The American Interest

Reversing Field

Tue, 17 Aug 2010 17:19:44 -0400

From the 2004 Orange Revolution to the 2010 problematical election, Ukraine’s politics followed the beat of the pro-Western Victor Yushchenko, who was committed to Ukraine’s earliest possible accession to NATO and the European Union. Yushchenko touted this rhythm as an alternative to closer ties with Russia, and in the most recent election, he asked voters to face up to this stark choice. They did: He got a little more than 5 percent of the vote in the first round of the election, while Victor Yanukovych, a long-time rival who advocated closer ties with Russia, went on to win the Presidency in the subsequent runoff election.

The vote was by all accounts free and fair, and so comforting Western media descriptions of Yushchenko’s defeat as a “victory for democracy”, if not necessarily for U.S. foreign policy interests, are not entirely off the mark. But these views miss the essence of what actually happened: Yushchenko was the only major candidate to run on a pro-Western agenda that specifically tried to distance Ukraine from Russia, and he went down in flames. What the U.S. and West European governments need to learn from the election is that Ukrainians simply do not wish to join the West at the expense of a good relationship with Russia, and that such a posture is entirely consistent with both democratic politics and Ukrainian sovereignty.

To varying degrees, all the other presidential candidates ran against Yushchenko’s pro-Western platform, including members of the Orange Revolution hierarchy itself. Prime Minister Yulia Tymoshenko spent most of 2009 trying to convince Ukrainian voters of her pro-Russia credentials, first by signing a ten-year gas contract with Vladimir Putin in January 2009 and then by distancing herself from President Yushchenko’s anti-Russia policies at every opportunity. In April 2009, she pointedly told the press that the era of Russia-Ukraine confrontation had “faded into the past.”

Orange Peels

Tue, 17 Aug 2010 17:19:59 -0400

Five years ago, post-Soviet Ukraine, a critically placed country of some 46 million people, seemed to be on the fast track toward modernity. The Orange Revolution, the spontaneous mass protests of fraud in Ukraine’s November 2004 presidential election, presaged a mature civil society and free media. The protests led to the election of Viktor Yushchenko, a banker and former Prime Minister who had joined the opposition and challenged Viktor Yanukovych, handpicked successor of the authoritarian Leonid Kuchma.

But the Orange Revolution’s rhetoric of democracy, reform and NATO integration never lived up to reality. Internecine conflicts and the vanity and venality of the two main leaders of the Orange forces, Yushchenko and Yulia Tymoshenko, plagued a series of governments and led rapidly to political deadlock, dysfunctional populist eruptions, and the squandering of a rare mandate for fundamental reform. Indeed, internal Orange camp rivalries led to the collapse of two governments and one incipient majority. When the second Orange government of Prime Minister Tymoshenko took power in December 2007, her policies faced vetoes and nearly endless obstacles strewn before her by President Yushchenko.

The lack of serious long-term dialogue with the opposition, represented by the Party of Regions, added to Ukraine’s domestic political fragmentation, as it reflected the political elite’s indifference about forming a consensus on such contentious issues as national identity, the complex relationship with Russia, and Ukraine’s historical legacy. Worse still, by the end of the Yushchenko presidency in 2010 it had become clear that Ukraine’s Orange leaders, despite their high-minded paeans to Western values, were little different from their adversaries and eagerly made common cause with the country’s oligarchs, the richest ten of whom control about a quarter of the country’s GDP. They also tolerated corruption within their own inner circle to a degree that ultimately made them no better than the elite they had replaced in late 2004.

A Letter from Tirana

Tue, 17 Aug 2010 17:20:14 -0400

Albania is a small country, about the size of Massachusetts, with 3.6 million people tucked in a corner of Europe that is not, to say the least, a popular tourist destination for Americans. It is one of those countries rarely in the news unless blood is flowing in the streets or, in the Albanian case, unless a massive Ponzi scheme comes telegenically crashing down, as in the infamous Lottery Uprising of 1997. Upon the collapse of the country’s bizarre communist government and its travel restrictions in 1991, hundreds of thousands of Albanians promptly left for Italy, Germany, Greece and other European countries.

I had always wanted to visit Albania for several reasons. The strange character of its communist past evoked my curiosity. I wondered if the personality of the French-educated supreme leader, Enver Hoxha, accounted for the peculiarities of that system, or if instead there was something in Albanian history and society that made it different (and worse) than others of similar basic character? My curiosity was also aroused by the fact that almost nothing was known about the country for so many years. In a way, Albania was a Balkan version of North Korea. So when I received an unexpected invitation from a distinguished Albanian sociologist to attend a conference at the new European University of Tirana I eagerly accepted.

When Sanctions Work

Tue, 17 Aug 2010 17:20:30 -0400

Almost as soon as the United Nations Security Council voted in June for a new sanctions resolution against Iran, doubters questioned whether it would have any real impact on Iran’s behavior. Indeed, some analysts have argued, sanctions never really work against their intended targets; they only harm average citizens, sometimes inadvertently help the targeted regime and demobilize the international community with the false sense that at least it is “doing something.”

Although scholars argue endlessly over just how ineffective sanctions are, all agree that in some exceptional cases, sanctions have worked. Positive examples are relatively rare (the most optimistic researchers claim no more than a 34 percent success rate¹), and may have succeeded for different reasons, but they include the apartheid regime in South Africa and the Communist government in Poland.

There is another success story that gets comparatively little attention: Belarus. Beginning in 2002, a sanctions campaign led by the United States but with broad European support against the Belarusian regime worked, exacting significant political concessions without harming the welfare of the people. Run by the authoritarian Alexander Lukashenka, Belarus is a country of ten million people that emerged in 1992 from the detritus of the Soviet Empire. Bordering Russia, Ukraine, Poland, Lithuania and Latvia, Belarus has had a sorely strained relationship with western countries (and even with Russia). Known as “Europe’s last dictator”, Lukashenka lords over a Soviet-accented kleptocracy, having worked to hobble an emerging free-market democracy since his election in 1994. Belarus has little in the way of natural resources. A major source of revenue for the state, and Lukashenka personally, has been arms sales, including sales to Saddam-era Iraq, Syria, Venezuela, Sudan and Iran.

Presidents and Their Generals: A Conversation with Eliot Cohen

Tue, 03 Aug 2010 18:06:23 -0400

AI: Let’s start with the Stanley McChrystal episode. What’s your take on this? Why did the general act with such inexplicable tactlessness? Did President Obama, in your view, respond appropriately?

Eliot Cohen: Obama handled it well. I’m not one of his greatest admirers, in general, but I thought he reacted quickly and decisively and that his speech hit all the right notes. It was also gracious and appropriate to ensure that General McChrystal retires at four-star rank.

For me, I have to say that this was a really painful episode. I know Stanley McChrystal, and I admire him enormously. I’ve been fortunate to see him do his thing when I was in the Department of State. Yet I agreed right from the start that he had to be relieved. As for why he (and much more, his staff) spoke that way in front of a Rolling Stone reporter, who knows? It was probably a perfect storm of people who were tired and a little bit relaxed because of being in Paris and a journalist who, if he had been a correspondent from one of the regular outlets, would have exercised some judicious self-censorship. It may have something to do with Special Operations culture, too.

AI: Meaning that McChrystal and his personal staff may not have been as familiar with dealing with the press as some others?

Eliot Cohen: Yes. Of course, he has dealt with the press before. But he’s not been long in that world, and his most recent experience has been in that very intense world of Special Operations. As Director of the Joint Staff, too, you’re not a public figure, so he hasn’t dealt with the press very much in recent years. Still, why the staff let that guy in is beyond me. If you spent just a minute or two Googling “Michael Hastings”, you’d immediately think, “Trouble. Don’t let this guy anywhere near the boss.” And Rolling Stone, for goodness’ sake. And finally in this regard, if you’re going to bring a journalist in that close, presumed to be adversarial or not, have it be one of the regular defense reporters, someone who not only knows the context but will want to work with you in the future.

Ebb Tide

Tue, 03 Aug 2010 18:06:23 -0400

Only one statement can be made with certainty about the future of the U.S. Navy: Its strength is a necessary precondition of U.S. continuance as a great power. A robust, globally distributed and technologically superior naval force does not ensure the future of American international preeminence, but a waning fleet composed of fewer and less fearsome vessels guarantees the decline of U.S. influence in the world. Venice, Spain, Holland, France and England learned the identical lesson over the past 500 years: The loss of seapower paralleled and was in large measure responsible for their decline as great powers.

Seapower is an uncommonly flexible instrument of national power. It can and has been used to supply humanitarian assistance, as it did for the survivors of the Indian Ocean tsunami in December 2004 and more recently following the Haitian earthquake in January 2010. It can be used to pummel an enemy, as carrier-based strike craft are doing today to our enemies in Afghanistan. The Navy critically supports the amphibious operations of the U.S. Marines. It also supports important national purposes that fall between disaster relief and combat. For example, it supports our trade in and access to strategic resources, keeps sea lanes secure in peace and war, and assures allies of our presence and commitment. By maintaining sufficient combat power to provide allies with security by deterring and protecting against ballistic missile attack, it reduces the incentives to proliferate weapons of mass destruction and lowers the prospect of destabilizing regional security competitions. And the Navy, last but not least, also reinforces U.S. diplomacy, collects intelligence and supports homeland security by monitoring the movement of potentially dangerous cargo destined for U.S. or allied ports.

A shorter, more conceptual way of putting all this is to say that U.S. seapower protects our vital interest in a benign international order, thus providing a global common good that simultaneously enables America to do well for itself and to do good for others.

Despite the critical role of the Navy, the prevalence of land conflicts in recent years—the 1989 invasion of Panama, the 1990–91 Gulf War, the Balkan wars of the 1990s, the post-September 11 invasions of Afghanistan and Iraq (and the ongoing counterinsurgency campaigns there)—have propelled American seapower into virtual obscurity. This is not to say that the Navy has not participated in all these conflicts, but that the historically unprecedented concentration on land warfare has led a generation of American lawmakers, their staffs, policy experts and the media to take U.S. maritime interests for granted. This has engendered an unprecedented ignorance of the political and broadly strategic role of seapower in providing American and global security. American Presidents from George Washington to George H.W. Bush knew from history and their own experience alike that America was preeminently a seapower, and that American security has been inseparable from the development of seapower and the ideas that govern it. It still is. Indeed, the demand for U.S. seapower will only grow in the years ahead.

Caught on a Lee Shore

Tue, 03 Aug 2010 18:06:23 -0400

Currently, the United States has two armies. At least that’s the growing concern of senior leaders in the Marine Corps and a point echoed as well by Secretary of Defense Robert M. Gates as recently as this May.¹ Their observation stems from the impact that seven years of sustained land operations have had on the Corps. Like the Army, the Marine Corps has had to increase its inventory of heavy-armored vehicles to counter the widespread use of powerful improvised explosive devices in Iraq and Afghanistan. The weight and size of its units have grown to the point that Marine Corps leaders worry about their ability to embark them aboard amphibious ships. The complexity of protracted counterinsurgency and stability operations has also caused the Corps to dedicate its institutional attention to these challenges almost to the exclusion of everything else, especially amphibious operations.

