Ten years ago Robert Kagan told us it was time “to stop pretending that Europeans and Americans shared a common view of the world.” We knew, of course, that we were different; America was the action hero, sure of where it was going, Europe the continent of doubts and ambiguities. Pierre Bezukhov to America’s Prince Andrei. Or to use another Kagan image, the U.S. was the tragic hero and Europe the Greek chorus warning in many voices that there is no armor against fate. But these were questions of character. What Kagan told us was in the realm of ideas: In spite of all the joint communiqués, we had very different visions of the world. And he went on to articulate them more clearly and to explain them more sympathetically than anyone had before. In different times and places we each set out our worldviews, but we rarely listened to each other or took each other seriously. It is the European view that Kagan’s essay explained so well, its origins in history and policy — U.S. policy, of course: Part of the Kagan story was that Europeans didn’t do real policy but mostly relied on wishful thinking.
The central idea in the European worldview was summed up well by Kagan in a quotation from Romano Prodi: “Europe has a role to play in world governance. The rule of law has replaced the crude interplay of power . . . Power politics have lost their influence . . . by making a success of integration we are demonstrating to the world that it is possible to create a method for peace.” That was July 2001, but such statements can be found any year since: government by laws and not men at the national level, replicated at the international level by a system of rules and not of power.
What about the U.S. view? This was not set out so clearly; but by default we could work out that this was and is a vision of a world ruled by power, and more specifically by its ultimate expression: military power. If so we had better make sure that power is in the hands of the good guys, namely us. Less noble than the European version, certainly, but it has the merit of honesty and is more practical than cloudy European aspirations to multilateralism. This Kagan sees as a reflection of European weakness — if you are weak you proclaim the virtues of decision by consensus rather than recall the doctrine of the Melian dialogue, that the strong do what they want and the weak do what they are told.
Isn’t that what power and weakness means? Americans are mostly too polite to put this in plain language, but George W. Bush did so about two years after Robert Kagan’s gentler version. Speaking to the American Enterprise Institute, the president said, “We meet here in a crucial period in the history of the civilized world. Part of that history was written by others. The rest will be written by us.”
When Kagan wrote his essay both the eu and the U.S. were looking good, especially the United States: victor in the Cold War, solo superpower and ready to use its power for good causes — getting Saddam Hussein out of Kuwait, making peace in Bosnia, and rescuing Kosovo from a potential genocide. The eu also was a winner in the Cold War: Through enlargement it was taking over from nato as the stabilizing force in Europe; through the Economic and Monetary Union it was going to enter a new phase of integration; and it was endowing itself with the instruments of diplomatic reach and power projection.
Europe and America ought to have been feeling confident and set for an even stronger partnership than the one that won the Cold War. And yet things did not seem quite right. The fixed certainties and the convenient enemy of the Cold War were gone. The arrival of another new president had reminded Europeans of what they often forget — that America is a foreign country. “Power and Weakness” told us something we sensed but had never articulated: that the differences of philosophy which had been concealed by the common cause of the Cold War were now going to become awkward in the dramas of a wider world.
The ten years that have followed have not been the “low dishonest decade” of Auden, but they have exposed a different sort of falsity: hubris and false hopes rather than falsehoods, a lack of rigor that has turned good intentions into disastrous results. The paradox is that the origin of our failures has been the neglect of that which won the Cold War for us: the political dimension of legitimacy.
America: The weakness of power
Robert kagan was right but both of his protagonists were wrong. The decade has exposed the weakness of power and the failure of rules. Have we not seen the greatest military power in the history of the world unable to master a small country with a third-rate military? With this we ought to understand at least that the days of imperial adventures are over. Actually we ought to have understood that years ago: The whole story of the 20th century has been not the strength of military power but the power of the idea of self-determination. This has driven the British out of India; the British, French, and Portuguese out of Africa; the British, French, and Dutch out of Southeast Asia; the Russians out of Central Europe. No one learns from the experience of others, but the U.S. had its own chance to learn the lesson in Vietnam (and, in case it had forgotten, Haiti, Mexico, and a few other places).1 And the lesson was, after all, an American lesson, taught initially by Woodrow Wilson.
