can win only by playing
vertically as well as horizontally. On the top board of classical interstate
military issues, the United States is likely to remain the only super-
power for years to come, and it makes sense to speak in traditional
terms of unipolarity or hegemony. However, on the middle board of
interstate economic issues, the distribution of power is already multi-
polar. The United States cannot obtain the outcomes it wants on
trade, antitrust, or financial regulation issues without the agreement
of the European Union (EU), Japan, and others. It makes little sense
to call this distribution "American hegemony." And on the bottom
board of transnational issues, power is widely distributed and chaotically
organized among state and nonstate actors. It makes no sense at all to
call this a "unipolar world" or an "American empire." And, as Bush's

FOREIGN AFFAIRS .July/August2o03 [65]

 Joseph S. Nye, Jr.
new doctrine makes clear, this is precisely the set of issues now intruding
into the world of grand strategy. Yet many of the new unilateralists,
particularly the Jacksonians, focus almost entirely on the top board of
classical military solutions. They mistake the necessary for the
sufficient. They are one-dimensional players in a three-dimensional
game. In the long term, their approach to implementing the strategy
guarantees losing.

SELLING SOFT POWER SHORT

THE WILLINGNESS of other countries to cooperate in dealing with

transnational issues such as terrorism depends in part on their own
self-interest, but also on the attractiveness of American positions.
Soft power lies in the ability to attract and persuade rather than coerce.
It means that others want what the United States wants, and there is
less need to use carrots and sticks. Hard power, the ability to coerce,
grows out of a country's military and economic might. Soft power
arises from the attractiveness of a country's culture, political ideals,
and policies. When U.S. policies appear legitimate in the eyes of others,
American soft power is enhanced. Hard power will always remain
crucial in a world of nation-states guarding their independence, but soft
power will become increasingly important in dealing with the transna-
tional issues that require multilateral cooperation for their solution.
One of Rumsfeld's "rules" is that "weakness is provocative." In
this, he is correct. As Osama bin Laden observed, it is best to bet
on the strong horse. The effective demonstration of military power in
the second Gulf War, as in the first, might have a deterrent as well as
a transformative effect in the Middle East. But the first Gulf War,
which led to the Oslo peace process, was widely regarded as legitimate,
whereas the legitimacy of the more recent war was contested. Unable
to balance American military power, France, Germany, Russia, and
China created a coalition to balance American soft power by depriving
the United States of the legitimacy that might have been bestowed
by a second UN resolution. Although such balancing did not avert
the war in Iraq, it did significantly raise its price. When Turkish
parliamentarians regarded U.S. policy as illegitimate, they refused
Pentagon requests to allow the Fourth Infantry Division to enter Iraq

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 US. Power and StrategyAfter Iraq
from the north. Inadequate attention to soft power was detrimental
to the hard power the United States could bring to bear in the early
days of the war. Hard and soft power may sometimes conflict, but
they can also reinforce each other. And when the Jacksonians mistake
soft power for weakness, they do so at their own risk.
One instructive usage of soft power that the Pentagon got right in
the second GulfWar has been called the "weaponization of reporters."
Embedding reporters with forward military units undercut Saddam's
strategy of creating international outrage by claiming that U.S.
troops were deliberately killing civilians. Whereas CNN framed the
issues in the first Gulf War, the diffusion of information technology
and the rise of new outlets such as alJazeera in the intervening decade
required a new strategy for maintaining soft power during the second.
Whatever other issues it raises, embedding reporters in frontline
units was a wise response to changing times.

ALLIANCE A LA CARTE

PROPONENTS of the neoconservative strand in the new unilateralism

are more attentive to some aspects of soft power. Their Wilsonian
emphasis on democracy and human rights can help make U.S policies
attractive to others when these values appear genuine and are pursued
in a fair-minded way. The human rights abuses of Saddam's regime
have thus become a major post hoc legitimization of the war. Moreover,
as indicated earlier, the Bush administration has made wise investments
in American soft power by increasing development aid and offering
assistance in the campaign against HIV/AIDS. But although they share
Woodrow Wilson's desire to spread democracy, the neo-Wilsonians
ignore his emphasis on institutions. In the absence of international
institutions through which others can feel consulted and involved,
the imperial imposition of values may neither attract others nor
produce soft power.
Both the neo-Wilsonian and the Jacksonian strands of the new
unilateralism tend to prefer alliance A la carte and to treat interna-
tional institutions as toolboxes into which U.S. policymakers can
reach when convenient. But this approach neglects the ways in which
institutions legitimize disproportionate American power. When others

FOREIGN AFFAIRS .July/August 2003 [67]

 Joseph S. Nye, Jr.
feel that they have been consulted, they are more likely to be helpful.
For example, NATO members are doing much of the work of keeping
the peace in the Balkans and in Afghanistan. NATO works through
many committees to achieve the standardization and interoperability
that allow coalitions of the willing to be more than ad hoc groupings.
Without regular institutional consultation, the United States may
find others increasingly reluctant to put tools into the toolbox. One
day the box might even be bare. American-led coalitions will become
less willing and shrink in size-witness the two gulf wars.
The UN is a particularly difficult institution. The power of the veto
in the Security Council has prevented it from authorizing the use of
force for collective-security operations in all but three cases in the past
half-century. But the council was specifically designed to be a concert
of large powers that would not work when
Hard and soft power they disagreed. The veto is like a fuse box in
the electrical system of a house. Better that a
may sometimes conflict, fuse blows and the lights go out than that
but they can also the house burns down. Moreover, as UN

reinforce each other Secretary-General Kofi Annan pointed out

after the Kosovo war proceeded in 1999
without a UN resolution-but with French
and German participation-the UN is torn between the strict West-
phalian interpretation of state sovereignty and the rise of interna-
tional humanitarian and human rights law that sets limits on what
leaders can do to their citizens. To complicate matters further, politics
has made the UN Charter virtually impossible to amend. Still, for
all its flaws, the UN has proved useful in its humanitarian and peace-
keeping roles on which states agree, and it remains an important
source of legitimacy in world politics.
The latter point is particularly galling to the new unilateralists,
who (correctly) point to the undemocratic nature of many of the
regimes that cast votes in the UN and chair its committees-one
rankling example being Libya's chairmanship of the Human Rights
Commission. But their proposed solution of replacing the UN with
a new organization of democracies ignores the fact that the major
divisions over Iraq were among the democracies. Rather than engage
in futile efforts to ignore the UN or change its architecture, Washington

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 US. Powerand StrategyAfter Iraq
should improve its underlying bilateral diplomacy with the other
veto-wielding powers and use the UN in practical ways to further
the new strategy. In addition to overseeing the UN'S development and
humanitarian agenda, the Security Council may wind up playing a
background role in diffusing the crisis in North Korea; the Committee
on Terrorism can help prod states to improve their procedures; and
UN peacekeepers can save the United States from having to be the
world's lone sheriff. If Washington uses it wisely, the UN can serve
U.S. interests in a variety of practical ways. But the reverse is also true:
the new unilateralists' attacks on the UN may backfire in ways that
undercut American soft power.
There is considerable evidence that the new unilateralists' policies
tend to squander U.S. soft power. Before the war, a Pew Charitable
Trust poll found that U.S. policies (not American culture) led to less
favorable attitudes toward the United States over the past two years
in 19 of 27 countries, including the Islamic countries so crucial to the
prosecution of the war on terrorism. Other polls showed an average
drop of 30 points in the popularity of the United States in major
European countries.
No large country can afford to be purely multilateralist, and
sometimes the United States must take the lead by itself, as it did
in Afghanistan. And the credible threat to exercise the unilateral
option was probably essential to getting the UN Security Council to
pass Resolution 1441, which brought the weapons inspectors back
into Iraq. But the United States should incline toward multilater-
alism whenever possible as a way to legitimize its power and to gain
broad acceptance of its new strategy. Preemption that is legitimized
by multilateral sanction is far less costly and sets a far less dangerous
precedent than the United States asserting that it alone can act as
judge, jury, and executioner. Granted, multilateralism can be used
by smaller states to restrict American freedom of action, but this
downside does not detract from its overall usefulness. Whether
Washington learns to listen to others and to define U.S. national
interests more broadly to include global interests will be crucial to
the success of the new strategy and to whether others see the
American preponderance the strategy proclaims as benign or not.
To implement the new strategy successfully, therefore, the United

FOREIGN AFFAIRS .July/August2oo3 [69]

 Joseph S. Nye, Jr.
States will need to pay more attention to soft power and multilateral
cooperation than the new unilateralists would like.

IMPERIAL UNDERSTRETCH

FINALLY, those of the new unilateralists who openly welcome the

idea of an American empire mistake the underlying nature ofAmerican
public opinion. Even if the transformation of undemocratic regimes
in the Middle East would indeed reduce some of the sources of Islamic
terrorism, the question remains whether the American public will
tolerate an imperial role. Neoconservative writers such as Max Boot
argue that the United States should provide troubled countries with
"the sort of enlightened foreign administration once provided by self-
confident Englishmen in jodhpurs and pith helmets," but as the British
historian Niall Ferguson points out, modern America differs from
nineteenth-century Britain in its chronically short attention span.
Some say the United States is already an empire and it is just a
matter of recognizing reality, but they mistake the politics of primacy
for those of empire. The United States may be more powerful
compared to other countries than the United Kingdom was at its
imperial peak, but it has less control over what occurs inside other
countries than the United Kingdom did when it ruled a quarter of the
globe. For example, Kenya's schools, taxes, laws, and elections-not
to mention external relations-were controlled by British officials.
The United States has no such control over any country today.
Washington could not even get the votes of Mexico City and Santiago
for a second Security Council resolution. Devotees of the new impe-
rialism argue that such analysis is too literal, that "empire" is intended
merely as a metaphor. But this "metaphor" implies a control from
Washington that is unrealistic and reinforces the prevailing temptations
of unilateralism.
Despite its natal ideology of anti-imperialism, the United States
has intervened and governed countries in Central America and the
Caribbean, as well as the Philippines. But Americans have never felt
comfortable as imperialists, and only a small number of cases led
directly to the establishment of democracies. American empire is not
limited by "imperial overstretch" in the sense of costing an unsustainable

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 US. Power and StrategyAfter Iraq
portion of U.S. gross domestic product. Indeed, the United States
devoted a much higher percentage of GDP to the military budget
during the Cold War than it does today. The overstretch will come
from having to police more peripheral countries than public opinion
will accept. Even after the second Gulf War, polls show little taste
for empire and no public inclination toward invading Syria and
Iran. Instead, the American public continues to say that it favors
multilateralism and using the UN.
In fact, the problem of creating an American empire might better
be termed "imperial understretch." Neither the public nor Congress
has proved willing to invest seriously in the instruments of nation
building and governance, as opposed to military force. The entire
allotment for the State Department and the U.S. Agency for Inter-
national Development is only 1 percent of the federal budget. The
United States spends nearly 16 times as much on its military, and there
is little indication of change to come in this era of tax cuts and budget
deficits. The U.S. military is designed for fighting rather than police
work, and the Pentagon has cut back on training for peacekeeping
operations. In practice, the coalition of neo-Wilsonians and Jacksonians
may divide over this issue. The former will espouse a prolonged U.S.
presence to produce democracy in the Middle East, whereas the latter,
who tend to eschew "nation building," have designed a military that
is better suited to kick down the door, beat up a dictator, and go home
than to stay for the harder work of building a democratic polity.
Among a number of possible futures for Iraq are three scenarios
that deserve some elaboration. The first is the example of Japan or
Germany in 1945, in which the United States stays for seven years and
leaves behind a friendly democracy. This would be the preferred out-
come, but it is worth remembering that Germany and Japan were
ethnically homogeneous societies, ones that also did not produce any
terrorist responses to the presence of U.S. troops and could boast
significant middle classes that had already experienced democracy
in the 192os. A second scenario is akin to that of Ronald Reagan in
Lebanon or Bill Clinton in Somalia, where some of the people who
cheered U.S. entry wound up protesting its presence six months later.
In this scenario, terrorists kill U.S. soldiers, and the American public
reacts by saying, "Saddam is gone, Iraq has no weapons of mass

FOREIGN AFFAIRS .July/August 2003

[7']
 Joseph S. Nye, Jr.
destruction, they don't want our democracy, let's pull out." If this
scenario left Iraq in conflict, dictatorship, or theocracy, it would
undercut the major post hoc legitimization for the war. The third
scenario would be reminiscent of Bosnia or Kosovo. The United
States would entice NATO allies and other countries to help in the
policing and reconstruction of Iraq, a UN resolution would bless
the force, and an international administrator would help to legitimize
decisions. The process would be long and frustrating, but it would
reduce the prominence of the United States as a target for anti-
imperialists and would probably best ensure that America did not
pull out prematurely. Ironically, the neo-Wilsonians of the new
unilateralist coalition might have to make common cause with the
multilateral realists to achieve their objectives. They might find that
the world's only superpower can't go it alone after all.

THE PARADOX OF PRIMACY

THE BUSH ADMINISTRATION'S new national security strategy

correctly identified the challenges growing out of the deep changes in
world politics that were illuminated on September u. But the admin-
istration has still not settled on how to implement the new strategy
most effectively. Rather than resolving the issue, the second Gulf War
leaves the divisions in place, and the real tests still await.
The problem for U.S. power in the twenty-first century is that
more and more continues to fall outside the control of even the most
powerfil state. Although the United States does well on the traditional
measures of hard power, these measures fail to capture the ongoing
transformation of world politics brought about by globalization and
the democratization of technology. The paradox of American power
is that world politics is changing in a way that makes it impossible for
the strongest world power since Rome to achieve some of its most
crucial international goals alone. The United States lacks both the
international and the domestic capacity to resolve conflicts that are
internal to other societies and to monitor and control transnational
developments that threaten Americans at home. On many of today's
key issues, such as international financial stability, drug trafficking,
the spread of diseases, and especially the new terrorism, military

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 US. Powerand StrategyAfter Iraq
power alone simply cannot produce success, and its use can sometimes
be counterproductive. Instead, as the most powerful country, the
United States must mobilize international coalitions to address these
shared threats and challenges. By devaluing soft power and institutions,
the new unilateralist coalition of Jacksonians and neo-Wilsonians is
depriving Washington of some of its most important instruments for
the implementation of the new national security strategy. If they
manage to continue with this tack, the United States could fail what
Henry Kissinger called the historical test for this generation of
American leaders: to use current preponderant U.S. power to achieve
an international consensus behind widely accepted norms that will
protect American values in a more uncertain future. Fortunately, this
outcome is not preordained.0

FOREIGN AFFAIRS .July/August2003 [73]

 Striking a New
Transatlantic Bargain
Andrem Morarcsik

BACK ON TRACK

THE RECENT WAR in Iraq has triggered the most severe transatlantic
tensions in a generation, dividing Europeans and Americans from
each other and themselves. Pundits proclaim daily the imminent
collapse of three vital pillars in the institutional architecture of world
politics: NATO, the UN, and even the EU. And yet some form of trans-
atlantic cooperation clearly remains essential, given the vast mutual
interests at stake. Where, then, should the Western alliance go now?
The Iraq crisis offers two basic lessons. The first, for Europeans, is
that American hawks were right. Unilateral intervention to coerce
regime change can be a cost-effective way to deal with rogue states. In
military matters, there is only one superpower-the United States-and
it can go it alone if it has to. It is time to accept this fact and move on.
The second lesson, for Americans, is that moderate skeptics on both
sides of the Atlantic were also right. Winning a peace is much harder
than winning a war. Intervention is cheap in the short run but expensive
in the long run. And when it comes to the essential instruments for
avoiding chaos or quagmire once the fighting stops-trade, aid, peace-
keeping, international monitoring, and multilateral legitimacy-
Europe remains indispensable. In this respect, the unipolar world
turns out to be bipolar after all.
Given these truths, it is now time to work out a new transatlantic bar-
gain, one that redirects complementary military and civilian instruments

ANDREW MORAVCSIK is Professor of Government and Director of the

European Union Program at Harvard University.

[74]
 Striking a New TransatlanticBargain
toward common ends and new security threats. Without such a
deal, danger exists that Europeans-who were rolled over in the
run-up to the war, frozen out by unilateral U.S. nation building,
disparaged by triumphalist American pundits and politicians, and
who lack sufficiently unified regional institutions-will keep their
distance and leave the United States to its own devices. Although
understandable, this reaction would be a recipe for disaster, since the
United States lacks both the will and the institutional capacity to
follow up its military triumphs properly-as the initial haphazard
efforts at Iraqi reconstruction demonstrate.
To get things back on track, both in Iraq and elsewhere, Washington
must shift course and accept multilateral conditions for intervention.
The Europeans, meanwhile, must shed their resentment of American
power and be prepared to pick up much of the burden of conflict pre-
vention and postconflict engagement. Complementarity, not conflict,
should be the transatlantic watchword.

THE DEATH OF ATLANTICISM?

THERE ARE TWO conflicting views about the seriousness of the

current crisis in transatlantic relations. Pessimists maintain that
differences in power, threat perceptions, and values are forcing an
inexorable divergence in European and American interests. Op-
timists see recent troubles as the product of rigid ideologies, domestic
politics, and missed diplomatic opportunities. Both views are
partly right.
The pessimists emphasize the radically new distribution of
power in the international system. The United States is less mil-
itarily dependent on allies than at any time in the past half-century.
U.S. defense spending now surpasses that of China, France, Ger-
many, India, Japan, Russia, and the United Kingdom combined,
and the disparity will only grow, since the United States outspends
Europe by a ratio of 5 to 1 on military research and development.
Washington can now wage war confident of quick victory, low
casualties, and little domestic fallout, and its ambitions have ex-
panded accordingly. Two decades ago, the Reagan administration
pursued "regime change" only in small countries and by proxy;

FOREIGN AFFAIRS .July/August2003 [75]

 Andrew Moravcsik
today, the Bush administration feels free to conquer a midsize
power across the globe directly, with little allied participation.
American and European threat perceptions, meanwhile, have
also diverged. The terrorist attacks on the World Trade Center and
the Pentagon, combined with existing U.S. commitments involv-
ing oil and Israel, have led many Americans to view the war against
rogue regimes, terrorism, and weapons of mass destruction (WMD)
as a matter of vital national interest. But since the attacks were not
directed at them, Europeans find the threat less pressing-and
with large Muslim minorities at home and Islamic neighbors next
door, they worry more about the spillover of Middle East instability.
For Europe, the defining moment of the contemporary era remains
the collapse of the Soviet empire, symbolized by the fall of the Berlin
Wall on November 9,1989; 11/9 is thus more important to Europeans
than 9/1. Without major direct threats to their security, Europeans have
felt free to disarm, cultivate their unique postmodern polity, and
criticize the United States.
Europeans and Americans disagree about not only power and
threats, but also means. As Robert Kagan and other neoconservatives
argue, U.S. military power begets an ideological tendency to use it.
In Europe, by contrast, weak militaries coexist with an aversion to war.
Influenced by social democratic ideas, the legacy of two world wars, and
the EU experience, Europeans prefer to deal with problems through
economic integration, foreign aid, and multilateral institutions. These
differences have become embedded in bureaucracy: the best and
brightest American diplomats specialize in unilateral politico-military
affairs, whereas their European counterparts focus on civilian multi-
lateral organizations such as the EU.
These structural shifts do mark an important, and perhaps
epochal, transformation in world politics. The heyday ofAtlanticism,
when the protection of Europe by U.S. strategic and European
conventional forces was the centerpiece of the Western alliance, is
gone for good. Americans and Europeans must accept new realities:
the rise of new extra-European threats that are of varied concern
to the allies, the American military ability to force regime change,
and the deep European commitment to multilateral institutions and
civilian power.

[7 6 ] FOREIGN AFFAIRS Volume82No.4

 Striking a New TransatlanticBargain

UNNECESSARY ENMITY

TRANSATLANTIC OPTIMISTS are also right when they argue that

the recent shifts need not lead inexorably to the collapse Of NATO, the
UN, or the EU. Historically, they note, transatlantic crises have been
cyclical events, arising most often when conservative Republican
presidents pursued assertive unilateral military policies. During the
Vietnam era and the Reagan administration, as today, European polls
recorded 80-95 percent opposition to U.S. intervention, millions of
protesters flooded the streets, NATO was deeply split, and European
politicians compared the United States to Nazi Germany. Washington
went into "opposition" at the UN, where, since 1970, it has vetoed
34 Security Council resolutions on the Middle East alone, each time
casting the lone dissent.
In the recent crisis, a particularly radical American policy combined
with a unique confluence of European domestic pressures-German
Chancellor Gerhard Schr6der's political vulnerability and French
President Jacques Chirac's Gaullist skepticism of American power-
to trigger the crisis.
Most Europeans-like most Americans-rejected the neoconser-
vative claim that a preemptive war against Iraq without multilateral
support was necessary or advisable. Sober policy analysis underlay the
concerns of the doubters, who felt that the war in Iraq, unlike the one
in Afghanistan, was not really connected to the "war on terrorism."
Skeptics were also wary of the difficulties and costs likely to attend
postwar reconstruction. No surprise, then, that most foreign govern-
ments sought to exhaust alternatives to war before moving forward
and refused to set the dangerous precedent of authorizing an attack
simply because the United States requested it.
In spite of these doubts about the Bush administration's policies,
however, underlying U.S. and European interests remain strikingly
convergent. It is a clich6 but nonetheless accurate to assert that the
Western relationship rests on shared values: democracy, human
rights, open markets, and a measure of social justice. No countries are
more likely to agree on basic policy, and to have the power to do
something about it. Even regarding a sensitive area such as the Middle
East, both sides recognize Israel's right to exist, advocate a Palestinian

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[77]
 Andrew Moravcsik
state, oppose tyrants such as Saddam Hussein, seek oil security, worry
about radical Islamism, and fear terrorism and the proliferation ofwMD.
Indeed, these shared interests and values help explain why the
trend over the past two decades has been toward transatlantic harmony.
Europeans are hardly doctrinaire pacifists or myopic regionalists; the
recent Iraq war is the first U.S. military action since the Reagan
years to trigger significant European opposition. In the first Gulf
War, for example, UN authorization unlocked European support,
participation, and cofinancing. And the Kosovo intervention, although
"preventive" and conducted without UN authorization, was unanimously
backed by NATO.
The September ii attacks themselves did little to change this sit-
uation. The celebrated Le Monde headline on September 13 proclaiming
"Nous sommes tous Amfricains" ("We are all Americans") and
Schbder's simultaneous pledge of "unconditional solidarity" were not
just rhetoric. Diplomats invoked NATO'S Article 5 (its mutual defense
clause) for the first time, and when the United States invaded
Afghanistan in hot pursuit of al Qaeda, European governments lent
their unanimous support. Since then, Europeans have provided more
financial and peacekeeping support to Afghanistan than has the United
States. The shared commitment to peacekeeping operations in Bosnia,
C6te d'Ivoire, East Timor, Kosovo, Rwanda, and Sierra Leone suggests
a consensus on humanitarian intervention, and the unanimous passage
of Security Council Resolution 1441 regarding Iraq in November suggests
that a similar consensus may exist on counterproliferation.
Even in the recent crisis, the vigorous rhetoric of some European
governments was balanced by more tempered action. Many NATO
members backed the United States outright. Setting aside a few re-
grettable episodes, such as the brief attempt to delay NATO defensive
assistance to Turkey (easily overcome in a few days), it is misleading to
portray France and Germany as having attempted to balance American
power. Neither state took material action against Washington, nor
even proposed multilateral condemnation of the U.S. position, as has
happened many times in decades past. (Indeed, Germany and other
countries informally aided the war effort.) Paris and Berlin simply
withheld multilateral legitimacy and bilateral assistance for what they
considered a rushed war, and encouraged others to do likewise.

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 CORRTS

Withfriendslike these.-JacquesChirac, VladimirPutin,

andGerhardSchroder,St. Petersburg,Russia,Aprilii, 2003

Rigid positions, unfortunate rhetoric, and misguided diplomatic

tactics on both sides, however, unnecessarily exacerbated the crisis.
The Bush administration offered a variety of shifting rationales for
the war, some of them dubious, and engaged in little of the patient,
painstaking diplomacy that had underpinned the broad coalition of
the first Gulf War. In the end, the U.S. case for war rested on an open-
ended assertion of U.S. security interests, unconstrained by explicit
doctrinal constraints, a firm commitment to multilateral procedures,
or widespread trust in the American president. Given the Bush admin-
istration's flagrant repudiation of a series of multilateral agreements
over the previous two years and its apparent lack of concern for foreign
interests, other governments were loath to grant it a free hand.
Despite all this, a Security Council majority of 13 or 14 states could
have been mustered to support a second war resolution had the Bush
administration been willing to wait until June or September and
then advance a procedurally proper case for war based on completed
inspections. Even French military participation would have been

FOREIGN AFFAIRS .July /August 2003 [79]

 Andrew Moravcsik
likely under such conditions. Yet Washington declined to make any
substantive concessions on either its timetable or alternatives to war.
Meanwhile, France, backed by Germany and Russia, seemed deter-
mined to oppose any hasty compromise as a matter of principle, only
softening its position when it was too late.
The evidence of so much rigidity, bungling, and pique gives the
optimists heart, since it suggests that the ultimate outcome was
avoidable-and thus that future crises could be handled more smoothly.
By going it alone, the United States lost the tens of billions of dollars
in financial support that it managed to attract in the first Gulf War
and complicated its military operations by missing a chance to create a
second front. Postwar reconstruction is proving an embarrassing burden
rather than a prized opportunity, and Iraq's future remains unclear.
For France, meanwhile, the crisis undermined the two institutions
in which it holds the greatest influence-the UN and the Eu-and
perhaps NATO as well. French opposition failed to slow the American
move to war and thus undermined France's transatlantic and cross-
Channel relations with little to show in return.

THREE PATHS

THE P ES SIMIST S are right to note that the Iraq crisis highlighted the
need for a new set of arrangements, structures that can deal with
global issues but are appropriate to a world in which the United States
and Europe possess different means, perceive different threats, and
prefer different procedures. For their part, however, the optimists are
right to argue that such crises are still manageable and that Western
governments have a strong incentive to manage them. Wiser leadership
on both sides, backed by solid institutional cooperation, could have
avoided the transatlantic breakdown in the first place.
To prevent future ruptures, both sides must recognize that they benefit
from the active participation of the other in most ventures. Only a
frank recognition of complementary national interests and mutual
dependence will elicit moderation, self-restraint, and a durable will-
ingness to compromise. To this end, the allies could follow one of three
paths. They can simply agree to disagree about certain issues, cordon-
ing off areas of dispute from areas of consensus; they can begin to part

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 Striking a New TransatlanticBargain
ways militarily, with Europe developing its own, more autonomous force
projection capabilities; or they can negotiate a new bargain, in which
American military power and European civilian power are deployed
together at targets of mutual concern. The first option is the simplest
and least costly solution, but the last promises the greatest returns.

DECENT DIPLOMACY

THE EASIEST WAY to overcome the recent troubles would be for the
United States and Europe to manage controversial high-stakes issues
delicately while continuing to work together on other subjects that
matter to both sides. This is how the Western alliance has functioned for
most of its history-protecting core cooperation in European and non-
military matters, while disagreeing about "out of area" intervention and,
sometimes, nuclear strategy. Today this lowest-common-denominator
policy should still unite nearly all Western leaders.
The transatlantic partnership remains the most important diplo-
matic relationship in the world, and so the allies have much to protect.
Together, the United States and Europe account for 70 percent of world
trade. The success of the Doha Round of global trade negotiations-
which promises much for the developing world-could contribute
greatly to long-term global security. Ongoing cooperation on intelligence
and law enforcement is indispensable to successful counterterrorism.
An expanded NATO is now widely recognized as a force for democracy
and stability. Western governments have unanimously authorized a
dozen humanitarian interventions over the last ten years. They work
together on many other issues, including human rights, environmental
policy, disease control, and financial regulation. Failure to cauterize
and contain disputes such as that over Iraq threatens all of this coop-
eration, as would any deliberate U.S. strategy of trying to weaken or
divide international organizations like the UN, the EU, or NATO.
The challenge that remains, of course, is just how to depoliticize
controversial high-stakes issues such as preventive intervention. The
simplest way to do so would be for the United States to adopt a less
aggressively unilateral approach, trying to persuade or compromise with
its allies rather than simply issuing peremptory commands. Fortunately,
since this policy would appeal to any centrist U.S. administration,

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 Andrew Moravcsik
American strategy is likely to move in this direction over the long
term. Unless senior officials of the Bush administration undergo a
radical conversion on the road to Damascus, however, such a course
is unlikely to emerge anytime soon.
Restoring diplomatic decency would be an easier first step. The
transatlantic partners should commit to consulting quietly and com-
prehensively before launching public attacks in the media. Similarly,
reprisals, whether they take the form of U.S. threats against Europe
or French threats against small central European democracies, are
ineffective and inflammatory, particularly when a domestic majority
supports the offending policy.
More fundamentally, the Iraq crisis suggests that both sides harbored
unreasonable expectations about the UN Security Council, fueling an
escalating spiral of rhetoric and diplomatic threats. Contrary to what
many Europeans wish, the Security Council was not initially designed,
and cannot function today, to block a permanent member's military
action against a perceived security threat. And contrary to what some
Americans wish, U.S. military assistance to Europe (whether in World
War II, in the Cold War, or today) does not oblige Europeans to offer
blanket authorizations for unlimited U.S. military activity anywhere.
Were the Security Council to find itself deadlocked again, therefore, the
prudent (and, arguably, normatively appropriate) course would be to
drop the matter and allow discussions to move ahead in other forums,
as was done with the debate over Kosovo. Absent a clearer threat, how-
ever, this implies that the United States would act almost alone-likely
failing to persuade even staunch allies such as Blair's United Kingdom.

FROM EUROPE TO MARS

MANY WILL FEEL that mere diplomatic flexibility is an insufficient

response to the problems at hand. A parade of pundits-American neo-
conservatives, traditional NATO analysts, European federalists, and
French Gaullists alike-have recently promulgated a new conventional
wisdom: that the rearming of Europe is the alliance's only hope. Their
logic is simple. To get the United States to listen to its concerns, Europe
needs to develop true power projection capabilities. Only an alliance of
equals can work, and military power is the only coin that matters.

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 Striking a New TransatlanticBargain
Interestingly, given their supposedly "Venusian" tendencies, many
Europeans find defense cooperation attractive. Nearly 75 percent of
the European public favor the notion, and politicians from Tony Blair
to Jacques Chirac and German Foreign Minister Joschka Fischer
have reasons to advocate it. The governments of Belgium, France,
Germany, and Luxembourg-the same group that impeded NATO
support to Turkey-recently called a summit to discuss the creation
of a group to coordinate European defense procurement, establish a
common military headquarters, and construct a unified force.
Little has come of schemes for a powerful European military, how-
ever--and little will. A common European force with the capacity to
wage high-intensity, low-casualty war around the globe remains a pipe
dream. Whatever they may tell pollsters, European publics will not
tolerate the massive increases in military spending required to come
anywhere near the American level, and more efficient use of current
European resources, although desirable, will achieve only modest gains.
Even if Europeans could agree on the funding and the mission for
such a unified force, moreover, new transport aircraft, satellites, and
soldiers would not add up to a viable European alternative to U.S.
unilateralism. For what would the Europeans do with their new power?
Deploy it against the United States? Launch pre-preventive inter-
ventions? Even if they sought simply to reduce European dependency
on U.S. security guarantees, the result would only be to encourage the
redeployment of even more American forces outside of Europe. In
the end, the best way for Europe to play a world role is to play with,
not against, the United States.
A more pragmatic variant of remilitarization would be to develop
a European high-intensity power projection capability within NATO.
The alliance's members have already pledged to create a response
force: a European expeditionary unit of 21,000 troops capable of
executing a full range of high-intensity missions. If European troops
are able to fight alongside Americans, it is argued, their political leaders
will get more of a say in U.S. grand strategy. Some foresee such a
force, increased in size tenfold, as the Germans and others have proposed,
as suitable for intervention in areas of European interest-such as
North Africa, for example-where the United States might eschew
involvement. Had the Europeans landed such a force in the Persian

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 Andrew Moravcsik

Gulf late last year but conditioned its eventual engagement on multi-
lateral authorization, some analysts believe the United States would
have been compelled to compromise.
A robust European force of this kind would certainly help matters.
But does the Bush administration value European military participation
so much that it would moderate its behavior to secure it? Unlikely.
Neither NATO nor the United States itself really needs more high-
intensity military forces, and the United States, seeking to deflect
political pressure and prevent a repetition of the interallied "war by
committee" in Kosovo, will not permit itself to become dependent on
others for essential materiel. In sum, a high-intensity European force,
inside or outside NATO, may make for evocative (albeit expensive)
symbolic politics, give the Europeans a more glamorous NATO role,
and dampen U.S. complaints about burden-sharing, but it would not
change the underlying strategic calculus on either side of the Atlantic.