To counter these trends—especially increasing weight and decreasing experience aboard ship—the Corps has begun reviewing its equipping, training and exercise initiatives and is working to regain proficiency in amphibious operations. Representative of this effort is the recently concluded “Dawn Blitz”, a two-week long major exercise that took place this past June at Camp Pendleton, California, culminating in a brigade-level amphibious assault, the first such exercise in nearly a decade.

The Corps’s concern about becoming a “second land army” touches a nerve within a service perpetually worried about its perceived relevance. Indeed, its identity as an amphibious force is the feature that most distinguishes the Corps from the Army, yet the need for such a capability is being increasingly questioned. America does not need two armies in the conventional sense, notwithstanding the fact that the operational demands of Iraq and Afghanistan exceeded the Army’s capacity, thus requiring the extended use of the Marine Corps. As U.S. involvement in these conflicts winds down, the Corps will need to refocus on those characteristics that distinguish it from the Army.

In the Army Now

Tue, 03 Aug 2010 18:06:23 -0400

The U.S. Army and its principal client, the American people, stand at an important crossroads. Ongoing military operations in two wars have exposed the difficulties of accomplishing critical policy aims. In these conflicts, the nation has relied heavily on the Army to carry a significant portion of the national effort, and it has done so in ways that neither it nor the Army had envisioned a decade ago.

The Army has adapted well. It has radically reorganized its force structure, shifting from an emphasis on large division formations and conventional combat to smaller formations centered on brigades with component modules more easily tailored to a variety of contingencies. The Army has also thoroughly reworked its doctrinal and intellectual foundations to incorporate counterinsurgency and stability operations on par with traditional combat operations in a comprehensive framework known as “full spectrum operations.” It is more nimble than ever, and it certainly contemplates the future far less narrowly than it did a generation ago.

None of this adaptation, unfortunately, ensures that the Army will meet the challenges of the future with the same success. Several factors are working against a successful evolution. It will have to implement its vision in the face of unaccustomed budget stringencies, and it will have to do so against the grain of a long-standing organizational culture that still privileges conventional combat capabilities over the rest of the operational spectrum. Indeed, most disagreements within Army ranks fall along these lines.

The Army will also face a kind of philosophic problem: There is an inherent limit to how well any person, let alone any organization, can see what is not yet. In 1973, the eminent British historian Sir Michael Howard cautioned against those who supposed they could play the oracle:

This is an aspect of military science which needs to be studied above all others in the Armed Forces: the capacity to adapt oneself to the utterly unpredictable, the entirely unknown. I am tempted indeed to declare dogmatically that whatever doctrine the Armed Forces are working on now, they have got it wrong. I am also tempted to declare that it does not matter that they have got it wrong. What does matter is their capacity to get it right quickly when the moment arrives. . . . [I]t is the task of military science in an age of peace to prevent the doctrines from being too badly wrong.¹

This eternal challenge, as framed by Howard, is the one that the U.S. Army must revisit now as it tries to think past the opaque curtain of the future. In light of past performance, it is a daunting task. Certainly, events since 1973 validate Howard’s skepticism. Why did the Army not escape being “too badly wrong” coming out of the Cold War, so that it might have avoided the uneven performance and wrenching changes of the past decade? Might knowing the answer to this question, in turn, help us avoid being too badly wrong for the future?

Up in the Air

Tue, 03 Aug 2010 18:06:23 -0400

In a September 2007 Capitol Hill speech, Secretary of the Air Force Michael Wynne warned that “the Air Force is going out of business . . . . [A]t some time in the future, [aircraft] will simply rust out, age out, fall out of the sky.” Coming from the usually understated political appointee, Wynne’s dire assessment amounted to a red cape waved before the Defense Department’s civilian leadership and supporting bureaucracy. Tension mounted as Wynne and Air Force Chief of Staff Michael Moseley continued to speak out on this topic, and a few months later, ostensibly for unrelated reasons, Secretary of Defense Robert Gates fired both Wynne and Moseley—the first simultaneous firing of a service secretary and chief of staff in history. Officials in the Office of the Secretary of Defense subsequently asked Air Force leaders not to speak publicly about the state of their service. After several outspoken Air Force generals failed to heed the warning and were asked to retire, the problem disappeared from the public sphere.

The problem itself, however, remains. The average age of the refueler and bomber fleet, which forms the foundation of U.S. air power-projection capability, now exceeds fifty years. Most of the Air Force’s fighters were built in the 1970s. Virtually all Air Force aircraft are decades past their planned retirement dates. Technology designed to overcome Vietnam War-era surface-to-air missiles and fighters is becoming obsolete in the face of emerging air-defense capabilities. Air Force bases built half a century ago are poorly placed to meet emerging deterrence missions. Today, a large portion of the Air Force exists only on paper, its aircraft too old to fly in combat but requiring enormous sums to maintain. If current procurement practices continue, the readiness and effectiveness of U.S. airpower will steadily worsen over time, with serious consequences for U.S. national security.

The Air Force’s tailspin began well before Wynne’s remarks in 2007. It began in the early 1990s, when, as the Cold War drew to a close, Congress sought to wring a peace dividend out of the military budget at the same time that a series of Presidents began to call upon the Air Force far more often than programmers had anticipated. Between 1989 and 2003, the United States went to war five times, and throughout most of this period the Air Force also maintained intense operations in no-fly zones over southern and northern Iraq. With limited budgets, the Air Force ate up its seed corn. It spent its recapitalization budget on current operations, expecting to end this practice when the wars ended. But the wars did not end.

Benevolent, Adaptable and Underappreciated

Tue, 03 Aug 2010 18:06:23 -0400

How should the U.S. Coast Guard plan for the future? Given its status as a branch, albeit often a neglected one, of the U.S. Armed Forces, one might suppose that the old saw about generals (and admirals) busily planning for the last war might apply here. But it doesn’t, for the Coast Guard’s portfolio of missions has rarely been stable for long enough to allow any orthodoxies to form. The Coast Guard’s history, rather, is one of adaptability in the face of challenge, an awkward fit in the Federal cabinet and government structure and, owing to these two factors as well as others, a low political profile. Understanding this history is the key to meeting the challenges of the Coast Guard’s future: still-shifting mission priorities, a new status in a new Executive Branch department, and looming budgetary austerity.

It is no simple matter to tell the Coast Guard’s history. Its official inception dates to 1915, but the various organizational threads that were woven together into a single agency at that time had many different origins and served many different purposes. The earliest thread was the Revenue Marine (re-named the Revenue Cutter Service in 1894), created in 1790 as a system of seagoing vessels serving as the maritime arm of the Treasury Department’s Collectors of Customs. The Revenue Marine enforced customs laws as well as supported revenue generation for the new Federal government, and before long the government had also charged it with protecting the nation’s coasts and interests on the high seas during the Quasi-War with France.

Another thread joined the fabric in 1838, when an explosion aboard the steamboat Pulaski, the last in a series of fatal accidents that year, killed more than a hundred passengers and severely injured many others. Congress responded to the tragedy with decades of legislation eventually leading to what came to be called the Steamboat Inspection Service, marking the beginnings of the maritime safety mission that was eventually merged into the Coast Guard in 1915. (The Steamboat Inspection Service was merged with the Revenue Marine and the U.S. Life-Saving Service, which was formally organized in 1878.)

Unreserved Support

Tue, 03 Aug 2010 18:06:23 -0400

These are the men and women of America’s Guard and Reserves:

Lt. Col. Steve Countouriotis, Army National Guard (ret.), looks like he was carved from a piece of granite. A retired California Highway Patrolman, “Count” served four combat tours in the aftermath of September 11, two each in Afghanistan and Iraq. A former infantry officer and Blackhawk pilot, in 2007 Count mentored the Afghan Minister of the Interior in counterinsurgency and police tactics. There are nine completed combat tours in his immediate family, including two by each son and one by his daughter. Now retired from the National Guard, Lt. Col. Countouriotis continues his public service as an adviser to the Coast Guard on domestic security issues.

Sgt. Bill Cahir, U.S. Marine Corps Reserve, volunteered for military service at age 34 because he had a passion to serve his country. A former staffer on Capitol Hill, respected newspaper reporter and candidate for Congress, Sgt. Cahir was assigned to a Marine Reserve Civil Affairs unit. He deployed twice to Iraq, then at age forty to Afghanistan. While on patrol with his Civil Affairs unit in southern Afghanistan, he was shot and killed. A few months after Sgt. Cahir’s funeral at Arlington, his wife René gave birth to their twin girls.

Sgt. Leigh Ann Hester, Army National Guard, enlisted just four months before September 11. Assigned to the 617th MP Company, Richmond, Kentucky, on March 20, 2005, Sgt. Hester and her unit were tasked with a convoy security mission in Iraq. When the convoy came under insurgent attack, Sgt. Hester led her team in a flanking movement. She assaulted an enemy trench line with grenades and killed three insurgents with her own rifle. According to the Pentagon, “When the fight was over, 27 insurgents were dead, six were wounded, and one was captured.” Sgt. Hester was awarded the Silver Star—the first female soldier to earn this decoration since World War II.

Lt. Gen. Steve Blum, former Chief of the National Guard Bureau, spent much of his reserve career training for infantry and Special Forces missions. With a shaved head and blunt speech and action, Lt. Gen. Blum never fit the expectations of his peers at the Pentagon; he was too intense, too passionate. But more than anyone else, he brought the National Guard into the 21st century. Following Hurricane Katrina, largely by force of personality and superb leadership, he called upon the goodwill and sense of duty among the nation’s Adjutants General to coordinate the movement of 51,000 National Guardsmen to the Gulf Coast in less than ten days. When other agencies and institutions failed, the National Guard came through. Thousands of Gulf Coast residents owe their lives to Steve Blum and the National Guardsmen he effectively deployed.

These are the citizen warriors of the 21st century, well trained, better equipped, combat experienced. The Guard and the Reserve Component are indisputably essential elements of the Total Force. They exist on a plane of military professionalism far removed from the marginalized Reserve Component (RC) of the Vietnam era. Unfortunately, more than a few old bulls within the Defense establishment haven’t gotten word. As the drawdowns in Iraq and Afghanistan continue, a new threat to the Reserve Component will inevitably emerge: Without significant institutional reform and a commitment of greater resources, the Reserve Component, most notably the National Guard, could easily slide back into the morass of an earlier, less capable era.

Getting to No

Tue, 03 Aug 2010 18:06:23 -0400

As proximity peace talks between Israelis and Palestinians appear to give way to a resumption of direct negotiations, the parties will shift their attention from pre-negotiation maneuvering to the substance of the negotiations themselves. When they do, conventional wisdom will reassert itself. That wisdom holds that there is already in existence at least the general shape of a deal to which both sides can agree. It is a modified version of what Yasir Arafat walked away from at Camp David and then at Taba in 2000, what an unofficial group of Israelis and Palestinians presented at Geneva in 2003, and what Mahmoud Abbas failed to answer definitively when it was presented to him by outgoing Prime Minister Ehud Olmert in 2008. With some fine-tuning, the chorus of pundits will say, perhaps an agreement can be consummated. President Obama himself said, during Israeli Prime Minister Netanyahu’s visit to Washington on July 6, that he thinks an agreement can be readied within the year.