The failure of military power to turn into real power should therefore not surprise us. What should shock us more is the collective failure of America’s superb foreign policy community, with its great resources of intellect and intelligence, to see this coming and to issue a collective warning, and the failure of America’s political institutions to insist on debate and to offer alternative views.
This was a failure of foreign policy. If war is the pursuit of policy by other means, what was the policy in Iraq? If the military objective was the overthrow of Saddam Hussein, what was the political objective that it was to serve? The establishment of a new regime? If so why, among all the supposed experts and planners, was there no plan? Not, probably, that it would have mattered. Any plan would have failed since its execution would have depended on Iraqis who would have had their own ideas. This is not a criticism of either Iraqis or Americans. It is just that to operate a political strategy inside the domestic politics of another country you need to be able to swim among the people (as Mao said) as a fish swims in the sea. It is not just that this is rarely possible for the military; absent exceptional circumstances it is also beyond what diplomatic representatives, even Americans, can do, too. Thus the point of a post-imperial age: Foreigners no longer do what they are told.
Contrast Iraq and Libya. In the second case there was a limited political strategy — to support one faction in a civil war and use military power to even out the odds. And commensurate with the limited strategy went a limited level of commitment. Or contrast Iraq and Bosnia, where (again in the latter case) there has been a long-term readiness to keep forces on the ground and take responsibility for the development of the state. With this goes a vision of a European future in which our politics merge with theirs in a new definition of a political community that eventually includes them as well as us.
If military power does not translate automatically into political power then how much use is military force in a post-imperial world? One answer is provided by the examples of Bosnia and Libya: There may be cases where it can tip the political balance in favor of a better outcome, or where it can prevent a catastrophe, as we could have done in Rwanda. Or there may be cases, such as that of the first Gulf War, where it can used to reestablish a legitimate international order. The key in each case is legitimacy: international legitimacy in the case of Saddam Hussein’s invasion of Kuwait, domestic legitimacy in the case of Libya. This is a political and not a legal concept. un Security Council resolutions are powerful contributions to legitimacy but they are not decisive. In the case of Kosovo — another military campaign that might have benefitted from a clearer political objective — the approximation to a regional consensus was perhaps enough, though, as history has shown, it was not much more.
The world is still full of irrational and dangerous people, and the use of force in defense of legitimate order cannot be excluded. But the lesson of the last ten years is this: It is not the owner of the power alone who makes the decision on what is and is not legitimate. This is not just a world of power; somewhere, hidden, there is also a sense of rules.
The European dream
Europe no longer wants to rule the world; but it would like to be the world’s schoolmaster. Over the last ten years it has done its bit by giving lectures to anyone who wants to listen, and to many who don’t. Meanwhile a world of rules seems an attractive alternative to ruling the world. In fact, the point of ruling the world is usually to impose one’s own rules; and if one does not have the power to impose rules a decent alternative is to have a say in making them. The eu itself is a community of law; and the main output of the Brussels machine are rules that govern trade and that set standards for consumer protection, for the environment, for competition, etc. These rules enable a wider freedom, but most of them concern technical questions and are of limited public interest, though their results are welcome. If the power to make rules is power, then Brussels, in a modest way, is also a power.
As Romano Prodi said in the lead-up to the passage quoted earlier: “The genius of the Founding Fathers lay in translating extremely high political ambition into a series of specific, almost technical decisions.” Because the professional groups concerned had an interest in a wider market for their products or services, they accepted the European process. The rest of Europe knew little about what was going on and did not much care. Occasionally there were media stories about the folly of European policy, especially agricultural policy (straight bananas, etc.), but these issues rarely touched voters directly. There were general benefits from free movement of goods and people and from wider competition, but people who benefitted from the results were rarely aware of the process. The endless European meetings that brought these results also created not a political community among ordinary people but a community of elites in politics, in civil services, and in professional associations, all of which contributed to cooperative relations and — though one can never be sure of such things — helped sustain a period of peace never known before in European history.