EXPLOITING ADVANTAGES

I s E U R O P E then doomed to play second fiddle, with the only question

being how gracefully it accepts its subordinate status? No. Ultimately,
proposals to remilitarize Europe are unproductive, because they presume
that military force is the predominant instrument of interstate power.
This neoconservative nostrum is a poor guide to modern world politics,
as well as being sharply at odds with the values most Europeans profess.
A better approach to rebuilding the transatlantic relationship
would aim at reconceiving it on the basis of comparative advantage,
recognizing that what both parties do is essential and complementary.
Europe may possess weaker military forces than does the United
States, but on almost every other dimension of global influence it is
stronger. Meshing the two sets of capabilities would be the surest
path to long-term global peace and security. Each side would profit
from being responsible for what it does best. Complementarity is the
key to transatlantic reconciliation.
The United States has already demonstrated in Iraq that military
force can be remarkably effective. Yet the war's aim was not just to
drive Saddam from power but also to establish a much better regime
in his place. Some in Washington still believe that doing so will be

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 Striking a New TransatlanticBargain
easy; they assume that a two-year occupation, modest aid, a quick
handoffto an interim government, and a postwar economic boom based
on sales of privatized oil will spark a rapid economic miracle, similar to
that which occurred in West Germany after World War II. Democracy,
reconstruction, and development will be self-fifilling, self-financing,
and self-legitimating--and will make Iraq into a new reliable ally.
Few outside the White House, the Pentagon, and the American
Enterprise Institute share this optimism, however. Even the postwar
German miracle was based on massive, long-term U.S. assistance,
and Iraq is less promising terrain. Skeptics point to Afghanistan as
a cautionary tale. Indeed, its example is chastening: warlords have
reasserted themselves, government ministers have been assassinated,
internal security has collapsed to the point where humanitarian aid
no longer reaches many regions, the country has reemerged as the
world's largest exporter of opium, the battle against al Qaeda has
stalled, and Taliban forces are resurfacing in a half-dozen provinces.
If rosy forecasts for Iraq prove incorrect, will the United States
match its devastating military force with equally efficacious civilian
engagement? Unlikely. Not since the wake of World War II has the
United States forged civilian and military means into a coherent
geopolitical strategy. In Afghanistan, the United States pursued a "fire
and forget" policy: few peacekeepers, no trade concessions, and meager
foreign assistance. A recent Carnegie Endowment study reveals that
of 16 U.S. efforts at nation building over the past century, only four of
them resulted in sustained democracy: Germany, Grenada, Japan, and
Panama. The odds are against Iraq's becoming the fifth.
The best way to buck those odds would be for the Bush administra-
tion to reverse course and encourage far greater European participation
in Iraq and for the Europeans to rise to the challenge. Why? Because
with regard to each of the key policy instruments that could make
a difference-trade, aid, peacekeeping, monitoring, and multilateral
legitimation-Europeans are better prepared than Americans to do what
has to be done. Here the central institution is the Eu as much as NATO.
Arguably the single most powerful policy instrument for promoting
peace and security in the world today, for example, is the ultimate in
market access: admission to or association with the EU trading bloc.
New Eu applicants and associated nations perform well economically,

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 Andrew Moravcsik

and in country after country, authoritarian, ethnically intolerant, or

corrupt governments have lost elections to democratic, market-
oriented coalitions held together by the promise of EU membership.
Although actually joining the union is an immediate option only for
those nations in closest proximity, association with the Eu remains an
option for many. Association agreements already encompass Russia,
much of the rest of the former Soviet Union, Israel, and many Arab
states in the Middle East and North Africa-all of which trade more
with Europe than with the United States. Holding out such a carrot
to postwar Iraq would create a strong incentive for good behavior.
Foreign assistance, meanwhile--whether in the form of humanitarian
aid, technical expertise, or support for nation building-reduces im-
mediate human suffering and bolsters peaceful development. Here,
too, Europe is the civilian superpower, dispensing 70 percent of global
foreign aid and spreading its largess far more widely than the United
States. How much aid will ultimately be needed to rebuild and stabilize
Iraq is unclear, but oil revenues and U.S. aid will cover only a fraction
of the costs, which include basic reconstruction, essential subsistence
and infrastructure support, debt payments and reparations, and hand-
outs to the nearly 50 percent of the population previously dependent
on the public sector.
If European officials, nongovernmental organizations, and citizens
are not given some direct stake in the success of Iraqi reconstruction,
however, much less aid will be forthcoming. This is one of the reasons
why it is so important to bring the UN into the process, having it endorse
the establishment of a civilian administration, authorize participation
of UN relief and reconstruction agencies, and support the deployment of
a multilateral security and stabilization force. Recent Anglo-American
proposals to the Security Council represent a good start. Involving
prominent Europeans in the everyday management-people such as
Bernard Kouchner, the pro-war French humanitarian activist who
served as chief administrator of Kosovo from 1999 to 20o0-would
further help invest Europe's prestige (and its unmatched expertise) in
Iraqi reconstruction.
Maintaining order and internal security will be a crucial challenge
in Iraq, and here again Europe is the dominant player. Current and
prospective EU members contribute ten times as many soldiers to

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 Strikinga New TransatlanticBargain
peacekeeping and policing operations as does the United States. In
trouble spots around the globe, European nations take the lead, as did
the United Kingdom in Sierra Leone, France in C6te d'Ivoire, Italy
in Albania, and Germany in Afghanistan. In Kosovo, 84 percent of
the peacekeepers are non-American, as are over half of those in
Afghanistan. Even optimistic scenarios estimate that two to three
years will be required to establish an Iraqi army, and the U.S. leader-
ship manifestly lacks enthusiasm for being tied down to costly and
perhaps dangerous peacekeeping. The United States should thus dust
off a German proposal made back in February to have NATO formally
take over peacekeeping duties in Afghanistan, and throw in Iraq as
well. In expanding these peacekeeping capabilities, much more so
than in high-intensity missions, EU proposals for greater coordination
of military procurement and deployments will be helpful.
Multilateral monitoring of disarmament and human rights, further-
more, is generally more effective and more legitimate than unilateral
efforts. Multilateral measures are also less sensitive politically, for the
monitored party has less reason to suspect the inspectors' motives.
There is now a considerable bipartisan consensus in the United States
on the desirability of a lead role for NATO or the UN in securing and
destroying Iraq's weapons of mass destruction and production facilities.
The policing of human rights in transitional Iraq is important as well.
Europe has extensive regional experience at conditioning aid on
monitoring and is the major supporter of the multilateral institutions
with serious inspection capability.
The most reliable evidence of Iraq's weapons programs came from
the years of UN-sponsored inspections, and even the Bush adminis-
tration now concedes that the inspectors forced Saddam to dismantle,
destroy, or displace many, and perhaps nearly all, of his WMD. One of
the unexpected implications of the Iraq crisis is that although neither
UN inspections nor American coercive diplomacy work very well alone,
they can be extremely effective as complementary elements of a "good
cop, bad cop" routine. This tactic would have been more effective had
Europe been willing to sponsor thousands of "coercive" inspectors, a
promising avenue for future EU collaboration.
Postconflict monitoring under appropriate multilateral auspices will
be equally important, since American credibility has been undermined

FOREIGN AFFAIRS July/August2003 [873

 Andrew Moravcsik
by prewar errors and exaggerations. Most important of all, the trans-
atlantic commitment to strict controls over the use of nuclear, biological,
and chemical materials might be harnessed to promote a stronger
peacetime counterproliferation regime focused particularly on trafficking
in WMD materials.
Finally, in gathering international legitimacy-the persuasive
influence Harvard's Joseph Nye terms "soft power"-for confrontations
with rogue states, European involvement is crucial. In 1991, President
George H.W. Bush was initially disinclined to move against Iraq
through the UN, but he was advised that European countries would
not back his efforts without a Security Council resolution. The result
of his administration's carefil diplomacy was near unanimous Western
support for the war, the unlocking of $5o billion to $6o billion in
cofinancing, and near universal logistical cooperation from neighboring
countries. The second Gulf war, by contrast, was opposed by large
majorities throughout the world, and the most important reason for
that appears to have been the lack of final, explicit UN authorization.
Absent such approval, the allies offered no financial contributions,
and important regional actors such as Turkey withheld vital support
for military operations.
Gaining international legitimacy now for the postwar occupation
will be just as crucial, and the participation of the UN and Europe
remains the best way to achieve it. By laundering its power through
various multilateral mechanisms, the United States would minimize
the potential for violent popular backlash directed at it while still
maintaining critical behind-the-scenes influence (as in Afghanistan).
From this perspective, the gravest danger to coalition policy in Iraq
now is not European opposition but European apathy, for without
multilateral legitimation, national parliaments are likely to be stingy,
and the United States will be left holding the bag.

AFTER IRAQ

FOR ALL THESE REASONS, the reconstruction of Iraq and the re-
construction of the transatlantic alliance should proceed hand in
hand, with the former serving as a template for the latter. A new
transatlantic bargain based on civil-military complementarity would

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 Striking a New TransatlanticBargain
reflect hardheaded national interests. Europe needs American military
might; America needs European civilian power. Each side has reason
to value a predictable relationship that will induce moderation, self-
restraint, and greater accommodation in advance of military action.
If this is indeed what U.S. policymakers seek, they would do well
to avoid flagrant violation of multilateral norms and instead start
accumulating political capital for future crises. For their part, Europeans
should acknowledge the effectiveness ofU.S. military power and support
ongoing efforts to establish a flexible EU foreign policy that better
coordinates civilian, peacekeeping, and military decision-making.
Now is the time to commit to this realistic goal.
If things go smoothly-Iraq improves, Europe invests in civilian
and peacekeeping instruments, and the United States prefaces future
military interventions with measured consultation-a new transatlantic
consensus could swiftly be reestablished.
Should Iraqi reconstruction falter, however, with Europeans staying
on the sidelines and Americans sticking to their uncompromising
and impatient military unilateralism, Western interests in the Middle
East could be threatened. Even so, the transatlantic partners could
grasp the least bad option of agreeing to disagree on controversial issues
while deflecting possible collateral damage to other common interests.
Either way, the diplomacy of the last year stands as a guide for what
to avoid-and what to seek-the next time around.0

FOREIGN AFFAIRS July/August2o3 [ 89 ]

 Blair's Britain After Iraq
Steven Philip Kramer

A NEW GRAND STRATEGY

WHEN TONY BLAIR became prime minister of the United Kingdom

in 1997, he took on the great unresolved issues of the second half of
the twentieth century and defined a fairly coherent grand strategy
to face them. At stake was how to sustain economic prosperity and
increase social equality, how to respond to the decay of traditional
British national identity and British political institutions, how to
develop a new relationship with Europe in which the United Kingdom
would play a central and self-confident role, and how to balance ties
to Europe and the special relationship with the United States.
Blair's efforts seemed to succeed until the Iraq crisis drove Wash-
ington in the opposite direction from Paris and Berlin. The crisis
challenged the cornerstone of Tony Blair's grand strategy-that the
United Kingdom could act as a bridge across the Atlantic. It damaged
the new relationship with France established by Blair in 1998. It raised
questions about the wisdom of the special relationship with the United
States. And it even threatened the survival of Blair's premiership.
Although the military phase of the intervention in Iraq is now over,
the long-term implications of Blair's stance remain unclear for his
project and for the future of the United Kingdom, Europe, and
transatlantic relations.

STEVEN PHILIP KRAMER, currently a Public Policy Scholar at the

Woodrow Wilson International Center for Scholars, is Professor of
Grand Strategy at the Industrial College of the Armed Forces, National
Defense University. The views expressed are the author's and do not
necessarily reflect the official policy or position of the National Defense
University, the Department of Defense, or the U.S. government.

[90]
 Blair'sBritainAfter Iraq

BLAIR'S BALANCING ACT

THE BLAIR GOVERNMENT came to power under exceptionally

favorable circumstances. Elected at the beginning of a long economic
upswing, for the first time Labour won a big majority in a time of
prosperity. The international and European situations were also propi-
tious. Blair had strong affinities with President Bill Clinton, who had
also steered his party to the center in search of postmodern "Third
Way" progressivism. In Europe, the dominance of the Franco-German
relationship had declined; France and Germany were not providing
European leadership together or separately. The interventionist
model of economic development they espoused-and that the United
Kingdom generally opposed-had run out of steam. This seemed the
moment for the United Kingdom to seek a larger role, even leadership,
if it could shed its traditional ambivalence toward Europe.
Under Blair, the United Kingdom's postwar economic decline
ended. The interests of the British economy and of British society were
seen as inseparable; the government successfully fostered development
of a technologically advanced economic base, entrepreneurship, com-
petition, a free market, and sound fiscal policies. It began the process
of rebuilding crucial but long underfunded areas of infrastructure,
such as the National Health Service and the transportation system.
Traditional welfare was to be replaced by a system that enabled citizens
to participate in the work process. Striving to create greater social
equality not only was seen as a good in itself but contributed to a
more productive society by reducing the corrosive social consequences
of inequality. For the first time in many years, a British prime minister
did not feel a chip on his shoulder about British economic perfor-
mance vis- -vis Europe's.
The government also addressed the decline of traditional British
identity and the decay of political institutions. Scottish devolution
was its greatest achievement, but Blair also moved closer to peace in
Northern Ireland than had any previous British leader. It can be argued
that Blair's reforms triggered the end of the 1688 settlement, which
constituted the basis of modern British government, and that this
"progressive destabilization" will lead, sooner or later, to a new political
system. At the same time, the recent triumph of piecemeal reform

FOREIGN AFFAIRS .July/August2003 [91]

 Steven PhilipKramer
means that the British political system remains complex and asymmetric.
As a result, it is more difficult for the United Kingdom to accept an
"ever closer" European Union (EU) based on the kind of political
rationalism common to the continent but still alien to the British.
At the heart of Blair's grand strategy was an effort to find a new
balance between the relationship with the United States and that
with Europe. Since World War II, the focus of British foreign policy
has been the special relationship with the United States. This kind of
permanent alliance is an anomaly in British history. For hundreds
of years, the British had practiced balance-of-power diplomacy and
avoided alliances. In 1940, however, the United
At the heart of Blair's Kingdom found itself at the edge of an abyss:
with the fall of France, the British could only
strategy was an effort to hope not to lose the war; they could hardly
balance the relationship expect to win it. U.S. involvement became a
with the United Stts matter of life and death.
As the war went on, the balance of forces
and that with Europe. between the two Atlantic allies shifted, so
that the United Kingdom became the junior
partner. The emergence of the Cold War perpetuated the special
relationship. The United Kingdom defined its role in the alliance as
playing Greece to America's Rome. But in 1956, the true nature of the
friendship was made clear when the United Kingdom and France
attempted to forcibly undo Egypt's nationalization of the Suez
Canal. The United Kingdom quickly learned that it could advise and
collaborate with the United States (albeit largely on American terms)
and act as secundus interparesin NATO, but it could not act contrary
to American wishes. What was left of the special relationship was the
ability (or at least the hope) to influence American policy. As Tony
Blair said, "the price of influence is that we do not leave the U.S. to
face the tricky issues alone."
Unlike the other states of western Europe, the United Kingdom
and France aspired to play a role in global security, but they chose
opposite means. After Suez, France decided to develop the where-
withal to maintain its independence and status as a great power.
In the United Kingdom, there has always been some support for a
European alternative to the United States. Yet the basic asymmetry

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 Blair'sBritainAfter Iraq
between the United States, a superpower, and a Europe that was more
than a confederation but far less than a state, most of whose members
had little desire to project power globally, meant that so long as the
United Kingdom wanted to play a significant role in international
security, it could not choose Europe over America.
The decline of British power, however, and the country's relative
isolation from the continent diminished its weight in the special rela-
tionship and with it, its influence. Indeed, former U.S. President George
H.W. Bush's talk about "partnership in leadership" with newly unified
Germany demonstrated that the British-American special relationship
risked becoming ornamental. When he took office, Blair therefore
shifted focus, believing that by becoming more European, London could
strengthen its role in the special relationship with Washington.

AN ISLAND APART

THE STRATEGIC REALITY of the United Kingdom's self-definition

as an island empire was weakened by World War I and destroyed by
World War II. Nonetheless, it continued to inform British thought.
After World War II, the Schuman Plan was developed as a means of
solving a political problem-the century of conflict between France and
Germany-through economic means. Still looking to its empire
and to the continuation of the grand alliance with the United States,
the United Kingdom declined the invitation to be a founding member
of the European Coal and Steel Community, the European Defense
Community (which failed largely because of the British refusal to
participate), and the European Common Market. As a result, Europe
organized itself around a Franco-German partnership.
When Charles de Gaulle returned to power in France in 1958, he
realized the potential for continental European cooperation to counter-
balance U.S. dominance in Europe. Thus when the Harold Macmillan
government finally concluded that it was in the United Kingdom's
economic interest to join the Common Market, the French president
blocked its entry, believing that the British would serve as America's
"Trojan horse." Although the United Kingdom later joined the Common
Market, it did not embrace the Franco-German vision of Europe as
a distinct political, let alone security, community.

FOREIGN AFFAIRS .July/August2003 [93]

 Steven PhilipKramer
The story repeated itself in the 199os. The goal of the Maastricht
Treaty was to irreversibly tie the new unified Germany to Europe.
The primary means of doing so were European Monetary Union
(EMU) and the creation of a European Security and Defense Identity
(ESDI). The debate over EMU exacerbated differences within the
British Conservative Party between a Thatcherite majority of euro-
skeptics and a pro-European minority. This Conservative disunity
helped elect Labour in 1997. Thus, the positions the new Labour
government took on EMU and ESDI would largely define its orientation
toward Europe, and how the continent would perceive it.
Blair wanted to commit the United Kingdom to Europe. That
doing so involved joining the currency union was never in doubt. But
EMU was more than a symbolic act of fealty to the European ideal that
would bear fruit in closer relations with Europe. It was a major
economic act that could have enormous consequences for the United
Kingdom's future. It was also a political wager, and a risky one, because
Blair agreed to put the issue to a referendum.
The British public has never favored EMU (although it seemed to
consider it inevitable), nor did most of the formidable media barons
whom Blair assiduously courted. But Blair faced a problem: whereas
EMU membership would provide incremental benefits for the United
Kingdom and delay would incrementally decrease British influence,
defeat in a referendum would constitute a catastrophe for the gov-
ernment. This was one reason for caution, but there was another.
Once the policy decision was made that joining EMU served
British interests in principle-but that the government would not
join immediately-significant decision-making authority for the
process was assumed by Chancellor of the Exchequer Gordon
Brown. He developed five tests to determine when and whether
sufficient convergence of the British and continental economies existed
to justify joining. All the stars need to be lined up for the United
Kingdom to join EMU: British and European economies have to
match, as do the British and European politics, and Blair and
Brown. Such an alignment may not be possible in the post-Iraq era.
(Shelley's lines concerning marriage apply to Blair's relationship to
Brown: "With one chained friend, perhaps a jealous foe /The
dreariest and the longest journey go.")

[94] FOREIGN AFFAIRS- Volume82No.4

 CURBIS

Man on a mission: Tony Blair,Birmingham,May 16, 2001

Meanwhile, the Labour Party's efforts to build up ESDI are now

facing difficulties as well. The Maastricht Treaty gave the European
Union a legal basis to become involved in matters of security and
defense. In the United Kingdom, however, the Conservative govern-
ments of the 199os generally opposed making use of that power to
create a European security and defense institution that could compete
with NATO. The United Kingdom often acted as NATO point man
for the United States, which resisted ESDI during the first Bush admin-
istration and was ambivalent toward it under Clinton. London found
itself at odds with Paris and, to a lesser extent, with Berlin, which
advocated a more autonomous security and defense role for Europe
outside of NATO.
Under Tony Blair, British policy changed qualitatively when the
decision was made to cooperate closely with France. The Franco-
British summit in the French city of Saint-Malo on December 3-4,
1998, called for an EU capacity for "autonomous action, backed up by
credible military force" to act at times when NATO as a whole was not
engaged. Once involved in the push for ESDI, the United Kingdom
became its de facto leader.
Of the major European NATO states, only the United Kingdom
and France have modern, all-professional militaries, the capacity to

FOREIGN AFFAIRS .July/Adugust2003 [95]

 Steven PhilipKramer
project force, independent command capability, and the political
will to use military power on a global level. Moreover, because of its
privileged relations with the United States, the United Kingdom
could secure American acceptance of ideas anathema when proposed
by France, such as the fusion of the Western European Union (a weak
European-only defense organization) and the EU. Differences between
France and the United Kingdom were reflected in the lengthy debate
about the extent of links between the EU and NATO and about how
much redundancy the EU should have in its military planning staff.
But since the United Kingdom was indispensable to the success of
ESDI, the French had little choice but to abandon-or adjourn-hopes
for an ESDI completely independent Of NATO and of the United States.
Blair's reorientation of British policy was explained as an effort to
play a European leadership role in an area in which the United Kingdom
has genuine strengths, since the country is excluded from playing a
leadership role in other areas of Europe (economic, political) until it
joins EMU. The British commitment to ESDI is a down payment on a
new relationship with Europe, the balance of which would be paid
with EMU membership. But above all, the reorientation epitomized
Blair's belief that close relations with Europe are fully compatible
with the special relationship with the United States. Blair's bridging
efforts reached their climax after September ii; when Blair spoke
before the U.S. Congress, many Europeans felt he was speaking not
just for the British but for all of Europe.

THE BRITISH IRAQ CRISIS

THAT U N IT Y OF EMOTION was undercut, however, by deep skepticism

in Europe and the United Kingdom about the substance of U.S. policy
toward Iraq and the manner in which this policy has been pursued.
In the United Kingdom, among policy elites and the general public,
few believed that the pursuit of the war on terrorism led logically and
inevitably to giving priority to regime change in Iraq. In October
2001, Blair himself said that before moving against Iraq, there would
have to be absolute evidence of Iraqi complicity with al Qaeda, which
was not available at the time. Throughout Europe, there was widespread
opposition to what was perceived as a bullying American approach

[9 6 ] FOREIGN AFFAIRS Volume82No. 4

 Blair'sBritainAfter Iraq
and a strong belief that any intervention should take place with the
authorization of a UN Security Council resolution.
What distinguished the United Kingdom from most of the rest of
Europe during this period was that it not only gave verbal support to
the United States throughout the crisis but was willing to make a
large military contribution to the war. Blair never opposed the use of
force, if necessary, to eliminate Saddam Hussein's weapons of mass
destruction. In fact, he supported it during Operation Desert Fox in
1998. However, he did differ from the Bush administration in clearly
indicating that elimination of such weapons,
not regime change, was the goal (although The dominant reason
the probability of achieving the former
without the latter was not high). Accord- for Blair's commitment
ing to Hugo Young, a commentator for to U.S. policy on Iraq
The Guardian, Blair even said that if Bush
had held back from intervening in Iraq, Blair
would have pushed him in that direction. moral perspective.
Blair did try, however, to influence the United
States to operate through the UN and urged the Bush administration to
work actively toward a solution between Israel and the Palestinians
to eliminate a root cause of Arab grievances against the West.
British willingness to participate militarily in a war against Iraq was
not the inevitable consequence of the special relationship, nor was
it the result of overwhelming pressure by Washington. Four decades ago,
Prime Minister Harold Wilson successfully resisted strong American
pressure for British military participation in Vietnam. The United
Kingdom could have publicly supported the American position on the
war while avoiding military involvement, or it could have provided
only token military support. British military participation was thus
the result of a conscious policy choice by Blair. The key question is
why he made that choice.
One factor, but not the determining one, was the momentum
of the United Kingdom's own Iraq policy. Since the first Gulf War,
London and Washington had consistently enforced UN resolutions
concerning weapons inspections in Iraq. The British joined the
Americans in patrolling no-fly zones in northern and southern Iraq,
averaging 2,ooo Royal Air Force sorties per year. The British also

FOREIGN AFFAIRS .July/August2003 [97]

 Steven Philip Kramer
cooperated in Operation Desert Fox in December 1998, using missile
attacks to erode Iraq's military capability and its ability to make chemical,
biological, and nuclear weapons. This operation marked the end of
French willingness to participate in enforcing the southern no-fly zone.
But the dominant reason for Blair's commitment to U.S. policy on
Iraq was his intense and rather unique moral perspective on interna-
tional politics. In his speech to the Economic Club of Chicago on
April 22, 1999, Blair argued that the Kosovo war was a "just war, based
not on any territorial ambitions but on values." International affairs
now had to be based on the "notion of community." Some of his
remarks pointed uncannily to the future:

Many of our problems have been caused by two dangerous and ruthless
men: Saddam Hussein and Slobodan Milosevic. Both have been prepared
to wage vicious campaigns against sections of their own community. As a
result of these destructive policies both have brought calamity on their own
peoples.... One of the reasons why it is so important to win the conflict is
to ensure that others do not make the same mistake in the future.

Blair saw Bill Clinton's America as having "no dreams of world

conquest," indeed, "too ready to see no need to get involved in affairs
of the rest of the world." He also argued, "If we want a world ruled
by law and international cooperation then we have to support the UN
as its central pillar. But we need to find a new way to make the UN and
its Security Council work ifwe are not to return to the deadlock which
undermined the effectiveness of the Security Council during the
Cold War."
There was, of course, no Security Council resolution on Kosovo
because of Russian opposition. Blair's position, which was accepted
by most western European governments, certainly seems to suggest
that the ends in Kosovo justified the means. On March 18 of this year,
the eve of the invasion of Iraq, Blair's speech to the House of Commons
echoed the Chicago speech.
Lord Jenkins, Blair's erstwhile mentor, hit an important point in
an earlier comment: "The prime minister, far from lacking conviction,
has almost too much, particularly when dealing with the world
beyond the U.K. He is a little Manichaean for my perhaps nowjaded
taste, seeing matters in stark terms of good and evil, black and white,

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 Blair'sBritainAfter Iraq
contending with each other, and with a consequent belief that if evil
is cast down good will inevitably follow."
Blair's prewar efforts were instrumental in securing passage of
UN Security Council Resolution 1441. This resolution satisfied the
United States and France by being sufficiently ambiguous that it
could be interpreted to justify intervention in the case of Iraqi non-
compliance or to require a second UN resolution, which the French
wanted. Blair undoubtedly believed that a UN mandate for intervention
in Iraq was good in and of itself. But as the likelihood of war increased,
bringing with it growing disquiet and restiveness in Labour ranks, a
second resolution (or at least a serious attempt to achieve one, even if
blocked by an "unreasonable veto") seemed politically necessary.
Blair's steadfast support for U.S. policy had secured him enough
credit with President Bush that the United States was willing to
accommodate his insistence on UN approval for some time. But the
results were tragic. Ironically, Blair's doggedness in pursuing a second
resolution made such a resolution seem all the more important, and
the failure to achieve it all the more damaging.
The Iraq war produced a large-scale revolt among Labour members
of Parliament (MPs). Blair's decision to support the war and to engage
the United Kingdom without a second UN resolution defied two
strong and ancient currents in Labour: a religiously based pacifism
and a commitment to collective security. The number of MPS who
favored war was arguably fewer than ioo out of 659, although Blair
eventually got the votes he needed. Not many of the Labour MPs who
decided to vote with Blair on March 18 did so because they supported
an Iraq war, however. Of those who did find sufficient justification,
few were comfortable with U.S. conduct. The Conservative side of
the aisle offered more full-throated support.
Blair was vulnerable for other reasons as well. Disaffection and
disenchantment are normal among those whose ambitions are disap-
pointed. Throughout his premiership, Blair has kept his distance
from the Labour Party, rarely attended sessions of the House of
Commons, and made little effort to cultivate the traditional Labour
movement. On some key policy issues, the most important of which
was creation of foundation hospitals (hospitals with greater managerial
and financial independence) within the National Health Service,

FOREIGN AFFAIRS .July/August2003 [99]

 Steven PhilipKramer
Blair provoked, or was threatened with, major party revolts. Yet Blair
has brought Labour back to power with huge majorities; many MPs,
elected in traditionally Tory districts, owe him their jobs.
The House of Commons debate over war, in which Blair and the
leader of the House of Commons (and former foreign secretary)
Robin Cook eloquently argued their opposing cases, was a tribute to
the vitality of British politics and provided catharsis. (Cook subsequently
resigned in protest over Blair's push for military engagement in Iraq.)
Nonetheless, Blair was certainly damaged
Blair remains hostage and remains hostage to the fortunes of the
war's aftermath.
to the fortunes of the The special relationship with the United
Iraq war's aftermath. States was also damaged in the short and
long term as a result of the war with Iraq.
The balance sheet as seen from Washington
is mixed. On the positive side is the practical value of the British
military contribution. Without the large British presence, it would
not have been plausible to talk about a "coalition" effort. Moreover,
Blair's conviction and eloquence strengthened the moral case for the
campaign. On the other hand, Blair alienated hard-liners in the Bush
administration, who had never wanted the United States to become
involved with the UN in the first place. They believed that the debate
over a second UN resolution delayed the war and resulted in greater
international anger and resentment. Secretary of Defense Donald Rums-
feld's comment of March -that the United States could go to war
without the United Kingdom-was an indication of that frustration.
Their irritation will likely increase as Blair, out of conviction and
political necessity, continues to strongly advocate a large role for the UN
in the postwar administration of Iraq and for a distinctly British position
on how Iraq should be rebuilt and governed. Blair's advocacy will be made
in public in order to reclaim the allegiance of disenchanted British liberal
internationalists and to reconnect with France and Germany. The
immediate future of the special relationship will thus depend on whether
the aftermath of the Iraq war strengthens the unilateralist elements of the
Bush administration or fosters a renewed emphasis on internationalism.
There will be serious reconsideration of the special relationship on
the British side as well. British public opinion was close to that of the

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 Blair'sBritainAfter Iraq
rest of Europe in opposing war without a second UN resolution, and this
view was shared by much of the British elite. The British foreign policy
and defense communities, even the most Atlanticist of them, showed
very little support for the substance, let alone the style, of American pol-
icy on Iraq. At the very minimum, many believed, the United Kingdom
should have set firm conditions for involvement, including such things
as a second UN resolution and firm and well-defined American support
for a solution to the Israeli-Palestinian problem. Many question
whether Bush's America has much in common with John E Kennedy's,
and whether the United Kingdom should continue to tie itself to a
country perceived as seeking hegemony, not internationalism.
Even those close to Blair seem to be reconsidering the relation-
ship. On March io, Peter Mandelson's Guardianarticle concluded,
"It is tragic that military action could occur without full UN author-
ity, when the case for action is so clear-cut and justified by the UN
itself. But it would be an equal tragedy for America to fight alone
and victory to be handed on a plate to the unilateralists in Wash-
ington, with much wider and longer lasting consequences for the
future of the world than the fate of Saddam Hussein." The not-so-
hidden argument for engagement with the United States, then, is
the fear that without it, America might run amok. The special re-
lationship thus becomes essentially a strategy for containing the
United States-much the same as the French position, in ends if
not in means. This is far from the belief in a great Anglo-American
community of values on which the idea of a special relationship
used to rest.

THE BATTLE WITH CHIRAC

FOR HALF A CENTURY, French policy has opposed either a bipolar

or a unipolar world. De Gaulle sought restoration of France's great-
power status, but even he recognized that France alone was not a su-
perpower. The long-term goal of French policy increasingly became
the creation of a certain kind of Europe, a Europe as France writ
large, which could play a global role. At the same time, French policy
assumed a real community of interests with the United States. Thus
for the French, the question was whether the United States would

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 Steven PhilipKramer
continue to dominate a fragmented Europe or be faced with a
European Europe that could bargain from strength.
What makes the Iraq crisis unique is that France and the United
States failed to achieve a compromise. What began as a policy dis-
agreement about how to deal with Iraq became something quite
different: Chirac's effort to take the leadership of a vast coalition to
counterbalance the United States. This was considered by the Bush
administration as war by diplomatic means. Chirac provided cover for
many countries that otherwise would not have stood up to the United
States, and in doing so made a second UN resolution impossible.
Chirac's diplomatic war was directed against the United Kingdom as
well. Chirac believed that Iraq was a defining moment for Europe,
that Europe needed to speak with one voice, and that France spoke for
Europe's permanent interests. The United Kingdom, as France saw it,
stood in the way of that unity. Blair participated in the January 30, 2003,
open letter by eight European leaders, which in effect endorsed the
U.S. position. Coming a week after Secretary Rumsfeld's talk about
"New Europe" versus "Old Europe," the letter was certainly seen as an
attack against French leadership on the continent. When Blair looked
desperately for some way to obtain a second UN Security Council reso-
lution to bolster his political position at home, he found little sympathy
in Paris. London sensed that Chirac was trying to destabilize Blair,
and in his House of Commons speech of March 18, Blair blamed French
opposition to a second resolution for having made war inevitable.
The momentum of the "logic of war" pitting France against the
United Kingdom will carry over into the post-Iraq war era. Chirac can
use his temporarily strong position to attempt to marginalize British
influence in the EU. But in the long run, the EU can play a significant role
internationally only with British involvement. That is what the Saint-
Malo summit was about. The logic of the British and French national
interests should lead to a restoration of Anglo-French dialogue.

MULTILATERALISM REDUX?

THE MAJOR DETERMINANT of European policy, including that of

the British, will be how America defines its global role and, above all,
whether the United States concludes from the Iraq experience that it is

[10o2] FOREIGN AFFAIRS - Volume82 No. 4

 Blair's BritainAfter Iraq
better off acting within a multilateral framework than alone. Europe will
define itself by the way it reacts to American strategy, which Europe has
been doing for 6o years. Europe was always ambivalent about the
United States during the Cold War, but the situation is now different.
The world is unipolar, not bipolar. U.S. dominance is greater than
before, and not only militarily. There is less agreement on the nature
of threats and less belief in the fundamental altruism of American in-
tentions. What is new and disturbing is the widespread feeling that
America is the problem, not part of the solution.
There has been continuity in the way some European states react
to American power. The United Kingdom tries to influence the
United States from within a close alliance, and France tends to be
more confrontational. However, Germany has revolted against
American policy, something new in the post-Cold War era. Above
all, in the last few years, the American relationship with Europe has
begun to change from being a genuine alliance with a strong shared
vision and common values into a "coalition of the willing," with many
states not very willing.
In 1997, before this change took place and when he formed his gov-
ernment, Tony Blair developed a grand strategy that attempted to
make the United Kingdom a modern entrepreneurial economy whose
dynamism was founded on a competitive private sector but whose state
strove to promote greater equality of opportunity. It was a grand
strategy that dared to open the Pandora's box of British identity and
constitutional reform, even if it lacked the will to follow through in
all areas. It sought to find a new balance between a close relationship
with the United States and a determination to finally become an
unquestioned part of Europe.
And Blair's government has governed well. For example, Gordon
Brown is the finest chancellor of the exchequer in memory; for the first
time since World War II, the British economy has done better
than those of its European neighbors. By acting European, the United
Kingdom has been able to gain trust among the other Europeans. By
speaking loudly and clearly for what he thought was right in Kosovo and
by following through, Blair came across as a true international leader.
The rise of American unilateralism and the ensuing European
reaction against it, the loss of mutual trust between the two sides of

FOREIGN AFFAIRS .July/August 2003 [103]

 Steven PhilipKramer
the Atlantic, and the divisive nature of the Iraq crisis have led to a
paralysis of NATO and a loss of faith in the value of the Atlantic
partnership. This development has put the United Kingdom in an
impossible situation. There is no good answer.
Another British leader might have distanced himself from the
United States, as Harold Wilson did during Vietnam, providing
lip service but little more. By acting out of conviction, however, Blair
entangled himself in a bitter conflict with much of Europe, and by seek-
ing international agreement on a second UN resolution, he unwittingly
produced greater divisiveness. In the process, he placed his premiership
in jeopardy. But it is to Blair's credit that his personal survival is not an
existential issue for his country. Much of his program has become a
matter of national consensus. Blair really has changed the United King-
dom. On the other hand, when it comes to drawing lessons from the
Iraq crisis and engaging in course correction, no one has the flair of
Tony Blair, and it does matter-not only to the British-whether he
survives. Moreover, only he can cut the Gordian knot of EMU.
The British approach of working with the United States in order to
influence it, rather than confronting it in the name of multipolarity, is
the best course for Europe. Jacques Delors, the former president of the
European Commission, said it well in April 2003: "We cannot accept
the Messianic vision of the Americans ... nor can we limit ourselves to
simply opposing it. ... My position is between the two, of course. We
have to find the basis for an acceptable partnership." But the day is past
when the United Kingdom could somehow exist as a kind of third party,
linking Europe and the United States.
The Iraq crisis proved that in order to influence Europe effectively, the
United Kingdom must fully affirm its identity as part of Europe, and
the Blair program toward Europe must be completed. This will take
time, given the bad blood between key European states, but there is no
other answer. Europe's influence will indeed be weakened if the United
Kingdom and France continue to pursue the opposing strategies that
evolved following Suez. Blair has talked of Europe, which has much to
offer, as a partner of the United States. A partnership that brings critical,
not automatic, support would provide room for both the French and the
British approach. And perhaps Iraq will teach that no great nation, not
even a superpower, should act without the benefits of good counsel.