This is an illusion. There are important elements of the hypothetical deal itself to which each of the parties has strong objection. Even if those could be overcome, there are two greater obstacles standing in the way of permanent peace. The first concerns whether the negotiating partners, having agreed among themselves, are able to bring along enough others on their side to make peace. The second is even more daunting: Can either side make a credible commitment to deliver the future—that is, can a peace agreement, duly signed and sealed, really end the conflict once and for all? At this time, the answer to these questions is no.

Think of the problem as involving three concentric circles. In the center is the agreement itself, consisting of terms based on compromises to which the negotiators can give their assent. In the middle circle are politically influential segments of both sides whose starting views diverge from those negotiating on their behalf. Can they be induced to support an agreement that is far from what they see as optimal? In the outer circle are the spoilers and diehards, those for whom the conflict has an existential element. In ordinary circumstances, a good agreement and skillful implementation tend to marginalize people in this last category, but the Israeli-Palestinian conflict has a special feature that makes the outer ring unusually problematic.

Robots of the Rising Sun

Tue, 03 Aug 2010 18:06:23 -0400

In the 1980s, when automotive trade friction between the United States and Japan sparked ugly riots and deadly violence in Detroit, the Japanese people—salaried men in particular—were stereotyped in the American media as automatons or robots who slaved 24/7 for the glory of Japan, Inc. These disparaging characterizations seem to have faded along with the Japanese economy, but robots—albeit the unsalaried kind—are still very much in the picture.

Today, Japan is banking its economic revival on robots. Its Ministry of Economy, Trade and Industry (METI) forecasts that its robot industry and spin-offs will dominate this century’s global marketplace, just as its automotive industry did forty years ago. Robots Will Rescue Japan! shouts the title of a 2009 best-selling book by Shin Nakayama. Shigeki Sugano, who chairs the Department of Modern Mechanical Engineering at Tokyo’s prestigious Waseda University, claims,

If the robot is commercialized the investment will be nothing compared to the money that will be made if it is mass produced. Companion robots are going to be the next big industrial thing after the car and the computer. It is not just Japan but the whole developed world that is moving towards an aging society.¹

Already Japan is home to over half of the global share of the one million industrial robots, 295 for every 10,000 manufacturing workers; Singapore is second with 169 industrial robots per 10,000.² Japan also leads in the creation—and most importantly, acceptance—of humanoid household robots developed to care for children and the growing numbers of senior citizens, to provide entertainment and companionship, and to perform domestic tasks. In 2016, by which time each Japanese household is likely to own at least one robot, the size of Japan’s household robot market is expected to top 18.6 million units.³

Demographics and Gender

There is no secret about what is driving Japanese enthusiasm for robots, at least at a social structural level: demographics. Japan’s birthrate presently stands at about 1.3 children per married woman, and over 21 percent of the population of nearly 127.7 million people is over 65 years of age. By 2050 that ratio is expected to surpass 40 percent. The Ministry of Health now projects that Japan’s population will shrink to fewer than 111 million by 2035 and to fewer than 90 million by 2055.

Demographic estimates from 1995 indicated that more than 600,000 immigrants a year for fifty years would be needed to keep the labor force at its 1995 level of 87.2 million persons. That forecast has obviously not made much of a dent on reality, for Japan’s politicians have discouraged immigration as a solution to the demographic challenge; they prefer humanoid robots made in Japan to workers from outside of Japan. METI’s survey data indicates that, after their own children, elderly Japanese preferred robot caretakers to foreign ones.⁴ In a recent interview, Shigeki Sugano—the creator of Twendy-One, a dexterous humanoid caretaker robot unveiled in 2007—explained that free trade agreements by Japan enacted between 2002 and 2006 provoked tenacious opposition because of their proposals to “import” foreign labor. As I see it, limiting the number of foreigners in Japan reinforces the tenacious (if mythical) ideology of Japan’s ethnic homogeneity.⁵

Electric Company

Tue, 03 Aug 2010 18:06:23 -0400

. . . lonely in the midst of a million of his race . . . a man walks his tedious miles through the same interminable street every day, elbowing his way through a buzzing multitude of men, yet never seeing a familiar face, and never seeing a strange one the second time. . . . There is little sociability, and . . . little cordiality. Every man . . . rushes, rushes, rushes and never has time to be companionable. —Mark Twain, Travels with Mr. Brown (1866)

When I learned a few years ago that some of my Western colleagues in Saudi Arabia possessed blow-up vinyl sex dolls, I rolled my eyes but resisted the urge to snicker. Odd though this behavior seemed, it made a warped, Saudi kind of sense. In the Kingdom, women are more forbidden to the unwed Western contract worker than alcohol. While the former are genuinely unavailable, the latter is merely proscribed. This combination explains its own consequences: After several months of unrequited natural longing, inebriated men will often lower their standards to the point where, as Tom Waits says, even “the crack of dawn ain’t safe.”

I was less sympathetic this past January when TrueCompanion.com introduced a conversant female sex robot for the domestic American market (a male robot is in the works, ladies, never you fear). The target market for this fembot clearly extends beyond lonely men working on oil rigs out in the middle of nowhere. The manufacturer apparently thinks there is a large number of Americans who, whatever they may think or say, are in fact closer emotionally to their smart phones than to any living, breathing human being—who, in other words, use gadgets as social prostheses.

All this led me to wonder when and why people began thinking, or rather assuming, that humans could replace flesh-and-blood companionship with a connection to plastic and silicon. I soon found that I am not the only one to wonder. Sherry Turkle, a professor in MIT’s Society and Technology program, claims that “we are witnessing a new form of sociality in which the isolation of our physical bodies does not indicate a lack of connectedness.”¹ We are at a point, she suggests, where computers and mechanical objects are subsuming human relationships without our being fully aware of it. If so, the online avatar—not to mention the movie Avatar itself—signals a fundamental change in our concept of human connectedness. We can now wonder, for example, whether friendship has become less durable now that both “friend” and “unfriend” have become verbs.

There is no doubt that Blackberries and iPhones have become our constant companions in a hybrid universe of wireless technology and human mobility. At a time when Iron Man 2 has one of the largest grossing premiere weekends, there also seems little doubt that the interpenetration of machines and people will grow more pervasive, more ornate, and also more invisible as nanotechnology matures. Americans born years from now may presume that all of this is perfectly natural (word chosen carefully). Already, modern machines can certainly be made to seem more reliable than people or their governments. In Iron Man 2, Tony Stark boasts of the reliability of his “prosthesis”, saying that together they have privatized world peace.

Whether or not these new tech toys are in fact more dependable than human beings, our relationships with them in films are apparently more entertaining. In recent years the two Transformer films idealized a relationship between Sam Witwicky (Shia LeBeouf) and Bumblebee, a robot protector who transforms into a Chevy Camaro. I watched both films with my sons, aged 5 and 15. They understood immediately when Bumblebee invents a one-way system to communicate with Sam using extracts from old radio or television broadcasts. The boys loved it. I was entertained, too, but also left strangely uneasy. When the vestigial noise finally left my head (these are very loud films, crosses between a heavy metal concert and a demolition derby), I recognized the long curve of our relationship with personal machines as a series of increasingly explicit prosthetic friendships.

Humanism's Four Stages

Tue, 03 Aug 2010 18:06:23 -0400

Not so long ago David Denby wrote in the New Yorker that “the word ‘humanist’ has a slightly moldy sound.”¹He was spraying verbal air-freshener to clear the atmosphere for his praise of Iranian film director Abbas Kiarostami, who “redeems humanism by combining it with circulating formal play”—whatever that means. But regardless of his reason for doing so, Denby aptly expressed current sentiment about humanism among cultivated people: Humanism seems a vague, well-intentioned sort of thing but is very uncool, almost embarrassing.

This ambiguous distaste for humanism is inherited partly from the revulsion created by World War I against 19th-century high-mindedness (as with Wilfred Owen on “the old Lie: Dulce et Decorum est/Pro patria mori”), and also from the Nietzschean revolution in thought, which gave that revulsion some philosophic depth. These come together, for example, in Sartre’s famous diatribe in Nausea (the epitome of serious cool for postwar college students) against the serene humanist who, faced with headstrong, angry people who have real passions, “digests all their violence and worst excesses; he makes a white, frothy lymph of them.” There is already something of Denby’s condescending tone in Thomas Mann’s treatment of Settembrini, the fiery spokesman for liberal humanism in The Magic Mountain. He’s a good guy in the end, but a somewhat comical lightweight compared to the seductive Naptha and the charismatic Peeperkorn.

If humanism functions today as a kind of well-worn security blanket for those who prefer their nihilism with a human face, it doesn’t fare well as a concept among serious scholars either. Thus Vito R. Giustiniani, the intellectual historian of the Renaissance, demonstrates that “humanism” has meant widely different things. He lists variants from the study of “the resurgent classical culture” or even “what is now called literature” to a 19th-century (the period when the term itself was coined) “philosophy of man” as set out in Renan, Feuerbach and Marx. His melancholy account, which finds room even for John Dewey and Corliss Lamont, ends by pronouncing that “God’s curse still rests on a term which should define the very essence of God’s most perfect creature.”²

Conceptually cursed, intellectually diffuse and socially dubious, why not just jettison the term altogether, and maybe even the underlying concept of “man” itself? Derrida and Foucault were all for that.³ And why not, if its many meanings in the end mean nothing?

Reading Al-Anbar

Tue, 03 Aug 2010 18:06:23 -0400

The Iraqi “Awakening”—Sahawa al-’Iraq in Arabic—was the decisive event of the Iraq War. The revolt of the Sunni tribes against al-Qaeda began in early 2006 among the Albu Mahal of al-Qaim, in far northwestern Anbar province. By mid-2007 it had spread to Baghdad, cascading from tribe to tribe throughout Anbar and beyond, transforming the attitudes of population groups across at least half of Iraq. As the tribal and nationalist wings of the insurgency turned against al-Qaeda, the war was transfigured. The tribes began to partner with U.S. and allied forces, their young men began to join the Iraqi police, and the vortex of violence that had torn Iraqi society apart began to abate. Iraqis started putting their weapons down, turning to peaceful means to resolve their grievances against the occupation and the Baghdad government.

There is still a long way to go in the process of institutionalizing a decent politics in Iraq; even today the country is far from peaceful. Still, the Awakening saved tens of thousands of lives, transformed the war at a stroke and enabled a political process to set roots that, however shallow, have at least some chance of enduring. But what exactly occurred? Was the Sahawa a coincidence that just happened along at the critical moment, a lucky anomaly that was neither predictable nor repeatable, and therefore no guide for the future? Or was it, at the other extreme, a planned, purposive component of the “surge” that happened because we made it happen? Was it a homegrown miracle, springing from the heroic vision of leaders like Sheikh Abdul Sattar or his brother Ahmad Fteikhan of the Albu Risha, who had the courage to radically re-conceptualize the war, to see us as partners and al-Qaeda as brutal exploiters? Was it something in between—a spontaneous movement, an unplanned uprising-within-an-uprising that U.S. Marines, soldiers and civilians on the ground were smart enough to notice, and their leaders just barely agile enough to exploit?