Of the three developments that ten years ago seemed set to make Europe into a new sort of world power the most modest was the creation of the Common Foreign and Security Policy. This was a consequence of the weaknesses exposed in the 1990s in Bosnia and Kosovo. Its objective was the least original: to take Europe a step closer to being an old fashioned power in the Kagan sense. In institutional terms it was the least ambitious. It did not represent the Europe of rules described by Romano Prodi but a development of the Europe of voluntary cooperation: integration by joint machinery political commitment (“intergovernmental,” in euro-speak). Often in Europe its supporters have been too keen to project their hopes forward beyond the difficult present. The reality appears, in Kagan’s phrase, “anemic.” It remains far from fulfilling its potential; time and the pressure of events may one day make it more substantial.
The second, more solid, achievement was enlargement, the completion of Europe whole and free — or at least a substantial step in that direction. This was the stabilization of Europe through the extension of rules and standards — the enlargement of the Europe of Mr. Prodi organized on the basis of rules, not power, which was different from most of the world and from the Europes of the past. This was achieved through a process which appears technical but in reality was political. It served the same political goal as the Marshall Plan, the consolidation of the West by economic and institutional means. It was achieved through political mobilization of people and parties in the countries of Central Europe, usually a profound engagement among elites backed by a broad political consensus at a popular level. A weakness was that the importance of this process has never been sold to a mass audience within the eu, so that the big enlargement — a strategic success for Europe — has been one of the factors that has disturbed the eu at home.
The third big project was the Economic and Monetary Union. This had been in the collective consciousness of the European elite for a long time. A first push for it resulted in the 1961 Werner Report, the work of a group chaired by the then-prime minister of Luxembourg. The arguments for a monetary unification have varied little over the years: that it is a natural corollary to a single market, that it will avoid the risks of competitive devaluation, that it will reduce transaction costs, that it is a step towards the “ever closer union” foreseen in the Treaty of Rome.
The real drive for the Monetary Union came, however, from the periodic exchange rate crises that ran through the whole postwar period, in spite of Bretton Woods and the different European arrangements to promote stability — of which the most developed was the Exchange Rate Mechanism (19791999). At the core of these crises was usually a Franco-German problem — typically France found that high German interest rates were putting pressure on the franc, or were giving it an uncomfortable choice between recession or devaluation. Usually the French called for revaluation of the mark and the Germans said that if France had a problem it could devalue. Behind these crises lay the unique position and powers of the Bundesbank, which was independent of government and politics and had a mandate focused exclusively on preventing inflation — a legacy of the memory of the hyperinflation of 1922.2
These sporadic currency crises appeared to be struggles for power, somehow recalling the Franco-German conflicts of the past, which (so the political doctrines of the time stressed) had been overcome through the eu. They were accompanied by a sporadic debate on monetary union, largely between those who argued that a currency union made sense only when economies were largely convergent and those who argued that convergence would come only under the pressures created by a monetary union. The former position — that of the Bundesbank and the governments of Germany and the Netherlands — was often expressed by saying there could be no monetary union without economic union. Sometimes, as in the Werner Report, it was also asserted that monetary union required political union. The European Exchange Rate Mechanism, created by Helmut Schmidt and Valéry Giscard, could be seen as an attempt to reconcile these two positions by imposing discipline on the different currencies and, over time, promoting convergence.
Europe: The failure of rules
When it came in the end, the Monetary Union did not grow organically out of this process — it is not clear that the European Exchange Rate Mechanism reduced either the frequency or the intensity of exchange rate crises — but through a series of decisions taken against the background of German reunification. Like enlargement, the Monetary Union is an example of the Europe of rules, and like the European Union itself it came as a kind of enlightenment project created on the basis of a blueprint, rather than grown out of practice. 3 With hindsight it seems that the project was flawed: that the rules were the wrong rules; that they were not followed. And rules may not be enough.