[104] FOREIGN AFFAIRS Volume82No. 4

 A High-Risk Trade Policy
BernardK. Gordon

A STEP IN THE WRONG DIRECTION

ROBERT ZOELLICK, the U.S. trade representative and the main

force shaping U.S. foreign trade policy today, combines prodigious
negotiating skills with an equally solid background in realpolitik.
Nevertheless, the current American approach to trade, over which he
has presided, promises to severely damage U.S. foreign policy and
trade. At the heart of the problem is Washington's unwise return to
economic "regionalism"-an approach evident in the many U.S.
efforts now underway to build new bilateral or regional trade agreements
with a number of small trading partners.
Washington's regionalism aims, in principle, to induce the world's
major trade actors, especially Europe and Japan, to complete the
broader, multilateral agenda of the World Trade Organization (WTO).
This strategy is no secret; in fact, it has been publicly discussed several
times. In a letter to the author in late 2001, for example, Zoellickwrote,

I believe a strategy of trade liberalization on multiple fronts-globally,

regionally, and bilaterally-enhances our leverage and best promotes
open markets. As Europeans have pointed out to me, it took the
completion of NAFTA [North American Free Trade Agreement] and
the first APEC [Asia-Pacific Economic Cooperation] Summit in 1993-94
to persuade the EU to close out the Uruguay Round. I favor a "competition
in liberalization" with the U.S. at the center of the network.

BERNARD K. GORDONis Professor of Political Science Emeritus at

the University of New Hampshire and the author, most recently, of
America's TradeFollies: TurningEconomicLeadershipInto Strategic Weakness.
An earlier version of this essay was presented to the Cordell Hull Institute
in Washington, D.C.

[105]
 BernardK Gordon
Zoellick's description of events in the early 199os is dead on. That
was a time when the former main framework for world trade, the
General Agreement on Tariffs and Trade (GATT), was notoriously in
trouble-"GATT is dead," economist Lester Thurow declared at the
time-and its weaknesses led to the establishment of the considerably
more institutionalized WTO. American efforts were key to that change,
and the WTO's present Doha Round of negotiations likewise owes much
to Washington. Two recent and very bold
A new and developing American proposals-dealing with trade in
agricultural goods and industrial products-
competition between could make the Doha Round the most
Beijing and Tokyo is not successful round thus far.
Yet at the same time the United States has
something Washington also accelerated its "free trade areas" policy,
could possibly want. and these FTAs-precisely because they are
not broadly multilateral-are bound to cause
serious problems. Aside from the conceptual and practical challenge
they pose to the WTO (a point its leaders recognize and often con-
demn), regional FTAS are also fundamentally incompatible with
America's national interests. Nowhere is that incompatibility clearer
than in East Asia, where local FTAs are proliferating, and where all
are justified as a necessary response to American initiatives.
China, for example, since 2001 has embarked on a mission to achieve
a free trade area with all of Southeast Asia and has begun work on a
similar arrangement in Northeast Asia. In direct response to that
Chinese initiative, Japan has announced that it is ending its 50-year
commitment to multilateral trade. Recognizing how large is its policy
shift, Japan frankly calls it a "departure." Yet both countries, to explain
and justify their new emphasis on regionalism, regularly blame the
United States for starting the trend.
The Japanese shift dates to 1999, when the director of the Japan
External Trade Organization (JETRO), Japan's foreign trade body,
wrote that in a world of regional trading blocs, "we cannot prevail
alone. We have to face reality ... 26 of the world's 30 main economies
were or would be partners in such [regional] accords-the European
Union, the North American Free Trade Agreement and the Association
of Southeast Asian Nations' planned Free Trade Agreement (AFTA)."

[106] FOREIGN AFFAIRS" Volume82No. 4

 A High-Risk Trade Policy
Since then, and especially in light of China's economic successes
and its announced FTA with the Association of Southeast Asian Nations
(ASEAN), Tokyo has hardened its rhetoric still further. Old rivalries
between Japan and China, among Asia's longest-standing, have
resurfaced. Today, however, the antagonism is marked by an ascendant
China and a possibly declining Japan. A Tokyo official put the issue
simply: "IfJapan does nothing, its economic leadership in East Asia
would be taken over by the Chinese."
This new and developing competition between Beijing and Tokyo
is not something Washington could possibly want. Nor would American
interests be served by the most likely alternative: formal collaboration
between China and Japan on East Asia's trade. Yet that is precisely
the pattern now forming. Since early last year, and culminating in
November 2002-when the foreign ministers of China, Japan,
and South Korea met on the fringes of the annual ASEAN meetings-
evidence of such cooperation has proliferated, coming under the
rubric of"ASEAN + 3"(or the reverse), which combines the ten ASEAN
countries with Japan, China, and South Korea.
As many will remember, "ASEAN + 3"is exactly the model first
proposed in the mid-198os by Malaysian Prime Minister Mahathir bin
Mohamad. He called at the time for an "East Asian Economic Caucus,"
a proposal that was quickly resisted and successfully put down by U.S.
Secretary of State James Baker, who believed the Mahathir plan would
in effect draw a line down the Pacific separating the United States from
East Asia. Because the grouping would also have excluded Australia,
New Zealand, and Canada, it was quickly labeled a "caucus without
Caucasians," and those racist overtones have been perpetuated by the
fact that ASEAN continues to rebuff Australia's membership.

LESS IS LESS

THE GROWTH in regionalism was thrown into new and urgent focus
earlier this year, when preliminary 2002 trade data were released.
Most attention centered on Japan because, for the first time since
1961, Japan imported more from China than from the United States.
Similar dramatic changes were reported by the other East Asian
economies. Taiwan and South Korea, along with the principal ASEAN

FOREIGN AFFAIRS July/August 2003 1107]

 BernardK Gordon
nations, all recorded 50 percent increases in their exports to China in
2002, while their exports to the United States remained flat.
This was sobering news, but it should not have been surprising.
Signs of change, particularly of a relatively reduced U.S. trade presence
in East Asia, have been evident since at least the mid-199os. Those
signs were discounted or ignored by many observers because they ran
counter to the widespread belief that large and growing exports from
Asia to the United States were a reliable fixture of the environment.
Indeed, the "Asian miracle" analysis identified exports to the United
States as a key element in East Asia's growth, so much so that they
were taken for granted.
Many American observers were so blinded that they ignored the
evidence and dismissed as naive any suggestion that Asia's economies
were intensifying their regional interactions and becoming less reliant
on the U.S. market. Whenever that suggestion was made, the common
rejoinder was that "the Japanese [or the Koreans, or the Chinese]
would never do anything so foolish and so much opposed to their own
interests." The response recalls a comment made by John Foster
Dulles when he was supervising the end of America's occupation of
Japan in the early 1950s. In a memorable remark on Japan's economic
future, he urged that Tokyo concentrate on nearby Asian markets
because Japanese products would never be attractive to Americans.
Needless to say, the seeds had already been planted that would soon
become known to Americans as Honda and Sony.
Incipient trends are once again present in U.S.-East Asian trade,
but this time in the reverse direction. As the accompanying charts
illustrate, the rise of China and the relative decline of the United
States-the two events that raised eyebrows in 2002-have already
been evident for a number of years. The chart on the facing page
shows that Japan's imports from China rose from $36 billion to
almost $6o billion between 1995 and 2001, while its imports from the
United States fell, from $76 billion to $63 billion. It is hardly sur-
prising, then, that in the year following, Japan's imports from China
exceeded those from the United States.
Although Japan's shift is the most dramatic in absolute dollar
terms among the several East Asian economies, there were similar
striking trends across the board. South Korea's exports to China rose

IlO08 ] FOREIGN AFFAIRS Volume82No. 4

by ioo percent (from $9 billion to $18 Japan's Imports From the
billion), while its exports to the United United States and From China,
States grew byjust 30 percent. Likewise 1995-2001 (in billions)
for its imports: from China they nearly $80 - . -

doubled, to $13 billion, while from the / \

United States they fell by a quarter. 75-
Again, in absolute dollar terms, South
Korea's trade with the United States still 70
remains larger than its trade with China,
but the very different growth rates are 65"
not promising-and the same applies to 65 From the US.
Thailand, Singapore, and Malaysia. For
each of these four countries, trade with 60-
China has been rising much faster than
trade with the United States. In three 55-
out of four, imports from China rose by
more than 70 percent, while imports
from the United States fell. Singapore's
experience is particularly dramatic: its
imports from China rose by 120 percent, From China
while those from the United States fell 40-/ 'tI
by 6 percent.
These trends, to borrow a Wall Street
reminder, do not necessarily predict 35 -

the future, but they do highlight several 1995 '97 '99 2001
important realities. One is the mam- SOURCE: Calculated from data inthe
International Monetary Fund's Direction of
moth size of U.S. exports to East Asia. Trade StatisticsYearbook, 2002.
In 2001, precisely a quarter of the United
States' total exports of goods went to the Pacific Rim. Their value,
at $182 billion, was identical to the value of the United States' exports
to Europe. In 2002, U.S. exports to the Pacific Rim rose still fur-
ther, to 26 percent of the U.S. total, while Europe's share dropped
slightly, to 24 percent.
The sharply different trade growth rates underline a second reality:
East Asia's tightening economic ties. That process was accelerated by
the region's financial crisis in 1997-98 and reinforced by Washington's
initially cool response. Tokyo, in contrast, stepped up to the plate

FOREIGN AFFAIRS .July/August 2003 [1o9]

 BernardK Gordon
with several imaginative offers of help, including its sponsorship of
the "Asian Monetary Fund," an idea quickly-and, some would say,
brutally-crushed by then Treasury Secretary Lawrence Summers.
The contrast in behavior strengthened the view, especially in Southeast
Asia, that the United States was prepared to write off several of the Asian
economies; some even believed that Americans were anxious to benefit
from Asia's plight.
A good reflection of this sentiment were the statements of a senior
official in Thailand's Foreign Ministry. In 1997, at the onset of the
crisis, he complained that while the United States benefited from
globalization, Thailand suffered. Three years later, when Bangkok
was planning to host an economic conference, his bitterness had
ripened to a conviction that the United States was simply uncon-
cerned with Southeast Asia: "The leaders of eight ASEAN countries
have confirmed participation. The Japanese prime minister will at-
tend. ... EU leaders will ... attend [but] I am a bit disappointed with
the U.S. participation. ... The U.S. domestic economy is large and
sound, which is probably why it does not attach much importance
to participation in international forums."
Much the same disappointment with the United States was
reflected this past March, in a Washington speech given by Emil
Salim, one of Indonesia's most prominent economists. Salim co-chairs
the United States-Indonesia Society, and in remarks there, he spoke
of a fundamental change in Indonesia's future economic orientation.
Gone was the familiar talk of first-rung manufacturing progress, of
the sort typified by Nike footwear and garments destined for the
United States. Instead Salim spoke of how Indonesia must now fit in
with "China's role in Asia's economies," of"ASEAN + 3," and of how
Indonesia's future must depend not on manufactured exports but on
exports of its traditional "tropical products." His statements, like
those of many others in Southeast Asia today, reflect a shift away
from the region's 30-year effort to integrate with America and the
West. They signal instead a turn toward planning for prosperity as
part of a resurgent and postcrisis Asia.
The third reality these illustrations point to is the global distribution
of U.S. exports. As the chart on the facing page demonstrates, half of
American exports are divided almost equally between Europe and

[11o0] FOREIGN AFFAIRS" Volume82No. 4

Asia, and more than a third Global Shares of U.S. Merchandise
go to immediate neigh- Exports in 2002; Totals693.5 billion
bors, Canada and Mexico.
Putting this another way, /Allof Europe 6% aan
OPEC lupe
otbeanral
almost 9o percent of U .S.
exports are directed, in 24 N mr a
roughly equal proportions, aid. Rim
thee
to te gobes ain (inl.Japan) s~(CanadaandMexico
to the globe's three main 26% 37%
economic regions: North
America, East Asia, and
the EU. None of the world's
other major economic 70
players, whose exports go South and Central
America
mainly to nearby markets,
has a distribution even ap- SOURCE: Calculated from data in U.S. Commerce Dept., Census Bureau,
prohas a g isUo
proaching this U.S.eenorap
record. Exhibit 14 in FT 9 oo, Exports of Goods, December 2002.

The Eu export pattern is NOTE: OPEC share excludes Venezuela and Indonesia.

the least diversified, with two-thirds of the exports staying within

the EU, and Japan's exports are almost as concentrated.

ONE AFTA THE OTHER

THESE CONTRASTS are a reminder of the enormity of the United

States' stake in all of the world's regions, and of the corollary U.S.
need to strengthen and maintain its commitment to the global
trade system symbolized by the WTO. Yet both recent presidents
have undermined that goal by their insistence on new regional or
bilateral free trade agreements. None of those agreements is remotely
analogous to NAFTA, the creation of which was justified by the polit-
ical and strategic advantages it brought to the United States. The items
on today's FTA agenda represent no such political or economic gain
to Washington.
The most recent, a proposed "Central American Free Trade Area,"
can hardly be taken seriously from a U.S. perspective, in part because
Central America is a tiny market, but more important because U.S.
exports there already account for at least 40 percent of Central America's
imports. In contrast, the United States' supposed "competitors," the

FOREIGN AFFAIRS .July/August2003 [Ili]

 BernardK Gordon
EU and Japan, have less than io and 5 percent of the Central American
market, respectively. Yet so strong is today's FTA fetish that when
President George W. Bush called for a Central American FTA, all
perspective (and humor) went out the window. The White House
solemnly announced that U.S. exports to Central America were
"more than to Russia, Indonesia, and India combined"-conveniently
forgetting that those three have long ranked at the bottom of
America's markets.
How to explain this belief in the future of FTAS? Zoellick hopes
that they will act as "building blocks" of global free trade, but that has
always been a debatable proposition, and now there is clear evidence
that trade blocs in one region simply beget
There is now clear trade blocs in other regions. This is the real
lesson of the Asian experience and Asia's
evidence that trade new FTA proposals. Whether under Chinese
blocs in one region or Japanese sponsorship, these proposals are
simplybeget trade responses to burgeoning FTAS elsewhere-
especially those in the western hemisphere,
blocs in other regions, which are U.S.-sponsored-and they will
likewise have two consequences for the
United States. The first, as the above data demonstrate, will be to
threaten the United States' major economic stake in East Asia. The
second will be to help build a political and strategic counterweight to
Washington's long-term security interests in the Pacific.
Critics will object that there is no tradeoff between the two: that
East Asia and the western hemisphere are quite separate, and that U.S.
policy can readily handle that separation. But events in the two
regions are far from separate, as Henry Kissinger was forcefully
reminded when he visited Tokyo in the early 199os. Kissinger spoke
with Ryutaro Hashimoto, who was then Japan's finance minister and
would soon become its prime minister. In his book Vision ofJapan,
Hashimoto reported on their conversation and recalled that its back-
ground was two policy questions that directly connected the western
hemisphere and East Asia.
The first issue was Malaysia's proposal for an "East Asia Economic
Caucus" (EAEC). The second was the debate then current in the
United States about NAFTA, specifically its possible expansion to

1112] FOREIGN AFFAIRS* Volume82No. 4

 A High-Risk Trade Policy
Central and South America. Those developments, which of course
later led to President Bill Clinton's call for a hemisphere-wide Free
Trade Area of the Americas (FTAA), were closely monitored by Asian
leaders, who worried that an enlarged NAFTA would give South
Americans preferential treatment in the enormous U.S. market and
that those preferences would come at Asia's expense. Some also
feared that this FTAA talk in the western hemisphere would give
added support and justification to those Asians who had long con-
templated establishing their own regional trade bloc in the Pacific.
It was in that context that Hashimoto spoke with Kissinger about
the link between the EAEC proposal, which Japan was being pressed
to support, and the possibility Of NAFTA expansion, which the United
States was considering. When Kissinger asked whether Tokyo's posture
would be influenced by American plans to extend NAFTA southward,
Hashimoto answered, "Yes, that is what would happen":

As a member of the cabinet I do not highly regard the Mahathir plan.

But if the United States strengthens its posture towards forming a pro-
tectionist bloc by extending NAFTA and closing off South America and
North America, then Japan will have to emphasize its position as an
Asia-Pacific country. This will inevitably alter theJapan-U.S. relationship.
... So please do not force us into such a corner.
In the years since that blunt advice, Japan's posture has moved sub-
stantially along the lines of Hashimoto's warning, as two recent
developments suggest. The first is the reemergence ofwhat Hashimoto
called Japan's "position as an Asia-Pacific country." In part this revival
stems from Japan's perennial debate about whether it is truly "Western,"
and in part it derives from the passing of the generation that directly
(and usually favorably) experienced the American occupation.
Equally important, however, are the views of Japan's most senior and
sophisticated observers, in which a central strand holds that U. S. primacy
has become somewhat suffocating and must be loosened. A good
example is Ogura Kazuo, one ofJapan's most senior Foreign Ministry
officials, and hardly an elderly right-wing "nationalist." Now ambassador
to France, he has a graduate degree in economics from Cambridge,
was ambassador to both South Korea and Vietnam, and has been his
ministry's director-general for economic affairs. He writes often on

FOREIGN AFFAIRS -July/August 2oo3 11131

 BernardK Gordon
Asian affairs in influential Japanese journals, and in a 1999 essay
titled "Creating a New Asia," Ogura argued that it is "necessary for a
united Asia, along with Western Europe, to be prepared to check
America. Asia must act in a unified way and ... Japan must shoulder
a large part of the leadership needed to achieve that. One reason has
to do with America's world dominance, the concentration of power
in the hands of the United States."
Hashimoto's prediction has also come to pass in Japan's decision
to end its exclusive reliance on the GATT-WTO system. The Japanese
government's 2000 white paper on trade signaled the change, and
China's announcement of its ASEAN free trade plan prompted an
immediate Japanese response. Within weeks of Beijing's initiative,
Prime Minister Junichiro Koizumi went to Southeast Asia to stake
outJapan's claim. In Singapore, he conceded that "China is an attractive
market" but insisted nevertheless that Japan's trade approach is better:
"Cooperation among Japan, China, and South Korea is essential; and in
the future, it would only be natural to add Australia and New Zealand."
The prime minister's rhetoric led quickly to action: Tokyo signed its
first-ever free trade agreement, with Singapore, and in early 2002,Japan
and South Korea announced they too were talking about an FTA.
In practice, and because of the power ofJapan's agricultural interests,
both steps will result in less than meets the eye. The agreement with
Singapore, for example, excludes agriculture, even though Singapore
has no pastureland and its "agricultural" exports are mainly its tropical
fish. An agreement with South Korea will face similar hurdles. Even
so, Japan is engaged in ongoing talks with both New Zealand and
Mexico, and elsewhere in the region other FTA negotiations are in
progress. They include talks between Thailand and China, between
New Zealand and Singapore, and reportedly even between the
United States and Thailand and Japan.
It is certainly true that this flurry of activity does not mean immi-
nent change, as Beijing acknowledged with its ten-year ASEAN time
frame. But more important is the question of whether Asia should be
moving in this direction at all. Today's competing Chinese and Japanese
models remind us why, thanks largely to Cordell Hull, U.S. secretary
of state from 1933 to 1944, the early postwar vision of regions and
economic blocs promoted by Winston Churchill was rejected, and why

1114] FOREIGN AFFAIRS Volume82No. 4

 A High-Risk Trade Policy
multilateralism was adopted instead. Political rivalries inevitably
develop within and among the blocs, and protectionist walls, by
whatever name, necessarily rise between them.
A good example is Northeast Asia today, where an FTA is being
actively discussed by specialists and governments, and where its
advocates expect it to result in a "huge trading bloc." That outcome,
which implies a dividing line in the Pacific, would hardly be in the
interests either of the global economy or of the United States. It is
tempting to believe that, given the history and consequences of re-
gional blocs between the two world wars, no policymaker today would
deliberately repeat such folly, but the historical record provides no such
assurance or comfort.

A WINNING RECORD

MUCH OF THE CURRENT trade dilemma and its U.S. foreign policy
consequences stem from a widespread American belief that the
United States has not been a successful player in world trade. This
perception is found both at the local level and in Washington, and it
is rooted in a long-standing mercantile tradition, which teaches that
exports are better than imports. That lesson is regularly reinforced
when monthly trade figures are released because they are always
accompanied by reports of the nation's "growing trade deficit." The
genuine importance of that deficit is debated among economists, but
what is not in doubt is that Americans commonly believe that they
are a "soft touch" on trade and that the United States has not done
too well as an exporter.
Nothing could be further from the truth. A long look back at the
record ofthe last ioo years, illustrated on page u6, shows that the United
States has largely held a steady 12-13 percent share ofworld exports. That
was the case at the beginning of the twentieth century, when farm prod-
ucts and commodities dominated U.S. exports (and Europe dominated
global exports), and at the century's very end, when U.S. exports of air-
craft, jet engines, medical equipment, and other high-technology and
industrial products had replaced those earlier commodities.
Only in the periods that followed the two world wars did America's
exports account for more than their rock-steady 12-13 percent. In

FOREIGN AFFAIRS "July/August2003 [115]

U.S. Exports as a Percentage of the World Market, 1896-2000

25%

20

15

10 V

1896-1900 1913 '28 '37 '49 '60 '70 '75 '80 '85 '90 '96 '97 '98 '99 2000
SOURCES: HistoricalStatisticsof the UnitedStates; League of Nations; UN; IMF,
Direction of Trade Statistics; US. Commerce Dept.

those years, as a result ofwartime devastation, few other nations were left
on the trade scene, and American suppliers briefly and very temporarily
had the export field to themselves. In all other periods, 12-13 percent
was the norm; indeed it is remarkable that both in 1913 and 1998, two
years that are worlds apart in almost every other respect, the U.S.
share of world exports was the same: 12.6 percent.
The years since 198o are worth a second look because that period
witnessed an explosion in world trade and the arrival of major new
economic actors. Both factors are essential for understanding America's
role in world trade because most of those new actors either simply did
not exist as independent players when the century began or-as in
Japan's case-had just entered global export markets. In 1913, Japan's
share of world exports was just 2 percent; since then it has more than
tripled. The other new actors-Singapore, South Korea, Taiwan, and
Hong Kong-played no separate role at all as export economies before
World War II, but today their combined global share is more than
lo percent. Add to that China, the newest major Asian exporter, and
the global share of these newcomers becomes more than 13 percent.
Japan's inclusion brings the figure to more than 20 percent.
The meaning of this arithmetic is that more than a fifth of today's
global export market is now held by economies that had little or no
international significance when the century began. Yet despite those
new arrivals, and in the face of the overall explosion in world trade,
America has continued to hold a steady global share. That has been

[116] FOREIGN AFFAIRS Volume82No. 4

 A High-Risk Trade Policy
the one constant factor in a world of otherwise enormous change; it
should help demonstrate that the United States, far from having been
"disadvantaged" in world trade, instead has a clear winning record.
Believing the opposite, that the field is not level but is tilted against
the United States, has led to two troublesome consequences. One
is the kind of protectionist "safeguards" the United States is often led
to adopt: antidumping measures and countervailing duties, spurred
by the self-serving demands for Washington's protection that regu-
larly come from America's steel, textile, and farming sectors. The second
and now more dangerous consequence is the belief that the United
States needs to build special bilateral or regional FTAS. The reality is
that the United States not only does not need any such special FTAS,
but is precisely in the opposite situation: because it has the world's
most evenly distributed pattern of exports, U.S. interests would be
harmed were regional FTAS to flourish.
To avoid that outcome, Washington should take two main steps.
One is to end the promotion of regional blocs. For the United States
that will mean recognizing that its own trade policies, especially its
quixotic insistence on a western hemisphere FTA, have helped bring
about what it cannot want: the emergence of an East Asian economic
bloc. The FTAA has long been in trouble in any case, especially and
increasingly with Brazil, and its aims would best be met at the wxo.
Second, the United States must resume in practice as well as in
rhetoric its postwar role as world trade leader. It must reject, and be seen
to reject, whatever short-term advantages regionalism or bilateralism
might seem to offer. That will be no easy task for an administration
now in serial FTA mode: witness Australia, which was moved to the
top of the list of FTA candidates following its support for the United
States in Iraq, and the president's recent call for a "Free Trade Area
for the Middle East." Instead, the United States must act intensively
and single-mindedly to champion the multilateral system of trade,
which means principally to ensure that the U.S.-inspired WTo and its
Doha Round offshoot are vigorously maintained and strengthened.
Many will argue that because of its recent actions on steel, textiles,
and timber, the United States cannot now enter that fray with clean
hands. Paradoxically, however, since the United States clearly is not
about to reverse those actions, and has already been subjected to

FOREIGN AFFAIRS .July/August 2003 [1117]

 BernardK Gordon
worldwide criticisms for them, its situation contains an important
tactical and strategic advantage, namely that any positive trade steps
it now takes will be welcomed as acts aimed at redemption. The
United States has already begun to seize that advantage with its call
for the elimination of all tariffs on industrial goods traded among
the nations of the Organization for Economic Cooperation and
Development. More broadly, however, what is called for is a trade-
policy initiative that will restore to center stage the multilateral trading
system represented by the WTO.
Such an initiative will mean sparing no effort to complete, by its
scheduled 2005 date, the WTo's Doha Development Round, and to
meet its important milestones before then. One opportunity has
already slipped by, when negotiators failed in March to agree on agri-
cultural "modalities." The next test will be the September ministerial
meeting in Cancun, Mexico, and if that chance too is missed, the
prospects for 2005 will be bleak indeed. The administration should
therefore now concentrate its energies on Cancun and on the core
agricultural and market-access issues. In the overlapping trading
format represented by the WTO's 146 members, the onus will be on
several key actors: the Eu, Japan, South Korea, Brazil, India, and of
course the United States. All stand to gain, as the GATT's 50-year
trade explosion has shown, but all will have to give in order to get.
For that reason, Zoellick--acutely sensitive to Congress' constitu-
tional power in trade matters and already an avid counter of congressional
votes-will need to hear from business, agriculture, and industry,
along with consumers, that their interests require success in the Doha
Round. The WTO is not as strong as it needs to be, but from the per-
spective of American national interests it is better than any realistic
alternative. It is time, in other words, to recall that in the 193os and
1940s, the massive contribution of U.S. policymakers was to aim for a
world not of regional economic blocs, but a single world trade system.
That is what we now have, and that is what could now be lost.0

Ills8] FOREIGN AFFAIRS" Volume82No. 4

 Adjusting to the
New Asia
Morton Abramowitz and Stephen Bosworth

AMERICA'S CHANGING ROLE

TRANSPACIFIC RELATIONS today have become almost as uncertain

as those across the Atlantic. The United States' strategic position in
East Asia is changing, and in ways few anticipated just a couple of
years ago. America's role in the region and its military posture there
will look very different at the end of this decade than they did at the
start of it.
The changes are due in part to trends within East Asia itself-
trends over which the United States has little control and lessening
influence. Two factors have affected Washington's role most directly.
The first is the rise of China, in both economic and geopolitical terms.
And the second is the dramatic diminishment of Japan's economic
vitality, which has led its regional influence to slip. Japan will remain
a major economic player in the region for years to come, especially
as a source of investment and technology for the rest of Asia. But its
strategic value to the United States, although still great, is declining.
Meanwhile, other players are starting to take on more importance
in East Asia. First among these is South Korea, where stunningly
rapid economic growth, burgeoning democracy, and generational
change have produced a newly assertive and more independent foreign
policy. At the same time, Taiwan-long an economic powerhouse and

MORTON ABRAMOWITZ is Senior Fellow at the Century Foundation

and a former U.S. Ambassador to Thailand. STEPHEN BOSWORTH is
Dean of the Fletcher School at Tufts University and a former U.S.
Ambassador to South Korea.

[119]
 Morton Abramowitz and Stephen Bosworth
ward of Washington-is being further marginalized internationally and
increasingly integrated into the mainland's economy. Peaceful recon-
ciliation between the two Chinas thus now seems closer than ever.
Changes outside Asia have also affected the U.S. role in the region.
First on this list is the Bush administration's preoccupation with the war
on terrorism. Fighting terror has become as or more important to Wash-
ington than were its traditional concerns for peace and stability. This shift
in priorities-as well as America's demonstrated ability to wage war with
minimal international support and the reconsideration of its worldwide
basing requirments-has raised pointed questions about the vitality of the
U.S. commitment to its long-standing alliances in Asia and elsewhere.
More specifically, the war on terror has led to a new American focus
on the growth of Islamic extremism among Muslim populations of
Southeast Asia. Suddenly, that area is experiencing significant Amer-
ican involvement-including the United States' largely unexamined
participation in a small war in the Philippines.
Together, all of these changes in Asia will ultimately require Wash-
ington to reexamine its strategy of the 199os. That strategy was based on
the idea that stability and prosperity in East Asia depend on a "hub and
spokes"-that is, bilateral relationships between the United States and key
regional players-and on the trilateral relationship among the United
States, China, andJapan. These relationships will obviously continue to
be important. But the United States, consciously or not, has already
begun stepping back from its role as the unique balancing power in East
Asia and is moving toward a closer relationship with China instead.
Despite the strategic differences that remain between the two countries,
a new and heretofore unimaginable relationship is developing, with
regional actors also playing important roles. Power and influence are
diffusing, although this trend has been restrained by continuing tensions
over North Korea and Taiwan.

NEW DYNAMICS IN KOREA

OVER THE PAST 50 YEARS, Korea has played a key role in U.S. policy
toward Asia; affairs on the peninsula have long affected the more central
U.S.-Japan security alliance. Developments on the Korean peninsula
now could thus profoundly affect Washington's strategy toward

[120] FOREIGN AFFAIRS Volume82No. 4

 Adjusting to the New Asia
the entire region, and so the peninsula is a good starting place for
a discussion of the changes sweeping across East Asia.
Already, relations on the peninsula have started to shift dramatically.
The two Koreas have moved from unrelenting hostility toward a wary
but creeping reconciliation. Simultaneously, Seoul's relationship
with Beijing has expanded exponentially, even as China continues to
provide crucial economic aid to the North. Meanwhile, U.S.-South
Korean ties have become seriously strained. The only thing that has
not changed on the peninsula is the totalitarian, militarized nature of
Kim Jong Il's regime.
For all the criticism leveled at former South Korean President Kim
Dae Jung's "Sunshine Policy" of engaging North Korea-his crude
attempt to purchase Pyongyang's favor, the lack of reciprocity, and the
creation of a false sense of security in the South-the idea underlying
his strategy has taken root. South Korea is using its economic strength
to move the South-North relationship from a Cold War standoff to
a cautious but peaceful coexistence. Growing contacts, including a
widely watched summit meeting in Pyongyang, have allowed many
Koreans, especially in the South, to catch glimpses of their neighbors,
reducing fears ofwar. Few South Koreans now consider the impoverished
North's nuclear program or missile capabilities overtly threatening-
at least to them. Many Southerners, especially the younger generation,
regard the North more as a charity case than as a security threat.
For its part, North Korea has become increasingly dependent on
the South's munificence without making real moves toward economic
reform. Seoul's tolerance for carrying Pyongyang economically does
have limits, both practically and politically. But President Roh Moo
Hyun campaigned on promises to continue his predecessor's Sunshine
Policy, and so far, his constituents seem more worried about the North's
collapse than they are about the costs of engagement or nuclear weapons.
This balance could still change, however, if Kim Jong I1overestimates
the South's tolerance for his bluster and nuclear provocations-
especially the negative effects his brinkmanship is having on South
Korea's economy.
As for China, it has for some time worked hard on its relationships
with both Koreas. Although Pyongyang's trust in Beijing never
recovered from the blow itwas dealtwhen China established diplomatic

FOREIGN AFFAIRS .July/August2003 I121 ]

 Morton Abramowitz and Stephen Bosworth
ties to the South in 1992, China has retained real influence with the
North-certainly more than any other country has. This influence,
of course, is due in great part to the massive amounts of aid China
continues to send over the Yalu River-aid that, for example, now
accounts for between 70 and 90 percent of North Korea's fuel imports.
In the meantime, the Chinese-South Korean relationship has
grown impressively. Last year, China surpassed the United States as
South Korea's largest export market. South Korean firms have also
joined the flood of foreign companies investing in China as they
struggle to stay competitive with low-cost Chinese sales in third markets.
And political and military ties are also growing warmer, having been
boosted by the two countries' converging interests about how to deal
with North Korea's nuclear weapons program.
Even as South Korea's ties with China have strengthened, its
alliance with the United States has become more and more difficult.
The current tensions are partly a byproduct of South Korea's enormous
economic success, which has made the South Korean public both
more assertive and profoundly concerned about how much would be
lost if there were ever another war with the North. Relations between
Seoul and Washington have often been strained in the past, but
differences were previously held in check by a shared sense of danger
from the North. Now, however, many South Koreans (although
far from all of them) no longer sense a severe threat from north of the
3 8th parallel and so have started to question the substantial and highly
visible American military presence in their country. Although the
wave of anti-Americanism that accompanied last year's presidential
election appears to have receded, many South Koreans continue to
resent Washington for what they charge is unequal treatment and
disregard of their concerns.
The United States has also complicated matters through its own
behavior. Whatever the value of the Sunshine Policy, the Bush
administration never liked it much, and its obvious distaste for deals
with Kim Jong Il's regime opened a rift between the two countries.
This rift became a gulf in October 2002, when Pyongyang admitted
to having a secret nuclear weapons program. Initially, Seoul and
Washington favored different strategies for dealing with this revelation.
Facing a massive conventional threat to its capital, South Korea was

112 2] FOREIGN AFFAIRS Volume82No. 4

 Adjusting to the New Asia
less worried about the nuclear problem and the danger that the North
would pass on fissile materials to terrorists or other states (a real
source of concern for Washington). Some progress has since been
made-at least rhetorically-in narrowing the differences between
the allies. But South Koreans still worry that what the United States
really aims for in the North is regime change, not a negotiated
dismantling of the North's nuclear program. Southerners feel the
American approach could well lead to war
or the collapse of North Korea, either of South Koreans worry
which, they believe, would decimate every-
thing South Korea has built in recent years.
Already, the U.S.-South Korean estrange- really aims for is regime
ment over the nuclear problem is starting to change in the North.
affect the posture of U.S. forces in the area.
The U.S. military presence in South Korea
and Japan was largely designed to deter North Korea, but U.S.
officials assumed-at least until recently-that when and if the North
Korean threat ended, some American troops would remain on the
peninsula as a regional balancing force-and would be welcomed.
Both sides, however, are now questioning that assumption, and
pressure is growing to reduce the American deployment. The North's
catastrophic economic decline has eroded its conventional military
capabilities, and the South's military has also become much stronger.
Yet when recent South Korean complaints about American troop
deployments led Defense Secretary Donald Rumsfeld to suggest that
the United States move its main force to somewhere south of Seoul
and consider reductions in forces, the warnings prompted South
Koreans to reconsider what they had wished for. The South Korean
government quickly proclaimed the importance of U.S. forces'
remaining where they were. Ironically, many of the same Koreans
who agitated against U.S. troops now fear that removing them from
near the demilitarized zone will enable the United States to more easily
attack North Korean nuclear facilities. Even more important, Kim
Jong I1 likely shares this perception.
Nonetheless, the United States now seems determined to change
its military footprint in South Korea-initially, by redeploying its
ground forces within the country, and later by reducing their number.

FOREIGN AFFAIRS .July/August 2003 [123]

 Morton Abramowitz and Stephen Bosworth
Bilateral talks about repositioning have already begun, despite the
disharmony in the alliance and the ongoing North Korean threat.
Such a change hardly constitutes abandonment, however; given the
remarkable technological improvements in the U.S. military, deterring
an attack from the North will no longer require such a large ground
force close to the front.