You Are What You Click

Tue, 03 Aug 2010 18:06:23 -0400

“Beginning in the late 1970s the world began to change—and fast.” So say John Palfrey and Urs Gasser in the introduction to their Born Digital: Understanding the First Generation of Digital Natives. Intentionally or not, the assertion echoes Virginia Woolf’s oft-cited observation about the arrival of the modern era: “On or about December 1910 human character changed.” Both statements provoke argument, expressing as they do not just a sense of a world in transformation (the world is always in transformation), but that of a radical break. Woolf’s intuitions of Modernism have been parsed by generations of grad students, of course, but Palfrey and Gasser are staking out still unfamiliar territory. They are identifying a condition of technological critical mass that, pace Ecclesiastes, is something new under the sun, the effects of which are profoundly shaping what they call the generation of “Digital Natives”—those born after 1980.

Palfrey and Gasser begin their study with a slightly hyperbolic but nonetheless apt description of how these not yet thirty-something Natives inhabit the world. It is almost enough to list their devices and tools: iPods, smart phones, Facebook, Twitter, YouTube, and a host of applications—“apps”—still too new to have made it into the dictionary. Of course, many of the Natives’ parents are users as well—“Digital Immigrants” in Palfrey and Gasser’s terminology—but for them these are learned behaviors, elected adaptations. For Natives, the various interfaces and the interactions they enable are simply the given:

Unlike most Digital Immigrants, Digital Natives live much of their lives online, without distinguishing between the online and the offline. Instead of thinking of their digital identity and their real-space identity as separate things, they just have an identity (with representations in two, or three, or more different spaces). . . . Digital Natives don’t just experience friendship differently from their parents; they also relate to information differently.

The Unreal Thing

Tue, 03 Aug 2010 18:06:23 -0400

“Now and then it is possible to observe the moral life in the process of revising itself”, wrote Lionel Trilling in his masterful little book Sincerity and Authenticity (1972). Originally delivered as the Norton Lectures at Harvard in 1969–70, the book and its opening line allude to the shift in values underway at the close of the 1960s, when droves of newly cynical citizens scurried from politics after a decade of three assassinations, a bloody and undefined televised war and a cascade of sizzling race riots. Trilling’s volume, rolling through the opening door of the Watergate fiasco, emerged at a time when the American ethos had transformed from that of a caricatured middle-class of conformist management drones—made famous by David Reisman’s “other-directed” lonely crowd, C. Wright Mills’s white-collared bureaucrats and William H. Whyte’s “organization” men—into freewheeling, existentialist Beats and Hippies who demanded the shedding of repression, propriety and clothing. Instead they would value personal liberation, uninhibited exploration and, above all, authenticity.

They launched themselves into their personal arcs of libération, the story goes, by saying “no” to their parents’ numbing suburban conformity and postwar patterns of conspicuous consumption. Against marching to the beat of someone else’s drum—especially the American military-industrial complex’s, man—they were going to do their own thing, blaze their own trail, “think different”, and have it their way.

Hey, wait a second! These rallying cries sound remarkably (actually, exactly) like the sales pitches used now to sell laptops and iPods, Jeeps, sneakers and flame-broiled hamburgers: phony, two-bit tropes crafted by advertising firms and trend-scouting agencies. What’s going on here?

An admirable new attempt to answer this question is The Authenticity Hoax by Andrew Potter, a Toronto-based journalist and philosophy professor. In language that is accessible, punchy and generally well informed, Potter lays out how the authenticity plague has mutated from maverick Birkenstock into rebel Reebok over the past five decades—and how it was cultivated in the first place.

Potter begins his romp with a gentle anecdote of today’s absurd search for supposedly authentic life. He tells of a French couple who, ignoring repeated warnings of Somali piracy, uproot themselves and their toddler from the horrors of civilization to sail to Zanzibar. During their journey they are, naturally, kidnapped by Somali pirates. The father, 28-year-old Florent Lemaçon, is shot and killed. “Why did they continue on their voyage, despite being repeatedly warned?” Potter asks. His answer is that the 1960s-inspired search for authenticity, “a form of individualism that privileges self-fulfillment and self-discovery”, has become “the foremost spiritual quest of our time.” It has become an undeniable quest, argues Potter, that we have come to believe may be undertaken only outside the corrupting influence of contemporary social life:

The Gallic Orwell

Tue, 03 Aug 2010 18:06:23 -0400

This year marks the fiftieth anniversary of the death of Albert Camus. The French novelist, essayist and journalist was killed in a car crash on January 4, 1960, along with his friend and publisher Michel Gallimard, at the sleepy little town of Villeblevin in northern Burgundy. He was 46. Three years earlier, he had been awarded the Nobel Prize for literature in recognition of “his important literary production, which with clear-sighted earnestness illuminates the problems of the human conscience in our times.”

Camus’s early death made him a symbolic figure of near-universal appeal. But that appeal was diverse and multifaceted; readers from all points of the political and intellectual spectrum were liable to cite him with approval, or at least respectful interest. That tendency now stretches into decades. L’Étranger, the short 1942 novel that remains his best-known work, acquired a talismanic significance amid the student unrest of 1968; in 2006 it also featured (famously or infamously, depending on one’s point of view), on the holiday reading list of President George W. Bush.¹

In this wild plasticity of invocation, Camus’s posthumous fate seems to mirror that of another author who died at the same age, George Orwell. Born a decade before Camus, Orwell had followed in life a similar intellectual and political trajectory. His idealistic engagement with revolutionary socialism turned with experience, as a commitment to communism turned for Camus, into profound disillusion with the oppressive inhumanity of the totalitarian Left. Orwell’s premature death from lung disease (from which Camus, coincidentally, had also suffered), transformed him into a literary and ideological equivalent of a bestselling if ambiguous global brand. The essentially rightward shift in both men’s politics, though hardly undeviating or uncomplicated in either case, was clear enough while they were alive. With both writers cut off in their prime, however, such developments were left tantalizingly incomplete. That very incompleteness has enabled virtual historians, and their political counterparts from the Right and the Left, to have a field day imagining what Orwell or Camus might have said about contemporary events.

Orwell has perhaps fared better in this process than Camus. His eloquent critique of British imperialism and class politics, his unremitting opposition to exploitation and social injustice in all forms, and his (just about) enduring belief in the possibility of a humanist, non-totalitarian socialism have continued to inspire many on the Left, even as his plain-spoken anti-communism and robust denunciations of leftist decadence and abuse are treasured by thinkers far more conservative than he was. A remarkable and unexpected potential for humility has arisen from this competitive adulation, as all of Orwell’s admirers, in wanting to claim him as their own, have had to concede that their political opponents might also have a case.

Camus, by contrast, has been the focus of a rather more acrimonious and intractable set of disputes. This was evident even in his lifetime, particularly his very public quarrel (primarily about communism) with his literary associate and fellow writer Jean-Paul Sartre. This argument became one of the defining events of French postwar intellectual life, as did the furor prompted by, or manufactured around, the much-reported (and misreported) observation he made to students in Stockholm after accepting the Nobel Prize: “I believe in justice, but I’ll defend my mother before justice.”

Chesterton's Warning

Tue, 03 Aug 2010 18:06:23 -0400

With a few honorable exceptions, our historians have tended to gloss over the Progressive Era’s affinity for many of the 20th century’s most troubling ideas. Few Americans know, for example, about the magnetic appeal Italian fascism held in the 1920s for many of the most prominent American liberals and pragmatists. They openly praised Mussolini’s achievement in transforming a chronically disordered nation into “the cleanest, neatest, most efficiently operating piece of social machinery I’ve ever seen”, as FDR Brains Trust adviser Rexford G. Tugwell enthused.

An even more interesting omission is our neglect of the then-widespread popularity and respectability of eugenics. This new “science” for the systematic practice of selective human breeding for the supposed improvement of society led to the sterilization and segregation of the “feeble-minded” and other “undesirable” individuals and groups in American society. It sounds like a preoccupation of the exotic fringe to most of us now, but nine decades ago eugenics was openly advocated as a mainstream Progressive idea. Indeed, the most certifiably advanced minds of the day promoted and celebrated it. In 1923, former President Charles W. Eliot of Harvard, U.S. Senator Royal Copeland of New York, former President David Starr Jordan of Indiana and Stanford Universities, President Livingston Farrand of Cornell University, and a host of other educational, medical and social-welfare luminaries making up the Eugenics Committee of the United States came forth with a program calling for “selective immigration, sterilization of defectives and control of everything having to do with the reproduction of human beings.” In 1932, Margaret Sanger, founder of the organization that would eventually become Planned Parenthood, advocated “a stern and rigid policy of sterilization and segregation to that grade of population whose progeny is already tainted or whose inheritance is such that objectionable traits may be transmitted to offspring.” Nor was support restricted to a secularist avant-garde. As Christine Rosen has shown, many American Christian and Jewish religious leaders, including even some Roman Catholics, were fully supportive of eugenic ideas and policies. It was no fringe phenomenon.¹

Nor was eugenics merely a utopian idea. It formed the basis of concrete policies. For one thing, it lent its strong support to the immigration-restriction statutes of the 1920s. But there were more direct and telling effects. Thirty-three American states passed laws that allowed for the involuntary sterilization of those deemed “unfit.” The famous words of Justice Oliver Wendell Holmes, Jr. in the 1927 Buck v. Bell case—”three generations of imbeciles are enough”—expressed the Supreme Court’s upholding of a Virginia law, thereby signaling the general acceptability of eugenic involuntary-sterilization laws. Such activity was hardly restricted to Southern states. California, well-known to be one of the most Progressive-influenced states in the nation, led all others in performing some 20,000 forced sterilizations and did not cease the practice until the 1960s.

Autumn Note: Vial of Tears

Tue, 03 Aug 2010 18:06:23 -0400

This past May marked the fiftieth anniversary of the FDA’s approval of oral contraceptives. Not for nothing has this influential technology earned the simple honorific “the Pill.” As many of the tributes to this anniversary noted, granting women contraceptive agency enabled them to delay childbearing and pursue higher education, work and long professional careers. But even as the Pill alleviated fear of the unwanted pregnancy that would confine a woman to the home, it also dramatically heightened anxiety about the ticking biological clock. Thus the Pill sparked one revolution that led in turn to another: Infertility born of long-postponed pregnancy found a solution in assisted reproduction technology. The first revolution sped the disconnection of sex and marriage, the second the disconnection of marriage and childrearing. The Pill gave us first the joy of sex without babies, and then, in effect, the freedom and convenience of creating babies without sex.

While we have spent decades coming to terms with the massive effects of the sexual revolution, the fertility industry remains a virtually untrammeled Wild West. Only now, years after sperm, egg and embryo entered the open market, has the first wave of films, books and studies broken to tell the stories of the parents and children who emerged from this process. The combination of medical ingenuity, free-market entrepreneurialism and the profound desire to overcome infertility (whether biological or social) produces the kind of heady drama that attracts filmmakers and writers. And within the constellation of new reproductive options, the intrepid single mother purchasing donor sperm—usually as her biological clock winds down after a storied career in love and work—has captured the most attention. (Roughly half of all sperm sales in the United States are to single women.) Recent books like Louise Sloan’s Knock Yourself Up! (2007), Rachel Lehmann-Haupt’s In Her Own Sweet Time (2009) and the Oprah-approved Three Wishes (2010), co-authored by Carey Goldberg, Beth Jones and Pamela Ferdinand, present the path to hard-won belated motherhood as madcap adventure. This year alone brings three movies featuring A-list actresses that treat artificial insemination with indulgent humor: Jennifer Lopez in The Back-Up Plan; Jennifer Anniston in The Switch, based on a short story, “Baster”, by Jeffrey Eugenides; and Julianne Moore and Annette Bening as a lesbian couple whose teenagers find their donor father in director Lisa Cholodenko’s critically acclaimed The Kids Are Alright.