Enlightenment projects ought to be built on theory. In the case of the Monetary Union the relevant (optimal currency area) theory says that to function well a currency area needs some combination of similar rates of productivity growth across its different regions, labor mobility between them, and interregional fiscal transfers on an appropriate scale. Thus, although the U.S. has regions with different levels of economic performance, things are evened out by the willingness of people to move in search of work and by federal government’s readiness to site, for example, defense industries in depressed areas — a form of fiscal transfer. In Europe neither labor movement nor interregional fiscal transfers take place on the same scale: Language barriers inhibit the first, and the second represents less than 1 percent of European gdp. The convergence criteria for the Monetary Union, however, focused not on convergence in productivity growth but on fiscal deficits. Perhaps the intention was to ensure that those who developed trade imbalances due to declining competitiveness would solve the problem by austerity and deflation rather than prolong it by borrowing.4
These rules have not served the Eurozone well. Spain, like Italy, has kept strictly within the rules, but this has not prevented a massive housing bubble, a crippling recession, and unsustainable bond prices.
But that the rules were elsewhere not obeyed should not be a surprise. Governments are notoriously slippery on fiscal matters — the last uk government circumvented its own rules by moving large items off the balance sheet. Or they may be taken by surprise by falls in tax revenue. This occurred in the Eurozone in 2002–2004, during the recession that followed the German unification boom. France and Germany then decided to set aside the rules of the Stability Pact. There was a good economic case for doing this, but such behavior seemed high-handed to smaller member states, and it tends to discredit the rules — perhaps rightly since rigid rules are not the best way to manage economies liable to unforeseeable shocks.5 It is now proposed, as one of the solutions to the Eurozone crisis, that the rules should be written into a new treaty; but already there is talk of clauses to allow limits to be breached “in periods of severe economic downturn.” Who is going to judge; who is going to enforce? In the old German system bad behavior by the government was punished by the Bundesbank, usually by a rise in interest rates. Where there are seventeen fiscal authorities this is difficult to reproduce at the European level.
The real point, however, is that rules are not enough. A currency is too important, too political, to be left to technocratic management — which is what the combination of the European Central Bank and the treaties, stability pacts, etc. represent. Just as war is too important to be left to the generals a currency is too important to be left to central bankers, (even if, as with the European Central Bank, they are good central bankers). In Germany, before the euro, policy emerged from the tension between an independent central bank with a mandate to prevent inflation and a government with a popular mandate for growth. Hence the argument from the Werner Report onwards that monetary union must be accompanied by political union; and hence the decision that the Maastricht Treaty should be prepared by two intergovernmental conferences, one on political union and one on monetary union. But political union was neither thought through nor carried through: Instead, an irrelevant fig leaf was found in the shape of a rearrangement of the furniture for foreign policy cooperation.
Political union is a necessary accompaniment to monetary union in several senses. First, a single, political authority may be needed to take fiscal and other important economic decisions collectively, for the seventeen members of the Eurozone. A common currency is a collective enterprise and it needs collective responsibility, that is to say a real economic union. But the economy is also political, and an economic union will need political management, as the domestic economy does.
Second, a political authority is needed to take charge in a crisis. Summit meetings, hastily arranged and working by consensus at 27, or even seventeen, are not a substitute for a political authority. The eu’s slow machinery is admirable for building consensus over a long period and for managing the problems of peace. But it does not work for crises. In Rome, after all, they appointed a dictator during time of war. One of the sources of anxiety about the euro is the feeling that no one is in charge. This is partly structural — the lack of clear (“joint and several”) backing for Eurozone debt — but is primarily political. Markets, like foreigners, do not do what they are told; but they will listen if a single voice speaks clearly. Germany’s voice is clear, but it is not collective.
The third and most radical form of political union would be one which could make substantial fiscal transfers, as West Germany did to the East or most European states do to their poorer regions. This would be the strongest form of political union since it would imply something like the creation of a European nation, a stronger definition of “us” than the eu has so far offered. Until there is a stronger sense of European identity this seems unlikely. However, even the first and second versions of political union on their own would already need more democratic legitimacy than the current institutions provide; and that in itself would be a decisive step towards a real political union.
Europe and America: The need for politics
It was possible to build the original eu on weak political foundations because the regulatory issues it dealt with were of low political significance. European monetary unification was constructed on the same technocratic basis: Taking central banks out of politics was one of the essential steps in the process. (A cynic might say that the technocratic approach is now being applied also to some governments.) But economic management is not of low political significance. It is what wins and loses elections, the very heart of politics. Currency is where politics meets economics — not for nothing is the king’s head on the coinage — and those who insisted that some level of political union must accompany monetary union were right.