THE SHRINKING ALLY

CHANGES IN THE PRESENCE of American forces in South Korea

will also raise questions about the size and mission of the U.S. military
in Japan, where American bases have long been a sore spot. The U.S.
alliance with Japan has, for almost 50 years now, formed the foundation
of Washington's Asia strategy. Japan still has the second largest economy
in the world, boasting a high level of personal income and cutting-edge
technology. It thus remains a valued ally. But having grown economically
less dynamic over the last decade, Japan's influence in Asia is fading-
as is its strategic importance to the United States. The assertion
famously made in the 198os by Mike Mansfield, then U.S. ambassador
to Tokyo, that the U.S.-Japan relationship was the most important in
the world "bar none" no longer resonates.
As Japan's influence has shrunk, its security strategy has evolved in
modest ways, some of which have been welcomed by Washington. For
example, the United States warmly received recent legislation allowing
the deployment ofJapanese naval ships in the Indian Ocean to support
U.S. operations in Afghanistan. Washington also welcomed Tokyo's
decision to fund research on ballistic missile defense, its fresh interest
in buying Patriot missiles, and its launching of intelligence satellites.
Meanwhile, North Korea remains Japan's most immediate con-
cern. Pyongyang shocked Tokyo in 1998 when it test-fired a long-range
missile overJapan, and North Korea has since deployed some loo mis-
siles capable of reaching Japan. In response, Japanese officials have
recently spoken publicly of "preempting" North Korean threats. Tokyo
has also taken punitive actions, such as cutting the remittances that
Koreans in Japan send to the North. Despite the tough talk, however,
Japan fears that any U.S. effort to destroy North Korea's nuclear facil-
ities will result in retaliatory attacks on Japan.

[124] FOREIGN AFFAIRS" Volume82No.4

 Adjusting to the New Asia
Nor will the Japanese adopt a more assertive, independent national
security strategy any time soon. Discussions within Japan about the
constitutional implications of "collective self-defense" have not gone
far. The Japanese establishment has a strong affinity for continued
security dependence on the United States. Ultimately, however,
Japanese public opinion and policy will be greatly affected by North
Korea's nuclear and missile programs and by Japan's confidence in the
U.S. handling of these issues.
Japan, of course, also remains permanently preoccupied with
China, and its calculations about the future will be based on what
happens there. Tokyo is anxiously watching the pace of Beijing's military
modernization, the evolution of its relations with Washington, and
bilateral Chinese-Japanese ties. For the time being, Japan seems clue-
less about how to respond to Chinas rapidly expanding economic and
political presence; until it devises a strategy, policy will continue to drift.
On balance, it seems more likely than not that American ground
forces in Japan will be drawn down in the not-too-distant future,
especially as withdrawals take place in South Korea. Access to naval
bases in Japan, however, will remain particularly important to any
evolving U.S. strategic position in East Asia, and the bilateral security
alliance will remain important to both countries.

THE CENTRALITY OF CHINA

APART FROM EVENTS on the Korean peninsula andJapan, the third

major development reshaping American strategy in Asia is the
dramatic shift in the United States' perception of China. In short order,
Beijing has gone from Washington's strategic competitor to being its
security collaborator and a major trade and investment partner.
The change has been abrupt, dating to the aftermath of September n,
2001, when the Bush administration virtually reversed its China policy.
This turnaround was reflected in the administration's National Security
Strategy, released a year later, which identified terrorism-and not a
rising China-as the United States' primary strategic threat. Indeed,
Washington has made clear that it sees the fight against terror as an
interest that it shares with Beijing, although human rights considerations
may come to trouble that bond. President Bush recently received

FOREIGN AFFAIRS July/August 2003 [125]

 Morton Abramowitz and Stephen Bosworth
outgoing Chinese President Jiang Zemin at his ranch in Texas, and
Vice President Dick Cheney, an arch China-skeptic, plans to visit
Beijing later this year. Even the recalcitrant Pentagon has resumed
high-level military exchanges with China, and both countries have
expanded their intelligence cooperation.
Preoccupied by the war on terror and events in Iraq, the United
States has also pushed China to play a bigger role in maintaining
Asian security-a role of which Washington would no doubt have
been wary prior to September ii. Nowhere is this new reliance starker
than regarding North Korea, with which the United States has refused
to deal bilaterally. Instead, Washington has pressed Beijing to take
the lead in keeping Pyongyang from pursuing its nuclear weapons
programs. This element of U.S. policy makes sense, since China
shares U.S. concerns about weapons proliferation in its neighborhood.
And there have already been strong signs of Chinese cooperation:
the talks held in late April between all three countries were one result
of pressure from Beijing.
Chinese officials, however, believe that the North Korean nuclear
problem will ultimately be resolved only through direct talks between
Washington and Pyongyang. The issue could thus still become a source
of serious tension with the United States. China also remains strongly
opposed to any effort at a military solution to the problem. And it fears
the prospect of a North Korean collapse, which would send refugees
flooding across China's border. Beijing is thus unlikely to consider
sustained coercive measures that would risk destabilizing North Korea
as long as Washington resists serious negotiation with Pyongyang.
Regarding the rest of Asia, almost three decades of spectacular
economic growth have dramatically increased China's political
weight and caused all other Asian nations to rebalance their foreign
policies in subtle but important ways. The Chinese economy has defied
Western expectations by continuing to grow explosively. Economic
ties between China and its neighbors are thus also expanding at a
tremendous pace and have become central to the foreign policies of
many local countries. China has begun to realize broad regional trade
initiatives, leapfrogging Japan, for example, in starting negotiations
on a free trade agreement with the Association of Southeast Asian
Nations (ASEAN). And Beijing is endeavoring to project a generally

[126] FOREIGN AFFAIRS* Volume82No. 4

 Adjusting to the New Asia
benign external image. Although China is deeply interested in playing
a larger role in its region, it seems committed to the principle that its
own national interest is best served by stability on its periphery and
steady integration into the global economy.
To be sure, although China has worked hard to diminish suspicions
of its intentions, many of its neighbors remain wary of it. Maintaining
an American counterweight thus remains appealing, as long as doing
so does not cost too much. Over the long term, however, China's
neighbors recognize that, as with the weather, they must adjust to
China's growing power.
All of this should bear well on the Sino-American relationship. It
is important to remember, however, that the underlying politics of
that relationship remain unstable. Many Chinese leaders, strongly
suspicious of American power, were deeply disturbed by Washington's
willingness to intervene without UN approval in Kosovo and Iraq.
Taiwan remains a neuralgic issue and could quickly decline into crisis.
In the United States, meanwhile, many on the right remain similarly
distrustful of China, detest its government, fear the abandonment of
Taiwan or would like to see its independence, and believe the United
States is contributing too much to China's military strength. The
Sino-U. S. train could thus easily run off the rails once again, although
both governments are accruing stronger interests in preventing that
from occurring.

TAIWAN'S SLOW TANGO

THE SHIFTING BALANCE within Asia poses a particular challenge

for Taiwan, East Asia's other potential conflict zone where the United
States has long acted as a key military deterrent. China's growing
prominence within Asia and Taiwan's own increasing economic
interdependence with the mainland are creating new constituencies
for reconciliation and will make it increasingly difficult for Taipei to
resist a serious negotiation with Beijing over time. Some 700,000
Taiwanese now live in China, and Taiwanese investment, estimated
to exceed $ioo billion, is growing rapidly there. Beijing appears to believe
that expanding these economic ties will significantly improve its
bargaining position and help resolve the conflict. Accordingly, in 2002,

FOREIGN AFFAIRS.July/August2oo3 [127]

 Morton Abramowitz andStephen Bosworth
China's defense white paper, although it expressed commitment to
modernizing China's military, took a softer tone on Taiwan than in
the past, and Beijing appears to be moderating its rhetoric in gen-
eral. Of course, China will never drop its opposition to Taiwanese
independence altogether, since reunification remains central to
Communist Party ideology.
As for Washington's role, Taipei has reason to be worried by recent
developments. The Bush administration began its tenure by talking
of a more robust relationship with and new arms sales to the island.
Since then, U.S. reliance on China to help resolve the North Korean
crisis, and the general strengthening of U.S.-China ties since Sep-
tember ii, has dampened Taiwanese morale. Some Taiwanese may
now regret their decision to abandon the nuclear option, as they begin
to wonder whether the United States will really be willing to defend
them in the event of a conflict against a nuclear-armed China. It
would, however, be exceedingly hard for lonely Taiwan to resurrect
its nuclear weapons program.
The United States will continue to reassure Taiwan about its security
by offering to sell new arms to the island and helping Taiwan gain a
presence in international forums, while warning China not to be too
aggressive. Time is not on Taiwan's side, however. Domestic politics
in democratic Taiwan could lead to a precipitous move, such as a
declaration of independence, which China would take as an extreme
provocation. Many in Taiwan would like to delay talks with China
indefinitely. It is more likely, however, that serious negotiations on
relations with Beijing, either publicly or in secret, will begin in the
not-too-distant future. The United States, which has always advocated
a peaceful resolution to the conflict, should favor such a development,
which would gradually relieve Washington of its military role in
the Taiwan Strait.

IN THE SOUTHEAST

AFTER MORE than a decade of relative American disengagement

from Southeast Asia, the war on terrorism has once again made the
region more central to U.S. strategy. Since September u, new concerns
about Islamic extremism in the region and links to al Qaeda have

112 8 ] FOREIGN AFFAIRS- Volume82No. 4

 Adjusting to the New Asia
caused Washington to reexamine its interests and role there, which
was previously limited to commercial factors and support for regional
institutions such as ASEAN.
The United States is now working closely with all Southeast Asian
governments other than Burma's to fight terrorism. Congress has
increased appropriations for military sales and police training. U.S.
intelligence capabilities, which were seriously weakened in the 199os,
are being bolstered substantially, and cooperation with national
intelligence agencies in the region has improved. Last October, at a meet-
ing of the Asia-Pacific Economic Cooperation (APEC) forum in Mexico,
President Bush proposed that Malaysia host a regional counterterrorism
center, which is now being established. And U.S. special operations
forces are now working with the Philippine military to wipe out Abu
Sayyaf, a terrorist group with links to al Qaeda.
The United States may find, however, that the security measures
it has taken are not sufficient to address the growth of radicalism in
Southeast Asia. Terrorism does not arise in a vacuum. Politically and
economically weak states, such as Indonesia, could sink into chaos or
produce governments threatening to Washington. The United States
will thus likely find itself drawn once again into the political and
economic modernization of these countries. It will not be easy,
however, for the United States to reengage in Southeast Asia more
deeply, given regional opposition to U.S. military involvement and
the danger local governments will face if they look subservient to
American pressure. Already such pressures are being felt: to cite one
example, Washington's decision earlier this year to send 1,700 more
troops to the Philippines has been held up by intense local opposition
to the move.

FUTURE FOCUS

GIVEN THE COMPLEXITIES discussed above, the future of the

American security presence in East Asia presents an increasingly
mixed picture. In the short term the possibilities for hostilities on the
Korean peninsula and, to a lesser extent, in the Taiwan Strait remain
real, and U.S. military engagement there remains essential to pre-
serving the peace. In Korea, however, recent American actions have

FOREIGN AFFAIRS .July/August 2003 112 9]

 Morton Abramowitz and Stephen Bosworth
frightened the United States' friends almost as much as its foes-a
sign that Washington should either reconsider its policies or improve
its powers of persuasion.
For the time being, the most pressing question-and the source of
greatest uncertainty-remains North Korea and its nuclear weapons
program. At bottom, the issue is an existential one for North Korea:
Pyongyang appears to realize it must change if it is to survive, but it
fears that change will imperil its very survival. North Korea's strategy
thus remains unclear. In the aftermath of the second Gulf War,
Pyongyang may well have concluded that it cannot do without nuclear
weapons. It remains uncertain whether any package of security guar-
antees and economic benefits will change Kim Jong Il's mind, and the
answer can be learned only through negotiation. The dispute could still
turn violent, although war is more likely to result from miscalculation
or miscommunication than a deliberate decision. Pyongyang still fails
to recognize that its best chance of survival lies in working out some
sort of political arrangement with Seoul. Unlikely as it may seem
today, North and South may eventually do just that.
Many Koreans still fear that the quick end to the second Gulf
War will cause the United States to ratchet up the pressure on the
South for a more "robust" approach to resolving the nuclear issue.
But North Korea is not Iraq, and given military realities on the
Korean peninsula, it is almost inconceivable that the United States
would try to deal with the nuclear problem militarily. The risks of
a North Korean military response against South Korea and Japan
are simply too great.
On the other hand, it is equally difficult to imagine simply accepting
the fact of a nuclear North Korea. Pyongyang would be tempted to
increase or distribute its arsenal, raising hard questions for virtually
every other country in the region.
China remains another major uncertainty for American strategy
within East Asia. China's economic performance continues to astound,
but a stumble would have an enormous impact on the country's domestic
stability and foreign policy and the economic prospects of all of East
Asia. Now the fast-moving SARS epidemic-a totally unanticipated
phenomenon-may produce intense economic and political dislocation.
So much for certainty in the region.

[130] FOREIGN AFFAIRS Volume82No. 4

 Adjusting to the New Asia
Rapprochement between Taiwan and China no longer appears
remote, but many things can still get in the way, particularly Taiwan's
domestic politics. And given Japan's uncertainty about China, North
Korea, and the U.S. military presence, Japan could finally begin to
discuss rearming. Clearly many Asian countries still look to the United
States as their major source of security, but caution and wealth will
equally drive them to further deepen their relations with China.
American thinking on Asia will not clarify until some of these
major uncertainties are resolved. Conceivably, events on the Korean
peninsula may become a catalyst for a renewed American focus. More
likely, however, the diffusion of power brought about by economic
success in Asia and American preoccupation with the war on terrorism
will diminish the American focus on regional security, much as the
end of the Cold War led to a decreased interest in European security.
The defense ofJapan may mean nothing more than keeping tensions
between China and Japan down; it is difficult to imagine an actual
military conflict between the two.
As East Asian integration progresses, Washington will have to
react accordingly. The region will sorely test American diplomacy
and economic policy and, as in Europe, Washington's ability to deal
with increasingly successful and independent players.0

FOREIGN AFFAIRS .July/August2oo3 113 11

 The Future
of Energy Policy
Timothy E. Wirtb, C. Boyden Gray,
and 7obn D. Podesta

THE BIG QUESTIONS

A CENTURY AGO, Lord Selborne, the first lord of the Admiralty,

dismissed the idea of fueling the British navy with something other than
coal, which the island nation had in great abundance. "The substitution
of oil for coal is impossible," he pronounced, "because oil does not
exist in this world in sufficient quantities." Seven years later, the young
Winston Churchill was appointed first lord and charged with winning
the escalating Anglo-German race for naval superiority. As Daniel
Yergin chronicled in The Prize, Churchill saw that oil would increase
ship speed and reduce refueling time-key strategic advantages-and
ordered oil-burning battleships to be built, committing the navy to
this new fuel. Churchill's was a strategic choice, bold, creative, and
farsighted. The energy choices the world faces today are no less
consequential, and America's response must be as insightful.
Energy is fundamental to U.S. domestic prosperity and national
security. In fact, the complex ties between energy and U.S. national
interests have drawn tighter over time. The advent of globalization,
the growing gap between rich and poor, the war on terrorism, and

TIMOTHY E. WIRTH is President of the United Nations Foundation and

a former U.S. Senator from Colorado. C. BOYDEN GRAY is a partner at
Wilmer, Cutler & Pickering and served as Counsel to former President
George H.W. Bush. JOHN D. PODESTA is Visiting Professor of Law at
Georgetown University Law Center and served as Chief of Staff to former
President Bill Clinton. The views expressed here are the authors' alone.

[13 2]
 The Future ofEnergy Policy
the need to safeguard the earth's environment are all intertwined
with energy concerns.
The profound changes of recent decades and the pressing challenges
of the twenty-first century warrant recognizing energy's central role in
America's future and the need for much more ambitious and creative
approaches. Yet the current debate about U.S. energy policy is mainly
about tax breaks for expanded production, access to public lands, and
nuances of electricity regulation-difficult issues all, but inadequate for
the larger challenges the United States faces. The staleness of the policy
dialogue reflects a failure to recognize the importance of energy to
the issues it affects: defense and homeland security, the economy, and the
environment. What is needed is a purposeful, strategic energy policy,
not a grab bag drawn from interest-group wish lists.
U.S. energy policies to date have failed to address three great chal-
lenges. The first is the danger to political and economic security
posed by the world's dependence on oil. Next is the risk to the global
environment from climate change, caused primarily by the combustion
of fossil fuels. Finally, the lack of access by the world's poor to modern
energy services, agricultural opportunities, and other basics needed
for economic advancement is a deep concern.
None of these problems of dependence, climate change, or poverty
can be solved overnight, but aggressive goals and practical short-term
initiatives can jump-start the move to clean and secure energy practices.
The key challenges can be overcome with a blend of carefully targeted
policy interventions that build on the power of the market, public-
private partnerships in financing and technology development, and,
perhaps most important, the development of a political coalition
that abandons traditional assumptions and brings together energy
interests that have so far engaged only in conflict. Turning this
ambitious, long-term agenda into reality requires a sober assessment
of the United States' critical energy challenges and the interests that
can be mobilized for the necessary political change.

DECLARATION OF DEPENDENCE

U.S. DEPENDENCE on oil leaves the country's economic, security,

and environmental destiny to forces beyond America's control.

FOREIGN AFFAIRS July/August 2003 [133]

 Timothy E. Wirth, C. Boyden Gray, andJohnD. Podesta
Reducing this exposure-especially in the transportation sector,
which is 95 percent dependent on petroleum-must be a primary goal
of national energy policy.
Since October 1973, when Arab nations imposed a six-month
embargo on oil exports to the United States, America has vowed to
reduce its dependence on foreign oil. Each of the last seven U.S.
presidents has pledged to steer the nation toward greater energy
security, but the problem has only grown worse. Imports have passed
50 percent of total oil consumption and are projected to reach more
than 6o percent by 2010. Of the one trillion
Each of the last seven barrels of world reserves, only four percent
are to be found in the United States, and
U.S. presidents has fully two-thirds are in the Persian Gulf. A
vowed to create greater quarter of U.S. imports are from that volatile
region, and other key trading partners are
energy security, but substantially more dependent on the Persian
the problem has only Gulf: Japan, for example, buys 75 percent of
its oil from that region. China's economic
grown worse.
growth is also rapidly increasing its depend-
ence on Persian Gulf oil.
The intensity of oiI use in the transportation sector makes the
American economy vulnerable to the actions of other states. A study
by Oak Ridge National Laboratory estimates a $7 trillion cost to the
U.S. economy from the oil market upheavals of the last 30 years.
Indeed, every economic recession in the past 40 years has been
preceded by a significant increase in oil prices.
Diversification of U.S. oil imports is not an adequate answer. Oil
is like any other commodity-the last unit sold determines its price.
The United States could shift all its purchases to sources that are
relatively safe politically, such as Canada and Mexico, and it would
still not be protected. The global price is what matters most. This
means, for example, that if a terrorist sets off a "dirty bomb" in the
Saudi port of Ras Tanura, the price of oil will spike everywhere in
the world, dramatically affecting the U.S. economy.
Nor are supply disruptions and price shocks the only risks that oil
dependence creates for U.S. national security. The flow of funds to
certain oil -producing states has financed widespread corruption,

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 The Future ofEnergy Policy
perpetuated repressive regimes, funded radical anti-American funda-
mentalism, and fed hatreds that derive from rigid rule and stark con-
trasts between rich and poor. Terrorism and aggression are byproducts
of these realities. Iraq tried to use its oil wealth to buy the ingredients
for weapons of mass destruction. In the future, some oil-producing
states may seek to swap assured access to oil for the weapons them-
selves. It is also increasingly clear that the riches from oil trickle down
to those who would do harm to America and its friends. If this situa-
tion remains unchanged, the United States will find itself sending sol-
diers into battle again and again, adding the lives of American men
and women in uniform to the already high cost of oil.

IT'S GETTING HOT IN HERE

FROM THE ISSUE of local air pollution to those of regional acid rain
and global climate change, energy policy and environmental policy
are inextricably intertwined and must be addressed together. The
prospect of climate change represents the greatest threat. There is
almost complete consensus in the international community that our
climate is changing and warming; the only disagreement lies in how
fast it is occurring and how much this will affect the globe. Life as
we know it is based on climatic conditions that result from certain
concentrations of "greenhouse" gases. We alter the composition of
the atmosphere at our peril. The United States cannot duck this
reality; Americans must make new energy choices that reduce their
contribution to global emissions and help lead the rest of the world
toward an environmentally sound future.
The clearest consequences of increased concentrations of carbon in
the atmosphere have now been well documented: rising temperatures and
sea levels, altered precipitation patterns, increased storm intensity,
and the destruction or migration of important ecosystems. Most un-
settling, however, is the growing scientific concern that climatic changes
may not happen gradually, as has been commonly assumed. In a recent
report, the National Research Council warned:
Recent scientific evidence shows that major and widespread climate
changes have occurred with startling speed. For example, roughly half
the north Atlantic warming since the last ice age was achieved in only

FOREIGN AFFAIRS .July/August 2003 [135]

 Timothy E. Wirth, C.Boyden Gray, andJohnD. Podesta

a decade.... Abrupt climate changes were especially common when the

climate system was being forced to change most rapidly. Thus, greenhouse
warming and other human alterations of the earth system may increase
the possibility of large, abrupt, and unwelcome regional or global
climatic events.
Preventing catastrophic climate change is, at its core, an energy
challenge. Globally, fossil fuel production and use accounts for nearly
6o percent of the emissions that are causing the
earth's atmospheric greenhouse to trap more heat. In 0.4 -
the United States, the number is 85 percent. To
avoid worsening the problem, governments around
the world would have to take immediate, far-reaching
steps: dramatically reducing the burning of fossil 0.3
fuels, slowing deforestation, altering agricultural
practices, and stemming the use of certain chemicals.

0.2
Climate Change Since 1750

0.1

3!

00
"" -Mean tem erature*1902-1980: 13.80C
Il t i l
iIl iti l t

I III
z -0.1
l l ltl' ,
I1, ~f J I rl l

-0.2
1750 '75 1800 '25 '50 75 1900 '25 '50 75 2000
SOURCE: M.E. Mann et al., "Global Temperature Patterns in Past Centuries: An Interactive Presentation,"
World Data Center for Paleoclimatology, 2000.
*Global surface temperature.

[13 6] FOREIGN AFFAIRS- Volume82No. 4

 The FutureofEnergy Policy
Because change of this magnitude will take so much time, and because
there is so much momentum built into the current rate of carbon
release, it will be impossible to hold atmospheric concentrations at the
current level of 380 parts per million (which is already one-third
higher than preindustrial levels). More realistically, studies for the
Intergovernmental Panel on Climate Change suggest that an extremely
ambitious program to reduce worldwide carbon emissions by as much
as two-thirds by the end of the century will be necessary just to hold
the level of accumulated carbon in the earth's atmosphere below
550 parts per million-roughly double preindustrial levels. Even if this
goal is reached, the likely result is that sea levels will rise significantly
and species extinction will increase.
Because energy consumption is so vital to industrialized economies,
the barriers, both economic and political, to developing international
agreements on climate change have been very high. Although most
countries, including the United States, have ratified the UN Frame-
work Convention on Climate Change, implementation has been
much more problematic. The Kyoto Protocol, which seeks to implement
the convention, is too modest in its scope and at the same time
unrealistically ambitious in its timetable for the United States. It
must be supplemented by U.S.-led initiatives that start quickly yet
leave sufficient time for the private investment needed to achieve the
treaty's objective: stabilization of greenhouse gases in the atmosphere
at a safe level.
Obviously, Washington cannot hope to attain this goal unless it also
engages developing countries, whose greenhouse gas emissions are
growing much faster than those of industrialized countries. To help
maintain stability in the world's climate system, China, India, Brazil,
and others must, as their economies and populations grow, fuel their
development with economically competitive clean energy options.

ARRESTED DEVELOPMENT

WITHOUT ACCESS to modern, reliable energy sources, economic de-

velopment is not possible. And in this era of globalization, economic
performance around the world affects U.S. economic fortunes and U.S.
security. America's environmental destiny is also bound up in the

FOREIGN AFFAIRS .July/August2003 [137]

 Timothy E. Wirth, C. Boyden Gray, andJohnD. Podesta
energy choices that developing countries will make in coming
decades. And because poverty is such a long-term destabilizing
force, U.S. national security compels an enlightened approach to
international access to energy.
Of the world's six billion people, one-third enjoy the kind of energy
on demand that Americans take for granted (electricity at the flick of
a switch), and another third have such energy services intermittently.
The final third-two billion people-simply lack access to modern
energy services. Not coincidentally, the energy-deprived are the
world's most impoverished, living on less
than $2 per day. And their ranks will grow:
The United States
according to UN estimates, the total popula-
should address its tion of the 50 poorest nations will triple in
dependence on oil size over the next 5o years.
For the poor, especially the rural poor,
by cutting its oil obtaining even a meager amount of energy
consumption by a third. comes at a high cost: exposure to hazardous
indoor air pollution and the environmentally
destructive drudgery of gathering fuel wood
and dried animal waste. Equally important, the poor lack the benefits
of modern energy services: lights to read by, refrigeration to store
medicines, transportation to get products to market, let alone
telecommunications and information technology-all prerequisites
for economic growth and poverty alleviation.
Moreover, for most developing countries, the necessity of obtaining
oil for the transportation sector saps precious foreign exchange and
sends scarce dollars abroad, away from critical social needs such as
education and health that are unlikely to attract private investment.
Many developing countries also suffer from misdirected energy subsidies
to both consumers and investors, including the use of government
resources to underwrite inefficient energy monopolies and the capture
of benefits by urban elites at the expense of the rural poor. This mis-
management of energy resources contributes to impoverishment and
inequity, breeding unrest and violence and making the delivery of
sustainable energy even more difficult.
Furthermore, global climate change disproportionately hurts the
poor. Half of all jobs worldwide depend directly on natural resources

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 The FutureofEnergy Policy
that are potentially affected by human-induced climate change:
fisheries, forests, and agriculture. For example, 70 million people in
Bangladesh live in crowded lowlands near the sea, and very large
populations in Indonesia and Malaysia are similarly threatened by
rising sea levels. In Africa, we can already see agricultural productivity
diminished by drought, less availability of potable water, and inten-
sifying hunger and malnutrition. Mass flight from such conditions
could destabilize fragile governments and erode investments in
poverty reduction.

HURRY THE FUTURE

ENERGY is a common thread weaving through the fabric of criti-

cal American interests and global challenges. U.S. strategic energy
policy must take into account the three central concerns outlined
above-economic security, environmental protection, and poverty
alleviation-and set aggressive goals for overcoming them. Leadership
from Washington is critical because the United States is so big, so
economically powerful, and so vulnerable to oil shocks and terrorism.
This is a time of opportunity, too-a major technological revolution
is beginning in energy, with great potential markets. And finally, the
reality is that where the United States goes, others will likely follow.
America's example for good or for ill sets the tempo and the direction
of action far beyond its borders and far into the future.
Unfortunately, energy policymaking in the United States in recent
years has been neither decisive nor strategic. U.S. energy policy is
reminiscent of Mark Twain's quip about the weather: everyone talks
about it, but no one does anything. This inertia has deep roots. Vested
interests-in the oil, utility, and transportation industries, for example-
have been powerful economic and political players, protecting the
status quo and brooking little interference from the outside. Similarly,
the environmental lobby has proved itself able to block proposals it
opposes but less successful in advancing initiatives it favors. As a con-
sequence, little progress has been made toward breaking the gridlock.
America's inability to develop a farsighted, purposeful energy policy
is a reflection of the political climate as well. Too often, complex energy
issues have been reduced to pithy sound bites. Every decade or so,

FOREIGN AFFAIRS .July/August 2003 [139]

 Timothy E. Wirth, C. Boyden Gray, andJohnD. Podesta
Washington enacts a "comprehensive" energy policy, but with few
exceptions these measures do little but affect energy practices on the
margin, and U.S. strategic interests are kicked down the road.
No issues symbolize the numbing lack of progress on energy policy
more clearly than the debates over drilling in the Arctic National
Wildlife Refuge and increasing corporate average fuel economy. Both
issues have been argued over exhaustively, frequently, and fruitlessly.
Indeed, the acronyms "ANWR" and "CAFE" have themselves become
shorthand for a quarter century of legislative gridlock.
The time has come to craft a long-term strategic approach to energy.
A central feature must be public-private coalitions for change that
bring together business, labor, and environmental advocates. The
first step must be to focus on what is important and define what needs
to be accomplished. Three far-reaching, 25-year goals encapsulate
America's long-term interests and should guide its energy policies.
First, America should address its dependence on oil by cutting
U.S. oil consumption by a third, setting an example for the rest of the
world and breaking the grip of the global oil cartel. Second, to take
on the dangers faced by the world's climate, America should cut its
carbon emissions by a third, as a stimulus to a two-thirds global
reduction by the end of the century. Finally, the United States should
develop, deploy, and disseminate clean energy technologies and institute
trade policies that can increase the access of poor people around the
world to modern energy services and agricultural markets. Such moves
will improve the lives of billions of people, stimulate economic growth,
and create new markets for American goods and services.
Both public and private leadership will be needed to put together
the technological innovation and political will to transform the
American and world energy systems. Market mechanisms can help
address the various economic, environmental, and security interests
at stake. Aligning the interests of key stakeholders can build a coalition
with enough political muscle to break the status quo. As President
George W. Bush put it in his first address to Congress, government
has an important role, but not one so large as to crowd out initiative
and hard work, private charity, and the private economy. With the
public and private sectors working together properly, government
incentives and private initiatives can "hurry the future."

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 The FutureofEnergy Policy
A broad-based, cooperative coalition for change is the missing,
indispensable ingredient in transforming a strategic energy vision
into reality. Long-time antagonists who are willing to set aside his-
torical divisions and think boldly can create a shared vision for the
future that goes beyond the lowest common denominator. Wherever
one sits on the political spectrum, it is clear that we need to act, and
we need to act in coalition.

BRINGING IN THE MARKET

USING THE MARKET to find the cheapest possible methods to reduce

pollution has proved effective in curbing acid rain and should be con-
sidered in other instances. In the case of acid rain, the winning strategy
was an outgrowth of the work of Project 88, a bipartisan effort to find
innovative solutions to major environmental and natural-resource
problems. Fifteen years ago, Project 88 advanced the notion that
inefficient natural-resource use and environmental degradation can
be reduced by ensuring that consumers and producers face the true
costs of their decisions-not just their direct costs, but the full
social costs. It recommended a strategy of tradable permits for in-
dustrial pollutants, particularly with regard to power-plant emissions
of sulfur dioxide, a principal cause of acid rain. This novel strategy
was central to breaking a decade-long impasse on the issue, when
President George H.W. Bush and congressional leaders agreed to
a market-based, cap-and-trade system.
A dozen years later, the acid rain-control program is achieving its
goals at a cost far lower than even the most optimistic initial estimates.
This success owes to the fact that it combined economic efficiency
with long-term planning certainty: the program set out a 2o-year
time line to reduce sulfur dioxide emissions from power plants by
more than half, and it used the market to make the least costly reductions.
The economic benefits of this policy have been estimated to exceed the
costs by an order of magnitude.
The same tools can be applied to emissions of greenhouse gases
and other pollution issues. Now is the time for Washington to send
a signal and get investment moving toward less-carbon-intensive
fuels and technologies. Because fossil fuels are so deeply embedded

FOREIGN AFFAIRS .July/A ugust2003 1141]

 Timothy E. Wirth, C. Boyden Gray, andJohnD. Podesta
in the U.S. energy system, the most practical and efficient way to cut
back carbon emissions is an economy-wide market mechanism, which
will, over time, provide powerful incentives for investment in renewable
energy, improved efficiency, and other low-carbon options.
The myriad machines that use fossil fuels are long-lived, and
change comes slowly to them. Changes aimed at reducing carbon
dioxide emissions are so fundamental that they will in most cases
require replacement of existing capital stock-whether power plants,
industrial equipment, or even automobiles-to control emissions,
increase efficiency, or redesign production. Sudden changes that force
premature retirement of these assets can be expensive, wasteful, and
disruptive, especially to the labor force. Well-designed policies
and incentives to accelerate the turnover of capital stock can avoid
this outcome by encouraging investment in new technologies that
increase productivity, reduce emissions, and stimulate job creation.
Uncertainty is the bane of long-term investors, and investment in
such technologies today is discouraged by corporate uncertainty about
climate change. Many U.S. companies-particularly those with oper-
ations in other countries-are prepared to embark on aggressive and
innovative strategies to reduce the emission of greenhouse gases. But
without a market signal to justify this course, they wait. Meanwhile,
investments in carbon-intensive facilities such as coal-fired power
plants are held back in the United States by the specter of significant
carbon costs in the future, which are surely coming.
Because the carbon dioxide emitted today will warm the planet for
a century or more, we must get started immediately. Because the
world's energy systems are vast, complex, and expensive, economies
will need time to adjust capital investment strategies and realize the
benefits of existing assets. And because the transformation will be so
large, there must be a commitment to an energy future that looks very
different from the system of today.
Three elements are necessary to begin. First, there should be
an initial, modest restriction on carbon emissions, coupled with an
aggressive emissions-trading program. This policy would start to pay
a premium for increased energy efficiency and would encourage
greenhouse gas reductions worldwide. Second, governments should
create a transition period of io to 1S years, during which they provide

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 The FutureofEnergy Policy
incentives for the development and use of low- and no-carbon tech-
nologies. Finally, it must be established with absolute certainty that at
the end of the transition period, the limits on carbon will turn sharply
and rapidly downward until market forces stabilize emissions at a
safe and sustainable level. In economic terms, this kind of early sig-
nal informs investment and reduces the cost of change in the economy.
The United States must also engage the developing world. Emissions
of greenhouse gases are growing faster in poor countries than in rich
ones, and in time the developing world will assume the majority
share. Therefore, the earth's climate cannot be protected unless the
developing countries take on binding commitments to limit their
emissions. A global system to reduce emissions will ensure that the
marketplace can find the most efficient reductions and that developing
countries introduce clean energy technologies as their economies
grow. Policies that reduce dependence on crude oil can also encourage
the developing world to restrain greenhouse gas emissions and provide
it with the resources to do so.'

PARTNERING UP

Acc o MPAn YIN G marketplace incentives must be a set of new public-

private partnerships, smoothing and speeding the transition to a new
energy future. Partnerships must be formed behind five central goals:
more-advanced vehicles, better fuels to run them, carbon sequestration
from coal, modernized electric grids, and new tools for financing
global energy development. Strong political constituencies, allied as
never before, could be found in each of these partnerships. They
would be brought together by the need for a broader energy vision and
partly by their own self-interest. These five new partnership initiatives
are not all that needs to be done; they should complement ongoing
and much-needed support for using natural gas as a transition fuel,
broadening mass transit, encouraging energy efficiency in buildings

1C. Boyden Gray, while skeptical of the climate science, believes that there are
sufficient unrelated benefits from a comprehensive, market-oriented, and worldwide
approach that involves all sources, sinks, and countries, and sufficient cost savings associated
with such an approach, that the risk of disadvantaging the United States or endangering
the world economy by proceeding in this manner is minimal.