But this surge in celebration of female reproductive empowerment sits uneasily alongside an intensifying concern about the importance of fatherhood to children and society. While some increasingly question whether fathers are really necessary after all the assertion of paternal indispensability has been spurred on by President Obama’s two compelling Father’s Day speeches, and by the body of scholarship documenting the unique contribution that residential, biological fathers make to child well-being and cognitive development. When those adorable babies sporting bibs that say “My Daddy’s name is donor” become adolescents and adults, what do they make of their inorganic conception? Are the kids really alright?

A Crisis of Wishing

Wed, 02 Jun 2010 18:14:27 -0400

Europe used to be, within the living memory of many of us, the cockpit of world power, prosperity and prestige. Today it is raw material for an ouija board. Predictions about Europe’s future range from its impending suicide to its emergence as a unified, leading economic and political superpower. Of late most predictions, especially those coming out of Europe, have been on the dour and pessimistic side, and for good reason.

The Europeans have gotten themselves into a strange fix. They have expanded their Union to the point of decision-making paralysis but would consider expanding still further. They cannot deepen the Union, lest residual memories of democratic accountability roil Europe’s individual national souls. But the Union may have to be deepened, for as the Belgian politician Leo Tindemans noted in a famous report on the future of Europe more than thirty years ago, a house half-finished will not last. As the Greek crisis has shown, economic union without considerably more political union will not work. The European Union has established new central offices, but dares not staff them adequately. Meanwhile, its liberal immigration protocols, having stimulated a widespread anti-immigrant backlash, are now in de facto abeyance; but the demographic collapse of the native populations demands immigration to keep economies from collapsing as well. In nearly every sense, then, the European model, and the European promise with it, is locked in a crisis of wishing: The further the Europeanists try to go forward, the harder it is for them to move anywhere at all.

A Retired Power

Wed, 02 Jun 2010 18:14:27 -0400

As it stands now, Europe has lost its self-confidence, its energy and its hopes that the next century will be the “European century.” From Beijing to Washington—and even in Brussels itself—the Old Continent is widely viewed as a spent geopolitical force, as a great place to live but not a great place to dream. While America is fighting “declinism” as its worst enemy, Europe has decided to embrace it. In fact, these days the European Union is less a declining power than a “retired power”—wise but inactive, prosperous but elastically accommodating.

The irony is that all this comes at the very moment when Europeans have good reason to believe that they were right in their criticism of both the Anglo-Saxon economic model and America’s unipolar dreamworld. The perversity of the situation is that the European model has fallen victim not to its failure but to its success. At present, the European economy is the biggest in the world. The euro will survive the Greek crisis and probably emerge stronger for it. European companies are doing better than many dared hope some years ago. The European welfare state has demonstrated its resilience even in times of global economic crisis. And while public opinion is divided, to all appearances America is trending European in the Age of Obama rather more than Europe is trending American.

Afghanistan Greened

Wed, 02 Jun 2010 18:14:27 -0400

In 1983, when the antiwar Greens first marched into the Bundestag bearing their potted plants like triumphant supernumeraries from Macbeth, you would have gotten a good laugh if you suggested that 25 years hence, this crowd would be the staunchest defenders of a German expeditionary force in Afghanistan.

Oh sure, Joschka Fischer, the high-school dropout and occasional taxi driver, may have traded in his battered sneakers when he entered parliament. But there was no hint that he and his colleagues would one day abandon the fierce pacifism that was their own absolutist response to the poisoned legacy of Hitler.

And yet there it is. Today, even with the latest Forsa poll showing 62 percent of German voters pressing to bring the Bundeswehr home from the Hindu Kush, preferably yesterday, the Greens’ Marieluise Beck and Winfried Nachtwei are the ones arguing most passionately that German soldiers must stay in Afghanistan long enough to protect otherwise defenseless villagers against Taliban insurgents. International soldiers are essential to “guarantee protection against illegal violence” in a threatening “environment of many violent actors” and to create the preconditions for the kind of development that alone can bring real peace, argues Nachtwei.

This striking Green evolution has made for quite a different “long march through the institutions” than the one prophesied by the original mélange of treehuggers, flower children, feminists, human-rights activists, Leninists, Spontis (from “spontaneity of the masses”), artists, knitters, nursing mothers, ne’er-do-well industrial scions who tossed their inheritance into the party pot, and assorted other disestablishmentarians. In the beginning, the Greens prided themselves on their revolutionary pranks and periodic non-pacific battles with police in the streets of Frankfurt or at the irrigation canals outside a nuclear power plant. They choreographed a hundred-kilometer-long peace chain from Stuttgart to Neu Ulm to protest the imminent stationing of American Pershing IIs in the Swabian hills. In the staid Bundestag, Fischer thrilled his freshman Green colleagues when he broke taboos and growled, “With all due respect, Mr. President, you’re an asshole.”

The Green collective rarely spoke with one voice, of course, as befits rebels who exulted in their Streitkultur—culture of ferocious argument. Back in the 1980s, the first intramural ideological clashes between the radical Green “Fundis” (from “fundamental opposition”) and the more pragmatic “Realos” (from “realpolitik”) presaged the later arguments over military intervention in Afghanistan. The Fundis accused the Realos of the sins of selling out to capitalism, compromising with the traditional parties, and, most unforgiveably in the case of Realos voted into the Bundestag, reneging on their promise to remain amateur politicians and step down at half-term in favor of “back-up” Green candidates who had initially failed to win their own seats in the election.

Dear Mr. Corporation

Wed, 02 Jun 2010 18:14:27 -0400

Of all the bizarre decisions the U.S. Supreme Court has produced over its long and for the most part distinguished history, its decision in January in Citizens United v. Federal Election Commission ranks right up there with Bush v. Gore and Dred Scott for lacking any basis in common sense and for making a mockery of democratic ideals. When large corporations wield more political power than at any time since the late 19th century, the decision to treat them as persons with First Amendment free-speech rights in effect creates super-citizens who have at their disposal retained earnings and capacities to borrow against their capital exceeding the resources of almost every real citizen. The decision thereby consigns the rest of us to second-class citizenship.

Some argue that the Court’s decision will not lead to significant increases in corporate spending on political campaigns since there are so many other ways for them to pump money into the political process. That may or may not be so as time passes; the future is stretched out long before us. But as a practical matter, after Citizens United even the mere threat of a giant corporation spending money on this or that candidate may suffice to sway a politician. The rest of us don’t stand a chance of being heard on any but the most salient of issues. Because of this grotesque decision, our First Amendment rights have been diminished to the point where, although we can say whatever we want about a political issue and contribute to the candidate of our choice, we might as well be doing so on a different planet.

Transparency First

Wed, 02 Jun 2010 18:14:27 -0400

In the aftermath of 9/11, a pitched battle emerged between the American banking industry and the U.S. Congress. The month before the attacks, in August 2001, Senator Carl Levin (D-MI) placed a far-reaching anti-money laundering (AML) bill before the Senate Banking Committee chaired by Senator Phil Gramm (R-TX). Gramm ignored Levin’s proposed legislation just as over the past six years he had prevented no fewer than 11 AML bills from emerging from the committee. But the 9/11 terror attacks changed the political landscape. As Congress began work in October on the U.S.A. PATRIOT Act, Levin pleaded that his draft AML bill be included in the new act on the grounds that money laundering had helped and would otherwise continue to help fund terrorist groups intent on the mass-murder of Americans.

Enter Citibank. Supported by the American Bankers Association and other financial institutions, Citibank mounted a campaign bitterly opposing inclusion of strengthened AML provisions in the PATRIOT Act. A central point of contention was the phenomenon of shell banks that hide behind nominees and trustees so that no one can know who their real owners and managers are. Citibank had for years offered such trustee services to all sorts of rogues through Caribbean subsidiaries, and they desperately wanted to continue this lucrative business. The risk that their subsidiaries might be handling terrorist money seemed hardly to matter to Citibank directors.

Levin and other Senators were equally resolute in their determination to win the fight against illicit money. Civility collapsed; shouting matches between Citibank officers and congressional staffers erupted in the halls of Congress. Levin finally had to insist to his more reluctant colleagues that without an AML package there would not be a PATRIOT Act. Supported particularly by Senators Chuck Grassley (R-IA), John Kerry (D-MA), Paul Sarbanes (D-MD), Bill Nelson (D-FL), Jon Kyl (R-AZ) and Mike DeWine (R-OH), Title III, the International Money Laundering Abatement and Anti-Terrorist Financing Act, was signed into law with the PATRIOT Act on October 26, 2001.

Measuring Secrecy

Wed, 02 Jun 2010 18:14:27 -0400

The Financial Secrecy Index (FSI), developed by the Tax Justice Network in 2008, ranks jurisdictions based on the opaqueness of their financial markets. Put more crudely, the FSI, designed to complement Transparency International’s Corruption Perceptions Index, ranks the world’s tax havens, or secrecy jurisdictions.

Developed in cooperation with government officials, researchers and civil society organizations from many countries, the FSI uses only publicly verifiable sources. It combines two measures—one qualitative, one quantitative. The qualitative measure is an Opacity Score based on existing laws, regulations and treaty information. The quantitative measure weighs each jurisdiction based on the scale of the offshore financial services it hosts. The Opacity Score is the more important of the two. Using an assessment of how aggressively a jurisdiction provides secrecy facilities, the score highlights specific features likely to attract illicit financial flows.

The degree of opacity is assessed using 12 indicators grouped into three themes: transparency of ownership information, transparency of corporate activity and engagement in international cooperation to combat harmful practices.

Once an individual jurisdiction assessment has been completed, the aggregated results are arithmetically squared to emphasize differences in transparency among jurisdictions. This emphasis is important, since even small differences in the secrecy on offer can facilitate significant volumes of illicit financial flows. Finally, the values are normalized by dividing through by 100, giving an Opacity Score between 0 (absolutely transparent) and 100 (absolutely opaque).

The quantitative data, weighting each secrecy jurisdiction according to the scope of its cross-border financial services activity, uses either IMF data on cross-border trade in financial services or, where that data is unavailable, estimates of holdings of foreign portfolio assets. The quantitative and qualitative datasets are combined arithmetically by simple multiplication.¹

Law as Leverage

Wed, 02 Jun 2010 18:14:27 -0400

In the aftermath of an historic global economic crisis, forensic investigations have led us to appreciate more acutely than ever the dangers posed by secrecy jurisdictions to the overall stability of world markets. Before September 15, 2008, the infamous day that Lehman Brothers stunned the world by filing its petition for bankruptcy, only certain development experts, anti-corruption advocates, and specialized law enforcement experts devoted much energy to this problem. Some had warned us that the use of secrecy jurisdictions could undermine the entire global economy. In an American Interest essay that appeared in early August 2008, for example, Raymond Baker, John Christensen and Nicholas Shaxson focused on the dangers posed by offshore facilitation of “dirty money” flows, stating that “the current subprime and evolving credit crunch are . . . the leading edge of a deep, destabilizing global economic crisis.”¹Indeed, a few observers—Robert Schiller and Richard Sylla among them—had been warning about the perils of secrecy jurisdictions, among other dangers, since the aftermath of the Black Monday stock market crash of October 1987. But few paid them much attention.