Thus, over the last ten years, both Europe and the United States embarked on major projects without political strategies. As if to prove Kagan’s point, the U.S. relied on power and the eu relied on rules. But great undertakings like these need political strategies because they need consent or support to make them work.
For the United States, the people whose consent they needed were Arabs, mainly Iraqis, people about whom they knew little, and with whom the chance of success was always small. The U.S. theory in Iraq seemed to be that with the overthrow of Saddam Hussein democracy would establish itself and American troops could leave. In spite of large expenditures and remarkable efforts by its military over nine years, the U.S. has left Iraq with the future of that country still uncertain.
The European theory was not so different: that sooner or later there would be a crisis in the monetary union and it would then be completed by a political union.6 What this would look like or how it would come about were left for those concerned to work out when the time came. In retrospect both of these approaches seem irresponsible.
The people who European leaders will have to persuade, over time, to accept radical changes to their institutions are at least their own people; but the task will be enormous. Monetary union is a joint project and all those involved in its creation — including those who are not members — have a responsibility to make it work. Unlike Iraq, leaving and returning home is not an option.
Government is a trinity of power, rules, and politics. And the greatest of these is politics. It changes its shape with time and place. It needs leadership, debate, vision, trust, compromise, consent, solidarity; it must appeal to the heart as well as the mind, to the past as well as the future. It is built of institutions and sentiment, of hierarchy and equality, of interests and altruism — all these and much else combining to furnish legitimate decisions. Politics tames force and civilizes power. It builds institutions and makes the rules that govern ordinary life. When things go wrong, politics breaks the rules and remakes them. All this in the interest of government by words and not by weapons. We live in a world where it is right to hope that power can take forms other than the use of force, but also a world of ever greater complexity where the need for rules and order in international life is ever clearer. Success comes only by building trust and by building institutions, and the starting place for this is political relationships.
Alongside this trinity stands the functional trinity of politics, economics, and society. Once, these were tightly combined in the solid construction of the nation-state. Now at a national level they are disturbed by the open international environment. In the future we are going to need global rules for a global economy; but these will not be achieved without some further development in international politics — something quite different from the diplomacy of the closed state. The European Union is the first body to experiment in this: We must hope it succeeds.
It is always the images that linger in the memory. From “Power and Weakness” it is the image of the man meeting the bear in the woods — and the question of whether he has a gun or not. But this is also troubling. What if the gun doesn’t work? What if he only wounds the bear and it comes after him? What if it’s not a bear but a swarm of bees — maybe shooting at them will make things worse. The image is a simplification. One does not need a continuing relationship with a bear as one does with one’s neighbors and with the other powers of the world. A bear is not a political animal.
1 Even worse would be to learn the wrong lesson. This seems to be the inclination of Max Boot and no doubt others who are shaping up to argue that the fault of the U.S. in Iraq was that it did not stay long enough. Some have done the same for Vietnam: Such myths are as dangerous as the Dolchstoss legend was in Germany after World War I.
2 It is commonly argued that this ruinous and demoralizing event played a role in the rise of the Nazi Party. However it was by no means the only factor, and it can also be argued that the way the inflation was brought to an end — with austerity policies and recession — was as damaging as the hyperinflation itself.
3 The eu and the U.S. still have this in common: that both started, in some sense, as enlightenment projects.
4 Or one could present this as the outcome of a struggle between institutions in which the most powerful body in the field, the Bundesbank, having failed to stop monetary union, succeeded in ensuring that the result reproduced policies and institutions modeled as closely as possible on those of postwar Germany.
5 The current crisis in the Eurozone is a case in point. For most of the countries the trigger of the crisis was not badly unbalanced budgets but the need to recapitalize banks after the subprime disaster or, as in Ireland, following excessive private-sector borrowing. Greece is the only case where the government seems flagrantly to have disregarded the rules.
6 Romano Prodi, among others, said as much in 2001.