FOREIGN AFFAIRS .July/August 2o3 E1143]

 Timothy E. Wirth, C. Boyden Gray, andJohn D. Podesta
and appliances, and greatly increasing the use of renewable energy
sources. The future role ofnuclear power remains unclear; its enormous
potential to produce carbon-free electricity is clouded by continuing
serious concerns about safety, proliferation, radioactive waste, and cost.
But these five new partnerships would have unique characteristics:
they would bring together unlikely allies, energize large constituencies,
and form an unusual and powerful coalition that could alter energy
policy, set a truly visionary new course, and hurry the transition toward
a better future.

RETOOLING DETROIT

D IS P LAC I NCOI L in the American economy will address simultane-

ously the problems of dependence and climate change in the United
States, while providing cleaner alternatives for the millions of new
vehicles that will hit the world's roadways as other nations develop in
coming years. Two-thirds of the oil consumed in the United States
goes into the transportation sector, particularly the gas tanks of the
country's 220 million cars and trucks. The voracious consumption of
petroleum simultaneously puts the nation in thrall to foreign oil
producers and accounts for more than a third of all U.S. carbon
dioxide emissions. In one way or another, all of the parties involved-
automakers, autoworkers, environmental groups, consumers-agree
on the desirability of advanced vehicles that run cleaner and go farther on
a gallon of gas (or eventually dispense with gasoline altogether), yet
the fuel economy of the vehicle fleet has been dropping.
New technologies have emerged in recent years that could produce
substantial gains in fuel economy without compromising other con-
sumer preferences. These technologies include hybrid electric power
trains, clean diesels, incremental improvements to conventional
gasoline engines, and eventually hydrogen fuel cells. But changing
the fleet, within the required timetable, costs money. Automakers are
understandably reluctant to increase the cost of their products with
new, less-familiar technologies, especially now, when competitive
pricing and soft demand are squeezing the market.
Society as a whole should be a co-investor in these new technologies.
If automakers agree to reinvent their product lines and manufacturing

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 The FutureofEnergy Policy
processes, consumers will be able to get the performance they want,
and automakers the profit they need, while enabling more-efficient,
more-climate-friendly vehicles to enter the market rapidly. As a priority,
Washington should support sharply accelerated adoption of hybrid
technology as a step toward the Bush administration's goal of a "freedom
car" powered by clean-burning hydrogen.
Hybrid technology employs advanced combustion and electric
motor capabilities to improve efficiency sharply. This technology is
available now, not 15 or 20 years in the future. Ford will begin building a
hybrid version of its Escape sport utility vehicle later this year, General
Motors will release two hybrid pickups this year and plans ten more such
offerings by 2006, and Japanese automakers are well down the line in
integrating hybrid technology into an array of vehicles. But without some
greater incentive structure, the transition to
broad manufacture and consumer acceptance
of hybrids will be slow, too slow to help Hybrid car technology
significantly on the issues of dependence and is available now,
climate in the necessary time frame. Getting
millions of hybrid vehicles on the road quickly not 15 or 20 years
will require policy that is as smart as the tech- down the line.
nology. An aggressive set of tax incentives
would jump-start acceptance of hybrid vehicles by consumers and drive
penetration of the technology across different vehicle types. The result
would be improved fuel efficiency throughout the fleet, millions of
gallons of fuel saved, and countless tons of carbon dioxide emissions
avoided. For example, a government investment of $1o billion for a
combination of manufacturing changes and direct consumer incentives
would spur the production of millions, not thousands, of new hybrid
vehicles; accelerate the spread of the technology; and build consumer
acceptance, all without threatening the U.S. manufacturing base.
Regulatory flexibility can also help. Auto companies and fleet
operators ought to be able to help finance hybrid car purchases by
cutting certain emissions below baseline and then selling credits to
manufacturers, utilities, and other emitters, at least on a pilot basis.
For example, given the exceedingly high cost of cutting back on
nitrogen oxide emissions in places such as California, opportunities
for trading emission credits between car companies and industrial

FOREIGN AFFAIRS July/August2o3 [1-451

 Timothy E. Wirth, C. Boyden Gray, andJobnD. Podesta
emitters-now prohibited-could provide incentives far more power-
ful than tax breaks.
Hybrid and other advanced technologies already exist, but they
will remain as stuck as a car in a traffic jam unless an unprecedented
alliance breaks the gridlock. Such an alliance is taking shape now. A
broad coalition of oft-warring interests from industry, labor, and the
environmental ranks is currently working on an incentive package to
stimulate development of advanced technology vehicles.

FUEL GROWTH

A SECOND and similar partnership is emerging around the potential

for growing fuel in the United States. In this partnership, American
farmers-and the large and powerful block of farm-state politicians-
have an opportunity. to create a potentially profitable new market,
make common cause with large and small agricultural producers
around the world, and contribute to a better environmental future.
Through this partnership, Washington can help governments overcome
the key impasse in the Doha Round of trade talks by reducing or
eliminating agricultural export subsidies that distort global markets
and devastate developing countries.
Many Americans know about the nascent steps the country has
taken to encourage a domestic ethanol industry-transforming ears
of corn into gallons of gas. But the real promise of fuel farming
remains largely untapped. New industrial biotechnology processes
are revolutionizing the conversion of agricultural crops and waste
products to energy. By intensifying the nation's commitment to this
emerging industry and diversifying bioenergy feedstocks, the United
States can reduce oil consumption and carbon dioxide emissions
while stimulating economic growth in rural areas and enabling the
cultivation of transportation fuels in virtually every nation.
Encouraging agricultural-based fuel supplies squarely addresses
one of the toughest entanglements in current trade discussions.
The impasse over farm subsidies threatens the success of the Doha
Round and the further expansion of global trade. Yet these subsidies
have strong political support, particularly in Europe, which provides
agricultural supports for social reasons-to preserve a way of life.

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 The FutureofEnergy Policy
Subsidies for food crops and other core commodities squeeze
developing countries especially hard. The World Bank estimates that
the $300 billion worth of annual agricultural subsidies in industrialized
countries suppresses world prices and undermines developing-country
exports. In total, these subsidies are about six times higher than current
development-assistance levels. The average European cow receives
$2.50 per day in government subsidies, the average Japanese cow $7.50,
yet 75 percent of people in Africa live on less than $2 per day. Another
recent World Bank study found that full elimination of agricultural
protection and production subsidies in industrialized countries would
increase global trade in agriculture by 17 percent and raise agricultural
and food exports from low- and middle-income countries by 24 per-
cent. As a result, total annual rural income in these countries would
rise by about $6o billion.
As the developing countries' agricultural sector becomes self-
sustaining, their farmers will be able to mix production of food and tex-
tile crops with energy crops that have a robust and growing market.
Thus, shifting farm export subsidies to support biomass fuels would
encourage the production and reduce the costs of agriculturally derived
petroleum substitutes, while also breaking down distortions in world
markets and barriers to trade for farmers in developing countries.
Offering these benefits to developing countries may also help
entice them to participate in a worldwide carbon cap-and-trade
system, which would bring developed-country investment to carbon
dioxide reduction measures in the developing world, where such
actions would be much cheaper. Cutting carbon dioxide in devel-
oping countries will address a broad range of environmental and
regulatory equity issues, while also improving public health as
various local air pollutants are reduced along with carbon dioxide
(ozone and acid rain precursors, for example, as well as particulates
and toxic emissions).
The major breakthrough for the use of bioenergy will lie in the
commercialization of chemical and biological conversion techniques
that can make cost-effective use of cellulosic plant material (e.g., corn
stalks, wheat straw, rice hulls). Currently, ethanol is produced from
the starch in corn kernels, as opposed to the woody (cellulosic) ma-
terial in the stalk and leaves. Conversion of cellulose would enable the

FOREIGN AFFAIRS .July /August 2003 [147]

 Timothy E. Wirth, C. Boyden Gray, andJohnD. Podesta
use of agricultural waste products, providing a double dividend for
farmers (only 50 percent of harvested food and feed crops are used at
present). Other materials (grasses, wood wastes, even municipal waste)
could also be utilized. In the long run, crops grown for energy markets-
using sustainable management and consistent with biodiversity-could
greatly increase the supply of cellulose.
The current ethanol industry, based on corn, produced 1.6 billion
gallons of ethanol in 2000, or slightly more than one percent of total
gasoline consumption in the United States. Available waste materials
could increase ethanol production by a factor of ten, and low-cost
crops grown as ethanol feedstocks could
The U.S. electric triple that number yet again. One of the
great advantages of ethanol is that it can con-
power system is stitute both a short- and a long-term answer
antiquated and to oil dependence: long-term, because it will
inefficient, operating be an efficient and carbon-friendly liquid
carrier of hydrogen for fuel cells, when
for the most part on they become cost-effective; and short-term,
5o-year-old technology. because ethanol can be cleanly used as an
alternative fuel with today's technology in
blends of up to 85 percent in flexible-fuel
vehicles. Importantly, the production of these vehicles-i.e., cars that
can run equally well on ethanol or gasoline-is a simple and low-cost
adjustment to conventional automotive manufacturing. About four
million such cars and minivans are already on the road.
Cellulosic ethanol also can be "carbon neutral"-the carbon
dioxide given off during its production and use is the same carbon diox-
ide that was absorbed from the atmosphere by the biomass feed-
stocks as they grew. Enzymatic conversion of cellulose, based on
recent advances in biotechnology, would significantly reduce the
energy required to produce ethanol and virtually eliminate the net
increases in carbon dioxide emissions associated with the use of
traditional fuels.
Washington should pursue a well-focused program to make
bioenergy a low-risk commercial choice, funded at a level commen-
surate with its potential benefits to national security, trade, and the
environment. This may be the only way that the United States can

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 The Future ofEnergy Policy
ensure-in a few years, as opposed to a few decades-a significant
supply of renewable, sustainable, and indigenous fuel alternatives
to imported oil or limited natural gas reserves.

CLEANING UP COAL

JUST AS more-efficient cars and trucks that run on domestically

grown fuel will address the dependence and emissions problems
caused by oil, so, too, an innovative partnership is focusing on the future
of coal, the world's most abundant but most carbon-intensive fossil
fuel. This novel and unlikely partnership among industry, labor, and
environmental advocates is coalescing around a far-reaching clean-
coal technology-the sequestration, through underground disposal,
of carbon generated from coal combustion-that has the potential to
enable the continued use of coal as a primary energy source while also
protecting the climate.
Electricity is the fastest growing form of energy worldwide, critical
for industrial nations and developing countries alike. Over the past
decade, total world electricity demand grew by 29 percent, and it is
likely to continue growing. According to the 2002 World Energy
Outlook, two-thirds of the world's total power-generation capacity
that will be on-line in 2030 has not yet been built. Coal is fueling
the largest share of power generation now and will supply an in-
creasing percentage of growth in the future, particularly in the
developing world. Over the next 30 years, China and India alone
will account for two-thirds of the increase in total world coal demand,
principally for electricity.
But the history of coal has also been characterized by environmental
degradation. The climate-change issue arose on the heels of acid rain
concerns, blackened skies, and local air-pollution issues. Globally,
coal combustion now accounts for almost 40 percent of all fossil-
based carbon dioxide emissions (just behind oil, the leading emission
source), and coal burning results in more carbon emitted per unit
of energy than any other source. But coal also has very significant
advantages: availability and price. So the challenges are to make this
cheap, abundant resource more climate-friendly and to make its valuable
product-electricity-more accessible and available.

FOREIGN AFFAIRS .July/August 2003 [149]

 Timothy E. Wirth, C. Boyden Gray, andJohn D. Podesta
Technologies that allow the capture and sequestration of carbon
emissions can transform the future of the coal industry. Carbon dioxide,
the most pervasive byproduct of coal burning, can be captured in
gaseous form prior to or as a byproduct of combustion and stored un-
derground in deep geologic formations (e.g., depleted oil and gas
wells, coal seams, deep saline aquifers). Initial steps toward a broader
sequestration strategy are already being taken in commercial practice.
Thirty-two million tons of carbon dioxide are injected into oil fields
in the United States annually for enhanced oil recovery. Off the coast
of Norway, one million tons of carbon dioxide a year are being pumped
into a saline formation underneath the seabed.
The key challenges related to managing carbon dioxide from coal
are the costs of capture and storage. Industry and government have
begun work on both. The Bush administration recently launched the
"FutureGen" project, a $1billion partnership with industry to develop
a cost-effective new generation of coal-fired power plants that emit
no greenhouse gases into the atmosphere. And a variety of partnerships
are underway to explore the best long-term sequestration options.
Perfecting and commercializing carbon capture and sequestration
would allow the United States and others to exploit vast coal reserves
in a climate-friendly fashion. And global demand for technically
effective and financially feasible sequestration presages very large new
international markets. A successful carbon sequestration program
would be a boon to technology suppliers and the mining industry
alike. In addition, carbon-capture technology, which leaves behind a
hydrogen stream, could make coal a low-cost source of hydrogen for
fuel cells in buildings and cars and reduce U.S. dependence on oil.
The transition to this future will be tricky. The greatest danger the
coal industry faces in the United States is that as carbon emissions are
gradually constrained, it will give up market share piece by piece to
natural gas and lose its ability to recover. Washington must promote
policies to mitigate that outcome, such as aggressive research and
development on cheaper capture and storage of carbon, subsidies for
advanced coal technology for sale in domestic and overseas markets,
and incentives for power plants that commit to switching to carbon-free
technology by a certain date. All of these tools could lessen the harm
to the industry and its workers as coal is cleaned up.

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 The FutureofEnergy Policy

DIGITAL REVOLUTION

THE ELECTRICITY DISTRIBUTION SYSTEM in the United States is

perhaps the most underappreciated and vulnerable part of the country's
national infrastructure. In this digital age, the need for high-quality,
reliable electricity makes the transmission grid almost as vast and as
important as the highway system. The electricity business now generates
$224 billion a year in revenues, accounting for about four percent of
the U.S. GDP. Its value to the economy is multiples of its cost.
Yet the nation's electric power system is antiquated, fragile, and
inefficient, operating for the most part on 5o-year-old technology.
Running today's digital society through yesterday's grid is like running
the Internet through a telephone switchboard. Routine outages and
power-quality disturbances cost U.S. businesses tens of billions of
dollars a year. A serious accident or an act of sabotage could cripple
major regions for days or weeks and do enormous damage to the
economy, much like a disruption in oil supply.
Lack of investment in critical infrastructure and surging demand
for high-quality, digital-grade electricity have taxed the transmission
and distribution system to its limit. Most credible forecasts predict
that this underinvestment will continue. Additionally, microprocessor-
based technologies have radically altered the nature of the electrical
load, resulting in electricity demand that is incompatible with a
power system created to meet the needs of an analog economy. This
has led to problems with quality and reliability that particularly affect
such high-tech industries as telecommunications, data storage and
retrieval services, the financial industry, biotechnology, electronics fabri-
cation, and other businesses that use continuous-process manufacturing.
Rewiring the grid with advanced computer controls would allow
power to be distributed more efficiently, safely, and securely and
would facilitate the spread of distributed generation (via fuel cells
and solar panels, for instance). It would at once save energy, create
jobs, reduce emissions, and enhance American security.
Development of a self-healing transmission and distribution
system-capable of automatically anticipating and responding to
disturbances, while continually optimizing its own performance-
will be critical for meeting the future electricity needs of an increasingly

FOREIGN AFFAIRS July/ lugust 2003 [151]

 Timothy E. Wirth, C. Boyden Gray, andJohnD. Podesta
digital society. The benefits of a self-healing grid would include not
only enhanced reliability, but also innovative customer services, real-time
load management, reduced costs, and increased throughput on existing
lines via more-effective power-flow control. Standardized "plug and
play" interfaces for both power and communications systems would
allow distributed generation to proliferate. The self-healing grid
would also increase grid security in response to the threat of terrorism.
Public recognition that the electricity network is inefficient and
shockingly vulnerable to disruption and attack is the first step toward
building support for a "smart" grid. Policy change must follow. A
mechanism is needed to compensate both public and private investors.
Regulatory agencies at the state and federal level will need to provide
appropriately attractive rates of return to deploy this new technology.
Interconnection standards should be clarified and barriers removed.
Performance metrics should be incorporated in voluntary system
standards set by the North American Electric Reliability Council.
Transformation of the power grid would result in greater produc-
tivity growth, higher economic growth, lower carbon emissions, and
increased national security. These advantages, in turn, can help grow
the smart-grid partnership among private-sector beneficiaries-
whether in Silicon Valley or in a biotechnology manufacturing
plant-and those in government whose involvement is needed to
repair this fragile system.

PAY IT FORWARD

OF ALL THE PARTNERSHIPS forged to create a new energy future,

the one with the world's poor may have the most effect on collective
security, the environment, and common economic prosperity. The
world is looking at a tripling of energy use by 205o, as the economies
of China, India, and other developing nations increase economic
output. Even with that growth, the modern energy-services gap
faced by nearly two billion people will not be closed. And if that
growth occurs using outdated and polluting energy sources, climate-
altering emissions will grow dramatically. In human and environ-
mental terms, this scenario presents an unacceptable future and a
daunting challenge.

1152 ] FOREIGN AFFAIRS" Vo/ume82No. 4

 The FutureofEnergy Policy
An international response that faces up to the scale and scope
of the challenge requires three broad and complementary actions:
improved national policy and governance frameworks, increased
national and international resource commitments, and targeted
investment strategies. The United States can make an enormous
difference in all three areas-and advance its own national interests-
with policy, regulatory investment, and resource assistance to developing
countries. In addition, by providing international leadership in energy
technology and policy, the United States
can help create potentially enormous new The world faces a
markets for American suppliers of goods
and services in the energy sector. tripling o energy use by
Approximately $50 billion per year is 2050, as China, India,
spent on international aid by all the coun- and other developing
tries in the Organization for Economic
Cooperation and Development combined- countries grow.
representing only one-third of one per-
cent of their aggregate GDP. Clearly, this formal "aid" funding does
not reflect the potential of OECD nations to spur development.
And only a minor fraction of official development assistance is
spent on energy. Although development assistance can be catalytic
in nature (particularly in reorienting policy frameworks), financing
on the order required must depend on the mobilization of public
resources in developing countries and of private capital, both local
and international.
To help encourage local enterprise, Washington needs to galvanize
the international community around community-based projects that
actually work and target policies and scarce resources to help bring
them to scale. The current patchwork quilt of bilateral and multilateral
efforts is simply too balkanized and spread too thin. A new "Global
Rural Energy Fund" that allocates assistance on the basis of "what
works" would help bridge the yawning gap between pilot projects that
are actually delivering results and the capital needed to make them
standard practice.
In order for private investment to spur market adoption of
clean energy technologies, at least three critical financial barriers
must be overcome: high transaction costs (for small projects), high

FOREIGN AFFAIRS .July/August2003 [ -53]

 Timothy E. Wirth, C. Boyden Gray, andJohnD. Podesta
capital costs (relative to traditional alternatives), and inability to
capture life-cycle cost savings (for instance, over a period of 3o years for
hydroelectric projects and 20 years for solar ones). To overcome these
barriers, innovative financing techniques are needed that can the reduce
risk to and mobilize investment by the private sector--for example,
with extended-term financing for low-carbon energy technologies.
In addition, the United States should create a new category of
investment securities, called "Global Development Bonds." These
would combine tax benefits, political risk insurance, and matching
funds from the U.S. government, subject to the funds' being used
in selected countries (consistent with the president's Millennium
Challenge Account initiative) and for specified sustainable-development
purposes. Other nations could create similar instruments.
By authorizing these securities, the United States would benefit in
several ways. It would leverage private-sector funds in a way that
foreign aid now does not. It would improve the effectiveness of
dollars flowing overseas because the funds would flow through many
competing channels, seeking best applications through market forces.
It would improve the efficiency of moving money into key developing
countries because the private sector works faster and at much lower
overhead cost than government. And it would open up new export
opportunities for U.S. businesses and help restore American esteem
in the international community.

COALITIONS FOR CHANGE

THE PROBLEM of global oil dependence has long been apparent,

whereas concern about climate change is comparatively new. Both
issues suffer from their sheer size and scope: many people simply
believe that the problems are intractable and that practical solutions are
beyond our reach and imagination. Focusing on practical solutions of
the kind described above is a strategy for political change, a strategy
based on restoring hope that the world's energy systems can be turned
in a new direction.
A strategic energy policy will unite diverse political constituencies
and forge common cause among stakeholders that are often at odds.
The environmental community's objective is not to shut down coal,

15S41 FOREIGN AFFAIRS* Volume82No. 4

 The FutureofEnergy Policy
it is to shut down carbon; zero-carbon coal thus is something to agree
on. The automotive and oil industries' objective is not to prop up
dictators in the Middle East or to sully the natural world, it is to
provide a return to their shareholders; making fuels, cars, trucks, and
buses that are clean and profitable thus is something to agree on.
Most of all, a collaborative strategic approach holds out hope
for ending dependence on oil, eliminating excess carbon dioxide
emissions, and providing clean and reliable energy services and
agricultural opportunity to the world's poor. The result would be
to "hurry the future" by unleashing a torrent of innovation that
will stimulate economic growth, create new jobs, improve pro-
ductivity, and increase prosperity and security for the United
States and the world.0

FOREIGN AFFAIRS .July/August 2003 [155]

 Space Diplomacy
David Braunschvig, RichardL. Garwin,
and feremy C.Marwell

A EUROPEAN CHALLENGE IN THE SKIES

ACRIMONIOUS TRANSATLANTIC policy disputes have become all

too familiar in recent years. This winter's UN Security Council debates
over Iraq follow flashpoints on trade, the environment, and the
International Criminal Court. Now satellite navigation has been
added to the list.
Today, the Global Positioning System (GPs)-a satellite-based
infrastructure developed by the U.S. Department of Defense-
provides the only globally available signal for navigation, a feature
that is essential to the operations of U.S. and allied military forces and
to a growing number of civilian users. The European Union (EU)
has decided to challenge GPs by building "Galileo," an independent
European satellite constellation. Unsurprisingly, given the high stakes
involved, the European proposal has sparked a serious transatlantic
argument on several fronts, including the issue of potential interfer-
ence between GPS and Galileo. The debate pits the effectiveness of a
critical U.S. military asset against the EU's right to rely on a system
independent of U.S. control. Any viable agreement must satisfy
not only the negotiators on both sides of the Atlantic but also the
global user community.

DAVID BRAUNSCHVIG is a Managing Director at Lazard LLC and

Adjunct Senior Fellow for Business and Foreign Policy at the Council on
Foreign Relations. RICHARD L. GARWIN is Philip D. Reed Senior Fellow
for Science and Technology at the Council on Foreign Relations and
the author, most recently, of MegawattsandMegatons."The FutureofNuclear
PowerandNuclear Weapons. JEREMY C. MARWELL is a Research Associate
for Science and Technology at the Council on Foreign Relations.

[156]
 For 25 years, GPS satellites have crisscrossed the sky 12,ooo miles
above the earth's surface. Today, they emit two sets of signals that
allow users to calculate their precise location anywhere in the world:
an encrypted code for use by the U.S. military and selected allies
and an open free signal for civilian use. Sometimes referred to
as the world's "fifth utility"-on a par with water, gas, electricity, and
communication-GPS enables the precise positioning, navigation,
and timing information that is critical to modern society. Historically,
innovations in navigation have led to groundbreaking advances in
commerce, travel, and military strategy. Navigation and timing tech-
nologies are inherently dual-use, and GPS is no exception. The system's
unprecedented accuracy, availability, and speed have made it indis-
pensable to bankers, hikers, pilots, infantry, and generals alike.
The U.S. Department of Defense began launching GPS satellites
in the late 197os to improve navigation for military aircraft and ships,

FOREIGN AFFAIRS .July/August2003 [1-S71

 DavidBraunschvig, RichardL. Garwin, andJeremy C. Marwell
and to increase the delivery accuracy of the weapons they carried.
After almost three decades of development and some $2o billion in
procurement funding, U.S. and NATO aircraft, ships, vehicles, and
ground troops rely on GPS. The system enables a host of crucial military
applications, including, most notably, the current generation of "smart"
bombs employed by the U.S. Air Force and Navy. Adoption of Ps-
guided munitions in armed conflicts has been rapid, growing from
just 3 percent of the bombs used in Serbia four years ago to an estimated
6o percent most recently in Iraq.
Even so, GPS's civilian and commercial value is quietly eclipsing its
military applications. Worldwide, the ratio of civilian to military users
stands at about loo to 1,and by some estimates, commercial revenues
from satellite navigation exceeded $12 billion in 2002, growing at more
than 20 percent annually. Gps provides positioning and navigation
information to recreational boaters and hikers, drivers of GPs-equipped
cars, surveyors, and crews of commercial vessels, among others. And
cellular telephones, the Internet, digital cryptography, and interna-
l tional financial transactions all depend on
GPS is sometimes GPs-based timing information. Eventually, an
upgraded GPS could serve as the basis for a
referred to as the world's revolution in global air traffic management,
"fifth utility,"on a par making air travel far safer and more efficient.
Gps's extraordinary growth was by no
means preordained, however. Initially, the
and communication. Pentagon restricted GPS to military purposes.
In September 1983, following the Soviet
downing of Korean Airlines flight 007, President Ronald Reagan
approved the use of GPS in commercial aircraft. But beginning in
199o, the accuracy of the civilian signal-and therefore its practical
and commercial utility-was deliberately degraded to avoid giving
adversaries a military asset. In May 2000, President Bill Clinton
announced an end to this limitation, at a stroke improving the civilian
GPS signal's accuracy tenfold and opening the floodgates to further
commercial development.
The decision to open GPS made strategic and economic sense. By
2000, the Pentagon was adept at jamming GPS signals over a localized
area, reducing the threat that an adversary might use GPS in battle.

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 Space Diplomacy
Furthermore, after the Pentagon's initial investment in a constellation
of satellites, an infinite number of users could tap GPS'S open signals
at zero marginal cost. Thus, U.S. taxpayers had revolutionized their
military, developed a productive tool for U.S. commercial and leisure
activities, and presented an unprecedented gift to the world.
There are indications, however, that this convenient symbiosis of
civilian and military applications may be ultimately unsustainable.
Gps now faces two important technical barriers: vulnerability to hostile
jamming and the failure to satisfy stringent requirements for life-
safety applications such as air traffic control. The Pentagon is taking
steps, through its various GPs-upgrade programs, to address the former
problem. But an exclusive focus on the jamming threat will not bring
about the improvements civilian users need. Until GPS is certifiable for
aviation use worldwide, its usefulness will be unavoidably curtailed.
Gps is therefore at a juncture. On the one hand, it is a strategic,
state-controlled military asset; on the other, it is a global civilian
infrastructure with commercial potential that has yet to be exploited
fully. The Galileo challenge strikes directly at this paradox, for the
first time raising the question of whether the United States will con-
tinue to enjoy its current dominance in providing the global standard
for positioning, timing, and navigation.

IMITATE OR INNOVATE

THE EU HAS PITCHED Galileo as a civilian and commercial system,

contrasting its proclaimed peaceful orientation with GPS's military
roots. This approach has lent credence to the notion of diverging
U.S.-European attitudes on the use of force, and it anticipated the
voices raised in Europe in opposition to the war in Iraq.
But Galileo was not designed simply to catch up with U.S. techno-
logical advances. After the Kosovo war, several European governments
agreed that an autonomous satellite navigation capability must serve
as the basis for Europe's emerging security and defense policy. Given
that GPs is operated and funded by the U.S. Department of
Defense, Galileo would hedge against the perceived risk that the
United States could deliberately degrade or jam a signal increasingly
vital to European interests. When, in December 2001, French President

FOREIGN AFFAIRS .July/August 2oo3 [159]

 DavidBraunschvig,RichardL. Garwin,andJeremy C. Marwell
Jacques Chirac warned that without Galileo European countries risked
becoming "vassals" of the United States, he touched on two underlying
motivations for the Galileo program: defending European regional
sovereignty and challenging U.S. strategic and technological leadership.
Galileo's critics are quick to ask why, when the United States
makes the GPS signal available to the world free of charge, a second,
potentially redundant signal is required. But the EU contends that GPs
alone is inadequate because of its technical limitations and U.S. gov-
ernment oversight. Galileo purports to be a private-public venture
that will fill in the gaps.
This is not the first time that U.S. technological superiority has
prompted innovation in Europe. With substantial subsidies and after
years of investments, Europe developed successful aircraft-manufacturing
(Airbus) and satellite-launching (Ariane) industries at a time when
the U.S. lead in these areas seemed out of reach. From a European
perspective, satellite navigation promises similar success. By 2010,
commercial revenues from satellite navigation are expected to exceed
Eio billion in Europe alone. Galileo will also contribute to industrial
development in the Eu, representing a €3.6 billion investment and
creating more than lO,OOO technology-
Galileo should inspire intensive jobs. But the plan's success will
ultimately depend on whether Galileo can
the United States deliver on its weighty agenda.
to enhance GPS's Galileo's sponsors promise more robustness,
capabilities and reform greater continuity, and broader coverage than
GPs-improvements that would help satisfy
its institutional structure. requirements for life-safety applications
such as air traffic management. The system's
30 satellites are supposed to be fully operational by 2oo8, an ambitious
launch schedule meant to preempt GPS upgrades projected for the begin-
ning of the next decade. These upgrades are expected to offer many
of Galileo's promised enhancements and would thus close the window of
opportunity for Europe to set the global standard in satellite navigation.
When complete, Galileo will provide five primary positioning
services: free access for most consumer-related applications; a fee-
based service for applications requiring more precision, with attendant
charges levied on manufacturers of receiver chip sets; an open service for

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 Space Diplomacy
life-safety applications; a search-and-rescue service for emergency oper-
ations; and a public regulated service (PRS) for certain security-oriented
applications. Even if the PRS is intended for use by civil security
forces, many believe it will grow, in time, into a European version of
GPS'S upgraded military signal, the M-code.
Although Galileo positions itself as a rival to the U.S. system, its
success is actually predicated on its ability to work seamlessly with
GPs. Each system will be available to the other as a backup, but the full
benefit of a combined constellation-for which Galileo intends to
charge a fee-can be attained only if the systems are truly interoperable,
so that a user could, for example, employ three Galileo and four GPS
satellites simultaneously. Managing this interface successfully, however,
will present a real challenge.

SETTING THE STANDARD

ARGUMENTS ON compatibility and interference have been at the

center of transatlantic tensions since Galileo's inception. One of
the main sticking points has been the EU'S intention to position one of
its two encrypted PRS signals on the same frequency the United States
and NATO plan to use for GPS's upgraded M-code. The overlap could
be problematic in a conflict, since jamming one signal would also jam
the other. The United States has suggested that Galileo select a
different frequency, but the EU affirms its right to position Galileo on
a frequency it considers appropriate for its system and was supported
in this position by the International Telecommunication Union in
mid-2000. The United States strongly voiced its concern over the
issue in a letter allegedly sent by Deputy Secretary of Defense Paul
Wolfowitz to EU defense ministers, in which Wolfowitz argued that
placing Galileo signals in the GPS military band would imperil NATO'S
security interests. But this initiative apparently backfired, with the
U.S. attempt to influence EU policy bolstering the argument of those
officials who regard Galileo as a critical matter of European sovereignty.
Since the EU's official approval of Galileo in March 2002, the
United States no longer challenges Galileo's legitimacy. It does,
however, continue to seek a resolution to the M-code overlay debate,
while working to ensure Galileo-cPs interoperability. This diplomatic

FOREIGN AFFAIRS .July/August 2oo3 [161]

 DavidBraunschvig, RichardL. Garwin,andJeremy C. Marwell
game of chicken will eventually be resolved, but predictably, neither
side wants to be the first to blink.
The EU'S promotion of Galileo as the new global standard for satellite
navigation also poses serious questions regarding the future of U.S.
industrial policy and technology. The situation today is not unlike
that surrounding the development of digital cellular telephony in the
late 198os. At that time, penetration of mobile telephony in Europe
lagged significantly behind that in the United States. In response, the
European Commission supported the launch of the Global System for
Mobile Communications (GSM), which ultimately set the new digital
standard. Its widespread adoption is an example of a European gov-
ernment-sponsored initiative overtaking the incumbent's head start.
The United States presently enjoys a de facto monopoly in satellite
navigation. Yet as a public entity funded by the Department of Defense,
GPs has inherent commercial limitations: meeting the needs of civilian
users and convincing other countries to adopt the GPS standard are not
the Pentagon's highest priorities. A potential implication of Galileo's
deployment could be, as in the case of GSM, the global adoption of a
European system for satellite navigation that does not favor and may
even discriminate against U.S. industrial and commercial interests.
More than 30 years after the "American Challenge" to Europe
announced by publisher Jean-Jacques Servan- Schreiber, ironically,
Europeans are responding by proposing a capitalist alternative to
America's statist approach to satellite navigation. Of course, between
now and 20o8, delays common in most space projects could weaken
Galileo's technical edge, as would the planned upgrade of GPS. But
the challenge Galileo poses to a variety of vital U.S. interests deserves
serious consideration.
A report commissioned by the U.S. Congress in 1995 emphasized
that it is in "the U.S. interest to see GPS become widely accepted and
employed around the world." Today, through lack of focus and funding,
the United States stands to lose not only its primacy but even its
capability in satellite navigation if it does not rise to the occasion.
U.S. policymakers must realize that Galileo will go forward, profitable
or not. The Eu has the legal right and the technological know-how
to build and operate its own system. Pressing the EU to abandon Galileo
would imperil other transatlantic interactions and deny users worldwide

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 Space Diplomacy
the considerable benefits of two complementary satellite navigation
systems. Instead, the United States should be inspired by Galileo to
enhance GPS's capabilities and reform its institutional structure.