In the larger sense, then, opacity worked not just to help corporations make money but to deflect attention away from how they went about it. Now that a variety of recent investigations have shed light on different ways in which the use of secrecy jurisdictions played a major role in the financial meltdown—from AIG’s massive offshore booking of toxic commercial instruments to Goldman Sachs’s $57 billion subprime Altius III Funding, Ltd. Cayman Islands-registered scheme. Interest in the issue has now, not surprisingly, expanded.

Strategy Is as Strategy Does

Wed, 02 Jun 2010 18:14:27 -0400

Once upon a time there was a vast empire in the East, opulent and consequential, whose rulers wore jewel-encrusted robes and diadems, raced horses in teams “blue” and “green” around a hippodrome, built the world’s greatest ecclesiastical edifice and conducted its affairs (in all senses) in a manner which would give the world a word, “byzantine”, that conveyed a bizarre, duplicitous, even degenerate intricacy. This empire preserved and exemplified Christendom after the Roman Empire, newly Christian, collapsed under waves of barbarian assaults. Inaugurated on May 11, 330, it endured, by one expert calculation, for 1,123 years and 18 days.

Yet for most, this monumental achievement has been Western culture’s lost continent of Atlantis. Some young college graduates newly come to Washington for government work, strolling through Georgetown on Sundays, become dimly aware of rumors that somewhere inside the walled, gardened mansion called Dumbarton Oaks is a center for “Byzantine Studies”, where monographs with incomprehensible titles are published. But few pursue those rumors, much less Byzantine studies. I myself tried to explore mysterious Byzantium when, as a Foreign Service officer in Hong Kong, I bought a British paperback edition of Robert Graves’s historical novel Count Belisarius. I read only as far as the hippodrome races before giving up.

Blessedly, however, life is full of second chances. In preparation for reading Edward Luttwak’s big work The Grand Strategy of the Byzantine Empire I went back to try Graves’s novel again. There in Yale’s Sterling Memorial Library was a 1938 first edition in which William Lyon “Billy” Phelps, a revered professor of literature, had written his name, penciled some sideline notes for a few pages and then quit, giving the book to the college librarian. I did not quit, not the second time anyway, and now I think perhaps I understand the long indifference to Byzantium. For one thing, Emperor Constantine took the empire in the wrong direction. Having converted to Christianity in 313 after his vision of the Cross, he announced “in hoc signo vinces” and won a victory in the Battle of the Milvian Bridge. But then he ignored the big red “wrong way” sign, heading from West to East when everyone supposedly knew that the translatio imperii et studii required imperial world power and learning to move, inexorably, from East to West. In the period between the founding of Constantinople as the capital of the empire, in 330, and Charlemagne’s coronation as Holy Roman Emperor in 800, the main lines of history seemed to course through the Dark Ages of Western Europe, not in the Byzantine East.

Writing Strategy

Wed, 02 Jun 2010 18:14:27 -0400

On page 14 of his book Grand Strategies Charles Hill introduces Michel Eyquem de Montaigne to invoke his condemnation of envoys who parse the truth in reporting back to their principals. The guilty party in this case is wily Odysseus negotiating with furious Achilles on behalf of haughty Agamemnon: Odysseus fails to tell Achilles that a public display of submission is part of the deal (Achilles might have killed him on the spot). Although Hill later describes Montaigne as “one of the great stylists in French literature (citing Ralph Waldo Emerson’s “cut these words and they would bleed”), and that is a literature that certainly privileges style, Hill unaccountably cites Montaigne in English: “A Tricke of Certaine Ambassadors.” Moreover, this looks like the very first translation, published while Shakespeare still lived, by John (Giovanni) Florio, the London-born Italianist, litterateur and edgy thinker, whose French was imperfect. Hill could at least have cited a later translation.

Yes, this quibble is more than a little pedantic, but I have a very good reason for that in reviewing this most unconventional book, a truly masterful synthesis of “Literature, Statecraft and World Order”, in the words of the subtitle. Hill has drawn from a career in diplomacy, a thorough grounding in classical and modern philosophy and a rich appreciation of great literature to produce a kaleidoscopic masterpiece that illuminates all it surveys. That is why whoever reviews this book with an intention to criticize must either nurse some interagency grudge left over from the author’s distinguished diplomatic career, or else load up with the grapeshot of minutiae to throw against the exuberant enthusiasm generated by page after page of inspired writing.

Adult reviewers are not supposed to gush like teenage fans of the rock star du jour, I know. But it is not even over the top to evoke de Montaigne to explain what Grand Strategies is really about. It is such a surprising book that first impressions are bound to mislead. Hill puts before the reader a prefatory list of works cited, one containing every book central to the Western canon from Homer onward, plus a few more. This seems to presage a book that will mimic an anthology, that most dubious of genres, which more often substitutes for than encourages proper reading. But Grand Strategies resembles an anthology no more than a finely aged single-malt Scotch whisky resembles the vat of wet barley from which it started. Hill does not string together extracts but instead distills truly arresting insights from texts more briefly cited than quoted at length. His purpose is to address the largest themes of history through the literature that both reflects and has contributed to the understanding of humanity’s ultimate political circumstances.

Diversity Wins Out

Wed, 02 Jun 2010 18:14:27 -0400

Is Europe a global actor? The short answer is that the European Union is punching below its weight, and the Europeans have no one to blame for this state of affairs but themselves. European politicians got so good at pretending that the impossible was around the corner—a functioning federal union—that they ended up fooling themselves. The long answer, however, though vastly more complex, is also more enlightening. It is an answer rooted, first and foremost, in history and geography.

The past few months seem to have offered up both bad news and good about the prospects for the European model. The bad news is that the common currency has been cruelly tested, some political crockery has been broken in the course of taking that test, and the outcome is, at best, uncertain. The good news is that the Lisbon Treaty has finally cleared the hurdles. But this success poses another question: Has the Lisbon Treaty opened the road into the promised land of one voice, one foreign-policy telephone number and one common interest in the world at large? Not really. After wandering in an ever-widening wilderness for the past twenty years, we have discovered that there is no land of milk and honey, no truly common foreign policy, after all. The European Union is still the cumbersome and temperamental machine of old, one that will work for some purposes but, the advertising notwithstanding, not for others.

The Model of Models

Wed, 02 Jun 2010 18:14:27 -0400

Why does the world today no longer see Europe as a model, as it seemed to do only a few years ago? It’s simple: The world can’t be expected to believe in a European model that Europeans don’t seem to believe in themselves.

What is the “European model?” It seems to consist of some combination of managed markets, state-dominated social welfare nets, political integration, economic union, state industrialism, and social postmodernism (including a heavy dose of secularism), yet with a high degree of moralism in the protection of human rights, civil liberties and the environment. At its peak, the global image of Europe was that of a peaceful, stable, prosperous and integrated political-economic space—a magnet for others that guaranteed a high quality of life and buffered its citizens against the worst effects of free-wheeling capitalism. The appeal of this model was manifested in the expansion of the European Union, whose accession process led country after country to endure painful reforms in order to become members of the club.

But what do we see in Europe today? Challenges across the board: economic, political, ideological, security.

On the economic side, the European model has proven not to be immune to the effects of the global financial crisis, and indeed has demonstrated its own self-generated unsustainability. While Europeans may still blame American “wild-west” capitalism for causing the crisis, the fact is that European banks were as leveraged or more so than American banks, and state budgets were as laden with deficits and debt as America’s, if not more so. More important, European financial woes are ultimately due more to underlying structural problems than they are to the ripple effects of the global financial crisis: an aging and declining population, unintegrated immigrant populations, expensive employer taxes and high social welfare costs.

How We Got Here

Wed, 02 Jun 2010 18:14:27 -0400

To appreciate the tortured path of the efforts to control the power of money in American politics from the passage of the Bipartisan Campaign Reform Act in 2002 to January’s Supreme Court ruling in Citizens United v. Federal Election Commission, which reversed much of that law and undermined a few others, we must first understand the problem that reformers were trying to solve. They were not trying to make mortal the eternal problem of “money in politics”, or even “big money in politics.” Rather, they were responding to a specific set of changed circumstances: In the second half of the 1990s, the evolution of political communications and a sharply increased flow of money into elections had led to the failure of the existing regulatory regime.

By the elections of 1996 and 1998, the regulatory structure created in the post-Watergate Federal Election Campaign Act, as modified by the Supreme Court’s 1974 decision in Buckley v. Valeo, had essentially broken down. Contribution limits of $1,000, combined with the escalating cost of campaigns run almost entirely via television advertisements, made elections dreary affairs. Incumbents could build up massive war chests with the help of their parties, lobbyists and outside groups, while most challengers failed, or were simply deterred from trying, for lack of money. After significant turnover in the House of Representatives in both 1992 and the Gingrich Revolution of 1994, re-election rates for congressional incumbents shot back up to 98 percent later in the decade. The Republican challenger to President Clinton in 1996, Bob Dole, never got out of the starting gate thanks in large part to a huge advertising push by the incumbent in late 1995, while Dole was still trying to sew up his party’s nomination.

What the Court Did—and Why

Wed, 02 Jun 2010 18:14:27 -0400

Since 1976, when the Supreme Court decided the seminal case of Buckley v. Valeo, the Justices have been locked in what both sides see as a Manichean struggle over the constitutionality of campaign finance regulation. On one side are those Justices who view the world of politics as fraught with corruption and undue access for the wealthy; they worry that voter confidence gets shaken by each new campaign finance scandal. On the other side are those Justices who see any limitation on money in politics as overt government censorship that violates the First Amendment; they fear that incumbents will squelch criticism in a replay of the Alien and Sedition Acts. Justices fight this rarified battle with jurisprudential jargon that parses levels of scrutiny, compelling interests and the appropriate tailoring of the law, but it is this fundamental difference in worldviews that really drives the Court’s debates. And as Court personnel shifts—or, less often, Justices change their minds—the Court’s doctrine swings like a pendulum, alternating between deference and skepticism toward the regulation of campaign finance.

To most Americans, the Supreme Court’s 5–4 decision in Citizens United v. Federal Election Commission this past January, which recognized a constitutional right of corporations and labor unions to spend unlimited sums in candidate elections, came as a bolt from the blue. But for those who follow the issue closely, the decision was an inevitable consequence of the retirement of perennial swing-voter Justice Sandra Day O’Connor and her replacement with the more conservative Justice Samuel Alito. The outcome of Citizens United, the Court’s most skeptical judgment ever on the constitutionality of campaign finance regulation, came just a few years after the Court’s most deferential decisions in the area.

How did we get here? What did the Court actually do in Citizens United? And what room does the Citizens United decision leave for future regulation?