RISING TO THE OCCASION

IN THE NEAR TERM, the United States must demonstrate an enhanced

political, technical, and financial commitment to GPS. In response to
Galileo's promises of improved technical services, the United States
must speed up the funding and launch of planned GPS upgrades and
publicize the services it intends to offer. But it must also consider
overhauling GPS's organizational structure.
Galileo is positioned to appeal along two fronts: as a civilian
infrastructure it can better respond to public demand than can a
defense-centered system, and as a strategic capability it can eventually
serve the security needs of not one but several allied nations.
Strengthening the civilian component of GPs and separating it from
its military counterpart would enable GPS to address Galileo's challenge
more effectively. One possible scenario would include the partial pri-
vatization of GPS to yield two separate systems, one delivering M-code
services to U.S. and NATO armed forces ("GPS-M") and another dedicated
to commercial applications ("GPS-C"). The two systems could function
with relative autonomy as part of the same infrastructure. Gps-c
would then have the crucial commercial orientation required to
define, develop, and market customer-oriented services. Businesses
and consumers, in turn, would value such services enough either to
support a fee-charging mechanism or to fund them through tax revenue
if there is a clear benefit to American society. Gps-M, meanwhile,
would incorporate stronger radio signals from larger satellites, balloons,
or high-flying unmanned aerial vehicles to increase redundancy and
limit the possibility of jamming.
Jeffrey Bialos, former head of the U.S. delegation for negotiations
on GPs and Galileo, has also suggested separating the military and the
civilian elements of GPS. In the May 6, 2002, issue of Space News,
he advocated "a single new, integrated civil navigation system that
incorporates both the modernized GPS under development and Galileo."
If merging GPS-C and Galileo is unpalatable to those Europeans

FOREIGN AFFAIRS .July/August2oo3 [163]

 DavidBraunschvig,RichardL. Garwin, andJeremy C. Marwell
who are committed to a sovereign, politically symbolic Galileo,
however, the United States could simply build GPS-C into a competing,
autonomous, commercially oriented system. This competition would
encourage both sides to innovate and ultimately provide better services
to users worldwide.
Interestingly, a restructured GPS would also be in a much better
position to cooperate with Galileo. Interoperability agreements between
the two will be difficult to implement as long as Galileo is oriented
toward civilian applications and GPS toward defense. A civilian subset
of GPs would align the two systems' commercial objectives of serving
users and creating value, thus lifting a serious obstacle to interoperability.
And the continued presence of the GPS standard would help ensure
that U.S. companies could contribute effectively to satellite navigation's
civilian applications.
Increasing the input of key allies in GPS-M, finally, would transform
the system from a U.S. strategic asset to a more inclusive facility.
NATO is already a significant user of GPS, and responsibility for part
of GPS-M could well be transferred to the Atlantic alliance. This
expansion of GPS military applications would go a long way toward
mitigating the image ofGPs as the exclusive tool of the U.S. Department
of Defense while shoring up the Atlantic alliance and increasing
political support for the oPs program. Of course, this proposal would
encounter particular challenges in areas of funding and command
and control, especially from NATO members who are strong Galileo
advocates. But it could also serve as a catalyst for a broader debate
on the interaction between NATO and the EU'S emerging autonomous
defense capability.
With Galileo, the EU plans to imitate and improve on GPS's functional
capabilities. In response, the United States should heed the example
of Galileo's commercial orientation. A restructured GPs that provides
both an enhanced autonomous civilian entity and a multinational
defense capability could more effectively face its new rival without
losing its ability to serve vital U.S. strategic, technological, and
commercial interests.0

[164] FOREIGN AFFAIRS' Volume82No. 4

 Not in Oil's Name
Leonardo Maugeri

DANGEROUS MYTHS

SINCE OIL became vital to industrial societies, it has been the subject
of mythmaking. This is not surprising since the control and pricing of
energy is an emotionally charged issue that lends itself to conspiracy
theories and distorted interpretations of past events. Conspiracy theorists
are once again active, spurred on by the conflict in oil-rich Iraq. They
see multinational oil corporations working with the U.S. government to
dominate the supply, distribution, and cost of oil. To them, the ultimate
goal lurking behind major international crises, such as Iraq, is access
to oil. But the relationship between oil and politics is not so simple.
Neither oil scarcity nor energy security-the twin concepts that
underpin much thinking about this issue even in some official circles-
is a sound starting point for thinking about oil policy. Getting beyond
such notions, however, requires an examination of the myths and the
realities of oil.

THE GOLDEN AGE

IN WORLD WAR II, oil played an important international role, proving

essential to the conduct of mechanized warfare. That experience,
coupled with the Soviet threat, prompted U.S. policymakers and their
British and French counterparts to choose oil over coal to fuel the
rapid reconstruction of Europe's industries and societies. But this
daunting task and growing U.S. demand required fresh sources of oil.
Whereas before the war the United States had been able to supply

LEONARDO MAUGERI is Group Senior Vice President for Corporate

Strategies and Planning for the Italian energy company ENI.

[165]
 Leonardo Maugeri
90 percent of Europe's then modest oil needs, by 1948 the country had
become for the first time a net importer of oil. Thus attention focused on
the Middle East, which alone possessed the huge oil resources needed to
serve as Europe's oil tanker and as America's supplier of last resort.
The region, however, was wrenched by Arab nationalism, anti-
colonialism, and the emerging Israeli-Palestinian conflict, and the
resulting political instability provided fertile ground for the expansion
of Soviet influence. In response, the Truman administration devised
a multistage strategy, whose rationale was eventually codified in
National Security Council Resolution 138/1, to secure oil resources for
the Western world. The initiative turned out to be a great success.
Between 1948 and 1972, world oil consumption grew fivefold,
ushering in the golden age of oil. Given its higher initial level of
demand, North America's consumption only tripled, but elsewhere
oil demand increased by as much as 11 times. This range yielded an
average compound growth rate of ii percent per year, or a doubling
of oil consumption every six and a half years. Oil changed everyday
life and work in the developed world by spurring mass motorization,
broader access to electricity, and the spread of synthetic materials.
Above all, oil fueled the greatest economic
Ample Middle East oil leap forward by any group of countries in
modern history.
drove down prices, This extraordinary phase in economic
swelling consumption development depended on the flow of cheap
and increasing Western and abundant energy from the Middle East.
In the region, oil production cost 20 cents per
dependence. barrel, as opposed to 8o cents in Venezuela
and 9o cents in Texas. Middle Eastern oil there-
fore flooded the world right through the 196os, with brief interruptions
from 1951 to 1953 due to the expropriation of Iran's British-owned oil
industry and again in 1956 due to Egypt's nationalization of the Suez
Canal Company.
Ample Middle East oil supplies drove down prices, thereby swelling
consumption and increasing Western dependence. By the early 197os,
U.S. producers pumped without restrictions to fulfill growing demand.
All upkeep of U.S. reserves was ignored, thus leading the United
States to lose any spare oil capacity. The West's heavy consumption

[16 6] FOREIGN AFFAIRS Volume82No. 4

 Not in Oil's Name
and loose security policy progressively transferred power to Middle
East countries, which wielded oil to achieve political ends. The 1973
embargo was a rude shock to the Western system, with oil prices
rising fourfold, from $2.9o per barrel to $n.65 at the end of the year.
Retrospectively, it became clear that many U.S. decisions had actually
endangered the interests of oil multinationals and incited Arab upheavals
against Western interests. In 1959, for example, President Dwight
Eisenhower limited foreign oil imports to aid small and medium-sized
U.S. oil producers, whose production costs were higher than those of
the multinationals operating in the Middle East. Deprived of the U.S.
market, the multinationals had to contend with surplus production by
lowering prices and, in turn, sending less revenue to the producing
countries. Those countries reacted in 196o by forming the Organization
of Petroleum Exporting Countries (OPEc), thereby inaugurating a
new era of struggle that increasingly weakened the multinationals'
position in the Middle East. Their influence was further undermined
by growing White House support for Israel after the Six-Day War in
1967--a policy that also isolated Saudi Arabia, America's main oil ally
within the Arab world, and drove it to unsheath the oil weapon during
the 1973 Yom Kippur war for fear of becoming a target of Arab
radicalism. Moreover, the United States' support of Iran's aggressive
oil pricing (meant to enhance the shah's military prowess in the Persian
Gulf) continued to erode the multinationals' power, as did Iran's
competition with Libya to extract more favorable conditions from
them. Finally, their Middle East oil concessions were completely
nationalized by the producing countries between 1974 and 1975.
Meanwhile, once-low prices were now high, leading to public outrage
and widespread suspicion in the United States that giant oil companies
secretly plotted the 1973 oil shock in alliance with Arab countries. A
U.S. Senate investigation was marked by efforts to link multinationals
to U.S. policies that had left the nation overly dependent on Middle
Eastern oil. Despite such speculation, the final Senate report debunked
the perceived influence of oil multinationals on U.S. foreign policy.
If anything, the reverse turned out to be true: in the early aftermath
of World War II, the U.S. government had encouraged the multina-
tionals to develop Middle East oil under its umbrella, only to later
take up policies that injured their interests.

FO RE I GN AFFAIRS .July/August 2oo3 [167]

 LeonardoMaugeri
Still, indulgent Western habits and contradictory policies did
not alone cause the oil shocks of the 197os. The cheapness of Mid-
dle Eastern oil also discouraged oil exploration and production
outside the region, leaving no immediate alternatives to Arab oil.
Small populations, which then characterized the oil-rich states,
allowed them to sustain the embargo and still cover their social
needs. In addition, the impact of the Arab oil embargo was
amplified by the absence of reliable figures on effective consumption
or on the impact of cutbacks and their geographical distribution.
Finally, the Soviet Union had ominously stepped into the Middle
Eastern arena, posing a political and military counterbalance to
Western interests.

SECURITY AND SCARCITY

THE WESTERN OBSESSION with oil security grew out of these

conditions and then continued long after a number of forces had
dramatically reduced OPEC'S power. The second oil shock developed
in stages from 1979 to 1981. After the closing down of the Iranian oil
industry in December 1978 and the departure of the shah in January
1979, oil prices began to rise. Nonetheless, in 1979 the price increase was
between 30 percent and 40 percent. That year was the annus horribilis.
It opened with the near meltdown of the Three Mile Island nuclear
reactor, went on with the seizure of the U.S. embassy in Iran by
revolutionary Islamic students and the outbreak of the hostage crisis,
and closed with the Soviet invasion of Afghanistan. Less than a year
later, in September 198o, Iraqi forces crossed into Iran, launching a
bloody war that would last for another eight years. This combination
of factors made oil prices skyrocket to more than $40 per barrel in the
last part of 198o.
Relief through energy efficiency and the promotion of alternative
sources of energy did not kick in until 1982 and 1983. World oil demand,
which peaked in 198o, froze and decreased, particularly in 1982-84.
The birth of a competitive oil market was signaled by the flotation of
oil on the New York Mercantile Exchange in 1983.
Meanwhile, many OPEC members undercut the organization's
discipline in order to sell more oil, even breaking long-term contracts

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 Not in Oils Name
so as to take advantage of rapidly rising prices for spot sales. The
irrational speculation fostered by many producers and the lack of
immediate reliable figures about world consumption shadowed an
emerging oil glut that began to drive oil prices down starting in
1982. The "oil bubble" finally exploded in 1986 when Saudi Arabia
ceased underwriting OPEC's lack of discipline and flooded the
world with its own oil to regain market share. Oil prices plummeted
to below $io per barrel, driving home the lesson that using the oil
weapon injured the oil producers as well as Western countries.
Since 1986, the oil market has functioned smoothly, and OPEC has
constantly tried to ensure oil-price stability, promptly intervening
to supply more oil in times of temporary disruption. In recent
years, therefore, price hikes and volatility have been caused more
by market factors than by political issues.
Dire predictions of scarcity go hand in hand with fears about oil
security. The truth is that oil supplies are neither running out nor
becoming insecure. Today, the average world recovery rate from
existing oil reserves is 35 percent, as compared to about 22 percent
in 198o. Given current oil consumption levels, every additional
percentage of recovery means two more years of existing reserves.
This evolution also partly explains why the life index of existing
reserves is still growing even though the world is replacing only
25 percent of what it consumes every year with new discoveries and
major new oil discoveries have decreased since the 196os. Today's
ratio of proven oil reserves to current production indicates a re-
maining life of 43 years for existing reserves, compared to 35 years
in 1972 and 20 years in 1948. Advances in technology explain the
apparent contradiction between fewer discoveries and more oil.
Whereas an oil field does not change, knowledge about it does,
sometimes dramatically.
Oil abundance, rather than scarcity, has been recurring since
John D. Rockefeller's era. Barring unexpected disruptions, it should
continue to be the norm, given that the average growth rate of world
oil demand is expected to remain at less than two percent annually
over the next 15 years. Major producing countries have taken steps to
avoid repeating past excess-capacity cycles. Nonetheless, their ex-
pansion potential is huge. Saudi Oil Minister Ali Naimi has noted

FOREIGN AFFAIRS .July/August2oo3 [169 ]

 Leonardo Maugeri
that Saudi Arabia is producing oil from only 9 to lo of the coun-
try's 8o-plus oil fields, and 8 of these were discovered more than
40 or So years ago.
Oil supply is also limited by restrictions on investments by inter-
national oil companies in the Persian Gulf's large and cheap reserves.
The dictates of the financial markets play a role as well. Return on
capital measurements and premiums on the cost of capital oblige oil
companies to dismiss many investment opportunities because they do
not fit tight requirements. And higher production levels require
higher replacement ratios, thus raising the bar even higher. Basically,
the financial markets' prudent approach (indeed, an illogical one
from an economic point of view) depends on the assumption of
oil depreciation in the long term. Oil is considered a semi-mature
commodity, the fate of which is closely connected with that of most
raw minerals, all affected by a rise-and-fall consumption pattern in
modern economic history. According to this pattern, just as the Stone
Age did not end for the lack of stones, the
The world is not oil age will not end because of the scarcity
of oil. Rather, oil will inevitably be surpassed
running out of oil, and in convenience by a new source of energy.
there is no oil security Ironically, new investments in non-OPEC
problem in today's areas, where oil costs are higher, are made
possible by OPEC'S production ceilings, which
world market. sustain oil prices. If oil prices were below
$18 per barrel, the output of the United
States, Canada, the United Kingdom, Norway, and Russia would be
partially displaced. In Russia's case, a recovery in the price of oil and
natural gas has boosted oil output and revenues. This in turn has led
some observers to envisage Russia as a future main supplier of West-
ern oil needs, displacing Saudi Arabia. However, considering that the
Russian Federation has only one-fifth the oil reserves of the Saudis
and that old Soviet techniques have damaged many oil fields, it is rea-
sonable to assume that current Russian oil production is inflated by
specific circumstances that cannot last forever. Russia's own con-
sumption, for instance, will recover and will absorb a growing part of
domestic production. Overall, a return to low oil prices would dampen
any major leap forward by the Russian oil sector and thwart needed

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 Not in Oil's Name
investments in its export infrastructure. Thus, although Russia remains
an excellent long-term opportunity for oil and gas companies, particularly
once the current inflated outlook vanishes and legislation improves,
it is misleading to compare its potential role in the world oil market
with that of the Saudis.
In short, the world is not running out of oil, and there is no oil
security problem in today's world market. The problem instead is that
many Western observers speak about oil security when what they have
in mind is stable and cheap oil supplies. This confusion of two very
different things usually stems from public hysteria when oil prices soar.
When prices drop, oil matters are forgotten. Few remember the
general refrain in 1998-99, when oil prices plummeted to about $io:
"Bad for oil companies and producing countries, good for everyone
else." No one spoke then about oil security and energy alternatives.

A DOUBLE CURSE

CHEAP OIL has always been and remains a curse for industrialized
countries and is the most elusive enemy of oil security. It constricts
the development of expensive energy alternatives and new oil regions.
It discourages conservation and perpetuates lax Western consumption
habits. Finally, it increases dependence on the Persian Gulf countries
with the lowest production costs. Cheap oil is harmful to the produc-
ing countries as well. Today less than 25 percent of global production
but 65 percent of the world's proven oil reserves are concentrated in
five countries: Saudi Arabia, Iraq, the United Arab Emirates, Kuwait,
and Iran. All of these countries, as well as other OPEC members, need
decent oil prices; since 1999, they have finally managed a certain degree
of internal discipline in order to limit output and regulate prices. This
policy leaves few alternatives for the Persian Gulf producers because
their economies remain heavily based on oil while their demography
has changed dramatically.
The population in the Persian Gulf states has doubled in twelve
years, with 6o percent today under 21 years of age. This demographic
explosion has created expectations and frustrations to which stagnant,
single-industry economies cannot give a credible answer. Only sus-
tained oil revenues allow these countries to temper social unrest by

FOREIGN AFFAIRS July/August 2o3 [171]

 LeonardoMaugeri
preserving huge social assistance programs. Gulf countries' oil revenues
are already much lower than they were 20 years ago, and cheap oil
prices mean a dramatic dip in per capita oil income. Therefore,
frustration and violent revolt may erupt whenever the minimum
living standards are endangered by decreasing oil prices. Today's
Islamic fundamentalism, like yesterday's pan-Arab socialism, finds
fertile ground among hopeless people.
Beginning in 1962, Saudi Arabia financed the spread of conser-
vative Sunni teaching worldwide to counterbalance the enormous
appeal of pan-Arab socialism. Initially, the United States was
supportive of this policy, but it progressively abandoned its sup-
port during the 199os. Saudi Arabia dared not follow suit for fear
of isolating itself within the Arab world and calling into question
its very survival. The Saudi error has been the illusion that it can
control and shape the political evolution of radical movements by
financing them. Radical movements do pose risks, but they are
limited. Divisions within Arab and Islamic societies weigh against
any single fundamentalist leader's emerging. The only centripetal
force in these societies is a common distaste for rule imposed by
external powers.
But for Arab countries it is difficult to translate creeping political
rivalries into competitive oil policies. If a major producer, such as
Iraq, were to open its oil fields to foreign investment again, its
neighbors would be obliged to react so as not to lose future market
share and revenues. In short, they would be compelled to overproduce
and accept plummeting oil prices. That is the challenge that Iraq
could pose if unregulated foreign investments flowed in to rebuild
its oil industry. While Iraq is being reconstructed, care must be
taken not to deconstruct the oil market again by sparking fierce
competition among major producers.
A radical fundamentalist regime might be interested in launch-
ing such an output-and-price war to destabilize vested interests in
the region and throughout the world. Such a regime could impose
on its people the hardships and privation of lower prices for the
sake of a final victory over the enemies it deems unholy. This type
of scenario could devastate Saudi Arabia. It could also curb U.S.
and Russian oil production, endanger Caspian Basin prospects,

[172] FOREIGN AFFAIRS" Volume82No.4

 Not in Oil's Name
and halt new exploration and technology development. At the
same time, it would endanger many investments that the interna-
tional oil companies have already made worldwide. In short,
within five to seven years, the world would be far more dependent
on the Persian Gulf than it is today with no immediate way out-
an outcome that would seem like a real victory for a radical regime.
But today the very same outcome could also be caused by blind
Western policies designed to undermine OPEC and introduce com-
petition among its members.

ELUSIVE PROTEUS

LIKE THE GREEK GOD PROTEUS, the oil market is escaping control
by constantly assuming different forms, which makes political manip-
ulation of oil difficult, indeed useless. It is also dangerous because
of the concentration of oil reserves in the highly sensitive Middle
East. A hypothetical Western search for oil security through control
of oil resources would perpetuate the Arabs' and Muslims' perception of
a looming threat to their future, thereby increasing anti-Western
sentiment and diverting the countries of the Middle East from
confronting their own problems.
Oil security and scarcity are simply divisive and confusing myths.
Western governments must explain clearly to their constituencies
that oil is prone to price volatility, which makes occasional high prices
unavoidable. Furthermore, they must disabuse their citizens of"bonanza"
oil expectations and promote more careful consumption habits and
investment in new energy technology.
The West must also commit to a long-term strategy of containment
and rollback of any violent or terrorist mutations of Islamic doctrine,
without confusing them with Islam. It must also assist Middle Eastern
civil societies in their search for a different future, without seeming
to pose a choice between two extremes: a Western social model that
is not part of their culture and an authoritarian model that does not
accommodate freedom and individual rights.
This dialogue needs to be reinforced by Western aid to develop
economic activities other than oil. Throughout the 199os, this task
was relegated to private companies or international institutions,

FOREIGN AFFAIRS .July/August 2003 [173]

 LeonardoMaugeri
which were constrained by restrictive financial and social criteria that
only increased Middle Eastern discomfort with the West.
Of course, there is no easy or immediate solution to the Middle
East dilemma. Throughout history, the shaping and consolidation
of national identities has been a prolonged process fraught with
considerable suffering. The countries of the Middle East are rela-
tively new, forged mainly after World War I, and Western states
must ready themselves for the long road ahead, on which they must
avoid either underestimating the strength of Middle Eastern states
or exaggerating the threats that they pose. Western governments
must also overcome their misguided obsession with oil security so
that they can begin to cope more impartially with the Middle East's
problems. Ultimately, Western nations can prevail in helping to
bring about a better future for the Middle East, but only if they
debunk the oil myths and hold fast to their deepest values of freedom,
self-determination, and tolerance, and the awareness that there is
no absolute truth in human affairs.0

[174] FOREIGN AFFAIRS" Volume82No. 4

 Reviews & Responses

TWELVE STARS

From Captain Euro, an on-linecomic strip

European integration resembles a

long-running Broadway play: the actors
change, but the roles remain the same.
Putting It Together BarryEichengreen 194

We Didn't Start the Fire SheriBerman 176

Two Agents, Two Paths Zachary Karabell 182
The Great Revival DavidAikman 188
Stayin' Alive Edward C. Luck, Anne-Marie Slaughter,andIan Hurd 201
How Best to Build Democracy ChappellLawson 2o6
Letters to the Editor 210
Lurie's Foreign Affairs 214
 Review Essay

We Didn't Start the Fire

Capitalism and Its Critics, Then and Now

Sheri Berman

The Mind andthe Market. Capitalism in States to angry farmers in France and
Modern European Thought. BY JERRY frustrated strongmen in Malaysia, calls
Z. MULLER. New York: Alfred A. ring out to reclaim some areas of life from
Knopf, 2002, 487 pp. $30.00. the ever-tightening grip of the market.
The controversy has emerged so
Thanks to globalization, it is often said, quickly that it seems new and strange-
the world is at the dawn of a new era. although in fact it is anything but, as
The spread of markets across the globe Jerry Z. Muller demonstrates in his
and the deepening and quickening of wonderful new book The Mind andthe
economic interconnections have narrowed Market. A historian at Catholic University,
the choices open to leaders and publics. Muller has written a lively and accessible
You can either opt out of the system and survey of what dozens of major European
languish or put on what Thomas Friedman thinkers have thought about capitalism.
calls neoliberalism's "golden straitjacket"- The value of the book lies less in its
after which "your economy grows and contribution to the literature on any
your politics shrinks." The new order's particular individual than in its gathering
boosters tout its productivity and efficiency, together in one place of a wealth of
but critics bemoan its hollowing out of information on figures from Burke, Smith,
democracy and communal solidarity. From and Voltaire to Schumpeter, Keynes, and
blue-collar autoworkers and turtle- Hayek. Muller's masterful sketches of
suited environmentalists in the United intellectuals from across the political

S H E RI B E RMA N is a Visiting Scholar at the Center for European Studies at

New York University and the author of The Social Democratic Moment: Ideas
and Politics in the Making oflnterwarEurope.

[176]
 We Didn'tStart the Fire
spectrum help put today's battles over argued that "the love of money is the
globalization in proper historical perspec- root of all evils." Critics of capitalism
tive. He reminds us just how venerable could draw on this tradition, and did.
many of the current antiglobalization In the mid-nineteenth century, for
movement's concerns actually are, and example, Marx's collaborator Friedrich
thus how they need to be understood Engels stressed the new system's "morally
and addressed not as the consequences scandalous" foundations. Self-interest
of recent policies or conditions but rather was really nothing more than greed,
as inherent in the dynamics of capitalism he claimed, and greed stood in direct
itself.What becomes painfully clear in the conflict with morality and the larger
process is how far the level of debate needs of humanity. He and Marx were
has fallen in recent decades and how convinced that the market's exaltation
impoverished and narrow contemporary of self-interest would ultimately erode all
thought about the market has become. restraints on behavior and thus increase
social conflict and disorder--a development
GREED AND GOODNESS they were ready to welcome, since it would
Because Americans take capitalism for pave the way for the rise of socialism.
granted, they often fail to appreciate what The critics argued, moreover, that in
a historically recent and revolutionary addition to encouraging avarice, market-
phenomenon it is. Trade and commerce based societies distracted people from the
have been features of human society from common purposes and higher ends to
the beginning, but it was really only in the which life should be devoted. Advocates
eighteenth century that economies might claim that capitalism's greatest
began to emerge in which markets were accomplishment was freeing individuals
the primary force in the production and to pursue their own self-interest, but the
distribution of goods. And as soon as critics replied that in practice this often
such economies did emerge, they began translated into an obsession with trivial
transforming not only economic relation- choices about consumption rather than
ships but social and political ones as well. anything deeper and more noble.
These transformations were so radical and Such concerns were voiced with in-
so destabilizing, in fact, that they prompted creasing vehemence and regularity during
an almost immediate backlash. the surge of globalization that began
Some of the critics' concerns related to toward the end of the nineteenth century
the harmful effects that the glorification of and led a surprisingly large number of
moneymaking had on individual character. intellectuals to reject the liberal, capitalist
Throughout Western history, Muller system completely. Muller illustrates this
notes, the pursuit of material gain had dynamic by contrasting the careers of
generally been frowned upon, if not the Hungarian revolutionary and literary
actively discouraged, since it was seen as critic Georg Lukics and the German
incompatible with a virtuous life. Thus sociologist and political ideologist Hans
Plato had Socrates say in The Republic Freyer. Born in 1885, Lukcs gradually
that "the more men value money the less became obsessed by the "spiritual emptiness
they value virtue," while the Apostle Paul and moral inadequacy of capitalism" and

FOREIGN AFFAIRS .July/August2003 [177]

 Sheri Berman
became convinced that the system was not
worth saving. Longing to replace it with an
entirely new type of civilization, one that
promised a fresh start and an opportunity
to lead a meaningful and purposeful life,
he eventually turned to communism. For
Lulkcs, Muller notes, it seemed to provide
precisely "what capitalism could not: a
cause to which one could devote one's
whole life, rather than just part of oneself;
a source of discipline worth accepting; and
an all-encompassing community."
Born in 1887, meanwhile, Freyer took a
similar journey but ended up at a different
destination. He too grew increasingly
disillusioned with the spiritual emptiness
and personal alienation that characterized
modern society and searched for a radical
alternative to the "moral dead-end of
capitalism." But whereas Lukdcs found
his salvation in communism, Freyer
found his in National Socialism. Neither
a racist nor an antisemite, Freyer, like
many intellectuals, was attracted to the
Nazis because they seemed to offer
what capitalism lacked: an opportunity
to sacrifice for the larger good and partici-
pate in a world historical project.
THE GREAT TRANSFORMATION
Another set of criticisms focused on
capitalism's effects not on individuals
but on society. Well into the nineteenth
century, Muller points out, it was widely
believed that societies could be held
together only by "a shared vision of the
public good," and so many intellectuals
worried that the growth and spread of
markets would lead to the decay of social
and political institutions. An early ex-
pression of such concerns came from one
Justus M6ser, a fascinating figure Muller
rescues from obscurity. Born in 1720 in the
[178] FOREIGN AFFAIRS
small west German town of Osnabruick,
M6ser watched with fear as the market
began to destabilize the society in which
he lived. He decried the fact that in the
emerging capitalist world,
money and paid service decide all, and
both have shamefully extinguished the
economy of public honor which were
the nonmonetary means by which patriots
were rewarded. The economy of public
honor led in a certain and orderly fashion
to the commonweal; it functioned on the
basis of duties rather than punishments,
it created patriots willing to sacrifice for
the sake of their fellow citizens and
become involved in all undertakings for
the sake of the state and renown. Now
the rich in their gilded coaches trample
the common citizen into the dust; and the
paid servant laughs at the man who once
sought as his reward for voluntary and
grand service nothing but the honor of
wearing the black coat of public office.
For Mbser, in short, basing social relation-
ships on material exchange and reward
was not a historical necessity but rather a
choice that the communities of his time
were making, and a bad one.
M6ser also bemoaned the way the
emerging capitalist system led to a stifling
homogenization. By insisting on the
universality and primacy of a set of "simple
principles" and by allowing the direction
and nature of social relationships to be de-
termined by economic needs, the spread of
markets threatened to rob communities
of their distinctive cultures and institutions.
Capitalism thus departed, he declared,
"from the true plan of nature, which
reveals its wealth through its multiplicity,
and would clear the path to despotism,
which seeks to coerce all according to a
few rules and so loses the richness that
comes with variety."
Volume82No. 4
 We Didn't Startthe Fire
Concerns similar to M6ser's continued
to be raised by European intellectuals as
time passed, and became increasingly
widespread and impassioned. In 1887, the
German sociologist Ferdinand Tonnies
published his path-breaking Gemeinschaft
und Gesellschaft (Community and society),
setting the terms of the debate for gener-
ations to come. Tonnies asserted that
there were two basic forms of social life,
that which existed before the spread of
markets and that which existed after.
In the precapitalist world, community
reigned supreme. Commitment to the
public good was the highest value, and
citizens were bound together by common
views and an instinctual, unquestioned
sense of social solidarity. The dominance
of markets, in contrast, created a type of
social organization where self-interests
rather than communal interests were
paramount and the only bonds between
citizens were temporary and shifting re-
lationships of contract and exchange.
Although Tonnies intended his analysis
to be objective, he was clearly haunted
by the sense that modern man had paid
a terrible price for the advance of the mar-
ket-the loss of communities united by
shared ideals and the emergence in their
place of meaningless and transitory societal
groupings. As he famously noted, "In
community people remain essentially
united in spite of all separating factors,
whereas in society they are essentially
separated in spite of all uniting factors."
A recurrent subtheme of Muller's
book, interestingly, is how such ideas about
capitalism intersected with antisemitism.
He thus describes, for example, how
Tonnies' categories were taken a step
further by the German social scientist
Werner Sombart, who placed the ultimate
FOREIGN AFFAIRS .July/August2oo3
responsibility for the shift on the shoulders
of the Jews. Jews, Sombart argued, em-
bodied all the traits valued most highly by
the market-egoism, self-interest, and
abstract thinking-and therefore had the
most to gain from its spread. With Som-
bart, the triumph of capitalism was thus
portrayed as "the replacement of a concrete,
particularist, Christian Gemeinschaft by
an abstract, universalized, Judaized
Gesellschaft," an ominous turn that gave
the alienated and displaced someone
handy to blame.
WHAT WOULD BURKE DO?
Muller makes clear that over the centuries
even capitalism's most passionate defenders
took both the individual-level and the
societal-level criticisms seriously and felt
obliged to address them forthrightly.
Regarding the dangers of saying that greed
was good, for example, he cites Edmund
Burke, the great eighteenth-century British
conservative statesman and political thinker
who "championed capitalist economic
development from his earliest published
writing until his last days." Nevertheless,
Burke firmly believed that "among the
greatest of men's needs was the need for
society and government to provide a
'sufficient restraint upon their passions.'
An important factor driving this conviction
was Burke's experience with one of the
great multinationals of his day, the British
East India Company (EIC). He watched
with horror as the company's leaders
engaged in a "magnificent plan of plunder"
in India. In addition to devastating a
"great and venerable civilization," Burke
noted, the avarice of the EIC's leaders also
corrupted the English political system,
since they used their ill-gotten gains to
buy political influence at home. Only an
[179]
 Sheri Berman
active and interventionist state, he con-
cluded, could restrain such behavior
and ensure the "priority of human over
commercial rights."
And regarding the concern about
individuals being distracted from higher
purposes, Muller notes how Matthew
Arnold, the nineteenth-century British
poet and critic, supported capitalism
but worried that its advocates tended to
confuse "the agglomeration of means
with the ends of life, and the increase in
material wealth with moral improvement.
They treated political liberty as a good
in itself, instead of asking what purpose
that liberty served." Arnold did not
disparage either liberty or wealth, Muller
writes, but he objected to the notion that
"liberty was the last word in moral
evaluation, and that the principles of free
trade, industriousness, and self-interest,
which fueled the market, ought to be
applied to all other areas of life." He decided
such tendencies had to be counteracted by
a variety of means, including the promo-
tion of cultural and intellectual norms that
would protect against the materialism and
Philistinism capitalism encouraged.
The nineteenth-century German
philosopher Georg Wilhelm Friedrich
Hegel agreed. Hegel, Muller observes,
saw the market as the "central and most
distinctive feature of the modern world,
a world he affirmed and sought to explain
to his contemporaries." But he also recog-
nized the defects of market societies
and came to the conclusion that the state
had to step in to help remedy them.
Like Arnold, Hegel believed that in
order to lead a truly full and satisfying
life, individuals needed a sense of identity,
a feeling of being connected to some
larger whole beyond themselves. In the
[180] FOREIGN AFFAIRS" Volume 82 No. 4
precapitalist world these connections
were provided by things such as religion,
tradition, and shared cultural norms,
but in modern society Hegel thought they
would have to come from institutions such
as the state and the civil service.
Indeed, perhaps the only defender of
capitalism whom Muller finds largely
unmoved by the critiques is the twentieth-
century Austrian liberal Friedrich Hayek
(which undoubtedly explains a large part
of his contemporary appeal). Hayek had
little sympathy for talk of virtue or "higher
ends" and was skeptical of any state role
in controlling the market or in fostering
so-called public goods. Instead, he praised
precisely what was often criticized, the
emergence of a society in which individuals
were as free as possible to do as they
pleased and states served merely as "pieces
of utilitarian machinery intended to help
individuals in the fullest development of
their individual personality." But Hayek
is the exception that proves the rule, for
he was honest enough to recognize that
the libertarianism he championed would
not necessarily be very popular because it
would be too personally and socially
destabilizing for many to handle. Rather
than try to alleviate such concerns,
however, he was content to suppress
them and accept limitations on democracy
in the process-an aspect of his thinking
that receives little attention from his
admirers today.
IGNORANT ARMIES CLASHING BY NIGHT
Many of the figures Muller discusses are
little read today outside of graduate
seminars in intellectual history, but all
of this is, or should be, of far more than
merely antiquarian interest. It represents
the backstory of the antiglobalization
 We Didn'tStart the Fire
movement and shows that contemporary
worries about the downsides of capitalism
cannot be dismissed as the rantings of
ignorant fools or as simple adolescent
acting-out. Similar concerns, Muller writes,
have "been on the minds of intellectuals
for a very long time, at least since the
eighteenth century," and contributed to
the rise of both communism and fascism.
These concerns should be taken very
seriously indeed.
But today's market boosters disagree.
Pointing to the very real economic
benefits that capitalism brings and the
poor economic track record of non-
market-based approaches to arranging
economic affairs, globalization's propo-
nents find it hard to understand what
all the fuss is about. If only the protesters
could learn some math, they scoff, or learn
to care about increasing the aggregate
wealth of society rather than coddling a
few special interests or worrying about
quaint traditions and outmoded values,
everything would be fine.
What they fail to understand is that
such narrow economistic attitudes miss
the point. Yes, capitalism is far and
away the best method ever discovered
for producing growth. But for serious
thinkers that has not been, and is not
today, the only issue. Even its most
die-hard critics have never doubted
capitalism's amazing capacity to generate
wealth. In fact, Muller notes, for someone
like Justus M6ser it was "precisely the
superior productivity of capitalism that
was its most threatening aspect," because
that was what enabled it to so rapidly
and efficiently undermine traditional
forms of production and the lifestyles,
cultures, and communities that went
with them.
FOREIGN AFFAIRS .July/August 2oo3
Now and in the past, the real debate
about markets has focused not simply
on their economic potential but also on
the broader impact they have on the lives
of individuals and societies. Critics have
worried, and still worry, not about whether
unleashing markets will lead to economic
growth, but about whether markets them-
selves will unleash morally and socially
irresponsible behavior while eviscerating
long-standing communities, traditions,
and cultures.
The great defenders of capitalism that
Muller analyzes understood this well.
They respected the concerns of their
fellow citizens and took pains to address
them, often by accepting the need for
markets and market values to be countered
by other forces such as state regulation,
civil society activity, and social sanctions.
Could they return now for a visit, they
would be delighted to see the wealth
capitalism has generated since their
passing-and appalled to see how their
rich and vibrant tradition of political
economy has withered into the cramped
equations and narrow materialist calculus
of contemporary economics. They knew
that allaying the fears and unease generated
by the spread of markets would be one
of the central tasks of politicians and in-
tellectuals from the Industrial Revolution
onward; they might wonder whether
their successors have lost sight of the fact
that markets were meant to serve people
rather than the other way around.0
[181.]
 Review Essay

Two Agents, Two Paths

How the CIA Became a Vital Operation

Zachary Karabell

A Look Over My Shoulder.'A Life in the
CentralIntelligenceAgency. BY
RICHARD HELMS WITH WILLIAM
HOOD. New York: Random House,
2003, 512 pp. $35.00.
Lost Crusader: The Secret Wars ofCL4
Director William Colby. BY JOHN
PRADOS. NewYork: Oxford
University Press, 2003, 380 pp. $35.00.
Day by day, the visceral memory of
September u is fading, but the tectonic
reorganization of the federal govern-
ment continues. In April, the Bush
administration asked Congress to expand
the powers of the Central Intelligence
Agency. Specifically, the administration
wants the CIA to have the authority to
issue "national security letters" demanding
access to a wide range of personal records
held in the United States, including
those kept by banks and on-line service
providers. These de facto subpoenas
would not require court approval.
Perhaps the most striking thing about
the administration's proposal was how
little controversy it generated. True,
Democrats in a closed-door session of
the Senate Intelligence Committee
succeeded in temporarily delaying a vote
on the measure. But its very introduction
shows how significantly the parameters
of government have altered in the past
year and a half. During the 199os, the
national security state appeared to be
slowly eroding. Now, with the creation
of the Department of Homeland Security
and the expanding powers of the CIA, the
Federal Bureau of Investigation, and
the Pentagon, that trend has reversed.
If you had said 25 years ago that one day
the CIA would be authorized to undertake

ZACHARY KARABELL is a Vice President at Fred Alger Management. He is

the author of Architects oflntervention: The UnitedStates, the Third World, and the
Cold War and, most recently, Partingthe Desert: The Creationof the Suez Canal.