Expand Democracy

Wed, 02 Jun 2010 18:14:27 -0400

The Supreme Court’s January 21, 2010 decision in Citizens United v. Federal Election Commission struck me with a case of double vision. The decision said that corporations and labor unions have as much right as individuals to spend unlimited amounts for political advocacy. I cannot see corporations as being equivalent to natural persons and therefore do not agree with the constitutional theory that underlies the opinion. At the same time, however, I see out of my other eye some legislative ideas offered in response to the decision that have some merit but do not measure up to the underlying issue.

As my double vision cleared, I saw that it is time to shift paradigms. If we want to enhance democracy, democratic participation should be built up rather than squeezed down. Only a very small fraction of citizens contributes anything in most elections now, whether Federal, state or local. If even just 5 or 10 percent gave a small amount, we could fundamentally alter the system for the better. But for that to occur, the rules would have to change to encourage small donors, and that won’t happen if all of our energy is focused on boundary-line issues that marginally affect the political behavior of only those at the top. There is a limit to what one can accomplish through limits. We need to broaden the base of American democracy and re-energize what self-government means to average citizens.

Re-regulation?

In late April, Senator Charles Schumer (D-NY) and Representative Chris Van Hollen (D-MD) introduced a bill in response to Citizens United. Their Democracy Is Strengthened by Casting Light on Elections (DISCLOSE) Act, endorsed by President Obama, contains four major sections.

The first two would prohibit election spending by corporations with $50,000 or more in government contracts, as well as by U.S. corporations with a specified minimum of foreign ownership or control. These provisions would reinstate bans on spending that had existed for all corporations before Citizens United, but would do so only for corporations that the sponsors believe they are still constitutionally permitted to reach.

Decision Time

Wed, 02 Jun 2010 18:14:27 -0400

The European Union has seen more constructive institutional action over the past year than it saw over the several years preceding it combined. The Europeans elected a new Parliament in the summer, appointed a new Commission in autumn and concluded the Lisbon Treaty after five years of hard labor, much confusion and two failed national referenda (in France and the Netherlands). In abstract terms, these events would have to be interpreted as signs of success, proof that the European project could be a global blueprint for social progress, environmental protection and supranational governance. Yet nobody talks about Europe in such glowing terms today. On the contrary, recent events have driven a perception that the European project is hitting the wall and becoming a potential stumbling block for global economic recovery. Why has the shine come off the apple?

The short answer is that a certain infatuation with Europe developed at a time when many of the problems and limitations of an oversold European model were not evident, and when the unpopularity of the Bush Administration made Europe the only attractive version of “the West” available. Now, with the advent of the Obama presidency, a perceived shift in the global balance of power and Europe’s shortcomings in full view—dramatically highlighted by the Greece-generated crisis—this confusing and confused Europe no longer attracts many people outside its frontiers.

Drifting and at Risk

Wed, 02 Jun 2010 18:14:27 -0400

For a host of reasons, the European project, one of the most impressive international achievements of the past fifty years, is in deep crisis. “Malaise”, a word made famous by President Jimmy Carter in the late 1970s, now seems the most apt description of the European Union’s mood. In the United States, malaise gave way to “morning in America” under Ronald Reagan’s leadership. In Europe’s current situation, there are few reasons to believe that any comparable shift is likely.

The core of the European project’s success was economic. Beginning with the German Wirtschaftswunder in the late 1950s, the ability of European states to integrate was based on their collective ability to deliver jobs, affluence and a reliable social safety net to national publics. In particular, Europe’s success reflected a basic, strategic decision by successive German governments to pursue Germany’s national interests within the broader framework of Brussels-based institutions. This was an expensive strategy, but for Germany and the rest of Europe it largely worked.

The current financial crisis, however, has revealed some fundamental flaws in the European monetary system and the structure of its trade flows and investment more broadly. The threat of a sovereign default in Greece is only the tip of the iceberg: Over the next 12–24 months, the heavily indebted governments of Italy, Spain and Portugal are likely to face serious risks of default that could generate unprecedented economic and political strains within the European Union. On the one hand, lender governments, especially Germany, will come under heavy pressure to bail out these neighbors, both to preserve the Eurozone in its present scope and to head off further financial turmoil. On the other hand, as we have seen in the Greek crisis, Angela Merkel and other German politicians will be increasingly reluctant to support profligate governments and national welfare systems that are even more generous than Germany’s—witness the now-infamous Greek hairdressers who retired at the age of 52.

A Special Relationship in Jeopardy

Wed, 02 Jun 2010 18:14:27 -0400

The historic circumstances of America’s birth might not have seemed especially propitious for the development of a close alliance with Great Britain. Our origins in an anti-colonial war of national liberation and our founding President’s injunction against “entangling alliances” kept us at loggerheads with Britain for more than a century. As historian Edward Crapol has argued, anti-British nationalism runs like a

red skein through American history. . . . A clearly discernible pattern of Anglophobia . . . extends from the Revolutionary patriot cursing English tyranny with its suppression of personal and economic liberties, to the aroused farmer of the 1890s berating British plutocrats and denouncing the shackles imposed by British financial power.

One of America’s more colorful turn-of-the-century political figures, Pitchfork Ben Tillman, summarized this view as follows: “America for Americans, and to hell with Britain and her Tories.”¹

Today such rhetoric is limited to right-wing isolationists like Pat Buchanan and left-wing extremists like Lyndon LaRouche, but in the 19th century Britain-baiting—or “twisting the lion’s tail”—was a hardy perennial of the American political scene. Indeed, as late as 1895–96 the two countries almost went to war over conflicting claims in Venezuela and American fears that the Monroe Doctrine and the benefits of U.S. hegemony in the Western Hemisphere were at stake. An act of statesmanship by Lord Salisbury, the British Foreign and Prime Minister, helped quell the crisis, but it is instructive that he did not do so out of any idealistic desire to avoid conflict between fraternal English-speaking peoples. As his biographer Andrew Roberts notes, Salisbury had “no sympathy with the increasingly popular concept that there was some form of romantic, special relationship between the two English-speaking peoples. He treated America in the same way as he did France, Germany or Russia, strictly according to the exigencies of Realpolitik.” Salisbury continued to believe that a war with the Americans was “something more than a possibility”, but nonetheless his calm contribution to the resolution of the Venezuelan crisis helped set the relationship between the two countries onto a totally new trajectory, one in which sympathy and romance played no small role.²

Even as Salisbury bestrode the British Empire, the ground was now being laid for a closer Anglo-American relationship–what Bradford Perkins called “the Great Rapprochement.” There were two key elements to this: the interpenetration of national elites, and the emergence of leaders who believed in the importance of the relationship. As Charles S. Campbell noted, “it was the age of transatlantic marriages in high places. More than seventy Americans had married titled Britons by 1903; more than a hundred and thirty by 1914.”³ The 1895 marriage of the Duke of Marlborough to Consuelo Vanderbilt of the American railroading family, although short-lived, was the most famous match of the age. When all was said and done, the Churchill, Chamberlain and Macmillan families each had American connections.

Too Political to Succeed

Wed, 02 Jun 2010 18:14:27 -0400

As the debate over the proper size and shape of the regulatory response to the financial crisis heated up, one phrase in particular continually resounded: “too big to fail.” Sometimes a variant or complement to that phrase tagged along: “too interconnected to fail.” Sometimes, too, thinking about the staggering costs of bailing out banks that were too big and interconnected to fail, we rejoin with yet another phrase: “too big to rescue.” Looking back, some managers have decided that their institutions were too complex to assess, let alone control (some banks, such as Citigroup, are present in over a hundred countries): in other words, “too big to manage.” Simon Johnson and James Kwak now give us a new dimension and a new phrase to ponder. Their historical message is essentially that banks had become “too political to fail”, and their policy demand is, to paraphrase Edmund Burke’s famous motion against the corrupt regime of George III and Lord North, that the influence of banks has increased, is still increasing, and ought to be diminished.

This diagnosis is shared by a large number of influential insiders and policymakers, as well as by academic commentators hither and yon. The former group includes the highly respected giant of American finance Paul Volcker. His solution, the “Volcker rule” restricting proprietary trading, has played a prominent, if not exclusive, part in the Obama plan for dealing with the financial crisis. In a remarkable reversal of opinion, this group also includes Volcker’s successor as Chairman of the Federal Reserve, Alan Greenspan, who recently concluded that if it’s “too big to fail”, then it’s too big to be allowed to exist in the first place.

But for these and other critics of oversized finance, there is a paradox with which to reckon. Governments have responded to the crisis both by rescuing large institutions and by pushing banks together to ensure their solvency. The perverse result is that the degree of concentration in banking in the United States and also elsewhere has actually increased as a result of the crisis. Thanks to this apparent perversity, if not also others, it is very important to understand properly the origins of the phenomenon. Is the accident-prone size of banks and other financial institutions a result of a “natural” process of some sort, meaning in this context some amalgam of technological and social influence, or does it follow instead from particular interests, say, from lobbying in the context of an increasingly plutocratic political culture? That is the question that Johnson and Kwak, a software entrepreneur and former McKinsey consultant, try to tackle in 13 Bankers.

The Logical Insanity of Theodor Geisel

Wed, 02 Jun 2010 18:14:27 -0400

In 1936, Theodor Seuss Geisel was returning home to the United States from Germany aboard a luxury liner when a ferocious storm began to batter the ship. After passengers were ordered to return to their cabins, Geisel was plagued by memories of the doomed Titanic of 1912. To divert himself, he headed to the ship’s lounge, where he focused on scribbling out lines on ship stationery that were associated with more pleasant memories of his youth. The steady sound of the chugging engine gave him a sense of courage and the anapestic rhythm for his verse—which also matched the cadence of “’Twas the Night before Christmas.”

The images recalled what he had seen as an eight-year old watching a Fourth of July parade in 1912—including a float commemorating the Titanic—going down Mulberry Street in his hometown of Springfield, Massachussetts. But Geisel was already adding his own fantasies to childhood memory: “Chariot pulled by flying cat. Flying cat pulling Viking ship.” For the rest of the trip, Geisel remained fixated on the rhythm of the engine and the memories of Mulberry Street. His wife encouraged him to develop a story line combining the two. The result, published the following year, in 1937, was a book called And to Think That I Saw It on Mulberry Street.

That book, which came out eleven years after A.A. Milne introduced Winnie the Pooh to readers, would not rival the delicate intelligence or the imaginative nuance of the world’s most popular teddy bear. Nor did it have the psychological impact and mythical grandeur of the European fairy tales collected by the Brothers Grimm. But it marked the beginning of Geisel’s career as an extremely influential author of children’s books now known to generations of children and their parents around the world. This trajectory wasn’t immediate. The Cat in the Hat, for example, Geisel’s best-known book, wasn’t written until two decades later. But it and others like Green Eggs and Ham and Horton Hears a Who are among the most instantly recognizable and beloved titles of the 20th century—a love affair that shows no sign of fading after the first decade of the 21st. It was certainly not surprising that President Obama chose a Dr. Seuss book to be seen reading to his family in the White House garden last Easter.