[18 2]
 Two Agents, Two Paths
operations inside the United States, you
would have been laughed at or savaged.
The Watergate scandal led to allegations
that the CIA had become an unaccountable
and thuggish arm of government. After
the revelations of the Rockefeller Com-
mission and of the 1975 congressional
committees led by Senator Frank Church
and Representative Otis Pike, the CIA
was widely thought of as "a rogue elephant"
that had engaged in illegal and immoral
activities throughout the world and had
helped create the ugly morass of Vietnam.
As director of central intelligence (DCI),
William Colby admitted to Congress that
the CIA had planned assassinations of
foreign leaders and, contrary to its charter
and the law, had spied on U.S. citizens
within the United States. Another of the
agency's former directors, Richard Helms
(who served as DCI from 1966 till 1973),
was charged with perjury for failing to
reveal to Congress the fril extent of the
CIA's involvement in the coup that over-
threw Salvador Allende in Chile. In the
198os, the agency's reputation was again
tarnished by its part in the Iran-contra
affair, and in the 199os, it suffered another
blow when it was revealed that CIA officer
Aldrich Ames had been a long-time spy
for the Russians.
Yet today the agency has assumed a
lead role in the struggle against terrorism,
and its star is ascending. Helms could
not have known that his posthumously
published autobiography would appear
in the midst of this transformation, but
his defense of the CIA'S role in protecting
the United States could not be more
timely. Equally suited to the moment
is John Prados' comprehensive (although
often dry) account of the strange career
of Colby.
FOREIGN AFFAIRS .July/August 2003
Helms and Colby are suitable proxies
for the contemporary debate over how
much latitude government agencies should
have to preserve the nation's security.
For most of their overlapping careers,
the two men would have given a similar
answer: a lot. But then their paths diverged.
In the cultural maelstrom of the 197os,
Colby became a critic of the national
security state, while Helms remained its
vigorous defender. Colby became a hero
to those who believed government bureauc-
racies had crossed a dangerous line and a
villain to those who thought he had fatally
undermined the capacity of the United
States to defend itself. Depending on one's
point of view, Helms played the villain to
Colby's hero or the hero to his villain.
Judging from these two books, Helms
had the more compelling persona of the
two. Both men were consummate spies
and consummate bureaucrats. Although
bureaucracy demands conformity, narrative
demands drama, individuality, and sudden
shifts in plot. Colby provided drama when
he revealed some of the more sordid aspects
of the CIA, but much of his life and per-
sonality remain veiled, and Prados-one
of the true experts on the history of the
agency-does not succeed in fleshing
out his personality. Helms, however, was
blessed with a brilliant earlier biographer
in Thomas Powers. A strong desire to
rebut Powers may have been one reason
why Helms felt compelled to write his
own account of his life and career. As
evidenced by his rage at Colby, Helms
could give as good as he got, and although
much of his memoir is a breezy potted
history of the agency, the flashes of
anger, pride, and high dudgeon make
Helms' Helms more intriguing than
Prados' Colby.
[183]
 Zachary Karabell
THE QUIET AMERICANS
Until the late 196os, few Americans under-
stood the workings of the intelligence
world-the so-called secret government.
The CIA, the Defense Department, and
the National Security Council all were cre-
ated by the National Security Act of 1947,
and for most of the next two decades, the
functions of the first were only dimly com-
prehended. It was understood that the CIA
provided the president with intelligence
about potential and actual U.S. adversaries,
but there was little public awareness of how
that intelligence was obtained. Even less
was known about the other component of
the CIA: its Directorate of Operations, also
known as the Directorate of Plans, which
was responsible for covert action.
To some extent, there was a wink-and-
nod quality to public knowledge in this era.
People knew that the CIA was partly about
spying, and they had vague, romantic
notions about spies borrowed from Ian
Fleming and Graham Greene novels. But
as long as the Soviet Union and interna-
tional communism seemed to threaten the
security of the United States, most Ameri-
cans did not care to look too closely at the
nitty-gritty of what the agency actually did.
Both Helms and Colby cut their covert
teeth as officers of the Office of Strategic
Services, an outfit formed on the fly during
World War II. They both joined its succes-
sor, the CIA, in 1947, working with Frank
Wisner, Sr. (who helped create the
clandestine culture of the agency), and the
debonair gentleman spy Allen Dulles (who,
as director of the agency from 1953 till 1961,
made it a formidable bureaucratic player).
The emergence of a powerfil, indepen-
dent intelligence agency in the United
States was not inevitable. Dulles recognized
[184] FOREIGN AFFAIRS* Volume 82 No. 4
that as initially constituted, the CIA was
dependent on the White House for funding
and for direction. He wanted the agency
to be an independent force, and that meant
expanding the scope of its operations. As
he told Helms in 1953, "Intelligence collec-
tion has its place-no question, no doubt
about it.... [But] no matter how important
collection is, in the short and even the long
run, it just doesn't cost very much." To win
a bigger budget and gain a stronger voice,
the CIA had to take the lead on covert action.
"Ifthere's no real money involved," Dulles
concluded, Congress would think that the
agency wasn't important, "and they just won't
pay much attention to us." Covert action
was already becoming a larger part of the
Cold War, and some government body was
going to be responsible for its implementa-
tion; Dulles made sure that it was the CIA.
Helms relates this story in the same
matter-of-fact tone that characterizes his
entire memoir. He believed till his dying
day that the CIA had made a vital contri-
bution to the security of the United States
and that whatever unsavory actions it may
have taken were done at the behest of
the president. The fact that there was
calculation involved in the expansion of
the agency's autonomy is neither here
nor there; if anything, Helms believed
that the CIA did the job of gathering in-
telligence and implementing covert action
about as well as could have been expected.
THE BLAME GAME
Helms does not gloss over the problems
that the agency encountered, but with
few exceptions, he places blame for what-
ever went wrong squarely on the White
House, on the congressional committees,
and on Colby. On the first two counts,
his argument is hard to refute.
 CORBIS
Spies like us. RichardHelms and William Colby
During the 1950s, the CIA organized
coups against several Third World govern-
ments, including those in Iran, Guatemala,
and Cuba. At the Bay of Pigs in 1961, the
last of these plans went awry and failed
spectacularly. The fiasco was a notable
embarrassment for the agency, and its
failure led to the forced resignation of both
its director, Allen Dulles, and its director
of operations, Richard Bissell. Helms was
Bissell's deputy at the time but escaped
censure because Bissell had left him almost
in the dark. Although Helms writes about
the affair with sadness rather than animus,
he spares neither Bissell nor Dulles blame
for the miscalculations. From Helms' per-
spective, they only tried to implement
the desires of the Eisenhower and then the
Kennedy White House to remove Fidel
Castro. In the end, Helms felt, it was
Kennedy who failed the CIA (by refusing
to support the operation more enthusiasti-
cally) rather than the other way around.
If the Bay of Pigs was a black eye for
the agency, Vietnam was a turning point.
FOREIGN AFFAIRS .July/August2003
CO RB IS
By the late 196os, as public opinion began
to shift against the war, the CIA came
under even greater fire. As Helms and
Prados both note, some of the criticism
was misdirected. Many assumed, for ex-
ample, that the controversial and brutal
Phoenix program-designed to "pacify"
the Vietcong in South Vietnam-was a
CIA operation, when in fact it was not.
It was indeed overseen by Colby, but
technically it was really the South Viet-
namese themselves, rather than the CIA,
who were responsible for its most egregious
and violent aspects. Whereas Helms and
to some extent Prados are disingenuous
in letting the CIA off the hook, they are
correct in saying that the agency was only
one of several responsible parties and an
easy scapegoat.
What emerges from both Helms'
memoir and Prados' biography is how
the culture of secrecy shrouding the CIA
cut two ways. It kept the agency insulated,
but it also made it possible for successive
presidents to evade accountability. In the
[1851
1970s, a hypocritical and opportunistic
Congress made the CIA the fall guy for
the mistakes of an entire era because that
was easier and safer than untangling the
true web of responsibility that included
both a domineering White House and a
passive legislature. Helms was too loyal
a cold warrior to attack the White House
directly at the time of the investigations,
but two decades later, he uses his memoir
to argue that the agency and its officers
were just following orders.
The one person who receives Helms'
unsparing scorn is Colby. In the intro-
duction to his memoir, Helms refers to
the culture of the CIA and "one former
Dci's expressed determination to destroy
it." Colby did not just testify before the
Church and Pike committees; he provided
them with incriminating documents.
Helms believed that these disclosures
"effectively smashed the existing system
of checks and balances protecting the
national intelligence service." Helms had
both professional and personal reasons to
be resentful. He blamed Colby not just
for airing the agency's dirty laundry but for
initiating a chain of events that led to
Helms' 1977 nolo contendere conviction
for misleading Congress.
Helms and Colby have come to stand,
in stark terms, for the two faces of the
CIA. One, represented by Helms, reflects
an agency of anonymous patriots protecting
America against invisible enemies and
deflecting attention away from the White
House. The other, represented by Colby,
reflects an agency that ran off the rails in
its attempts to satisfy the unreasonable
demands of the White House and the
public. In truth, both men were loyal
soldiers, and as Prados adeptly shows,
Colby confessed just enough to prevent
[1861
Council on
Foreign Relations
I
FRANKLIN WILLIAMS INTERNSHIP
The Council on Foreign Relations is seeking
talented individuals for the Franklin
Williams Internship.
The Franklin Williams Internship, named after
the late Ambassador Franklin H. Williams, was
established for undergraduate and graduate
students who have a serious interest in inter-
national relations.
Ambassador Williams had a long career of
public service, including serving as the Ameri-
can Ambassador to Ghana, as well as the
Chairman of the Board of Trustees of Lincoln
University, one of the country's historically
black colleges. He was also a Director of the
Council on Foreign Relations, where he
made special efforts to encourage the nomina-
tion ofblack Americans to membership.
The Council will select one individual each
term (fall, spring, and summer) to work in
the Council's New York City headquarters.
The intern will work closely with a Program
Director or Fellow in either the Studies or the
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program coordination, substantive and business
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The selected intern will be required to make
a commitment of at least 12 hours per week,
and will be paid $1o an hour.
To apply for this intemship, please send a r~sum6
and cover letter including the semester, days,
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Human Resources Office
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Tel: (212) 434- 9400
Fax: (212) 434-9893
humanresources@cfr.org • http://www.cfr.org
 Two Agents, Two Paths
Congress from dismantling the agency
altogether. Helms' personal animosity
unfortunately clouded his ability to
recognize that had someone other than
Colby been DCI in 1975, the CIA probably
would not have survived.
BACK TO THE FUTURE
The subsequent history of the agency
has hardly been cause for celebration.
Its most notable operation, countering
the Soviet occupation of Afghanistan,
supported radical Islamist forces that even-
tually turned their sights on the United
States itself. And although the Church
and Pike committees led to greater congres-
sional oversight of the CIA, the result was
not, as Helms feared, a limitation on the
CIA'S powers. Instead, Congress as well
as the White House became accountable
for what the CIA did, something that
helped insulate the agency from greater
criticism in the wake of September u.
As Congress and the White House
prepare to expand the agency's powers
today, it is remarkable how rarely the
CIA's controversial history gets mentioned.
That may be because few remember it.
When Prados first mentions the scandal
that brought down the Nixon adminis-
tration, for example, he writes, "The
Watergate affair was named for the Wash-
ington building that Nixon administration
political operatives broke into in June
1972 to plant electronic bugs in the offices
of the Democratic National Committee."
Even as recently as a decade ago, no author
would have felt the need to explain to
readers what Watergate was. Now, how-
ever, the event is fading from memory, as
are revelations of government malfeasance
that dominated the headlines a few years
later. Much as the debates over slavery in
FOREIGN AFFAIRS •July/August 2003
the 185os no longer stir collective passions,
stories of assassination plots in Congo,
Cuba, and Chile, as well as allegations
of shadowy links between Watergate
burglars and the denizens of Langley,
Virginia, have lost their power to shock
and awe.
At the same time, we are now more
aware than ever of covert action. The
war against terrorism has been explicitly
described as a secret one, with victories that
will remain hidden, but with failures
that will be known to all. Even the military
campaigns in Afghanistan and Iraq were
described as a new type of warfare that
relied as much on special forces, psycho-
logical warfare, and covert action as on
conventional force. In this environment,
the CIA has solidified its position as a
lead provider of secret intelligence and
one of several government agencies re-
sponsible for covert action. It now plays
precisely the role that Helms wanted it
to play. Ironically, it may not have been
able to play that role had Colby not bent
with the prevailing winds in the 1970s.
To a degree that neither man would
have been comfortable admitting, today's
agency and today's war on terrorism are
the products of both-the silent soldier
and the whistle blower. Their legacy, and
the history of the agency, suggests that there
is a self-correcting mechanism in the
U.S. government, one that does not
prevent abuses from occurring but that
does keep them from becoming endemic.
As a result, Americans may not always
get what they want, but they may end
up getting what they need.0
1187]
 Review Essay

The Great Revival

Understanding Religious "Fundamentalism"

DavidAikman

Strong Religion: The Rise of beliefs could propel people to murder

FundamentalismsAround the World. thousands of innocent civilians?
BY GABRIEL A. ALMOND, R. SCOTT Americans had experienced that
APPLEBY, AND EMMANUEL SIVAN. same incomprehension, drawn out over
Chicago and London: University a longer period of time, in 1979, when
of Chicago Press, 2003, 281 pp. $19.00. militant Iranian students took 52 Amer-
ican citizens hostage within the U.S. em-
Within hours of the attack on the World bassy in Tehran. Who were these people?
Trade Center towers on September n, 2001, What strange religious and political
the final letters of hijacker Muhammad sentiments motivated them to do
Atta, discovered in the trunk of a rental such things?
car parked at Dulles International Air- An almost identical sense of bewilder-
port outside Washington D.C., were ment must have struck many highly
being dissected by journalists and TV educated Americans during the early
pundits. As the new book Strong Religion 198os, when activists on behalf of the
tellingly observes, commentators almost Moral Majority and other Protestant
uniformly characterized the mindset re- Christian groups suddenly became rather
vealed in these notes as "chilling," "eerie," visible on the American political scene.
and "haunting." Once again, it seemed, This confusion, however, may have been
Americans had been caught in a state of followed by a collective, simultaneous
incomprehension: what kind of religious "Aha" moment: of course, "fundamentalism"

DAVID AI KM AN is a former foreign correspondent for Time. His most recent

book, GreatSouls: Six Who Changedthe Century, is the subject of a forthcoming
six-part PBS TV series.

[188]
 The GreatRevival
explained it all. After all, the Reverend
Jerry Falwell, who founded the Moral
Majority in 1979, actually proclaimed
himself a fundamentalist, and those who
supported the new upsurge of Christian
conservatism seemed to share many of
his religious views. Surely they must be
fundamentalists too.
The five-volume, decade-long Funda-
mentalism Project was a major scholarly
effort to see if there was such a sociological
phenomenon as fundamentalism that
might explain similarities, or at least
"family resemblances," among so-called
fundamentalist groups within several major
world religions. A total of 75 different
movements were examined by historians,
anthropologists, sociologists, and political
scientists on several continents. The groups
included had emerged from all of the
world's major religions: Christianity,
Judaism, Islam (both Sunni and Shi'ite),
Hinduism, Buddhism, Sikhism, and
neo-Confucianism. Strong Religion
amounts to a concluding summation of
the project's work.
FUNDAMENTAL QUESTIONS
The volume's title is itself telling. The
word "fundamentalisms" appears only
after the colon. One reason, no doubt, is
the plain inadequacy of the word. As the
authors rather defensively admit, there
are strong reasons for objecting to the term
"fundamentalist." First, it has tended to
be used in a pejorative way, denigrating
almost anyone of convinced religious
viewpoint. In addition, it is often care-
lessly linked to the word "terrorist," as
though being a fundamentalist almost
inevitably leads to violence. Moreover,
strictly speaking, the name "fundamen-
talism" should be applied only to one
FOREIGN AFFAIRS .July/August 2003
particular movement within Protestantism
that came into existence in the early
twentieth century, inspired by a series
of booklets that attacked theological
modernism called The Fundamentals.
Another difficulty lies in applying
the word "fundamentalist" to people of
Muslim faith. That begs the question
of the extent to which their beliefs are
somehow more archaic than the beliefs
of those with a supposedly more modern
Muslim outlook. For this reason, Strong
Religion agrees that Muslims who have
been rather cavalierly labeled "funda-
mentalist" should instead be referred to
as "Islamist," a more neutral term that
has been carefully defined by scholars
examining the phenomenon of Islamic
radicalism or revivalism in different
parts of the world.
The question remains: Can the family
resemblances discerned in differing
varieties of religious revivalism be de-
scribed usefully as a "fundamentalist
phenomenon"? This book argues force-
fully that they can. It examines with
some insight different aspects of religious
communities that are commonly called
fundamentalist. It refers to the "enclave
culture," the tendency of so-called
fundamentalist movements to see
themselves as beleaguered minorities
in an alien and hostile world. Some of
the specific studies of religious move-
ments are fascinating and informative,
almost providing digressions from the
sociological narrative. Readers who are
not immediately familiar with militant
Sikhism, or Buddhist "extremism" in Sri
Lanka, or the haredi and Gush Emunim
movements in Israel will learn much.
There is also a pithy dissection of the
rise of Ayatollah Khomeini and his
[18 9]
 DavidAikman
followers in Iran. And the analysis of the but at other times seems more interested
distinctiveness of Sunni Islamic revivalism by the messianic, even eschatological,
in contrast with the Shi'ite variety is content of different movements. One
genuinely useful. insightful aspect of the book is its at-
tempt to categorize the interaction of
TRUE BELIEVERS? fundamentalists with the world outside
The larger issue raised by this effort to their enclave in four ways: as world
understand fundamentalism is the premise conquerors, as world transformers, as
of the entire project: that such religious world creators, and as world renouncers.
movements are "militant and highly Those in the first category are for the
focused antagonists of secularization." most part predictable: al Qaeda, Iranian
Many so-called fundamentalist move- Shi'ite radicals, Hamas, Sikh militants,
ments are undoubtedly hostile to much and, rather incongruously, the Moral
of modernity. But the word "secularization" Majority. But it does not seem self-
seems a bit loaded. It implies that in- evident that world transformers should
creasing global secularism is somehow include Pentecostalists in Guatemala
the natural order of things. In fact, the and Hindu nationalists, or that Luba-
global upsurge of religion in recent vitcher Hasidim and South Indian
years suggests otherwise. Christians should be lumped among
As sociologist Peter Berger argues in the world creators.
The Desecularizationof the World, "the A more serious difficulty with the
notion that we live in a secularized world book is an undercurrent of distaste that
is false." Secularization theory, derived runs through parts of it for many of
from Enlightenment views of religion the groups under examination. It is as
and popular in American academia in the though the researchers had to don
195os and 196os, held that the world would chemical-protective suits even to inves-
gradually abandon religious faith and tigate the phenomenon of fundamentalism,
free itself from the shackles of religion and as though it were a dangerous microbe
superstition. But as Berger notes, "The that might harm them. This impression
world today is massively religious, and is reinforced by the title of Chapter 2,
it is anything but the secularized world "Fundamentalism: Genus and Species."
that had been predicted (be it joyfully The references to Protestant Christian
or despondently) by so many analysts fundamentalism, moreover, seem to display
of modernity." both inconsistent terminology, on the
One of the difficulties of attempting one hand, and an unmistakable whiff of
to determine family resemblances among disdain on the other. At different times,
different types of fundamentalism is "North American Protestants," "U.S.
deciding whether what is at work is a Protestant fundamentalists," and "New
political ideology garbed in religious Christian Right" seem to be used syn-
terminology or a religious movement onymously. In discussing the American
defining itself largely or entirely by relig- variety of Protestant fundamentalism,
ious values. Strong Religion at times the authors include a scathing reference
seems to opt for the political definition to an "upbeat American patriotism"

[19o3 FOREIGN AFFAIRS" Volume82No. 4

 The GreatRevival
that is supposedly "xenophobic (anti-
German in the earlier twentieth century,
anti-Soviet following World War II)
and saturated with the rhetoric of
manifest destiny." One does not have
to have any interest in religion to con-
clude that "upbeat American patriotism"
just might have had something to do
with the Cold War or to know that
"manifest destiny" was coined in 1845 not
by a fundamentalist but by a thoroughly
secular newspaper editor, John O'Sullivan,
who sought simply to articulate the
emerging American national doctrine
of continental expansion.
The scholars also display something
approaching intellectual dishonesty in
their discussion of "martyrdom" in the
Christian and Muslim contexts. "Chris-
tians, like Muslims," Strong Religion
asserts, "have considered martyrdom a
prime opportunity for holiness, and
indeed, a direct ticket to heaven." This
grossly distorts the difference between
the Christian and the Islamic concepts
of martyrdom. Within Islam, martyrdom
is what happens when a person dies in
jihad. Thus Palestinian suicide bombers,
who try to kill as many civilians as possi-
ble while blowing themselves up in Israeli
buses or discotheques, are praised by many
fellow Muslims as martyrs. Christians
are only martyrs when killed purely and
simply for what they believe. Although
Muslim "martyrs" may indeed enter
paradise immediately, martyrdom within
Christianity has nothing to do with
entrance into heaven.
SPREADING THE WORD
Almost anyone interested in the rise of
Christian conservatism (to use a nonpe-
jorative term) as a cultural and political
FOREIGN AFFAIRS .July/August2003
concept in the United States will quickly
discover that although Protestant fun-
damentalism is indeed an identifiable
movement in American history, it was
numerically superseded by the late 1950s
by what is now called "evangelicalism."
Evangelicals believe as ardently as
Protestant fundamentalists in the need
to propagate the gospel, but they were
determined to break out of precisely
the enclave mentality into which the
fundamentalists had chosen to retreat
from the 19205 onwards. Strong Religion
refers a few times to Bob Jones Univer-
sity, certainly a bastion of American
fundamentalist thinking, but overlooks
the important point that Bob Jones, Sr.,
virtually excommunicated evangelist
Billy Graham from fundamentalism in
1957 because Graham wanted evangelicals
to work with any Christian church that
would accept them.
This fact is important to understand
because the evangelical, not the funda-
mentalist, brand of Christianity seems
to be expanding faster than any other
religious movement in the world today,
including Islam. (It is worth noting that
fundamentalist Protestant Christians
generally oppose strongly the Pentecostalist
or charismatic experience, which is at the
heart of much of the Christian growth in
the developing world.) The evangelical
Christian phenomenon in the southern
hemisphere has been thoughtfully exam-
ined by Philip Jenkins in The Next Chris-
tendom. Jenkins argues that the southward
expansion of Christianity in Africa and
Latin America will have more profound
consequences globally than the ongoing
phenomenon of Islamism.
Although perhaps uncomfortable with
going into what particular Christian groups
[191]
believe, the authors of StrongReligion are
certainly aware that it is the evangelicals
who are expanding their influence both
in the United States and around the
world, whereas those Christian groups
that have sought to accommodate secu-
larism are in decline. Interesting statistics
cited in the book for the United States
include the rise of Southern Baptists
from io million in 1960 to 17 million in
2000, a fourfold increase in the adherents
to American Pentecostal denominations,
and a massive decline in the Episcopal
Church from about 3.5 million in 196o to
2 million in 2000. The Southern Baptists
and the Pentecostals have been much more
supportive of positions such as biblical in-
errancy than the Episcopalians, many of
whom appear to have abandoned much
of the historical Protestant orthodoxy.
Strong Religion is undoubtedly correct in
noting that it is their response to modernity
that generally determines whether funda-
mentalist groups prosper or wither. But
how helpful is the book's definition of
fundamentalism as "an aggressive, enclave-
based movement with absolutist, reactive,
and inerrantist tendencies"? This strongly
negative depiction does not capture the
nuances of modern religious groups.
In Indonesia, for example, the Islamic
revivalist movement Nudhat'ul-Ulama
is both pro-democracy and pro-pluralism.
But it is probably also in favor of"in-
errancy" in the Islamic context, thus fitting
at least one of the authors' criteria for a
fundamentalist group.
Or take the role of religious revival-
ists elsewhere in the developing world.
In Guatemala, many sociologists have
observed that communities where Pen-
tecostalism is strong usually manifest
what German sociologist Max Weber
[192]
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 The GreatRevival
a century ago defined as "the Protestant religion inherited a new lease on life in
ethic": self-discipline, frugality, hard our supposedly postreligious age."
work, and saving. A similar pattern can What sort of people have been suppos-
be seen in China today, where there ing that our world was ever postreligious?
may be more than 6o million Protestant Berger wryly proposes that the faculty
Christians (compared with 700,000 in dining hall at the average U.S. college
1949). Some Chinese sociologists have might be a more interesting topic for
noted the "coincidence" that the most the sociology of religion than the Islamic
significantly Christianized city, Wenzhou, schools of Qum. Perhaps one should
where some 14 percent of the population merely recall what an anonymous New
is now Christian, is also one of China's York lawyer said on learning of the
top performers in domestic commerce emergence of the Moral Majority in the
and foreign trade. Wenzhou's Christians 198os: "Millions of people out there be-
would probably not describe themselves lieve what nobody believes anymore."a
as fundamentalists, but some of the
Fundamentalism Project experts, on
hearing what they believe about inerrancy,
miracles, and the End Times, might want
to jam them into that category.
Efforts to analyze and seek common-
alities among fundamentalist groups
can certainly be helpful. The authors of
Strong Religion have done a fine job in
examining many often obscure groups.
The sociological approach offers con-
siderable insights. But in the end, it is
hard to escape the feeling that the authors
need to take more seriously the notion
that it is what people believe, or do not
believe, that determines their actions
quite as much as their income level or
their street address. If fundamentalism
merely denotes strong belief in core
doctrines of faith, what distinguishes an
ardent churchgoer or mosque-attender
from a "reactive" terrorist? The con-
cluding paragraph of Strong Religion
offers a revealing insight into the re-
searchers' mindset as they affirm the
need to understand fundamentalism
"for politicians, diplomats, educators,
and scientists, including those who
continue to wonder ruefully how militant

FOREIGN AFFAIRS .July/August2003 [193]

 Review Essay

Putting It Together
The Foibles and Future of the European Union

Barry Eichengreen

European Integration1950-2002: Superstate mid-19 7 os, is dominated by Monnet and

or New Market Economy? BY JOHN
GILLINGHAM. New York: Cambridge
University Press, 2003, 544 pp. $25.00.
For some, the process of European inte-
gration resembles nothing so much as a
long-running Broadway play: the actors
change, but the roles remain the same,
the lines endlessly repeated, the action
tightly scripted. So it is in John Gilling-
ham's history of the European Union.
Gillingham's libretto revolves around
the conflict between the champions of
economic statism and proponents of eco-
nomic liberalism. The lead roles are those
of Jean Monnet, the charismatic French
technocrat, and Friedrich Hayek, the book-
ish Austrian economist. Act I, which
stretches from the late 1940s through the
his circle, who responded to the material
and moral conditions of post-World
War II Europe, which rendered the rapid
restoration of liberal market arrangements
infeasible, by making enterprise national-
ization and indicative planning (whereby
the government uses a combination of
direct controls and financial incentives
to encourage investment in particular
sectors) the order of the day. Controls on
international capital flows, retention of
which was permitted under the Bretton
Woods settlement, gave each government
the leeway to elaborate a national economic
plan. But capital controls did nothing
to rebuild Europe's trade or to create
confidence that Germany's economic
might would be funneled in productive
directions; if anything, financial restraints

B A RY E IC H EN GR EE N is George C. Pardee and Helen N. Pardee Professor

of Economics and Political Science and Director of the Institute of European
Studies at the University of California, Berkeley. He is co-author of Built to
Last: A Political Architecture for Europe.

[194]
 PuttingIt Together
stood in the way. Monnet's response was
to advocate the creation of a supranational
entity, a union of European nations,
through which state guidance of the
economy could be formulated on a conti-
nental scale, intra-European trade could
be liberalized, and Germany's economic
energies could be reliably channeled. The
economic constructs of the Monnetists,
from the European Coal and Steel Com-
munity to the customs union, were all
flawed to some degree. But together they
gave birth to a basic set of institutions-a
commission of technocrats, a representative
assembly, and a court ofjustice-on the
basis of which it became possible to
organize transnational policies and create
the European Union (EU).
Act II, commencing after an interlude
of six years, sees the revenge of Hayek,
with a helping hand from British Prime
Minister Margaret Thatcher. By the early
198os, the inefficiencies of state-led plan-
ning had become evident, and the special
circumstances that had lent legitimacy
to statism after World War II no longer
animated European leaders. Moreover,
the capital controls that gave European
governments the freedom to pursue dis-
tinctive national policies had lost much
of their bite. The expansion of trade, which
even die-hard Monnetists acknowledged
was necessary for prosperity, and the
growth of the Eurodollar market, which
they did not anticipate, destroyed the
feasibility of economic planning in indi-
vidual countries. The failed "Mitterrand
Experiment" of 1981-83, which attempted
unilateral budgetary expansion to over-
come recession but only precipitated a
financial crisis, drove home the point.
Enterprise privatization and market
deregulation thus became the economic
FOREIGN AFFAIRS .July/August 2003
tools du choix. A single European market
free of barriers to the internal movement
of merchandise, capital, and labor-
Hayek's vision- came to be seen as a
solution to the problems of stagflation
and high unemployment. A continental
market would allow European firms to
reap the benefits of economies of scale
and scope, and the need to attract foot-
loose factors of production would force
national governments to remove barriers
to production and innovation. A single
currency, a creation with both symbolic
and real value for integrating markets and
intensifying competition, capped the
process in 1999.
But this finale proved anticlimatic for
the Hayekians, for it neither reduced the
reach of the state nor led to the devolu-
tion of regulatory functions to regional
and local governments. To the contrary,
the creation of the single market starting in
1986 led to a greater role for the European
Commission, the EU's proto-executive in
Brussels. With the benefit of hindsight,
this result is unsurprising. The cross-
border spillovers of policies grow more
pervasive as markets are integrated, creating
a logic for centralizing the regulatory
functions required for the operation of
a single market. Even a classical liberal
economy must have a trade policy and a
competition policy, and an integrated
international market can have only one
of each. As Gillingham notes, Jacques
Delors, the EU's head technocrat from
the mid-19 8os through the early 199os,
saw this as a convenient opportunity to
expand the responsibilities of the European
Commission and to turn it into the EU's
central policymaking organ.
But conferring legitimacy on those
responsible for these functions requires
[1951
 BarryEicbengreen
creating mechanisms for holding them
accountable for their actions. As the powers
of the European Commission increased,
proposals spilled forth for enhancing the
oversight of the European Parliament,
strengthening the Council of Ministers,
and even directly electing the president
of the commission to redress the demo-
cratic deficit. In the ultimate irony, the
economic triumph of the Hayekians
gave new life to the political integration
so fervently desired by the Monnetists.
THE BEST DEFENSE
It is not surprising that Gillingham, author
of the definitive history of the European
Coal and Steel Community, should see
the development of the Eu as a contest
between these rival economic models. Not
that the author is unaware that others see
the process of European integration first
and foremost as political and only second-
arily as an economic project. One cannot
read his book and fail to be impressed,
for example, with how long-standing is the
French desire to use Europe as a platform
for its foreign policy and for countering
the military and diplomatic influence
of the United States. Already in the early
1950s, Monnet sought to capitalize on this
impulse with a scheme for a European
Defense Community. He envisaged a
European military headquarters and joint
armaments production, ideas that are again
circulating today. Revealingly, the idea
foundered over the absence of political
mechanisms to hold its leaders accountable.
The European Political Community
proposed by Monnet as a framework
for the defense community was quickly
rejected as a bridge too far.
Yet the French, embarrassed by
the climb-down from Suez forced by the
[196] FOREIGN AFFAIRS
United States, refused to let the idea die.
President Charles de Gaulle, however
much he distrusted Monnet, saw his
countryman's European project as a
way of escaping the domination of the
Americans. Subsequent French govern-
ments sought to advance this idea by
making a Franco-German defense union
part of the 1963 Elysee Treaty and by
proposing the creation of the Eurocorps
in 1992. Plus fa change, as they say.
Of course, a key difference now, when
the idea of a European defense union is
again being mooted, is the change in
Germany's geopolitical circumstances. In
1963, with the Soviet army on the Federal
Republic's doorstep, the Bundestag added
to the Elys6e Treaty a preamble stating that
the new agreement should not be allowed
to affect West Germany's NATO com-
mitments. Three decades later a unified
Germany similarly insisted that the Euro-
corps be placed in the NATO framework.
But today, with the Soviet threat long gone,
NATO is perceived as less central to German
security. Chancellor Gerhard Schr6der
can therefore more comfortably side with
the French when they argue the need for
European countries to act in concert to
counterbalance the United States.
A theme of Gillingham's history is the
role of the Cold War in shaping the process
of European integration; it guaranteed
U.S. support while both motivating and
constraining the European response. As
the Cold War becomes history, it is
correspondingly less likely that the goals
of U.S. foreign policy and European inte-
gration will dovetail and more likely that
the European project will acquire its own
distinctive geopolitical flavor.
No significant advance in the process
of European integration has been possible,
Volume82No. 4
 PuttingIt Together
of course, without both French and bloc, but their views are increasingly
German support, from the European Coal difficult to ignore. Thus, 18 small current
and Steel Community to the euro. And and future member states, predominantly
when France and Germany have set their central and eastern European, sought to
minds on further integration, the rest of capitalize on this fact by meeting in April
Europe has found the pressure to fall in prior to the Athens EU summit to agree
line irresistible. Italy was always happy on a common position on the institutional
to have competent government from future of their union. Notwithstanding
Brussels rather than something less French President Jacques Chirac's rebuke
from Rome, as Gillingham observes. Eco- of the new members when they expressed
nomically, Belgium, Luxembourg, and their support for U.S. policy toward Iraq,
the Netherlands were too closely tied to it is clear that their sheer number makes it
their larger neighbors to do anything but difficult for Paris and Berlin to dictate
go along. This makes the mini-summit decisions that must be taken by a qualified
to discuss closer defense cooperation, held majority of member states, and even some-
at the end of April by the leaders of France times by unanimity, in an enlarged EU.
and Germany together with their counter- France and Germany, with cover from
parts from Belgium and Luxembourg, a the Benelux countries, could still attempt
potentially portentous event. to push ahead on their own. The euro
and the Schengen passport agreement
NEW MEMBERS, NEW RULES demonstrate the feasibility of some Eu
At the same time, the current cast is very member states taking further integrationist
different from the original production's. steps in advance of others. Not surprisingly,
The United Kingdom is now firmly a the idea of "reinforced cooperation"-
member of the EU, and, just as de Gaulle of some countries moving ahead more
feared, it has a different vision of Euro- rapidly in areas such as defense and
pean integration, one that allows fewer foreign policy-is in the air.
compromises on sovereignty and insists But to think that thorny issues can be
on closer ties to the United States. Political addressed in this way is to misunderstand
normalization allowed Greece, Portugal, the problems that will occupy Europe's
and Spain to join the EU in the 198os. leaders in coming years. The pressing need
The end of the Cold War allowed Finland, will not be to establish a European military
Sweden, and Austria to join in the 199os. headquarters, an armaments agency, and
Next year, the greatest enlargement yet a joint army so that Europe can match
will expand the Eu from 1S to 25 members. the military ability of the United States
Already the new members are represented in an Iraq-like situation. There is unlikely
at the constitutional convention meeting to be consensus, even within what U.S.
in Brussels, and increasingly their shadow Secretary of Defense Donald Rumsfeld
hangs over Europe's other deliberations. called "Old Europe," on the desirability
Thus, France and Germany, even to- of doing so. Germany may be a different
gether with their Benelux friends, are place than it was before the end of the
now but a small minority of EU member Cold War, but the country's history con-
states. The others do not form a cohesive tinues to shape and constrain its foreign

FOREIGN AFFAIRS July/August 2003

[197]
policy. It remains understandably more
reluctant than France to project military
force abroad. France and Germany's shared
opposition to the Bush administration's
unilateralism on Iraq has done nothing
to paper over this difference.

WE OPEN IN VENICE
Homeland security is another matter. Here
European countries do share a common
interest, but there exists a particularly
great imbalance between Europe and
the United States in this matter. It is
not that Europe lags in technology or
administrative capacity. Rather, it lacks
organization and incentives. The efficiency
with which different U.S. federal agencies
coordinate their efforts to enhance home-
REGISTER AT
land security may be criticized, but at
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least those agencies are federal. Internal
security is similarly a competence of the
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spections of trucks and their contents
at Europe's internal borders.
Notwithstanding the best intentions
of the Italian border police, decentraliza-
tion creates a free-rider problem. Italy ) FOREIGN AFFAIRS
would suffer only some of the adverse

[198]
 PuttingIt Together
consequences for European security if it
cut spending on border inspection; the
rest would be incurred by its partners in
the EU. This is not to pick on Italy; it is the
structure of incentives that creates a ten-
dency to underinvest in internal security.
France and Germany cannot solve this
problem by themselves so long as they value
the internal market within which people
and products circulate freely. Doing so
requires the cooperation of all countries
participating in the single market. Hence
the only way to solve the free-rider problem
and ensure an adequate investment in
homeland security is to transfer responsi-
bility for European security policy to
the EU and to empower an EU agency
to organize the relevant resources. This
includes, if necessary, a single EU security
service and border-control force.
The question is where to locate these
responsibilities-specifically, whether
to vest them in the president of the
European Commission or the president
of the Council of Ministers. Should
this expanded executive authority be
assigned to the president of the com-
mission, who would derive authority
from the EU as a whole? Or should it be
assigned to the president of the council,
who would serve a significantly longer
term in office than the current six months
and derive authority from the national
governments that are the council's mem-
bers? This is the fundamental question
facing the constitutional convention.
The states of the EU have tended to
divide on it along lines of country size.
Most small countries prefer strengthening
the president of the commission, an in-
stitution in which the tradition of a
commissioner for every country has
guaranteed them a voice. The large
FOREIGN AFFAIRS .July/August2003
countries prefer strengthening the presi-
dent of the council, since they anticipate
that the nonrotating presidency will
inevitably be filled by a former prime
minister of a large country partial to their
views. Val6ry Giscard d'Estaing, the pres-
ident of the constitutional convention and
former French president, has predictably
sided with the large countries.
But there is no question of which
option dominates if security is to be
a European priority. Imagine some future
European equivalent of the terrorist attacks
of September u, requiring a rapid response.
It is hard to imagine that this could be
organized by laboriously assembling
25 European heads of state and gaining
their unanimous consent to a specific set
of actions to be carried out by the presi-
dent of the council. No council president
would have the power to call an abrupt
end to the discussions of the assembled
heads of state and act unilaterally. Even
the strengthened council presidency that
Giscard d'Estaing has in mind would have
powers only of "preparation and consul-
tation"; the president could not take
decisions on his or her own. Such capacity
could, however, reside in a strengthened
president of the commission, the EU'S
executive, who would have the ability to
respond in the manner of the president
of the United States. Jacques Delors rec-
ognized all this, according to Gillingham,
when he slipped the third pillar into the
Maastricht Treaty in 1992 as a rationale
for strengthening the commission.
The constitutional convention could
address worries about compromises of
sovereignty by specifying the limited
circumstances under which the com-
mission president could exercise his
new executive authority. It could give
[199]
 BarryEichengreen
the council the right to switch on and emphasizes throughout his tome. The
off the president's powers to take uni- idea that 25 proud, sovereign states would
lateral steps to protect Europe's internal suddenly see the need to counterbalance
security. It could also reassure those U.S. military might and foreign policy
afraid of a power grab by decisively influence as sufficient grounds to abandon
assigning other responsibilities, such national prerogatives is naive. This is
as the power to tax and redistribute especially true given the long history of
income, to national governments, Europe's failed defense and foreign policy
where they belong. initiatives, not to mention the uncomfort-
Ultimately, however, a commission able fact that there is no agreement on
president with new powers would be the nature of the European alternative.
regarded as legitimate only if he or she But internal security is another matter.
was accountable to Europe's citizens. Security in one country is no more feasible
In their proposal to the convention, the than socialism in one country when the
small countries that favor strengthening country in question is as small, open,
the president of the commission recom- and intimately linked to its neighbors as
mend that a college of electors selected is the typical EU member state. Terrorist
by the European Parliament and the threats to the European homeland may
national parliaments choose the candi- yet provide a compelling rationale for the
date. Better still would be to let the centralization of consequential policy
individual member states decide how functions and for the political integration
to choose their electors. Countries with necessary to lend legitimacy to those
a tradition of subjecting EU treaties to chosen to carry them out. If so, a common
referendums might wish to select them foreign policy may eventually enter the
by popular vote; others that regard spotlight, after some period of time,
matters involving the EU as more tech- from stage right.0
nical or obscure might wish to delegate
this power to the national parliament
or government. If and when a stronger
European demos develops, more member
states could opt to choose their electors
by popular vote, as happened over time
in the United States. Thus, the politi-
cal basis for decision making in the
EU could evolve at a pace chosen by
Europe's citizens.
To be sure, there are obstacles to
political reform along these lines. Most
European countries have little experi-
ence with the presidential form of
government. They have deep reservations
about pooling their sovereignty even
to this limited extent, as Gillingham

[200] FOREIGN AFFAIRS* Volume82No. 4

 Responses

Stayin' Alive
The Rumors of the UN's Death Have Been Exaggerated

The End of an Illusion Up to this point, Glennon's analysis

is right on track. But his commendable
EDWARD C. LUCK effort to apply the cold logic of political
realism goes too far: what we are witnessing
In "Why the Security Council Failed" today is not the death of the actual Security
(May/June 2003), Michael J. Glennon Council, as he suggests, but of the illusion
provides a singular service by insisting that it is meant to function like a court.
that our understanding of international Glennon takes three wrong turns in
law should take historical practice and reaching the overly dramatic conclusion
prevailing security and power realities that the council is finished.
fully into account. His commonsense First, to conclude as he does that the
approach offers a refreshing contrast to council's failure to act as a global legal
the tendentious claim (too often heard arbiter will leave the body unemployed
during the Iraq debate) that the proper and irrelevant requires adopting the
role of the UN Security Council is to pass absolutist standards of the legal purists,
judgment on when member states can standards that Glennon elsewhere rejects.
or cannot use force in defense of their In fact, abandoning a maximalist view
national security. of what the council is meant to do will
Such a definition of the council's job have a positive impact, allowing its mem-
is based on an overly narrow and selective bers to refocus their energies on seeking
reading of the UN Charter. The charter's common ground and on identifying joint
provisions limiting the use of force were projects for maintaining international
adopted as part of a larger system of col- peace and security. There are plenty of
lective security that the Security Council these missions to go around: the success-
was meant to enforce. By repeatedly failing ftil completion of the UN'S 14 existing
over the past decade to take effective action peacekeeping operations and the ame-
against Iraq, those permanent members lioration of the continuing violence in
now claiming to be the guardians of western Africa, Congo, and Sudan should
international law have, in fact, done the provide the council with ample challenges
most to undermine it. in the months ahead.

[201]
 Edward C. Luck, Anne-Marie Slaughter,andlan Hurd
No doubt the council faces an acute
identity crisis. As Glennon aptly points
out, the efforts of medium powers to
employ it to counterbalance American
primacy have debilitated the already
weakened body. Neither Paris, Moscow,
nor Washington, however, is ready to
drop the council from its political tool
kit. France wants its help in C6te d'Ivoire,
the United States wants to use it for North
Korea and the larger war on terrorism,
and the whole council recently embarked
on a fact-finding trip to western Africa.
Chances are that a wounded, and hope-
fully chastened, Security Council will
find a way to muddle through, as it has
so often in the past.
Second, in seeking to draw a sharp
distinction between the normative and
political dimensions of world affairs,
Glennon fails to take account of the critical
ways in which the two interact. The fact
that power politics predominates does
not mean that norms, values, and even
legal rules are not also relevant in shaping
both the ends to which the powerful
give priority and the means by which
they choose to pursue them. Power gives
a state capacity, but these other factors
help determine what the state will do with
that capacity. It is hardly coincidental that
both sides in the Security Council debate
on Iraq sought to invoke legal as well as
political symbolism. They recognized the
pull that such claims, however cynical or
superficial, have on both domestic and
international constituencies.
Third, Glennon, again like the legal
purists, asserts that one must choose
between realism and multilateralism, be-
tween power and the council. They argue
for the latter, he for the former. But this
is a false dichotomy, one that has been
12 02] FOREIGN AFFAIRS" Volume82No.4
promoted by those most resistant to
invoking the muscular enforcement
provisions of Chapter VII of the charter.
The UN'S founders had quite the opposite
worry: that U.S. power, already predomi-
nant in 1945, would not be sufficiently
integrated into the UN'S structures and
capacities. This fear was based on a stark
realism forged by world war, not on vague
pieties or abstract ideals.
Glennon's trenchant arguments, al-
though they ultimately miss the mark,
serve as a pointed reminder ofjust how far
the UN community has drifted from that
founding calculus. Rebuilding the bridges
between power and law could prove to be
a daunting task, but it beats a premature
burial for such a promising partnership.
EDWARD C. LUCK is Professorof
Practicein InternationalandPublicAffairs
andDirectorofthe Center on International
Organizationat Columbia University's
School ofInternationalandPublicAffairs.
Misreading the Record
ANNE-MARIE SLAUGHTER
Michael J. Glennon makes four fallacious
arguments to support his claim that the
Security Council has failed. First is his
historical claim that the establishment of
the UN represented a triumph of legalism
in foreign policy. As early as 1945, Time
magazine, reporting from the UN'S
founding conference in San Francisco,
concluded that the UN Charter is "written
for a world of power, tempered by a little
reason." Or as Arthur Vandenberg, the
Michigan senator whose switch from
isolationism to internationalism was
indispensable to U.S. ratification of the
 Stayin'Alive
UN Charter, described it, "this is anything does not make the law disappear. We all
but a wild-eyed internationalist dream must live with imperfect compliance,
of a world state.... It is based virtually on and that is as true at the World Trade
a four-power alliance." Such comments Organization as it is at the UN. Further-
make clear that the UN always was, and more, even during the Iraq crisis, the
remains today, a legal framework for United States acknowledged the force
political bargaining. Glennon's central of the charter as law by relying on it as
insight--that the UN'S effectiveness depends justification for its actions.
on the power and will of its members-was Finally, Glennon dismisses any moral
in fact the world body's point of departure. claims for upholding the framework of
Second, Glennon argues that the the charter, dismissing "archaic notions
political context in which the UN operates of universal truth, justice, and morality"
has changed fundamentally and perma- and insisting that "medieval ideas about
nently. The United States has become a natural law and natural rights ... do little
hyperpower and is determined to preserve more than provide convenient labels for
that status; therefore, the other permanent enculturated preferences." But such ideals
members of the Security Council will are not "imaginary truths"; they are goals
inevitably try to use the body to thwart that can never be fully achieved but that
the United States. Glennon concludes exist in all the world's countries, cultures,
that for Washington to use the UN today and religions. And the debate over their
will thus only "advance the cause of its proper role in legal practice remains very
power competitors." But while Glennon much alive today.
is right about the power shift and the Equally surprising is that Glennon is
incentives of some other powers (although so eager to pronounce a death sentence on
he ignores the role of the United King- the Security Council today. As he admits,
dom), his definition of U.S. self-interest states routinely used force without UN
is too crude. The United States has long authorization during the Cold War,
had a strong interest in allowing itself to when the U.S.-Soviet conflict froze the
be constrained-to the extent of playing world body. But by lumping together
by rules that offer predictability and the Security Council's stalemate this
reassurance to its allies and potential past March with its Cold War paralysis,
adversaries. As Harvard's Joseph Nye Glennon completely ignores the UN'S
has pointed out, such behavior maximizes actions throughout the 199os-in the
America's "soft power" (to persuade) as first Gulf War, Bosnia, East Timor, Haiti,
well as its "hard power" (to coerce). Rwanda, Somalia, and, after the fact,
Third, Glennon offers legal analysis, Kosovo. Some of these crises were indeed
asserting that the charter should no longer shameful failures for the entire interna-
be thought of as law because it has been tional community and particularly for
violated so many times. It is certainly its most powerfil states. But in all save
true that states have often used force Kosovo, those states used the Security
without Security Council authorization Council to frame their common response.
since 1945. But in any legal system, inter- And consider the nearly two years since
national or domestic, breaking the law September n, during which we witnessed

FOREIGN AFFAIRS .July/August2003 [2031

 Edward C. Luck, Anne-Marie Slaughter,and lan Hurd
the repayment of American UN dues and
unanimous Security Council resolutions
condemning terrorism, supporting the
reconstruction of Afghanistan, and
demanding the disarmament of Saddam
Hussein. From November to March,
Americans from Wall Street to Main Street
actively watched the Security Council's
every move-the same people who, ten
years ago, would not have known what
the council was. Even today, the principal
point of debate among the council's
permanent members has become whether
the UN will play a "vital" or merely a
"central" role in Iraq. On the ground,
meanwhile, the UN presence there in-
creases daily through myriad agencies.
Glennon argues that looking at what
Washington tried to achieve during the
Iraq crisis rather than what it did achieve
is naive-that the Bush administration
was determined from the beginning to
go to war regardless of what the UN said
or did. That is a fashionable view in many
circles, and one that can never be dis-
proved. But it requires believing, among
other things, that the administration
would have preferred sending possibly
hundreds of young Americans and thou-
sands of Iraqis to their deaths rather than
genuinely trying to oust Saddam through
coercive diplomacy. It requires overlook-
ing French President Jacques Chirac's
decision, for his own political reasons, to
focus the world on the threat of U.S.
power. And it requires listening to Richard
Perle, former chair of the Defense Policy
Board, who has written openly of his hope
that the war in Iraq will indeed be "the end
of the UN," but ignoring Secretary of State
Colin Powell, who has written and spoken
of U.S. determination to continue working
with and through it.
[204] FOREIGN AFFAIRS- Volume82No. 4
I agree with Glennon that we are once
again in an era in which threats to interna-
tional peace and security may increasingly
require the use of force. But if so, genuinely
recommitting the United States to a
multilateral decision-making framework
is America's only hope of ensuring that
its fellow nations-including its closest
allies-do not form coalitions to balance
against it, as if the United States were the
real problem. Pursuing such a strategy
requires a blueprint for reforming the UN,
not one for abandoning it.
ANNE-MARIE SLAUGHTER isDean
ofthe Woodrow Wilson School ofPublicand
InternationalAffairsat Princeton University
and Presidentof the American Society of
InternationalLaw.
Too Legit to Quit
IAN HURD
Michael J. Glennon's article is a useful
introduction to the politics of the second
Gulf War. But his analysis of the Security
Council rests on a faulty reading of its
original powers and purposes.
Glennon is right to suggest that the
Security Council lies at the core of the
UN'S international security system, but he
mischaracterizes its purpose. The council
was never intended as a "grand attempt to
subject the use of force to the rule of law,"
nor as a "legalist institution" in opposition
to "geopolitical forces." It did not, as
he claims, enshrine faith in "a single
global view."
Instead, the council represents a political
compromise to manage the competing
interests of the great powers. The UN
Charter clearly grants the council power
 Stayin'Alive
to intervene in the domestic affairs of was not enough to stop the American
states, but its five permanent members operation, but that isn't the point. It raised
can each block any such intervention the costs of unilateralism, and this is
using their veto. There was no expecta- the most that the council can do when
tion at San Francisco that the council's the great powers clash.
contribution to world order would be IAN HURD isAssistantProfessorof
to regulate the foreign adventures of the PoliticalScience atNorthwestern University
permanent members. The veto meant and the authoroftheforthcoming Legitimacy
that these states were deliberately shielded and Power in International Relations:
from all accountability to the council; The Theory and Practice of the UN
and without such protection, they would Security Council.
never have agreed to the UN in the first
place. The council compromise was not
primarily intended to protect the security
of the small states; it was intended to
avoid great-power war. At this, it has
succeeded quite well.
The power that the council wields
over the strong comes not from its ability
to block their military adventures
(which it is not empowered to do) but
rather from the fact that the council is
generally seen as legitimate. This legiti-
macy functions by raising the costs of
unilateral action in the eyes of many
countries and their citizens.
The legitimacy granted by the council
helps explain the pattern of recent U.S.
diplomacy, charted by Glennon. Wash-
ington clearly would have preferred to
act with council approval rather than
without it, as was demonstrated by the
first round of talks, which resulted in
Resolution i441. The impact of the council's
ability to convey legitimacy is also demon-
strated by the fact that many countries,
including Turkey, waited to see which way
it would turn before deciding whether to
support the U.S. action in Iraq.
In ultimately rebuffing the United
States, the Security Council signaled its
view that a military solution to the crisis
was the wrong approach. This disapproval

FOREIGN AFFAIRS July/August2003 [2051

 Response

How Best to Build Democracy

Laying a Foundation for the New Iraq

CbappellLamson

Adeed Dawisha and Karen Dawisha's
excellent article "How to Build a Demo-
cratic Iraq" (May/June 2003) contains a
series of valuable recommendations and
admonitions. The few failings of their
article lie less in what they advocate or
reject than in what they leave out. The
following recommendations draw on
the experiences of other democratizing
countries to fill in several gaps in the
Dawishas' analysis. Together they aim
to enhance the likelihood that democracy
takes root and survives in Iraq.
BARRELS AND BALLOTS
One of the biggest dangers facing post-
war Iraq is the prospect of its becoming
a classic "petro-state" (like Nigeria or
Venezuela), in which vast revenues from
the sale of oil accrue to a shaky national
government. Such states are characterized
by massive corruption, fiscal profligacy,
and vicious zero-sum competition for
control of oil revenues. Politicians who
gain power in these countries typically
invest heavily in repression to retain it.
Privatizing Iraq's oil industry would
not avert this danger because the immense
revenue that the government would receive
from royalties, taxes, or auctions could
be misspent in the same way as are rev-
enues from the sale of oil. Instead, oil
revenues should be driven as far from the
federal government as possible, down to
states, localities, and even individuals.
Dawisha and Dawisha dislike the idea of
giving each Iraqi citizen a bank account,
into which equal shares of Iraq's monthly
oil revenues could be deposited. But this
system, or something like it, should be
the goal. The result would be to put the
country's wealth directly into the hands
of Iraqis, to remove discretionary authority
from the national government, and to

CHAP P EL L LAWSON is Associate Professor of Political Science at the Mass-

achusetts Institute of Technology.

[206]
 How Best to Build Democracy
force the government to rely on taxation
for income-which would force it, in turn,
to report and justify its expenditures.
Another key component of the transi-
tion process will be to create an effective
electoral system. To ensure that early
standard-setting elections are free and fair,
foreigners could step into the role of
conducting and overseeing them. But
once the job is turned over to the Iraqis,
they would benefit from the establishment
of a virtual fourth branch of government
charged with administering elections. The
heads of this supreme electoral authority
could be chosen by a supermajority of the
legislature and granted sufficient funding
from domestic or foreign sources to ensure
their technical competence. Mexico trans-
formed its electoral system, which was
once riddled with fraud, into one of the
cleanest in the world by creating just such
an autonomous Federal Electoral Institute.
Iraq should follow suit.
Once an electoral system is actually
established, politicians respond with re-
markable predictability to the incentives it
produces. The trick is to get those incen-
tives right. Dawisha and Dawisha cleverly
advocate the creation of muhimember
districts as a way of moderating ethnic
tensions. But they do not go far enough
in specifying how these districts should
be drawn, and we know enough from the
experiences of countries such as Brazil and
Taiwan to guess at the potential effects of
electoral design. To prevent the emergence
of any permanent political majority, Iraq
should be divided into a small number of
very large districts, with boundaries that
match those of Iraq's three major ethnic
groupings (Kurdish, Sunni Arab, and
Shi'ite Arab), and possibly a separate
district for Baghdad. Not all of these
FOREIGN AFFAIRS .July/August2003
districts would need to have the same
number of members, but seats within them
would be based on a strict share of the
vote. Thus, in a district with 40 members,
a party or candidate that received 2.5 per-
cent of the votes would earn 1 seat.
Such a system would fragment chau-
vinistic parties designed to advance the
interests of one major ethnic group by
activating new types of division-based,
for example, on class, sector, tribal affilia-
tion, or policy platform-and by diluting
the salience of primary ethnic identities.
Ultimately, this structure would help
prevent the hegemony of any one group.
If such a system encouraged too much
fragmentation, districts could be made
slightly smaller--perhaps one for each
existing state, with at least five members in
each-but the same principle would apply.
SPRING-CLEANING
Dawisha and Dawisha rightly advocate
a parliamentary system for Iraq, but one
potential pitfall of such a system is the
power it grants to the bureaucracy. In
presidential regimes, directly elected
chief executives exercise direct-line
authority over cabinet officers, who
exercise direct-line authority over bu-
reaucrats. In parliamentary regimes,
indirectly elected prime ministers and
cabinet officers exercise indirect authority
over professional civil servants. Bureaucrats
under parliamentary systems are thus less
accountable to elected representatives
than they are under presidential regimes.
In postcolonial India, the effectiveness
of parliamentary rule was dramatically
enhanced by a clean, competent, British-
trained civil service. Lamentably, Iraq
has no such inheritance; after decades of
Baath Party rule, its own bureaucracy is
[207]
politicized and corrupt. As a consequence,
additional mechanisms will be needed to
prevent and redress bureaucratic abuses.
One such mechanism is that most Nordic
of institutions, the ombudsman. Properly
staffed offices of ombudsmen at the
national and provincial levels would offer
Iraqi citizens the opportunity to register
their grievances and seek effective admin-
istrative redress. Moreover, the office of
ombudsman has to date proved quite
adaptable to countries without a history
of such institutions.
A democratic Iraq will also require a
competent, well-trained, well-equipped,
and honest police force that is separate and
distinct from the military. Colombia's
special antinarcotics force, built from
scratch with U.S. funding, offers an exam-
ple of how such units can be constructed
even under the most challenging of cir-
cumstances. Other developing countries,
including South Africa, have had some
success in creating effective neighborhood
or community police forces. As with om-
budsmen, the construction and vetting of
such constabularies should start immedi-
ately, allowing the new cops to earn their
stripes during the period of occupation.
A related issue is how to structure
the military. The danger of a budding
democracy's falling to military rule looms
especially large in a country such as Iraq,
with its long history of coups and attempted
coups. At the same time, the experiences
of Argentina, Brazil, South Korea, and
other countries over the last two decades
suggest that states with a legacy of civil-
military relations as bad as Iraq's can still
establish full civilian control. Although
there is no single formula for doing so,
the following steps seem prudent in this
case. First, Washington should limit the
[208]
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 How Best to BuildDemocracy
size of the military overall, especially the is a systematic bias in favor of incumbents
army. Second, it must integrate Shi'ite and the wealthy, inadequate scrutiny of
and Kurdish elements, including the official misconduct, a dearth of civic and
Supreme Council for Islamic Revolution popular voices, and an absence of public
in Iraq and the Kurdish Pesh Merga, to forums where political options can be
ensure that the Iraqi officer corps is not peacefully debated. These problems can
dominated by Sunni Arabs. Next, the be mitigated by placing state-owned media
officer corps must be purged of Baath under the direction of professionalized,
Party loyalists or those who have been politically insulated boards, appointments
involved in massive violations of human to which require supermajorities in the
rights. Intelligence functions must be legislature. Creating a system for allocating
separated from the military and placed private broadcasting concessions that is
under the control of civilian agencies; likewise insulated from direct executive
any companies that the military currently control would further strengthen press
runs must also be privatized. Military freedom. Because the freest press regimes
promotions must be made a matter of in the developing world involve a mixture
professional standards and seniority, rather of public and private ownership, and
than connections to the executive branch, because many local private investors may
and the legislature must be given final lack sufficient capital, both domestic
authority over high-level promotions and and foreign private ownership should be
budgets. Civilian courts should get formal, allowed. Finally, a variety of protections
ultimate control over military officers. The for the press-including laws on freedom
post of the civilian commander in chief of information and the protection of the
should be specified in the constitution, confidentiality ofjournalistic sources-
and all cabinet officers, including the can be enshrined in the constitution and
minister of defense, should be civilians. the legal code. These laws hardly need
The military's official mission should be to follow a U.S. format; various countries
explicitly confined to external defense, and international organizations are capable
rather than internal security or law of rendering expert advice.
enforcement, and military curricula The challenges to democratization in
must be altered to reflect this limited Iraq are huge. Yet even if Iraq becomes a
role. Finally, Iraq's rebuilders should en- semiauthoritarian regime-of the type
courage the training of civilians in militarythat currently governs Russia-certain
matters so that they can oversee budgets, democratic institutions may endure.
procurement, and the like. Building these institutions now will
substantially enhance the odds that Iraqis
IN OTHER NEWS emerge from Anglo-American occupation
In most emerging democracies, mass media better off than they were before.0
are controlled by politicized state monop-
olies (as in eastern Europe, Africa, and
Asia) or private oligarchs who trade favor-
able coverage for political influence (as in
Latin America). The result in both cases

FOREIGN AFFAIRS July/August 2oo3 [2 0 9]

 Letters to the Editor
DavidHoffman on Iraqi media;Martin Gross on the Middle East
roadblock; David Outen tackles trade; and others
WHO REPORTS? WHO DECIDES?
To the Editor:
Adeed Dawisha and Karen Dawisha
("How to Build a Democratic Iraq,"
May/June 2003) lay out a clear and
coherent rationale for democratizing
Iraq, as well as a roadmap for how best
to accomplish that objective. But the
article fails to mention one of the key
pillars of a new, democratic Iraq-open
media-or to address the critical role of
news and information in building a
civil society in Iraq.
Iraqis have long suffered under the
dictatorship of Saddam Hussein, who
manipulated the news and information
Iraqis received through a monopolistic
state-run media. Independent voices and
views in Iraq were suppressed. Many
Iraqis were killed or tortured for daring
to openly disagree with Saddam's regime.
Iraq now faces major challenges, among
them to rebuild a credible information
architecture and to train a new generation
ofjournalists who can report fairly, objec-
tively, and independently on that society.
It is essential that the Iraqi people have
access to diverse local sources of informa-
tion that most citizens recognize as fair.
Local, indigenous media in Iraq will
help shape that country's social and
political future. If the only radio and TV
channels in the country are controlled by
1210] FOREIGN AFFAIRS" Volume82No. 4
rival groups, tensions could escalate, lead-
ing to civil war. The interim government
in Iraq will need to write liberal media laws
and policies, establish a national broadcast-
ing authority, train journalists, and ensure
unfettered access to news and information.
Open media will require international
support and training. If the West is serious
about democratizing Iraq, its greatest asset
will be its support for the proliferation
of pluralistic, independent, commercial
media outlets through which multiple
voices can compete. And Western govern-
ments should not seek to control media
in Iraq or to use it as a platform for
propaganda, but should instead support
nongovernmental media organizations,
which have the knowledge and the
expertise to help Iraqis develop their own
vibrant, professional media. Finally, in
providing such aid, the United States
and other donor nations must be prepared
to accept the criticism that comes with
a free press.
DAVID HOFFMAN
President,Internews
TRUSTEESHIP TO NOWHERE
To the Editor:
Martin Indyk ("A Trusteeship for
Palestine?" May/June 2003) mistakenly
believes that an appropriately "packaged"
trusteeship would solve the problem of
 Letters to the Editor
Palestinian violence grounded in a funda- subsidies given that the disproportionately
mental rejection of Israel's right to exist. powerful farm sector apparently feels
Indyk states that the Palestinian it is entitled to government support.
community is coming to the realization Furthermore, the United States, Europe,
that violence has been disastrous for its and Japan are not the only parties to the
cause but that no Palestinian institution agricultural disputes. It is the developing
exists that can stop it. But a community world that suffers most from manipulation
that truly realized violence is disastrous of the agriculture market, and the Doha
would simply stop committing it. If the Round is faltering largely because devel-
Palestinians did this, then the trusteeship oping countries do not trust their richer
would be unnecessary. If not, then the counterparts' good faith when it comes
trusteeship would fail. to the gradual elimination of farm subsidies.
MARTIN GROSS The European Union and Japan do not
Sandalwood Securities need to feel threatened by Bergsten's
idea of strong-arm tactics because, if
ONE STEP FORWARD ... negotiations fail, they can afford simply
To the Editor: to keep their subsidies in place indefinitely.
C. Fred Bergsten's article ("A Obviously, this is a luxury not available
Renaissance for U.S. Trade Policy?" to poverty-stricken developing countries.
November/December 2002) makes a This kind of situation only reinforces
fair point that in spite of a series of their doubts about the sincerity of the
protectionist measures, free trade policy rhetoric of free trade being for the ben-
has probably made a net gain in recent efit of all and contributes to the backlash
years, especially with all the opportuni- against globalization.
ties opened up by the passage of Trade DAVID OUTEN
Promotion Authority. Springfield, Ohio
However, in some cases it seems
that Bergsten is merely rationalizing, FALSE ALARM
particularly when it comes to his defense To the Editor:
of the farm subsidy bill passed in 2002. Nicholas Eberstadt ("The Future of
Bergsten argues that although the subsidies AIDS," November/December 2002) rightly
are not sound policy, they may ultimately warns that the center of gravity of the
prove to be beneficial by compelling the HIV/AIDS pandemic is shifting from Africa
Europeans and the Japanese to confront to Eurasia, with potentially serious geo-
the agricultural issue and to negotiate political consequences. However,
seriously. But the idea of using huge Eberstadt's piece also presents alarming,
subsidies as bargaining chips sounds indeed alarmist, projections of the impact
like a protectionist arms race, in which of HIV/AIDS on development prospects
the United States creates costly and in China, India, and Russia.
unnecessary "weapons" so that it can then According to Eberstadt, HIV/AIDS
destroy them in exchange for concessions. will have two negative impacts on the
It is also far from clear that Congress three countries' economic output. First,
would be willing to roll back these deaths from AIDS will reduce the size of

FOREIGN AFFAIRS .July/August 2003 1211]

 Letters to the Editor
the labor force, and second, the epidemic
will reduce output per worker. Even if
one accepts the former, the latter is still a
dubious proposition. Eberstadt assumes
that these societies and economies will
have absolutely no capacity to adjust in
any way, or to cope with the negative
socioeconomic effects of the disease.
Yet such total incapacitation is quite con-
trary to the nature of human societies.
In order to find credible the conse-
quences of the HlV/AIDS epidemic in Russia
posited by Eberstadt, one must believe that
the disease's impact on investment and
productivity will be not only serious but
catastrophic and unprecedented in the era
of modem economic growth. His results
for India and China are equally flawed.
They too assume that output per worker
moves in lock step with life expectancy,
there being no possibility for coping strate-
gies or adaptation. Decision-makers and
opinion leaders should beware of any con-
clusions based on such a faulty premise.
LANDIS MACKELLAR
InternationalInstitutefor Applied Systems
Analysis
WILLIAM MCGREEVEY
Futures Group
FOR THE RECORD
To the Editor.
I am grateful for Lucian W. Pye's
review of my book Korean Endgame
(May/June 2003) but distressed to find
in it two errors. I do not "justify" the
uranium enrichment program in the book.
Indeed, it had not yet surfaced when the
book was turned in and is therefore not
even mentioned. Far from justifying the
program, I have spent much of the past six
months deploring it and attempting to
deal with the new dangers its development
poses. Furthermore, I have never met Kim
Jong I1, as my book makes clear.
SELIG S. HARRISON
CenterforInternationalPolicy
BOOMERANG
To the Editor.
In "Just and Unjust Words" (May/June
2003), Matthew Evangelista quotes me
out of context in order to present a gratu-
itous and irrelevant personal attack against
me. Paradoxically, he does this in an
effort to fend off Charles King's criticism
("Crisis in the Caucasus," March/April
2003) that Evangelista has quoted me
out of context elsewhere. It would appear
that Evangelista's latest attack is a further
illustration and vindication of King's
point. Readers may wish to consult my
forthcoming review of Evangelista's
latest book, in The JournalofSlavic
Military Studies, in which I conclude
that much of his argument depends on
paradox and contradiction.
ROBERT BRUCE WARE
Associate Professorof Philosophy, Southern
Illinois University

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