Layard of Nineveh

Wed, 02 Jun 2010 18:14:27 -0400

Sometimes they rode camels, sometimes they rode horses, and they often affected native dress—the ominous Arabists of England. Their loyalty to Western civilization was suspect, and in the conspicuous cases of T. E. Lawrence and Harry St. John Bridger Philby their characters were, too. Beyond fancy dress and military fireworks, Lawrence’s main interests were literary and personal, while “Jack” Philby (Cambridge spy Kim Philby’s father) seems to have been hard-wired for betraying anyone and anything at all. Their grasp of politics was superficial; it was enough that Arab tribal rebellions against the Turks deserved support. But they all enjoyed meddling in the Middle East, or “kingmaking”, it was called back then—a deeply satisfying mixture of violence and intrigue.

Like many educated Englishmen of their time, Lawrence and Philby had a romantic conception of the world, and they tried to reshape their chunk of it accordingly. They certainly left geographical marks on the map. Both their names and greatest adventures are reasonably well known, in Lawrence’s case at least partly because of a classic Hollywood movie starring Peter O’Toole, with troops of men and animals rushing around Wadi Rum.

Yet Lawrence, Philby, Sir John Bagot Glubb, Gertrude Bell and scores of others were preceded by a man who out-romanced and out-adventured them all—Sir Austen Henry Layard (1817–94). Today his archaeological achievements are widely and properly recognized: The title of a 1962 biography, Layard of Nineveh, says it all, and in later years he became a renowned Victorian worthy. But his wild escapades among the Bakhtiari in Iran between 1839 and 1845 are little known. Vividly described in his autobiographical Early Adventures in Persia, Susiana, and Babylonia (1894) this period of his life epitomizes the contrast between romantic Western visions of the Orient and the raw and awkward facts of Middle Eastern society.

A Youth for the Books

As Layard tells his story, by 1839 he had spent five years as an articled clerk in a solicitor’s office in London and wanted out. In his early twenties, he set off for the East with a companion ten years his senior named Edward Mitford. They planned a journey overland to India and then Ceylon. As they reached northern Italy, everything seemed to be going rather well. For Layard himself the trip south from Trieste ensured a decisive break with dull old England, his aunt’s social circle and the routine of copying legal documents. Free of all that, he was delighted with the beauty of the countryside in late summer, “and with the picturesque costumes of the peasantry, which seemed to increase in gorgeousness as we went south and approached the land of the Ottoman.”

Notes on the State of Black America

Wed, 02 Jun 2010 18:14:27 -0400

The election of Barack Obama to the presidency in November 2008 marked a paradox in the long history of race in America that has not been much noticed: The installation of the first black President in American history—black, that is, as Americans define black, despite his white mother and his non-American, African father—coincided with the almost complete disappearance from American public life of discussion of the black condition and what public policy might do to improve it. There was a time not so long ago when we had trouble having a dispassionate, constructive discussion of these matters in public; now we seem unable to have any discussion at all.

Not one issue having to do with American blacks was on the explicit agenda of either major political party during the 2008 campaign, or on the agenda of the Obama Administration during the first year of his presidency. Neither the continuing crisis of black unemployment; nor the continuing crisis of public education for blacks in the inner cities; nor the crisis of black imprisonment; nor the related abandonment in most American cities of efforts to integrate black students in schools with substantial numbers of white and Asian classmates; nor the cyclical and structural “problems of the inner cities”, a euphemism for all of these problems and others suffered mainly by blacks—none of these issues has formed any significant part of public discussion now for years, including the years marking the political ascent of Barack Obama. As Harvard professor William Julius Wilson, perhaps the leading analyst of the black condition in our inner cities, has written in his important current book, More Than Just Race:

Through the second half of the 1990s and into the early years of the twenty-first century, public attention to the plight of poor black Americans seemed to wane. There was scant media attention to the problem of concentrated urban poverty neighborhoods in which a high percentage of the residents fall beneath the federally designated poverty line, little or no discussion of inner-city challenges by mainstream political leaders, and even an apparent quiescence on the part of ghetto residents themselves.¹

How is this to be explained, and what does it mean? Certainly, as Wilson notes, the disappearance of these issues from major public discussion cannot be explained by the successful end of the race issue in American history. Progress there has been in the fifty years or more since a major Supreme Court decision signaled the end of the legal segregation of blacks into an inferior position, but even so, some aspects of the problem have grown worse. The juxtaposition is jarring, confusing, and evidently silencing.

The Soft Power of Science

Wed, 02 Jun 2010 18:14:27 -0400

Science, the driving force behind so much in the modern world, has rarely figured as a tool for forging and advancing relations among nations. But this has begun to change. Last June, President Obama laid out a blueprint for a “new beginning” with the Muslim-majority countries in a major speech at Cairo University. The President expressed optimism about creating strong, enduring ties rooted in common interests and mutual respect. In particular, he called for scientific and educational collaborations that could both cement those ties and serve as engines of social, economic and political progress.

The President’s initiative must be followed with an action plan, and the United States is in a good position to do so. Much of America’s global influence is based on its leadership in science and technology, and so the United States would do well to integrate the “soft” power of American science into its diplomacy.

My own experience as a product of both the East and the West has taught me how formidable the “soft” power and transformative cultural potential of science can be. As a young man growing up in Egypt, I did my undergraduate work in Alexandria, a city steeped in the history and culture of science and a cosmopolitan center in a Muslim-majority nation. Its population was ethnically and religiously diverse, with Muslims and Christian Copts, as well as Arabs, Greeks, Italians and others living peacefully side by side. Women made up nearly half of my class at the University of Alexandria; indeed, my senior research adviser was a woman. Religious Egyptians of all denominations enthusiastically embraced arts, literature, theater and music. I cannot recall a single incident of terrorism by religious fanatics. It was this soft power, these values and this culture, embedded in and supported by strong educational and media systems that, far more than weapons and political hegemony, constituted Egypt’s chief export to the rest of the Arab world and the source of its leadership throughout the region.

Vacation Note: Two Funerals and a Meaning

Wed, 02 Jun 2010 18:14:27 -0400

We have come to expect many things from public figures in Western democracies. We make many demands of them, perhaps more than any previous civilization has ever done. We want our politicians to tell self-deprecating jokes as well as deliver inspiring speeches. We want our Presidents to show emotion in the face of tragedy as well as bravery in the face of danger. We want our political celebrities, like our entertainment celebrities, to reveal details of their lives so intimate that we would not demand as much of our closest friends. We follow their activities on television and via the Internet 24 hours a day. We know when their marriages are failing, when their children are in trouble and when they have financial difficulties. And if they happen to die, suddenly or tragically, we react with the kinds of emotions that we would normally reserve for people we know extremely well. Because we do know them extremely well, or at least feel as if we do.

Twice in my life, I have found myself close to the tragic death of a public figure, once as a journalist and once as a politician’s wife. The first tragedy was the car crash that killed the Princess of Wales in Paris in 1997. Although I did not know her, at the time of her death I was a political columnist for the London Evening Standard, an afternoon tabloid whose editors had a lively interest in royal affairs, and who duly threw themselves into coverage of the mass mourning in London.

The second tragedy, more recent and more serious, was the death of the President of Poland and several dozen other Polish politicians this past April in a plane crash in Smolensk, Russia. This time I did know many of the 94 victims. Some were friends, and almost all were colleagues and acquaintances of my husband, who is the Polish Minister of Foreign Affairs.

At the most obvious level, these two events are not remotely alike. At the time of her death, Princess Diana held no official status in Britain. She was divorced from Prince Charles and had been deprived of her royal title. She was better known for her clothes than for her political views, and she did not die while undertaking any form of public service. She was in Paris with her new boyfriend, Dodi Fayed, the son of the owner of Harrods, and was speeding away from paparazzi when her car crashed.

The Wall Street ICEcapade

Wed, 02 Jun 2010 18:14:27 -0400

As the U.S. Senate recently debated a major financial reform bill in which the credit default swap, a kind of derivative, played a significant part, Senators Carl Levin (D-MI) and Jeff Merkley (D-OR) proposed an amendment to that bill that would have banned banks from proprietary trading. There were a lot of high-rolling bankers who did not want that amendment to pass, because it would have messed up their plans to repatriate foreign profits into the United States, untaxed, by trading in derivatives on their own accounts. The clearinghouse ICE Trust U.S. forms a central part of these plans.

What is ICE Trust U.S., and who owns it? ICE US Holding Co., which was established in 2008 as the parent of ICE Trust U.S., is located in the Cayman Islands. Yet none of the owners of ICE US Holding Co. are based in the Caymans. IntercontinentalExchange, Inc., which owns 50 percent of ICE US Holding, is headquartered in Atlanta, Georgia. Among the other owners of the Caymans company are Citigroup, Goldman Sachs, J.P. Morgan, Merrill Lynch and Morgan Stanley, which are headquartered in New York. Bank of America, which now owns Merrill Lynch, is based in Charlotte, North Carolina. Deutsche Bank (Frankfurt) and both UBS and Credit Suisse (Zurich) are also part owners.

Derivatives lie close to the heart of the debate over financial reform, yet no one appears to have examined the ICE exchange, whose ownership means it will be the world’s main credit default swap clearinghouse; nor has anyone explained how its ownership structure might enrich the banks who own ICE US Holding Co. at the expense of U.S. taxpayers. This is what I propose to do here.

Hubris Hurts

Wed, 02 Jun 2010 18:14:27 -0400

Is Europe becoming interesting again? A few years ago, in the eyes of some Americans at least, it was basking in a comfortable yet boring “paradise”, having abandoned national sovereignties in favor of supranational institutions and left security to the protection of martial American power against a dangerous world. Today it looks to be on the verge of collapse, torn by acrimonious divisions both among its member states and within those states’ respective societies. It lives under the shadow of an economic crisis born in the United States and, like the latter, is dominated by the twin fears of bankruptcy and unemployment, as well as those born of Asian commercial competition and the dilemmas of economically necessary but politically corrosive immigration.

Both visions of Europe—one idyllic and one implosive—contain a piece of truth and a piece of myth. To see which is which and why requires distinguishing between European projects and ambitions, on the one hand, and the real situation of European countries on the other. Then the implications for America may become clear as well.

Two rival European grand designs, that of Jean Monnet and that of Charles de Gaulle, have battled for decades. As Monnet’s United States of Europe strove with de Gaulle’s United Europe of States, most onlookers presumed that one or the other of these designs would win out. It is now clear that both have lost their credibility, at least for the time being.

Beyond the Atlantic

Wed, 02 Jun 2010 18:14:27 -0400

Since Barack Obama came to power, many Republicans have been busy painting him as a socialist and decrying his Administration for attempting to turn America into a European social welfare state. They seem, at least, to have a point. The United States has been adopting policies (or trying to) that look suspiciously European: nationalization of key industries, comprehensive health care reform, enhancements to the social safety net, state-directed investments, and a foreign policy based on arms reduction and consensus. Just how far will America travel down this path?

Don’t worry: Washington, DC will not look like Stockholm any time soon. America’s Europeanization, while it may proceed further than Republicans would like, will never be complete, and there is no evidence that Barack Obama is really a closet socialist after all. You can reject the conservative refrain that “government is the problem” without being a wannabe totalitarian. America’s recent supposed Europeanization in fact has little to do with a vision of the European “good life.” It has been driven more by necessity than desire. The financial crisis revealed lax or mis-regulation, an insufficient social safety net and poor public investment strategies. Reactions to the crisis, both from the Bush and Obama Administrations, necessarily pushed in the direction of a more activist state as the reaction to the Great Depression did in its time as well.